IDXX - Earnings call 4 2023 | IDEXX Laboratories, Inc.

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Operator

Good morning, and welcome to the IDEXX Laboratories Fourth Quarter 2023 Earnings Conference Call.

As a reminder, today's conference is being recorded.

Participating in the call this morning are Jay Mazelsky, President and Chief Executive Officer; Brian McKeon, Chief Financial Officer; and John Ravis, Vice President, Investor Relations.

IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.

periodic risks in is this can our well our in these forward-looking under morning, idexx.com. be regarding Securities website, Investor as noticed the Relations SEC statements press our visiting obtained information from and Commission, or available uncertainties the as and the Additional Exchange with by which the filings release of issued section

or generally GAAP GAAP. most financial call, reconciliation measures discussing not be accepted visiting Investor we accounting earnings accordance in directly provided found this non-GAAP principles During these the also our certain Relations with A the of which website. financial measures will prepared to of may section release, by in be measures is comparable our

and results initial organic noted. to unless XXXX quarter XXXX to please the period all to fourth our and equivalent reviewing growth growth note growth, otherwise growth references comparable refer compared year guidance, prior In

participation their to may time broad questions, take allow into appreciate we'll in you please that have we X ask and queue, the questions. as back We your permits, follow-up free feel to To X so questions additional participant necessary. Q&A, limit get additional the if each with

Investors will after remarks to earnings be prepared concludes. posted conference call Today's the IDEXX.com

turn McKeon. call Brian would now I like to the over to

Brian McKeon

strong take our a Good overview had of an provide through fourth morning, outlook full our XXXX. quarter I'm results pleased IDEXX and to you XXXX, year our everyone. to to fourth XXXX reflected performance. quarter and for finish financial in

in leverage. and margin basis. in tax comparable EPS comparable gains selling growth supported a lower-than-expected gross and X% net recurring share headwind QX, organically, of XX% delivery increased on and fewer solid organic Diagnostic equivalent effective as revenues, Operating basis, $X.XX XX% up a These profits per Revenues in benefiting a on factors OpEx by rate gains XX% days. reported increased supported a X% CAG from of X% from

results EPS and increase reflected XX% comparable revenue from a payment XXXX comparable full contract year gains. XX% a year full and of enabled the high margin of delivery lapping financial operating EPS R&D in growth organic for customer resolution X% investments. of including combined a a discrete the growth benefit execution IDEXX strong basis, on overall supported This

These by in Diagnostic organic growth XX.X% targets. year aligned organic full and results in were XX% recurring full original CAG organic with international driven in the reflecting a growth growth gains U.S. XX% our revenues, regions, year

number in and placed We imaging also and achieved growth expansion XX% premium base. installed retention instruments, of which an revenues, drove levels, organic a year of record digital recurring software global high CAG customer full sustained premium our XX%

guidance well to we initial X.X% diagnostic enter to end XX.X% These of CAG trends the and of strategy. as revenues. growth, our advance revenue year, gains supported we're XX% strong our organic recurring targeting position execution us overall organic growth high XX% XXXX at in organic revenue X% growth, This range by

guidance supporting later EPS margin also for walk through high comments. financial of details growth. operating We're solid the We'll gains, in continued our comparable on long-term record track comparable our building my planning

Let's begin results. fourth of with quarter a our review

in the QX growth Fourth effects. net improvement QX, of days regions, of low in X% by international Diagnostic growth global increased XX% revenue CAG in quarter of driven by X% global in revenue X% net CAG growth organically range. our X%, with supported organic X% business. organic reflecting gains recurring X% price CAG of gains revenue was growth recurring U.S. at equivalent gains a XX% U.S. end was net average headwind organic Diagnostic this from in price and to the

quarter and X% of in the an XXXX. volume for and improvement volume from regions effects, reflecting days supported volume both levels QX growth international drivers U.S. gains execution growth IDEXX in strongest normalized normalized

rate recurring IDEXX U.S. revenue days of CAG fewer increased growth negative an remained growth selling revenue organically, X% Diagnostic in to growth quarter CAG the clinical from net above estimated growth X% levels, recurring visit solidly in X,XXX growth In basis Diagnostics impact levels. U.S., equivalent basis. normalized on X.X% declined which QX. This a point compared the premium a sector reflects same-store

solid growth levels drove high drivers per and execution IDEXX benefits in retention U.S. diagnostic business reflecting the quarter, new visit. frequency levels, customer gains, volume from sustained

improved CAG base. volume QX, also instrument placements, by increase execution, XX% recurring in in international a reflecting reflected results higher were which price realization Diagnostic in growth was benefits XX% supported premium strong gains. in solid revenue supported International IDEXX from net year-on-year our premium International continued installed growth and instrument

and solid achieved in XX% increased our SediVue quarter. gains supported testing international our across gains revenues IDEXX VetLab an organic regions. in gains major organically, XX% base XXXX, consumable Consumable fourth were modalities premium in and across installed Catalyst, hematology global IDEXX double-digit across by platforms. strong U.S. our increase gains premium reflecting the reflecting

XX,XXX premium levels, XXXX, record instrument quality, X% SediVue in placements gains from For competitive reflected expansion strong a driven new up sustained QX, In by instruments, prior premium ProCyte excellent placed One. year full we with high achieved X,XXX the placements. in we and and high continued of placements Catalyst year

the and reflecting supported effects high in program grew revenue instrument levels, comparisons mix. CAG revenues volume gains organically, increases sustained X% pricing solid QX, growth Assay X% solid in from revenue international Overall high in prior in declined in regions. gains to benefits organic organically global reflecting price Rapid the organically quarter, net Lab by X% the U.S. year U.S. Global expanded and single-digit and revenues

QX to prior supported recurring revenues increased growth CAG cloud-based in double-digit X% strong by Results be and in in veterinary momentum ongoing placements. software to compared continued diagnostic and year levels. revenues software imaging organically

diagnostic organic For the recurring imaging software revenues by veterinary and XX% revenues. organically, year, full XX% in increased supported gains

moderated year-end increased supported lower U.S. strong In was to timing. gains levels, continued by quarter growth our other revenues year segments, Overall in the X% and organically and solid QX in revenues in Water prior business by China compared the Europe. order

X% organically. X% grew Water year, and overall full the For revenues

screening decreased solid higher revenues offset Latin Dairy QX in and as levels comparisons to and in health herd declines revenues were and Poultry in organically X% swine U.S., gains in the Europe China. Livestock, testing by prior America

For revenues areas X% poultry herd the our year, LPD offset in macro down were gains solid by across were declines swine ruminant screening, reflecting and core organically health full like as businesses dynamics. regional

We comparison expect herd to screening through health XXXX. of the issues quarter in work first post

on Turning comparable X% to on operating XX% margin solid as the profit as and by increased P&L. and comparable supported X% basis, increased Gross basis. QX gains. profit operating reported reported comparable a a

impacts, impact, of business up benefits hedge a of from on offset Gross related points price XX basis, XX negative and adjusting the lapping favorable year primarily software margins. Gross to margin net consumable from margins strong FX XX.X%, impacts gains inflationary comparable service higher for gains. prior basis which mix growth, basis were points gross improvement, cost reflected

reported comparable innovation reflecting up basis quarter, in and investments were in as platforms. initiatives, spending new X% the expenses instrument including R&D X% on and commercial advancing growth in with our our increases a Operating aligned

payment increased benefit including basis, the lapping margins customer of were XXX the including operating year approximately of basis full XXXX, discrete combined basis from XXXX investments. comparable contract points, QX benefit On For XX XX%, a operating R&D resolution of and payment. XXX year basis from resolution customer margins full contract points the points the

For XX prior of related to by operating the year basis points, the lapping primarily full year, gains gains. foreign exchange margin hedge reduced

by a release XX% rate tax lowered per in QX, lower year FX In quarter. XXXX QX tax headwind rate. a the full increased to $X effective certain This hedge basis per included share, gains EPS benefited gains. up effective from which was activity from in and basis. valuation compensation allowances $X.XX from $X.XX share. lapping of points on our approximately in changes by were EPS quarter $X.XX million comparable and tax EPS $X.XX reflected exchange of jurisdictions, primarily benefits related EPS share-based foreign hedge the Fourth in the XXX

share, year payment of XXXX from XX% was increase the contract $XX.XX of of lapping and resolution XX% per on a Full including QX basis, growth benefit R&D combined comparable customer EPS EPS discrete the investments. an

share the lowering activity XXX $X.XX in year, effective rate stock-based tax compensation tax million provided basis $XX For benefit, our per full or points. by

full in noted, tax per of from release As benefited comparable share or year allowances $X.XX also growth jurisdictions. by the EPS certain valuation X% approximately

full increased by growth X%, Foreign QX year revenue respectively. approximately X% and and exchange

by lapping were of the year, full reduced and million full exchange In hedge XXXX share, to $X the For profits EPS gains year operating $XX hedge XXXX, exchange by foreign related gains. $X.XX primarily per foreign million.

was capital year spending. Free or million and or of Capital cash for the cash income. reflecting the of for X.X% million was conversion above spending flow end high earlier net was timing of flow $XXX full revenue. control XXXX projections, Free of XX% $XXX

of net We sheet ratios ended and in leverage remains cash. X.Xx gross balance position. Our of XXXX strong X.Xx with a

leverage expense Our forward XXXX for interest ratios recent year. and interest expectations incorporates this rates outlook similar

$XX million in repurchase the XX,XXX fourth to quarter. shares allocated We

repurchase million diluted outstanding For the deployment our reduction to full to X% for of cash in XXX,XXX X.X% supports $XX to full share year the projected repurchases XXXX. shares shares. XXXX, we year allocated Targeted

supported we X% exchange growth in by have We're billion, reflects Turning On increase revenues full recurring of Current limited to growth. rates, guidance impact XX.X% revenues. billion basis, to basis. initial a CAG XX% revenue organic full organic outlook. an an a XX.X% year to on providing Diagnostic of overall, X.X% for XXXX to this X.X% foreign our to range to expect growth exchange year $X.XX $X.XXX of on reported

revenue approximately from $XX Jay outlook comments. includes revenue in our growth million reported his will software projected Our highlight recent which acquisition, of

growth terms price growth growth volume of assumptions net post flat our revenue approximately recurring X%, with relatively our of aligned for of the for range key clinical of CAG approximately same-store QX. midpoint The drivers visit U.S. Diagnostic expectations X% incorporates In and outlook. global levels of gains gains organic XXXX

we effects overall levels. trends have which clinical expect January, discuss, impact QX in severe As from we'll some will U.S. we visit seen weather growth

solid outlook of IDEXX and including of volume half for higher year range XXXX, conditions. for the aligned growth from sector targeted a the risk to recurring lower growth The Diagnostic range growth trends expectations by growth IDEXX growth continued macroeconomic same-store full the our premium potential captures and from potential supported benefits our clinical CAG U.S. improved reflects our in effects execution calibrates volume second to end revenue The goals, with U.S. global trends Our potential. growth end visit drivers. for of outlook visits overall

growth XX% long-term our guidance organic of end of overall revenue is high goals. with aligned The our

expect expectations to and organic constrained levels. strong instrument We in growth by year growth placement for prior somewhat organic modest overall to LPD comparisons be

payment. the to of operating full a margin operating resolution margins, for to negative in impact comparable reported comparable an XX for XXXX a operating basis, net customer annual improvement QX XX reflects the XXXX outlook guidance related of is point lapping of XX.X% to basis basis Our points year margin of On XX this XX.X%. the contract

gross basis solid productivity for margin expansion by continued CAG from cloud-based in strong gains planning comparable recurring on XXXX, We're growth and our software a business, Diagnostic lab supported revenues, in of initiatives. benefits

operating EPS impact at on given share assumed press full estimate from by revenue current We release. margin XXXX foreign expect limited growth per in foreign exchange the our hedge exchange increase will and We $X.XX rates year positions.

to hedges. the full U.S. dollar in In sensitivities of rates X% million income terms by $X and million that projected press the revenue approximately we a net changes would the our by of impact assumed reported foreign of change release, year in approximately exchange $XX operating to value

lapping growth EPS reflects outlook on in EPS related from and share. of net basis, XX% lapping headwind a of the This benefits comparable from to tax X% $XX.XX increase reserve per headwind resolution to a XXXX. and, as XXXX of valuation and reported X% the $XX.XX releases customer X% contract payment Our to of is an

rate XXXX, activity. approximately in outlook tax Our to impacts lower increase our lapping benefits in in and reflecting factors X.X% share-based compensation a projected XX% overall EPS from these effective

average Our XXXX in benefits interest for well EPS count. lower XXXX, outlook compared expectations from to share as as captures expected in expense reductions

deliver million estimated Our XX%, cash net spending for goals. revenues. ratio is $XXX of performance X.X% strong free conversion outlook continued This flow XX% flow to Overall, approximately of we're or XXXX. to aligned capital free with in financial positioned reflects XXXX income well of a long-term to cash our

LPD severe for growth overall Reported to revenue with In the in growth for QX, and on weather should factoring be planning growth of like in in to QX line X% revenue outlook January, revenue in we're approximately from areas constraints comparisons. of of in growth operational X%, X% negative U.S. year-on-year organic tougher largely impact our terms related organic estimates. growth

year for our margins, we're reported recorded as adjusting moderate to for In margins terms to the profit operating resolution QX an This reflects expense. of million payment operating operating comparable in of XX.X% offset XX.X% of outlook, for expansion in prior the $XX lapping an QX. flat planning contract outlook to customer XXXX in

concludes his now comments. the Jay call over turn to our financial I'll That review. for

Jay Mazelsky

quarter, you, our where strong Thank while good growth Brian, financial strong capping in strategic delivered a year IDEXX performance driving priorities and fourth morning. results. the and business excellent advanced we

innovation informed high-touch in medical use clinical Our better while growing model, and veterinarians' customer, mission the ongoing testing relevant category. of generates growth drivers commercial in their The the supported insights profitable that accelerated sector care focus important businesses development. diagnostic deliver to a diagnostics highly on

annuity annuity impact by premium installed solutions, our levels reflected revenues streams. double-digit growth base, and year aligned the solid High placements, original aligned for regions. gains price instrument execution and and across in in targets high-quality Diagnostics value growth growth expansion major net in our This growth imaging full software against the included in CAG year High These of XXXX. growth drove revenue of integrated gains, our of double-digit our full the and recurring we reflected global digital quarter strategy cumulative realization new with business fourth deliver. high-return gains supported strong our was cloud-based the recurring strong software durable our instrument with

delivered factors customers we solid teams carried all we seek gains The volume momentum XXXX that as of quarter clinical levels. to sought-after appreciate gains. these and demonstrates achieve continued efficiency through work visit services improved this and commercial IDEXX's IDEXX through types solutions tools purpose-built to growth constraining

XXXX. advanced this strategy and key opportunity commercial highlight to direct Today, for our the on build our the capabilities address have to excited that growth in initiatives through business, long-term We're awareness, partnership momentum to commercial use the review global and, with a start and education care Diagnostics. increased and its innovation enhance creating ultimately, IDEXX I'll of role delivery. of our execution in I'll foundational

resulted bring sector IDEXX's has matter a deep in subject growth mindset and gains levels. expertise above that commercial teams partnership

of year off new Solid premium the in at accounts, record high capped including in and competitive and a placements. instrument instrument Catalyst placement reflected Outstanding sustained competitive of growth levels year U.S. levels was in full QX premium performance new record placements placement

for high realized We delivering in sustained XX% of coupled while EVI insights diagnostic SediVue for a placements, double-digit bases. the globally clinic foundation that IDEXX customer retention to revenue is for customers' managing workflow to recurring future and set in rates range with premium the XX% high CAG also our growth. provide expansion hematology solid and levels It High-quality, with U.S. pet in similarly, care, of levels installed a easy effectively high Diagnostics our also them demonstrates appreciation platforms deep use dynamic health necessary to busy clinic backdrop. and,

adoption which and multi-modality solutions. customers This XXX, the makes by are Our for our consumables' testing, begets effectiveness growth our their revenue only stream, of drives installed and modalities Diagnostics which overall. also easy of base premium IDEXX the diagnostics in areas inspired in fourth revenue sector technologies and visits practice, revenue fastest-growing at diagnostic IDEXX single-digit and benefited support growth sustained expansion high U.S. growth the one frequency veterinary and of quarter, of practice the utilization in in wellness level. the reflected technology financially diagnostics diagnostic expand IDEXX our across our benefits not supported growing but to of testing help customer as in remains and adoption instruments adoption appealing. the these from offering recurring gains the strong same-store interest use programs is The like marketing solid

and R&D positions on resources customers help long-term build investments Our commercial in to this well IDEXX our momentum.

commercial Diagnostics growth. strong an element this CAG is to recurring revenue of direct global growing Our important strategy capability sustain

as the support commercial around are investments shown delivering in while complements our is consistently X attractive, completed the Our These and very in world. first commercial in the have that many we've U.S. high-touch these growth our targeted to countries expansions was have ability results. XXXX during engagement X high-return fastest-growing business future complete still by and our since advanced It become commercial of most delivering expansions strong the large. territories teams international recent years expansion the in QX, regions,

the business expanded our international global of is performance showing commercial Our benefits capability.

gains specifically Diagnostics base international normalized growth, recurring strong our sales clinic premium of double-digit urine year, the pressured achieve growth and new These reflected installed base in expansion for revenue driven chemistry, XX% installed in to continue our of hematology this We macro across for gains, have days business sediment drove despite volume levels. platforms. sequential that headwinds international growth CAG same-store quarters improved by

network expanded total IDEXX XXX, X/X us in address The the exists ] an our U.S. approximately footprint marketing lab programs customer-friendly expanded regions, outside the of right international VDC [ to opportunity of the model tools like based commercial the estimate international gives which and successfully

in also segment. strong year growth in to IDEXX and software revenues, very diagnostic Diagnostics this services addition expanding CAG In performance our recurring veterinary delivered imaging

and to manage clinics. insights and provide customers software communications our Our access and across way efficient busy an solutions workflow imaging and important diagnostic with intuitive

these Clinics embed their increasingly and business generate lines pain eliminate better adopting their diagnostic that meaningful technology of aspects and drive focus staff of business the of their unrewarded able areas contemporary administrative clinic, patients points help continue providing to are high insights, younger reduce time and to care software either open communication embrace By to of across help them solutions, on significantly and growth. clinicians for spent or the them their opportunity medicine back-end to demographic. practice software activities their use in on levels many customer with

performance, placements full in the profit PIMS benefit multiplier XX% year base delivers in company provide the fourth to cloud imaging for diagnostic This by excellent and PIMS gains native growth faster. high installed These organic segment our gains continue commercial year. in the and year. which for growing veterinary of XX% supporting placements a software Supported attractive stream in drove solutions their XXXX, as of recurring software highly cloud loyal products, revenues driven represented diagnostic customers interest be over to and the double-digit grow quarter engagement strong this by a revenues quarter IDEXX software of the adoption profitable fourth

which services our portfolio. workflow Our engine fully from the diagnostic the practices PACS adopted installed imaging and IDEXX's and PACS, growth in subscriber expanding technology stack. cloud subscription-based focus service example. into Web a imaging, recurring software our veterinary IDEXX for revenues with PIMS We're pleased of double-digit base growth software and our IDEXX have is native integrated continued digital great from benefit on Web thousands

dental imaging major advanced added dental full recently time-intensive charts regularly These XX% workflows, addressing what We image to the process practices. including practices dental for dental who take of extras. point sorting, a for is PACS, pain workflows specific Web and integrated complicated streamlines otherwise and a X imaging

user a benefits faster workflow building example the that an will Station, integrated momentum coming new suite. as experience to VetLab VetConnect customers the on PLUS one-stop to our in-clinic such is a existing We're VMX recently across is new this practice variety drive VetLab instruments clinic. from within in control half interface which with for demonstrate offering our of efficiencies engine. the deliver and with and of the diagnostic IDEXX XXXX, of Xx which results These for software One platforms IDEXX team's clinics. relevant to and Announced second panel innovative all globally wide at the workflows further updated our solutions is

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through commitment and animal global innovation has leadership health. care of development higher and standards driven Our in sector

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driven track optics, global QX leveraging powerful time-saving IDEXX our increasing placement Customer offerings. We and the built-in of over this for estimate a intuitive allows of X-way building of menu our relevant our a by time value and at advanced VMX of shipment expertise, from IDEXX point XX,XXX inVue expansion, continued announcement trials to off response initial products overwhelmingly year, global workflow. and Analyzer opportunity record With service AI positive. connectivity, proven into years pathology were over menu the X highly in

one better the representing they preventive the screening tests. IDEXX's additional common the best to impacts of Already Available even intestinal time-consuming latest help gold young Analyzer, at costs inVue Cystoisospora antigen addition at have to even for Dx addition most the confidence the diagnostics, reference recently fecal that when starting as announced our platform clinicians fecal dogs identifies addition many typically also parasite month, of reference labs make extension platform now we and standard will the antigen in second the our years. a choose Fecal IDEXX for and no In greater Dx cats, common next the labs. Cystoisospora,

is in kidney IDEXX IDEXX kidney panel over B in to about as the injury this In B comprehensive already industry. the Since what for on we in our from IDEXX Dx customers XX,XXX test Cystatin launch, to North addition antigen XXX,XXX Cystatin America. launched have benefited health have Fecal adding of menu December, most North expansion detection planned, America successfully in

the accomplishments customers. been Overall, partnerships value-added advance able business capabilities our year we've we're in proud very with to our expanding this of and

on XXXX. opportunities, invested capital innovation on strong investment in drive focus delivering attractive and Our results, return financial while helped exceptional

of I'll IDEXX With strategy. our our conclude commitment thanking against their nearly company, set the across the XX,XXX through for organization rose XXXX. and teams up purpose colleagues strong delivered the intensive by us that, business IDEXX coordinated, both challenge. performance across These ongoing to High growth to well results our their execution levels off work and today and this in require XXXX build to

of There's significant adoption and products. the solutions related to and a continue to attractive diagnostic opportunity inspire utilization

teams work honor future behalf better IDEXX and address a opportunity, and people our to to IDEXX's report of results Our for to mission progress planet. colleagues. our animals, to while pursuing this our an continue It's tirelessly provide on

efforts this of all your So for thank management IDEXX year. team, behalf you on the

remarks our line we'll open With the now prepared Q&A. that, conclude and for

Operator

JPMorgan. Schott Chris Our first from question today comes of

Christopher Schott

Color on on guess it revenue than I you like a wider range here. past. seems the remarks just, guidance here is the the XXXX have in bit my question

macro would that, thinking how of where guidance you're the and the kind what's kind reflecting little this driving more and I maybe in the macro just terms in part broader environment latest So just the that bit range of of you're for year. color and most a environment on just year. the uncertainty And seeing like of

Brian McKeon

range. about range Yes, Chris. represents a guidance X% the Thanks,

recently which getting comment sector range of builds our midpoint benefits higher that the the highlighted we're I as for end potential our in the think, around well execution. seen the underlying some captures, think the I the largely in improvement. as The in we've of we from really trends that outlook, sector logic the business,

that longer-term been think we sector. be see what growth levels below clinical internationally sales in trends visit think we I same-store our the will levels, have

And potential as teams. that from well so even captures for front as that a our on stronger execution upside

midpoint risks, And I downside risks. think including is from view macro that capturing

supported we execution. think that last we all our delivering not higher and it's started so I than up year, strong end where range, at And of ended the different by

we'll that in some the that, we assumptions So laid do involve trends to but that sector out. of always will in improvement the strive terms

Operator

next Rich Our question comes Sachs. of today from Goldman Nathan

Nathan Rich

But of of through the playing Maybe of could how you year I just I kind be said for XXX of And you point detail I see in kind I us to end-market you said post your kind maybe guidance. on out? sure wanted that's understood clinical weather. the the you maybe visit embedded QX that I'd quarter. of interested kind year? same-store of QX. visits can flat the kind know and to in around kind then of if of then make up assumptions first just kind you the that. level impact expectations of Would following talk expect balance over you kind underlying basis guess, from be

I was kind normalized think volume remarks from your just the XXXX. stood that the fourth in quarter strongest growth And other prepared of thing out the of

any the what you kind could you're and maybe drove balance kind on share that, of color of 'XX? over Just what expecting of

Brian McKeon

terms But maybe just set your the year had we finish context. can Thanks, Nate. start our to in Yes, very good with of to last question a I performance.

you year. growth the our for days the quarter trends growth normalize had As I strongest for was and improved volume effects, U.S. a mentioned, actually QX volume we X% softer when from and that volume internationally was

So the very teams. that, we're our benefits getting good execution ongoing that about we feel by from strong the and reflects

half, with that. build in that benefit we highlighted second for our from XXXX, we'll line that we we the trends the have our looking -- expectation plans, outlook about strong the and that's our coming growth pricing on noted. volume is to As of we're for, year We roughly for out get thought the additional at midpoint

half second we last factored similar impact, XXXX in from I think, impacts in view international, million was somewhat and still that somewhat the our largely explicitly improved severe we're the the think clinical trends headwind. we January. -- before in in We -- in midpoint were U.S. had $XX the in for in year, visits the highlighted, we about flat were of but which of a weather weather U.S.

well So we'll that and and we're flowing some We're we a as hopeful of see time hopefully to get potential we over assuming January. to capture that's QX trying kind that flattening long-term in just full year. through the the we But isolated see growth think with trends or see. we'll -- aligned at least for of

Jay Mazelsky

to both if and about client just There's and -- and revenue demand, underlying the end-market appears then X% was quarter. practice pet at you some And be color stabilized Yes, remarks. Brian's clinic take owner revenue, and healthy. it to Yes. the in to look fourth add a good

From appreciate that at but them it's tools customers testing and productivity delivery with practices solutions communications, bring better, think I Even we I standpoint, looking the way positioning internal workflow across the new more for modalities. so whether integrates. diagnostic really in communications, all hunger of care the a there's that the run a and technology think client part also play, their can help it all as software, of

think, tools capacity And well work some of positioned that think the do to that partnerships the customers we're especially, be to to they've had I I and assumption and challenges help for through them. that. So continue is to looking able

Operator

America. from of Bank comes Our Ryskin next today question Michael of

Michael Ryskin

bit the on on to strong the view. in end wanted year. Congrats little a expand I to quarter, the

VMX guys of You that informative. really had great launch a was

going contribution how of just months, to since you inVue year, talked I'm But embedding to that XXXX meaningful? be late or couple to only curious, about launch XQ wondering, it's this already? much any be numbers going attributing launch. it's you you are in Just not target obviously, Are revenue of

throw just then other And the both I'll once. question, at

to at X% believe you year to, X%. this net last about talked price ended year. That compares X% You I

you're So levels. moderate sort of down back historical kind to of

Just XXXX the price announced could feedback been to as rollout? o-US wondering would the if provide you've price, what's you recently difference of sort any price helpful. U.S. be And on versus that

Brian McKeon

instrument, overall revenues don't briefly the inVue in then all principally for question we've the I that the talk benefits It it's just be more will the included the Jay time that instrument why quarter, launch? But guidance our the revenue Mike, in launch we over captured as the about build assumption annuity fourth outlook. guidance. address let from our in

Jay Mazelsky

Yes.

learn with the Customers, Talking that customers Just I I ear to relevant help for with launch. organization. very morphology, it certainly very are blood that, think, fits profile. the as well they do cytology on as some the that those follow-up about tests looking commercial excited think, our and today, who more to high-volume into commentary inVue

standpoint. It do but on helps many care the the morphologies, constraints to I complexities and address to where blood like don't gap due always a slides, to Especially with what a would from as do. they'd and morphology time do as is like. more variability they blood they standpoint think

that. And it we're I it think that So marketplace by very need. excited fits the and fits

It work And it moving would around. that practices left doesn't otherwise not importantly, work It's eliminates work. with. are add

also delivering it excellent the So both of I medical cylinders on workflow hits care think improvements. but productivity

you types. the mind mix -- Michael, had Sorry, different a asked is customer about pricing piece. that combination also pricing there's in Keep of by

corporate longer-term have obviously about contracts, to well way talk And We as as not a effects. so it. under may program customers be who different there's single

So contribution value as line -- is customers we guide standpoint. that much X% a very from we're IDEXX both commensurate the an that provided with we that see think in what delivering reflects the debt with and

medical in Keep decide the of practice an the price factor services up. to uplift pet it differentiation don't there's terms piece That's they And typically, the the test decide And they their management we and not how price. in it. mark up and mind, differentiation obviously to owner price veterinarian through itself, to also just into systems. of that -- they but set that

Michael Ryskin

Thanks back me. that, Appreciate much coming to for Jay. so

Operator

question from Tih of comes Paribas. Navin next [ ] BNP Our

Unknown Analyst

feedback regarding technology additional also you feedback further area including M&A purposes, timing I we be And for have could provide And to other on XXXX? second whether any consider Just indication. innovation slide-free software? and question, or to announced whether information a you more maybe could if in the able inVue, expect the assays the just KOL load-and-go on of would of early a and modeling provide for follow-up you're

Jay Mazelsky

Yes.

key and So number key had feedback. leaders of let upfront the inVue. We've and as some part a of talk the development a definition about opinion little of me bit inVue of involved leader opinion

the new them we're typically to So new world do the to -- something involve when bringing there's like market, this. we

natural is you're perspective including I exciting think structures, that their looking from cellular thing the state. structures their within at intracellular

I squish, use word it's you're it. slide, prepare the of don't word to want you a squishing use XD, but When a the I'll sort

provide wouldn't at getting able that you things that. state, don't otherwise a see it. natural look and differential view can nonnatural X-dimensional you diagnosis are and you're So -- When from to have you otherwise a it you that interrogate see in

very So they're that. by excited

technique-sensitive, very the to is I you highly that. minutes variable. prepare that they are XX slide. interpretation the Therefore, don't know XX spend by It's They in think have to excited a on veterinarians, in variable. output general, fact it's

something like is a solution that's having they're think that, -- that's very about I that. relevant, enthusiastic understood, they well that So

At instrument, not And pipeline, innovation constantly With product very funnel innovating or with announcing respect and point, disclose to as filled we and this then to more. launch about year we get this particular of or our software it interesting then we'll is and development activities. that. going innovation, we're talk to about talk assay closer

Operator

Our Erin from Wright today comes Morgan next Stanley. of question

Erin Wilson Wright

Or had a diagnostic Is just like follow-up of the instrument? I that in the after with more other expedited I you follow-up that that But be an launch XXXX platform on with or inVue you later? another at on could then could and do inVue, that still launch earlier pipeline? that. do all? have And soft another event have

Jay Mazelsky

Yes.

So launches. the point-of-care to with respect platform

within real it when see and works hands tried putting a within operating begin well-defined how the shipping in that of of the very benchtop something environment. and a it. there's know launch development We a customers, we true getting method it of clinic in and have difference what platforms, terms We feedback you between developing

average want We of between And the are time issues maybe world-class make premature practice us. to disruptive performance. customers sure of X, to that want environment. the have to levels that our expect These and support X years. that We are launch X, don't events are

it. what with timing it what existing itself. comfortable testing of categories, launch, overall past, we're and the So of other we've in closer the not further operating outside guided when the we'll talk within disclosing it's making fits next and and sure practice to in software we talked the the We're have of environment to about than we've ecosystem point-of-care we that our terms platform one, of that get

Erin Wilson Wright

And Okay. then a bigger picture question.

opportunities -- changes in Just accounts or your in of accounts is opportunities one seen one of relates new competitors the not landscape, in you disruptions competitive other individual your has there U.S.? I any take the this of point that distribution presenting of sort at evolving either changes been Could as you ownership corporate the may or sort have or share across to to for competitors guess, for it that particularly of in too? previously

Jay Mazelsky

Yes.

markets have a long for been time. very Our competitive

ownership I think new hasn't changed really dynamic. that

competitors choice. our and with services clinical were a also of Some have equipment side. partners Customers

Our focus the is it's to have practice, whether solutions, to better in constraints, new on address introducing challenging them continuing to the testing help they whether give problems results. innovate capacity medical it's

decisions to focus medical that's nature productively. customers the where insights end do outcomes day of integrated and help the our produce remain. user-friendly, these is that our at way critical to find the great is generate appreciate of where going the and That's inform offering, that it our is we ability What customer-friendly seamless focus

Operator

take of Jon now Financial. a Stifel from will We Block question

Jonathan Block

XX% year? gross look R&D up then margin expansion just the actually, a year down X we because g&A expansion And think OpEx, was decent fourth maybe the for if with Do price? modeling you Brian, in quarters to margin quarter a R&D versus at from op up the in about perspective. a get was another year-over-year, row, this GM Any way row.

pencils we on or anything as sort to detail on So just the 'XX? OpEx GM of sharpen our

Brian McKeon

the John. for question, Thanks Sure.

we targeting customer the XX improvement comparable to of headwind net points payment. basis from XX we're what contract revisit shared of resolution -- to was XX the from bps Just

So Diagnostic includes impacts. normalized driven We benefit our to with benefits improvement grow. that's basis inflationary that gross be by customers points. that revenues as we our think CAG price basis We offset XXX for recurring us in the faster XX to help supported consistent progress XXXX. we and that, point grow help primarily margin XXX will That that gains,

also from for on including us, we to grow We're benefits improving and as in and ongoing benefit our And cloud-based profitability our job also business. focus our we're software great that software an business our expanding have the lab business. an expanding front. continuing excellent a improving business doing It's operations,

build us help number gross think our we of to profit we So on have a that drivers will gains.

commercial area capability to where over ongoing continuing our invested revenue We we're supporting. to we're are. we'll OpEx highlight very to that's in and us operations. this of that continue priorities globally for and And year We U.S. growth. think I that We're innovation we to had time. line terms high largely opportunities recently overall in invest with our our want commercial manage agenda. launching support have look an you In That's obviously that our our innovation been a investment platform profile, We in. and return try efficient to enhance expansion our at be the

assumption. that's a think reasonable I

do innovation and But to front. in to if sustain OpEx our line an that the grow on always that some growing, revenue plans the job a there's better opportunity prioritize think get and I with of we I think faster, agenda. leverage investment commercial are

Jonathan Block

then helpful. sort Okay. Great. of just question, clarification. was That second more long a very And

And visit want XQ negative I implied XQ So that sure the get XX.X% got expectation had right, to trying full it at of vet your quarter? to visit at X, vet CAG I growth is right. seems midpoint that expectation I what's that recurring. make of XQ if like the to the XXXX the X.X% to just for 'XX the X% sort then visits. for assumption? I'm just Was

you of And an then then get any a And what tailwind day global? anything X% have call Do quick this U.S. price tack-on, to to year? rates? just the out international think growth about that days? miscellaneous we the extra does for when versus about sort And

Brian McKeon

Okay.

post QX, on in understand think just maybe I simple largely assumes comments, this we're, flat to midpoint U.S. a the in So first my one, I way the clinical business the said this is

be that's January. So numbers. principally capture saw U.S. that we to headwind visit is -- clinical $XX seeing of risk, business, Whether from U.S. impact we think the we're that and million in about going will it that trying the we'll to there's

we're to in. not trying that's but QX, So factor we're a that headwind estimate trying that to for obviously

picture, time to is visits clinical QX midpoint largely flat, QX I the But assumptions think Jon, frame. bigger is midpoint, u.S. the are

think question to able guiding a net expecting versus realization not We're X%, regionally, execute this what the price we're year. international. globally price U.S. I solid with we're you had on consistent but

realization price U.S. And so without I expect being international solid think and we're, specific, in you should again, regions.

that And year. year clarity we QX in dynamic. that. we're share it's on highlighting days, have the issue an -- But go full We'll not and for don't full a through as or as we quarter-by-quarter kind of material

Jay Mazelsky

don't we further So have questions.

been questions. So with that, of thank pleasure call. now you for strong We'll another results. Q&A your IDEXX our morning's It's conclude a of review quarter to this portion

animal raise the summary, IDEXX standard address into well the sustain the decades-long us XXXX, built continue health we've of is to In care. which momentum opportunity to companion to help to positioned will significant care

our on utilization sector. navigate a standards environment external focused dynamic consistent highly diagnostics is us in helped Our of increased the has elevating and strategy the supporting of care factor key in

against strategic priorities and by as forward execution through teams XXXX to strong IDEXX we move continued beyond. across look forward our We

you thank your morning, we'll conclude now and So the this participation for call.

Operator

for today's concludes This participation. call. your Thank you

You may now disconnect.

IDEXX Laboratories (IDXX) 5 Feb 242023 Q4 Earnings call transcript