IDXX - Earnings call transcript Q1 2024 | IDEXX Laboratories, Inc.

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Operator

Good morning, and welcome to the IDEXX Laboratories First Quarter 2024 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

XXXX or generally GAAP GAAP. most financial call, reconciliation organic measures discussing not compared to be accepted of we growth accounting earnings by accordance website. unless in XXXX our directly growth provided In guidance, this the growth refer non-GAAP all principles During these to prior reviewing equivalent updated also otherwise quarter our certain with A please to the of references and which financial measures will prepared noted. Relations found to note visiting comparable growth, section period may release, in year be measures our first is the and Investor comparable results

idexx.com broad participation to in questions questions. questions, concludes. that after take the Today's their conference feel additional limit one may will get allow one to additional into the posted you be if we Investors back and time Q&A, free permits, with appreciate call participant as to each follow-up please ask have queue, your necessary. the We To we'll prepared earnings remarks

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

Brian McKeon

call. QX I'll and financial results outlook XXXX. Good updated morning, to quarter you take review and welcome our through first Today, our our earnings for

first supported CAG recurring X% strong increased growth organically, organic growth profit achieved IDEXX highlights, quarter. In by terms of revenue organic revenues. X% and gains revenues the Overall in Diagnostic in solid

IDEXX recurring and which net were gains X% overall estimated high lowered by pressure instrument revenue premium, January clinical a visit organic diagnostic trends we revenue from organic reflected revenues. and to growth in Solid execution in growth X.X% software strong, same-store of revenue remained CAG negative levels. X% to in Diagnostic growth added global U.S. U.S. IDEXX effects veterinary weather in severe continued XX% growth IDEXX premium and imaging gains recurring placements gains

gains. performance of payment. supported EPS prior Profit delivery by EPS delivery a XX% margin negative of excellent enabled the operating customer share. for EPS up of margin in $X.XX a quarter, X% gross comparable as a X% the lapping contract and Strong net basis, per was resolution growth impact was on year reported

full delivering our we pleased of trends XXXX continued our we're which outlook this the organic have to and continue Overall, performance financial clinics. veterinary expanding sector we incorporate end recent constrain macro outlook and financial business our growth to as with year. work high constrained updated our strong through will We've growth that progress in at estimate visit sector factors year

incorporated review net midpoint. generation. interest guidance consistent comparable year benefiting reinforcing reflect our our solid of in adjustments flow expense recent this cash for margin outlook estimates for also EPS goals the favorable comments. foreign at estimates we're our operating later operational from U.S. on and my our performance, We'll improvement strong strengthening We've updated the to detail updated Building first quarter This for exchange strong effects reflects dollar. to

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

gains levels. driven prior organic diagnostic revenue X% growth year X% organic imaging in supported veterinary recurring X% with in organically, overall CAG our in CAG by revenues software moderated high First a building was organic by growth growth decline and by LPD. growth revenues. in X% increased growth organic instrument placement XX% Water gains organic X% revenue business, gains XX% driven quarter revenue and by organic was CAG of organic on

price XXXX continue with benefits X%, to solid volume net recurring growth major organic expansion global strong organically QX revenue CAG second International end placements, and gains, from International recurring was double-digit reflected X% X% realization growth range. U.S. across by reflected building a results revenue business regions. global the premium net on and momentum. at in realization price high net half be Diagnostic execution price QX, our revenue supported supported Diagnostic average Diagnostic base. by solid recurring IDEXX gains improvement installed our in gains CAG which of of premium to X% increased instrument reflecting lower in driven year-on-year of this CAG instrument

diagnostic growth customer results new visit also reflect drivers, visit per realization. price increased to CAG high was the It in including Diagnostic IDEXX's QX, practice severe estimated levels, growth and which a impacts from levels levels growth U.S. overall net negative IDEXX which recurring frequency clinical growth benefits declined at retention X.X% in an of quarter, from U.S. January same-store compared revenue reflects clinical X.X% execution solid significant reflects business sustained premium weather. utilization organic continued the sustained diagnostic solid gains, and including level.

These and clinical Excluding weather U.S. U.S. from broader consumers our were ongoing first on targeted potentially estimated relatively visit pressure midpoint levels in reflect in staffing growth trends impacts. outlook. than at challenges the softer quarter impacts, cumulative veterinary macro clinics

in near-term believe owner pet and these drive guidance. our to outlook. revenue for of organic into it's solid organic This trends our is end care in revenue high the durable sector we and prudent IDEXX's factor growth, full services growth resilient, ability health adjustments year to to While XXXX and remains reflected continued confident demand we're execute

double-digit regions. year-on-year XX% across gains across solid gains U.S. achieved QX. X% gains premium modalities installed instrument in Consumable reflecting growth base, installed instruments. of One by increased VetLab base prior ProCyte X,XXX our One by revenue and high over IDEXX Catalyst, the ProCyte the and year-on-year was international Premium Hematology levels. placements single-digit This to compared organic We were our to consumable in reflecting increasing supported growth XX,XXX strong revenues global instrument high growth in our supported placed in growth with organic X% IDEXX in platforms. SediVue increase CAG year QX, an placements in global premium organically,

Catalyst mix revenues regions. the in placement quarter, reflecting and Global expanded Rapid international X% shifts Assay year-on-year decreased placements in in organically prior to high the year levels in comparisons placement Global driven high price higher including reflecting similar QX gains gains the net single-digit and organically, international benefits the Global from solid X% U.S. realization. revenues in by in increased Lab regions. U.S.,

were revenues placements. ecosystem. Software including software Diagnostic benefits XX% benefits revenues, Veterinary as overall data our XX% driven recurring momentum and from and cloud-based software to organic reflecting reported, by Imaging adds increased in platform ongoing organic which recent growth software our acquisition, in X% gains from

U.S. order timing. Livestock, QX, double-digit from and benefits shipment and organically. XX% increased revenues by Dairy driven higher including organically Water in Europe, decreased Poultry X% in revenues gains the

Solid screening Pacific were gains China moderated by related from impacts in China. herd in health levels the lower testing Asia in import comparison U.S. reduced testing higher to lower revenues including prior to swine and Europe year revenues,

growth We half moderate the in XXXX. expect second impacts negative these of to

Turning and reflected in a to profit the comparable software expansion. as lower gains results by were supported margin quarter margin basis. mix, were gross comparable on QX from Gross profit basis reported solid service margins a increased basis. the P&L. costs and XX.X%, benefits X% points instrument margin on business Gross XXX gains. Gross up

the to lapping aligned was with driven year-on-year OpEx R&D agenda, XX% increased related million expenses including contract increases our spending prior $XX impact resolution payment. a approximately by in was overall of growth of basis, operating advancing basis, reported customer a the X.X% development. innovation to platform growth of On QX as $X.XX related new X% XX% on negative QX, prior impact a customer resolution share increase reported including rate comparable of lapping a the per contract of in payment. growth X% EPS and an net EPS year

exchange limited Foreign impact on million had $X in and a net gross margin, EPS quarter, operating of the gain. hedge a profits

a XX-month free was basis, cash was normal our seasonality. QX, conversion On XX%. $XXX Free trailing flow to net cash in flow ratio reflecting million income

to full For the maintaining million. of flow XX%, $XXX we're cash conversion free outlook reflecting capital approximately for our spending XX% estimated year, of

Our outstanding million prior in to cash rate $XXX of to allocated as X.Xx first current levels. continue in ended a position. repurchases capital compared We to gross shares were the relatively quarter. leverage in balance and We sheet net X.Xx environment. balance Diluted year we our quarter manage flat sheet in of the the ratios interest remains with conservatively share strong

P&L organic full Turning end to to of updated goals. year our XXXX the reflect growth high our to full outlook adjustments year guidance. We've

incorporates reinforces our outlook Our adjustments to We've exchange comparable and impacts, for strengthening operating favorable year estimates also net full interest expense. improvement reflecting recent margin dollar. of goals for for solid foreign the U.S. the estimates revised

by revenues our a year organic visits, have trends U.S. million approximately the our also full our of half high more we've reported billion, X% for $X.XXX of $XX to strengthening $X.XXX Compared related growth guidance impact of recent our rate In X% capture outlook outlook updated the or $XX which a terms year the to reported billion negative the growth outlook estimates, of clinical full to to U.S. revenue recent first XXXX. We've earlier lowered for reduction revenue the at dollar. organic to updated midpoint. end revenue includes growth constrained million for of outlook,

for guidance revenues. organic growth is Diagnostic X.X% year X% supported X%, full recurring to CAG by to overall updated Our in gains now X.X%

organic For for by recurring IDEXX Diagnostic outlook our CAG reflect continues gains, overall year, for revenue growth solid the execution. to supported full expectations

late aligns X.X% U.S. similar clinic visits midpoint declines QX in approximately in with to Our expectations of QX, outlook trends.

clinical continues outlook visit a relative of half of XXXX, second to trends. The flattening U.S. midpoint assume our

our with growth expect approximately HX organic year by effects organic approximately equivalent overall growth. X% X.X% benefits revenue days in We rate limited overall benefit to effects, results full to growth reflecting from QX

global Diagnostic CAG year full of net approximately Our revenue improvement outlook for consistent reflects price expectations recurring X%.

execution. with maintaining XX the to negative XXXX, margin the our of In This operating basis XXXX lapping net high operating to profit a XX customer of impact of terms comparable of related full XX payment. margins to reported full in levels XX.X% continued expansion, outlook outlook of by contract our year QX resolution the basis point supported aligns points for year operating guidance, for XX.X% we're

$X.XX at updated Our year We outlook negative by $X.XX favorability projections. net to per per will outlook $XX.XX our foreign a unfavorable updated high mitigated share by per foreign EPS end approximately year driven estimates. improvement net per full $X.XX sustained down the exchange margin $X.XX share expense $XX.XX organic guidance share reductions are share interest estimates. impact, operating by midpoint, full estimate have of exchange our Operationally, prior EPS to to per updated from share is our revenue now of growth of

outlook X% we're revenue from to an X.X%, X.X% of reported of for our organic revenue incorporates aligns planning of headwind This from recent an to software range growth acquisition. growth net outlook of X% estimated X.X% terms growth benefits and with our growth QX, In for FX.

As revenue at clinical quarter. trends the the relatively softer noted, with of growth at outlook aligns midpoint, organic growth the seen the end U.S. QX visit first

QX, in for spending on XX.X% to to XX.X% concludes our basis, relatively factoring quarterly advancement. of higher down comparable margins new in moderately platform operating of review. flat support financial projections reported for planning We're a That R&D in

call Jay the his turn for over now I'll comments. to

Jay Mazelsky

good Thank to morning. diagnostics Animal you, development year IDEXX engagement. had sector of Brian, advance drive innovation customer start a continue Companion and to our strategy through we and to solid the the as the

Our growth in pet human in is the growth a the healthcare by Animal expansion as that growth secular profitability. vet is Companion services of ongoing enabled of in the services. the These ongoing durable benefits well as clinic pet Medical pet key diagnostics drivers supported population bond strengthened multi-decade include element Medical of progress Services. the and from and expansion turn have drivers

by focused is through and efficient clinicians supported strategy and software growth robust levels supporting diagnostic intuitive This agenda is model care. with customer-centered providing solutions. high an IDEXX's in on way, test a commercial delivering by leading enabling and our innovation unparalleled that their long-term sector helps of confidence testing of mission a business insight high-touch

in realization price solution, our global brought to high reflected customers. value business sector, teams life high executed products the deliver by recurring Solutions in CAG retention quarter, to net and point-of-care premium strategy including to delivered and One. gains, IDEXX placements, adopting solid of grew reflecting premium level a that across sustained new at increased interest Software and contribution instrument our Diagnostics a global teams who ProCyte continued our innovations in services platform IDEXX, healthy Diagnostics IDEXX's revenues. newest rates reflects again in expansion Our is expansion recurring the at solid commercial from strong that growth of high customer and revenues growth the supported collectively by our in once

recurring gains Cloud-based functionality. reflecting software IDEXX grow These to cloud-native suite expanded clinic again and growth in vet turn help their IDEXX full productivity. once revenues to drive and scope and interest solutions practices in organic placements the advance in in supported software double-digit stack the that quarter, veterinarians software continues as them to

Brian and work growth broader dynamics that staffing levels. in terms consumers pressure through of noted, we visit on impacted to As continue clinic have challenges

work performance against drivers Our to strategy of to challenges demonstrates near-term our advance key and quarter. strong business deliver strong expand our our continuing Today, of while business through strategic our an the potential. and ability first progress financial I'll growth provide during long-term IDEXX's to globally initiatives these overview performance

an with are which start the utilization on to Let's update commercial efforts, of software IDEXX's and our driving and adoption testing key solutions.

customers premium reflected level, approach. point first teams with global an placements instrument in to year. XXX,XXX levels urinalysis our to customers see testing consecutive of remains record This chemistry, care user adoption Customer their in instrument faster. in our This opportunity third installed high business. bringing excellent to IDEXX's continue retain are commercial to with global delivering mindset high base, is we individually a work, IDEXX progress consistently IDEXX of the by approximately high combined performance, the today and for experience customer-first the double-digit to hematology platforms. quarter at globally, Intuitive execute a global and foundational solutions our for aligned resulted at in this in-clinic premium for platforms growth total grow ability placement helping premium

more the the of all supported in at compared a ProCyte in by benefits international innovations as a developed is commercial of installed earlier One. opportunity. to gains its for paper workflow combined regions to than modular smaller run and from provide significant instrument high experience area commercial of and key continue placement our ProCyte growth. A we back-office more even reagents playbook that to U.S. strong hematology utilization the expansion greenfield legacy front focus global drive international of this international a with platform our on growth analyzers greater our One teams sales Progress continued upgrade. decades intuitive footprint deliver development Leveraging provides who stages U.S., to model, relatively are benchtop international due benefits productivity such our of is have to base which reflected new customers from successful premium

A revealed to of One delivers new across increase recent and analysis -clinic for and LaserCyte analyzers. with to consistent percent customers benefits per noted to ProCyte benefits uplift adoption regions. in who day customer retention major XX-plus also runs multiplier a business, Upgrades loyalty adoption of upgraded from in our platforms and other IDEXX

in CAG Our continued results installed another base revenues. recurring international expansion quarter of strong Diagnostics in our sector

U.S., important Our including continues X.X% net in new support sector to U.S. new well IDEXX integrated competitive like formation increasingly an software the the growth. solutions interest and platform High are new solutions, also benefits practices the X% aligned our ecosystem in which contribute to regions placements. driver of in to of to practices become has from among

appeal of dynamics with have strong new to IDEXX modified attach customer-friendly increased suites catalysts modalities. XXX practice to across and of testing in high full attracted point interest like care rates programs flexible Our and marketing growth

our leverage and to make new agenda, on advancing continue for development including the platforms solid IDEXX progress solutions, testing. advancing ongoing Building diagnostic our progress of adoption we of innovation

X, The and cellular VMX. powered development a Slide first IDEXX enabled kind, was first is AI network. currently at trained by IDEXX's Dx analyzer of The inVue pathology under that global of has advanced new its such announced testing X Cellular platform, topics Analyzer, by been platforms recently by

stages to in this year. customers of in fourth of platform shipping and begin as this its is is plan quarter the schedule we proceeding final Development to to

and benefits. cytology medical practice appreciate while the the positive, reach cutting-edge consistent be practices educating feedback a for veterinary other a high which morphology, quarter that playbook. seek blood IDEXX's and forward The that feedback element Our both to who have This it technological this IDEXX and remains customers workflow standards. is general also tools highly commercial solutions of exam. efficacy which aspirate both our example, begun globe across new on needle multiplier with accounts IDEXX. another clinical across in practices, corporate engage testing the need We building helps solutions their X metrics of innovative international that by reflect complete powerful to look highly of critical piece IDEXX commercial customers conferences. Customers to specialists reflect daily the menu up on building of with using the may technology at a domestic support have Early are and well, revenue innovations ear by this relevant experience from to the from for resonated on delivering productivity enthusiasm new customers busy high-performance teams is innovation, now. the Clinicians hematology to

At IDEXX, new innovation goes beyond platforms.

portfolio insights, how Our complement products technology opportunities We we're inVue DX improved means value our life to which platform, inVue insights greater recently the to our IDEXX morphology to UA premium that easy add or analyzers. launched VetLab generation blood our on-market DX. our for constantly assessing hematology approach new Similar IDEXX on new use. for complements a with efficiency of

offering from for interpretive launched see detection innovations IDEXX that recently support IDEXX bolsters renal reference next with benefiting make further VetLab PLUS, The essential and results diagnostics. health test run new In the SediVue recent best-in-class we integrations guidance the with a time Station brings easier to clinicians UA, our UA and urine that use provided SNAP, from protein saving decisions. form commonly is with VetConnect injury features medical Dx urine steps are labs highly IDEXX actionable VetLab X and to driving on where parameters Analyzer a our kidney including practice factor, also modernized on attractive, differentiated informed team's PH on enhanced IDEXX customers. building merged momentum

America, solid, in year. We've customers launch and the exists to later now utility almost just with its of is at growing XX,XXX in veterinarians of U.K. deepen tests plan increase innovation XXX,XXX this of Europe Australia based test estimated and Experience by the on North the understanding awareness since and important December ordered U.S. Significant over Awareness clinical launch. to runway over launched is recent this survey XX% work. of with test.

perform Imaging significant addressing well and needs. continues to business is Software unmet IDEXX's and customer

revenue our strategy growth to communication software a across seamlessly drive supporting IDEXX. a workflow SaaS profitable for integrated recurring cloud-first advantages and while of building ecosystem clinic that Our productivity delivers double-digit stream

growth is looking for products. all and virtually to for unrewarded tools their mission an administrative create customers end Strong to modern It diagnostic workflows supported with care software increasingly practice IDEXX are is via native increasingly freed from placement customers communicate these on digitally partnering By by test streamline cloud-based with now assess insights, solutions, and pursue customer. patients.

diagnostic ecosystem. IDEXX platforms on we're also the focused and our menu, enhancing software Like

that Vello, announcement platform, our the recent an to thrilled live we software, Our Pet Western officially and our veterinarians this, communication Veterinary IDEXX late is March. in us with tool Owner newest supporting disjointed, Practice a time-consuming. at where workflows. of went announce efficient is increasingly and Veterinarians Conference their example client Management were Engagement which friction Vello tell within embedded streamlined provides tools processes and high powerful directly that more are interactions

and customer many, from benefits no-shows business benefits fewer drive improved stabilization suite IDEXX's as health The to recurring IDEXX. our increasing also are Vello and vertical multiplier software revenues expanding Vello customer of while of adopters that profitable including compliance our their are outcomes. benefiting with growth better early delivering Diagnostics helps diagnostic the software supports relationships deeper

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across while commitment we're proud passion the have results. prepared quarter, strong Overall, in I'll for areas multiple our purpose-driven remarks financial excellent and XX,XXX now and work. customer conclude our thanking of we very the how advanced by delivering initiatives for strategic ongoing an incredible our also first experience IDEXX employees your business

animals, Your and strong contribution providing future a IDEXX against care critical supporting in role Diagnostics to diagnostic our highly play a on IDEXX planet, sector, Companion against remains in software insights. help objectives deliver including but attractive, providing goal not only our a start people and helps also excellent financial teams deliver XXXX. The our of for better based Animal solutions

result, positioned a horizon. the are and over growth As financial solid to very we deliver long-term well results

on and continued team, wellbeing you for on So focus livestock. pets, thank of the health the behalf management enhancing people and of your

Now let's the Q&A. for open line

Operator

to JPMorgan. Instructions] go with first We'll [Operator Schott Chris

Christopher Schott

right guess. But this at actually dynamics vet than that, versus at terms corporate just more versus would macro be about we you're there's seeing a where It guess seems in you're bit demand in challenges some as the And capacity particular, you think year others? like consumer much the trends. if optimistic piece is like know comments best a made on this now, just bit elaborate both of that visit point? it capacity your linked I'm latter? of trends is Can either what your guidance regions just for earlier any acutely and maybe how more I'm interested the maybe the erosion what's visits. just practice wondering And maybe seeing you of just in impacting was it I little this a or initial visit to seems private stabilization on macro ongoing

Brian McKeon

a Thanks dynamics. over then but talk first did visits to were we flattening little we've I weather provide last internationally, trends for was the clinical we expected for was anticipate U.S. impacts, trends emerge. expecting think some versus softer in to numbers I we -- it on can the had the prior The Maybe would saw that and about -- that quarter. On to softer. I that Jay Chris. the what than we underlying our of clarity planning mentioned were in year we the good call, upfront quarter relatively highlight turn out We to quarter. HX. question, we make were growth and talked about the coming down building so continues relatively X.X% the been And the had a progress on very volume in

in U.S. are of highlight, may impacting be to ongoing here the broader challenges some consumer but we I'll that those. is staffing specific more the I could demand. issue. this relatively And talk impact impacts margin there think be related Jay So challenges, are But there capacity also to working did a that practices through, let

Jay Mazelsky

from vis-a-vis sure. be Yes, it continue practices. We increase that way of invest a the entertainment, largely is and sort from spend their placements in positive standpoint. the a positive. their very -- continue the outlook. in with spend very software, that practice know both And X%. saw thing. we see that we or They the and in owners customer priorities, consumer standpoint, conversation services other on out travel, seeing technology of it When to veterinarian for about They're pet it very having meaning to the significant I building customers new We're we're pets formation. we pet dinner, then healthcare the The owner standpoint, prioritize is on general think

help being think health And this recognize working resilient been point, I remain see the sector. To from Brian's be to that impacts macro for to standpoint both a cumulative customers They whole, as solution to affecting able trends some practices continues staffing So a technology on ongoing which animal we and and the challenges a we them. at see the have potentially both the outlook durable visit as IDEXX continue do also be may a and partner optimistic margin. the industry and through.

have on we approach We focus we a -- that can things control. and and those lot orientation, really from standpoint our

lot of teams the those confidence and from We commercial standpoint. very an have positive development we're a cylinders. in on think hitting the really and on execution dimensions, innovation And our operational product all teams of I

Operator

Rich Goldman next to Nathan go with We'll Sachs.

Nathan Rich

Can hear you Great. okay? me

Jay Mazelsky

do. We

Nathan Rich

back Great. kind of running I wanted year, the of of benefit. mentioned out effect on be too, to just to talked just different comment quarter we And a kind playing that degree be of improvement slight within able see think getting like you line balance know to the there's about over X.X% kind there, I traffic in below over your of -- follow that. days guess, end lines questions. confidence where curious sounds a business up as you it year? about prior the in first would guess, bit on But may I expectations. about that's traffic a you you the Chris' that I April more is of guess balance importantly, you of guess expect with some decline? in I levels. I the relative improvement in of the maybe

Brian McKeon

Well, help to second first a to I'll to take moment the of with some bridging. try half just half

my our of growth And QX, have So in you organic X.X%. to expectations highlighted our results. I X% QX comments, the around obviously

in similar in trends we assuming to visit we've exiting is March. we're midpoint saw clinical what assumed the outlook QX that at What

results, first in-quarter our would what the growth in QX We comment X.X%. in that apply minus QX. take just on the midpoint we're approximately that's outlook highlighting So planning don't with trends And X% organic the if you half.

approximately organic second The X% half growth. imply would

have we We'll days We through highlighted. software favorable see our is overall One a select We growth We're like we'll targeting have noted. to in that that benefit are QX higher lapping that we equivalent have should days some some factors largely flowing areas us. other positive factors business. half in LPD. in better dynamics

relatively for touch do well. at will be U.S. that And we of that know factors as that those So a I trends flattening Jay support and can have see we assumption positive midpoint an clinical visit number assumption on.

Jay Mazelsky

X%, Yes. I that clinical strong. would Great. is higher continue from our healthy to couple One the frequency total diagnostics there's little bit than a to in practice growth, revenue of utilization. highlight. is a QX diagnostics and see We things at that actually mean, I remain saw which growth perspective, over rates that have X%, continued revenue we

investing software help. investing remain a technology. systems. They're reduction we will is those to to think on productivity it back metrics benefits they're Vello, tools in IDEXX's client time our message We a see their practices, like earlier PIM is we be a on productive. tightly application with my of know It continue which gets So We to practices which in diagnostics. and staff. there integrates invest. strong. more to They're And becoming know in think engagement drag enables we be will no-shows, in very big uplift over It terms continuing

doing we're part positively. play clinics, in with time, we over out So our and will that think partnering

Nathan Rich

some of the view that over that curious strength. operating this. your the saw of to maybe quick despite sustainable, be first about I like just the you could on strength balance If Brian, talked you year. in the change kind should but guidance, didn't And Great. the I'd the you of quarter. that margin get guess, margin were just those driving follow-up a on ask I gross It be the sounds factors

cadence dynamics the think helpful? the of as thinking that be would should we year be over balance we any the about So about

Brian McKeon

organic outlook. good gross To sustained start had high the about taking your our We the in despite Sure. we margin down end and of very profit the the performance terms that growth performance. outlook point, feel we

think reflects execution to ability benefits operating year. this confidence of our in getting deliver that that I So and underlying the operational the we're solid gains margin just some

I some there are noted, think QX. select we costs lower being instrument dynamics in

Some outflow alleviating. an of chain of that the been have impacts is sort pandemic of supply that

relatively performance time I to outlook the over financial been think can part, we more that we So solid through through we the the had year most benefit highlighting. we QX we gains saw we've margin reinforces the that will reinforcing in that some as work a is this But I of performance for dynamics for think see expect year. than macro the operating strong near-term comparable deliver and

Operator

to with of Ryskin America. We'll next Bank Michael go

Michael Ryskin

now Can coming, persist a -- X.X you've improvement, second declines. you've for levers temporary got see I it the the We're you the you're for hear in the what could hit we still let's you different to if sort what years it visits. If you're expectations. behind vet a vet price was guiding continues of sort I pull increase and get in persist operating underlying you but of initially this, this lag We're and started in XXXX, second once. and say, to way. in current step to and at example, you waiting I'll and continue this continue terms of the took dynamic working in-view to got to hear still trends that. In want know other half, numbers? about almost back, If years, I try but to price visit effect you through leverage. of trends took this talking about in a -- talk really to and recovery a ask for I we prior comps into take macro, as seen it

think would So you just visits how address sort us through pressure, that? of talk you remain how would if under

Jay Mazelsky

as QX. I couple a standpoint, business. portfolio. From the consists has indirect It would the leverage is innovation plan a impact overall Yes. things. One of think, both in agenda, the a across point-of-care begin point on that, you to to portfolio We we and obviously, innovation very inVue that think our I direct strong. we highlighted, have, really shipping is,

software, then leverage overall a our very received as positive -- whole. sector. impact, antigen. of well twofer for our stronger the in and of has [indiscernible] supporting the acute out -- has has offering not great expanded We growing. the which also reference lab think and an but which overall builds menu know has business, the sort been renal preventive franchise fecal vertical never menu injury kidney a the impact been that test on individual and that's care overall We And screening it is being menu I that, only really diagnostics important our overall

benefits see growth. to execution some seen quarter commercial continues at high on We a be our level. quarter think some we've internationally I nice really quarter, very really where on

in investments regions. been country the think have off made that I we've paying individual and

retaining owners to in over and just training staff those productivity nice think So trends continuing I confidence those are what we and visit the improve. saw are seeking performance doing we through And around it's example. the underlying they will work EMEA, and the And attractiveness trends, time generating them and in highlighted. for customers really we think as demand support of our dynamics practices clinical pet the we've that have

Brian McKeon

Mike, the -- think strong solidly consistently deliver grow I'd and performance. just demonstrated ability financial And grow continue we've to to reinforce, I

our even and kind dynamics the of that are was those the as way recent off will through we work a through we've to growth agenda, to think so some kind strong of while of results. base I deliver established growth the more things advance to of we behind pandemic the continuing And been that highlighting, macro continue that higher important financial find invest post

So and outlook. we would that to strong track to committed support that record remain build we a

Michael Ryskin

in Okay. half? the some price increase cost table? another second But the would that consider potentially or on again you Is taking controls

Brian McKeon

supports more R&D we're investing the growth come. about strong today in there and shared highlighted we've we and margin what's agenda, and year laid invest we year, What our EPS our this improvement and we reinforce, -- I outlook outlook X% we advancing to assumptions that we approximately out price going think that the operating this as our comparable we're excited for expect to

that financial we So we're today. outlook our shared in confident

Michael Ryskin

Jay, a one I on said Okay. to the remains just quick -- prepared And follow-up. then really in squeeze I inVue could your remarks you inVue think in continues that if track.

been terms on You learnings unveiled later that X reception than Talk talked that realized what's versus when maybe But the that? of vets, ramp? it. about we'll it. you're Any along I of further it actually some releasing VMX, sort feedback X X, of in from capabilities months sort able months first of about still to What's you you're at offering at some the been from obviously. launch be early the of

Jay Mazelsky

in very time-consuming morphology. that the about enthusiastic like the been practice, Yes. and critical either use have customers, the high-volume, within fact -- They've general, blood product very itself. been it cases cytology They addresses

One be of they're feel they're that And things complete it doing just to be going blood like CBC they they now that as of more or should customers they it because workup. doing the continue do just to is a tell able to sense. of us a hematology part lot makes morphologies know

this suite. And so of And I they're think we looking VetLab -- IVLS and a just a worthy and our send station folks that whole. We're part level that suite, really overall they're of provides just that they a it. awareness workflow see forward that remind VetLab too, we point-of-care benefits, that the customers, have to generation the would about we as our Station, the to optimization as enthusiastic and next of very is as extension also overall increasing and

So really excited.

journalists I've about it. also within as that fits it I description, enthusiastic practice laid across think corporate out, are specialists, accounts both

well which the both discussion front and I think optimization. and do had front. a the fits retention dimension gets we and think morning productivity of medical how I of at productivity support addresses staff to questions this as we've this the And least practice, the clinical to continue capacity it around some the of the the on as bill

Operator

Erin with next to Stanley. go Morgan We'll Wright

Erin Wilson Wright

about landscape? practices little changes that? of Great. of have share an kind seen competitive kind accounts across as advantage opportunity And corporate bit clearly to take distribution of how you to in there's there's you more any and smaller think of And see Can can a notable been some you well? disruption terms some share in talk either terms of if gains, that ownership gains the more structure, I'm or of about date? meaningful the thinking Do just you market

Jay Mazelsky

-- end-to-end full I with see that we've that point to that we and we've it software pet being or that labs of not our differentiator tie the corporate software. We're competitors, tell on competitive Yes, together within us help to it's relative that is the think and level a just the to with is take that in really application a takes is able care the practice the in whole. integrated true set as support or the of our and of increasingly as to be think practices now a they progress the on, like provide. at largest a nature independent terms able a I digitally They communicate pleased with always landscape, what Vello, want they all to that them which What engagement able market, obviously, said, still we very overall advancing solutions. the patient U.S. say what the supports differentiators focus customers, customers our includes and suite as of provisionally to And being workflow next indirect terms in client being global -- would they of basis, made the reference environment. We owners our

continue and it's a to get off enthusiastic able to new where practices do as strong practices, my in partner we remarks a I've start, them focus of see about for formation be help those new are there, also practice to IDEXX as area We an us. indicated well been to

in the we're front, and overall, our transparent we're think that So doing well. of advance and pretty I both placements, continues and how agenda competitive within terms we're commercial to new Obviously, internationally, nicely. and U.S. doing on

Erin Wilson Wright

Okay. seems think have time guess fine you kind line of contracts. well? the where the competitor customers to of the the us feedback equipment the is be do needle timing sort out XXXX? Or focus that exclusive getting how aspiration can about then remind kind and of inVue some into of we And that or fits that I initially Or swapping how strategy is you on existing we're where as to on and there? of earlier

Jay Mazelsky

Yes.

the VetLab focused initially questions where with already with focused they customers. SediVue, of they'll couple -- way, or have the obvious a mix suite, we enjoy SediVue who focus we standpoint, IDEXX. We The that least customers So the IDEXX saw were a of from know inVue sales, their standpoint, fit there. IDEXX our our right workflow targeting partnership by at more saw in customers and from obviously, existing with that on already

a look, give we and us opportunity entree So other which great competitive it with into solutions. leverage road was fresh and accounts the a chemistry hematology and then to down

the needle important In this at to ability more a aspirate, And we'll hard terms next. fine of which customers enthusiastic we've cancer working all We're clients practice to it's as medicine. very is about of closer. great point aspirate get said talk diagnostics, of fine it. is know that their We and we really are expand about needle set and at

Operator

to next Jon Block go Stifel. with We'll

Jonathan Block

to don't the shocker your to sort -- hit on just I'm because of going tailored and try that a data. really seeming to with also is to visits I think stock need largely

you For constraints macro overall visits, mentioned the visits. vet capacity on weighing

our of seem sensitivity checks like it call pet to higher some from a out, And owner. tease the

Xx X, cases there. and that somewhere You're many marking up taking in that, in X, be price might

if sticker think Just think Brian, your couple we back getting industry X% about past so, sensitivity more on to a I So over your LRP, I'm call pet question. just shock? owner rather sort on price you years? of curious, that, do on it's of than anecdotally, price the bit identifying are the later? overstep it a Did this broader And sooner

Jay Mazelsky

Yes.

to The that. control [indiscernible] take in Jon, and the obviously -- -- practices I'll up pricing me Let to that's we don't veterinarians.

practices. for when who factor the things driver them. pandemic, staff. and a the stability challenge and into coming long-term of a that's I was really retain in supporting fellows a that thing And that's they We good owners, their think investing out that. staff They're are of pet within of real point a lot So their think upscale

that. the to pricing customers, pricing We good -- them in standpoint, of of we back our conversations From some from what always, their They do business to capacity with see a they're optimistic. helps we with equilibrium we continue for pricing technology, deliver. over maintain think continue time. invest practices standpoint, and look value we a They around when have the alleviating to challenges to heavily get

We biomarkers no Cystoisospora, and provide parameters B, like additional Cystatin continue to charge.

margin obviously that that equation. But So in panels on acknowledge the may the macro pet existing be owners. them included some are impacts of cumulative the help those at we affecting the value end

Brian McKeon

And Yes. reinforce what seeing. X% price consistent the delivering point, And And our factor which continue with were realization we globally. that approximately think with pricing earlier in. we that Jon, to on to the we'll is is align value net we're inflationary dynamics our shared just I outlook we underlying XXXX, Jay's for

Jonathan Block

Okay.

you Sorry about talked try questions. ones that. in the And then Brian, let vet me bunch just small maybe to about I've the a of second throw have midpoint. question. to visit the embedded as data other extrapolating box think it still you some the gotten simple lower out Is when coming. then the for end, just X.X%, as your we just negative call about guidance? And this have it,

a you've hitting level, and investor second a about presentation in just after you August, at in the box X then market alluded timing to talk in or high perspective in that premium, from think that XQ more VMX TBD data just 'XX maybe think officially back, the can still past? last taking out So step I as are think if recall the just similar it you people separate do from months January we excited that's about really in stop what almost was I year, grade getting think a manner? Just visit a a the about in XX I if handling that at we about introduced it guys can really the when like right?

Brian McKeon

question? you're trying what were trying clarify Jon, asking? your get wanted when to I what... you Yes, -- said follow to year it at to can just a clarify was question first full you you just just

Jonathan Block

Yes.

I that Is of first the Brian. XQ as recurring. it in take I'm X.X% was down but X.X% think it band I of XH. for XH, as just hopefully, has and with CAG and your it, That's Is of simple the call call part. that's the end, for sort lower sort DX and right, essentially visits midpoint it guide just in just maybe it Sorry, a simple your the in flat extrapolate then what's embedded going of where and out like lower

Brian McKeon

which continue valid, be that us leading factor softer, be broader considerations, could lower be to trends I is but set a would directionally, is towards point a obviously the your if think end. It's of -- that

Jonathan Block

the new box? And then on

Brian McKeon

Look, forward to I look sharing more.

As I driver commercial second benefits a on used to that see that we -- too. very an of very we the when lot time. and get we'll closer that, past the to on business. are multiplier our as that over excited inVue our We're And will that's more sales contribute platform. and as closer the our we'll advance about in know, we'll we've our maintain continue And business about that you track. share we we over we're to share directly, know and And to launch, is launch. also and we'll excited for approach have advancing additive force we time, being And that

Operator

go We'll BNP with next Navann Ty Paribas. to

Navann Ty Dietschi

followups on visits. vet few A

addressing health owner assist And to If you the and has date? your are you side, any on on please? and another the visits, could for can follow-up using shortages on full what comment discuss the vet technicians wellness non-wellness, on assumptions pet industry the of vets, U.S. progress mental vet vet year this continued? And macro progress vets to and more headwinds

Jay Mazelsky

owners of increasing challenges and tell pandemic, and pet back side, stabilized. of hours. by, us Coming think Yes. there is customers out staffing the benefits lot industry a the some has and what veterinarian an was profession what that I responded we salary think, I see From churn and cutting the largely

largely I think, have impacts, So stabilized. those

have practices to of hired training more steps. those training, internal sort more, think extent cases, some programs hire instituted in the they've they more, taken were to I able that have and

as more also, They've technology. invested in I mentioned earlier,

far think labs reference helps more software, just they're equipment, our I that technology, of time. save use them around receptive

cumulatively, Sometimes minutes can on highly procedure, other that XX worthwhile. think the per it may but matters, XX I that be be minutes, hand,

Operator

to go Ryan Blair. We'll next Daniels William with

Ryan Daniels

Maybe time. in just the of interest one quick one

life longer-term know as talked growth than you kind larger utilization pets cycle. post data You've I age pet And some about dynamics of pandemic. higher population the also diagnostic the about through their of have normal

seeing could diagnostic through benefits the us that in might use? you start we to when if the flowing curious thoughts in your industry I'm of So regards on give

Jay Mazelsky

time really even adult we increases dog. is see over it with What young the

an proportion adult -- So more generally, and and that get there's and as lot adult even obviously absolute visits, but both expands. a it there's they a cats of very and stage. as healthcare they diagnostics kittens. healthcare puppies and young amount services become accelerates both or there's And modest dollar dip, the as geriatric grows services, dogs then And into quickly then

it has does been wellness go linear stages, different stages. exams. on able -- It's So over our things focus up all accelerating to just the is time. testing really through young not that through including adults and life like or But

is that, to call forward reiterating you continued Okay. the against with to growth high diagnostics your morning. look from lead the the and IDEXX growth call. for the all development teams And of standard now Thank finish to the across I'll increase organization. portion our helping conclude execution utilization. IDEXX's Animal of for multi-decade Q&A committed questions initiatives we'll this care Companion today's opportunity is by our sector, participating for that supported organic we Healthcare and strategy of by the significant

development long-term capabilities for builds outlook and and in ongoing that decades financial reflects And now, sector have you. to we made the we'll call. results Thank investments end XXXX growth of business Our our off aligned framework.

Operator

conference today's call. conclude does This

now You may disconnect.

IDEXX Laboratories (IDXX) 1 May 242024 Q1 Earnings call transcript