Skip to content
    IDXX
    Earnings call· Mar 2026(Q1 FY26)

    IDEXX LABORATORIES INC /DE Q1 FY26 earnings call IDXX

    May 5, 2026 Source

    Executive summary

    IDEXX Laboratories Q1 FY26 — Strong Diagnostics Growth Despite Clinical Visit Headwinds

    IDEXX delivered a strong first quarter, exceeding expectations with robust organic revenue growth driven by diagnostic innovation and commercial execution, despite a decline in U.S. clinical visits. The company raised its full-year revenue and EPS guidance, reflecting confidence in its growth model and the continued expansion of diagnostics utilization. Leadership changes are underway, with a focus on accelerating innovation, commercial reach, and AI integration.

    Highlights

    5

    • Revenue increased 14% as reported and 11% organically, driven by strong execution and innovation.

    • CAG Diagnostics recurring revenues grew over 11% organically, with U.S. up nearly 11% and international up approximately 12%.

    • Premium instrument placements saw 28% organic growth, including 1,100 IDEXX inVue Dx analyzers.

    • Comparable operating margin expanded by 100 basis points, supported by gross margin expansion.

    • Comparable EPS grew 15% to $3.47 per share, with full-year EPS outlook raised by $0.13 at midpoint.

    Concerns

    3

    • U.S. same-store clinical visits declined approximately 1% in Q1, primarily due to a 3% drop in wellness visits.

    • Global Rapid assay revenues were flat organically, impacted by customers shifting pancreatic lipase testing to Catalyst, creating an estimated 2% headwind.

    • International Water business growth was impacted by supply chain dynamics in the Middle East.

    Guidance & targets

    16
    CategoryTargetConfidence
    Full-year 2026 overall revenue
    $4.675 billion to $4.76 billion
    high materiality
    High
    Full-year 2026 reported revenue growth
    8.6% to 10.6%
    high materiality
    High
    Full-year 2026 overall organic revenue growth
    7.7% to 9.7%
    high materiality
    High
    Full-year 2026 organic CAG Diagnostic recurring revenue growth
    8.7% to 10.7%
    high materiality
    High
    Full-year 2026 EPS
    $14.45 to $14.90 per share
    high materiality
    High
    Full-year 2026 comparable EPS growth
    11% to 15%
    high materiality
    High
    Full-year 2026 free cash flow conversion
    85% to 95% of net income
    medium materiality
    High
    Full-year 2026 capital spending
    approximately $180 million
    medium materiality
    High
    Full-year 2026 U.S. clinical visits
    decline of minus 1.5%
    medium materiality
    Medium
    Full-year 2026 reported operating margin
    32.1% to 32.5%
    high materiality
    High
    Q2 2026 reported revenue growth
    7.3% to 9.3%
    medium materiality
    High
    Q2 2026 overall organic revenue growth
    6.7% to 8.7%
    medium materiality
    High
    Q2 2026 CAG Diagnostics recurring revenue growth
    8.5% to 10.5%
    medium materiality
    High
    Q2 2026 reported operating margins
    33.9% to 34.3%
    medium materiality
    High
    Full-year 2026 IDEXX inVue Dx placements
    5,500 placements
    medium materiality
    High
    IDEXX Cancer DX new test launch
    third test
    medium materiality
    High

    Segment performance

    8
    SegmentRevenueYoYQoQMargin
    CAG Diagnostics recurring revenues
    Strong performance despite U.S. same-store clinical visit declines.
    U.S. organic growth: nearly 11%International organic growth: approximately 12%Equivalent days benefit: approximately 50 bpsGlobal net price improvement: approximately 4%
    		—11%——
    CAG Diagnostics instrument revenue
    Strong placements aligned with expectations.
    inVue Dx analyzers placed: 1,100 units
    		—28%——
    Water business
    International growth impacted by supply chain dynamics in the Middle East.
    U.S. growth: strongInternational growth: low single-digit
    		—7%——
    Livestock, Poultry and Dairy (LPD) business
    Solid gains across regions.
    Gains across regions: solid
    		—7%——
    IDEXX VetLab consumable revenues
    Driven by net new customer gains, premium instrument installed base, and expanded testing utilization.
    Double-digit growth in U.S. and international regionsDouble-digit volume expansion
    		—15%——
    IDEXX Global Reference Lab revenues
    Supported by IDEXX Cancer DX attracting new customers and broadening diagnostic use.
    Volume growth: solidNet customer gains: doubled from prior yearSame-store utilization: doubled from prior year
    		—10%——
    Global Rapid assay revenues
    Impacted by customer shift to Catalyst platform.
    Headwind from pancreatic lipase shift to Catalyst: approximately 2%
    		—flat——
    Veterinary software and diagnostic imaging
    Supported by cloud-based PIMS and DR50 PLUS launch.
    Recurring revenue growth: 11%Diagnostic imaging systems installations: approximately 330 (record)
    		—11%——

    Operational metrics

    36
    U.S. same-store clinical visits
    -1%YoY
    Q1 FY26

    Decline primarily driven by wellness visits, partially offset by non-well visits.

    CAG Diagnostics recurring revenue growth premium to U.S. clinical visits
    1,100
    Q1 FY26

    Highlights outstanding performance by commercial teams despite visit declines.

    CAG premium instrument placements
    4,650+12% YoY
    Q1 FY26

    Quality of placements remains superb.

    IDEXX inVue Dx instruments placed
    1,100
    Q1 FY26

    Tracking to full year expectations for 5,500 placements.

    Premium instrument installed base growth
    12%YoY
    Q1 FY26

    Supported by success in placing instruments and high customer retention.

    Cancer Dx customers
    over 7,500
    since launch

    Major differentiator for reference business, driving competitive lab transitions.

    Catalyst customers
    nearly 79,000+1,000 new and competitive customers in Q1
    current

    All customers have access to new and expanded menu.

    Cloud-native PIMS platform installed base growth
    double digitsQoQ
    Q1 FY26

    Strong interest with virtually all placements now cloud-based.

    Vello growth
    double digitsfrom last quarter
    Q1 FY26

    Pet owner engagement application gaining traction.

    Diagnostic imaging systems placements
    approximately 330record
    Q1 FY26

    Benefiting from the launch of DR50 PLUS platform, fifth consecutive quarterly record.

    IDEXX Telemedicine volume growth
    very strong
    Q1 FY26

    Supported by modernized integration with IDEXX Web PACS.

    Operating expenses comparable growth
    11%YoY
    Q1 FY26

    Advancing investments in global commercial and innovation capabilities.

    EPS benefit from share-based compensation
    $0.09
    Q1 FY26

    Related to share-based compensation activity.

    EPS negative impact from loss on equity investment
    $0.05
    Q1 FY26

    Included in Q1 EPS.

    Foreign exchange impact on operating profit
    $14 million
    Q1 FY26

    Net of hedge effects.

    Foreign exchange impact on EPS
    $0.14
    Q1 FY26

    Net of hedge effects.

    Net income to free cash flow conversion rate
    99%
    trailing 12-month

    Achieved on a trailing 12-month basis.

    Leverage ratio (gross)
    0.6x
    end of Q1 FY26

    Finished the period with low leverage.

    Leverage ratio (net of cash)
    0.5x
    end of Q1 FY26

    Finished the period with low leverage.

    Share repurchases
    $361 million
    Q1 FY26

    Deployed capital towards share repurchases.

    Diluted shares outstanding reduction
    2.1%YoY
    Q1 FY26

    Supported by share repurchases.

    Full year revenue outlook constant currency improvement
    $32 millionfrom initial guidance
    FY26

    At midpoint, building on strong Q1 performance.

    Full year reported revenue outlook foreign currency benefit
    $10 millioncompared to prior estimates
    FY26

    Related to foreign currency changes.

    Full year growth benefit from foreign exchange
    approximately 90 bps
    FY26

    At rates outlined in press release.

    Sensitivity to U.S. dollar strengthening
    $12 million
    remainder of year

    Would reduce revenue and EPS.

    Full year organic CAG Diagnostic recurring revenue net price realization
    approximately 4%
    FY26

    Included in outlook.

    Full year comparable operating margin improvement
    50 to 90 bps
    FY26

    Reflecting increased expectations.

    Operating margin headwind from discrete litigation expense
    30 bps
    FY26

    From 2025.

    Operating margin headwind from loss on equity investment
    30 bps
    FY26

    In current year.

    Operating margin benefit from foreign exchange effects
    30 bps
    FY26

    Offsetting headwinds.

    Full year EPS outlook operational performance increase
    $0.13at midpoint compared to prior guide
    FY26

    Increased projections.

    Full year EPS outlook benefit from updated foreign exchange rates
    $0.05
    FY26

    Outlined in press release.

    Q2 organic revenue negative impact from equivalent days
    50 bps
    Q2 FY26

    Impacts overall organic revenue growth.

    Q2 comparable operating margins expansion
    10 to 50 bps
    Q2 FY26

    Expect increased spending during Q2 related to timing of projects.

    Cytology done manually globally
    over 100 million, 150 million
    current

    Sizable opportunity for inVue Dx.

    F&A (Fine Needle Aspirate) procedures done
    around 12 million
    current

    90% or more of masses don't get investigated due to manual effort and cost.

    Industry KPIs

    11
    MetricValueDetails
    System utilizationexpanded
    Pricing realized priceapproximately 4%%
    New product launch ramp1,100units
    Procedure volume growth-1%%
    FCF conversion leverage guidance99%%
    Installed base system placements4,650units
    Segment franchise organic growth11%%
    Consumables recurring revenue mix15%%
    Sales force commercial capacity buildin place
    Indicated addressable patient populationover 100 million, 150 millioncytologies
    Pivotal trial clinical evidence milestonesstrong adoption

    Product announcements

    1
    ProductTypeDetails
    ImageVue DR50 PLUSlaunch

    Risks & headwinds

    5
    Decline in U.S. same-store clinical visitsQ1 FY26, full year estimate of -1.5%

    -1% in Q1 FY26, wellness visits declined -3%

    Mitigation: Increased diagnostic frequency and utilization per visit, strong commercial execution, benefits from innovation, focus on aging pet population.

    Impact of customers shifting pancreatic lipase testing to Catalyst platformQ1 FY26

    approximately 2% headwind to Q1 revenue growth for Global Rapid assay revenues

    Mitigation: Catalyst platform is an IDEXX product, so it's an internal shift rather than a loss of business.

    Supply chain dynamics in the Middle EastQ1 FY26

    Impacted low single-digit growth in international regions for Water business

    Mitigation: Company continues to work through it.

    Increased spending related to timing of projectsQ2 FY26

    Expected to impact Q2 operating margins, resulting in 10 to 50 basis points expansion on a comparable basis (lower than Q1's 100 bps).

    Mitigation: This is a planned investment, not an unforeseen headwind.

    Foreign currency fluctuationsRemainder of FY26

    a 1% strengthening of the U.S. dollar would reduce revenue by approximately $12 million and EPS by $0.04 for the remainder of the year.

    Mitigation: Company uses hedge positions (negligible impact on Q1 gross margins).

    Q&A highlights

    8

    Analyst expected more than 1,099 inVue Dx placements in Q1 given the 5,500 full-year target, asking about pacing dynamics and confidence in the full-year number.

    Management expressed high confidence in the 5,500 full-year target, noting that Q1 placements can be choppy due to customer mix but market receptivity is strong.

    “Keep in mind, we came off a very strong year in 2025 and Q4. We have a high degree of confidence in the 5,500 number. It tends to be -- you get some choppiness quarter-to-quarter, just based on customer mix of independents versus corporates.”

    asked by Michael Ryskin · answered by Jay Mazelsky

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 Performance Highlights

    IDEXX achieved 11% organic revenue growth in Q1 FY26, driven by strong CAG revenue gains (12%) and 7% growth in both Water and LPD businesses. CAG Diagnostics recurring revenue grew 11% organically, benefiting from a 50 basis point equivalent days impact and 4% global net price improvement. This performance led to a 15% comparable operating profit gain and 15% comparable EPS growth.

    02

    U.S. Clinical Visit Trends

    U.S. same-store clinical visits declined 1% in Q1, with wellness visits down 3% and non-well visits up 20 basis points. Despite this, IDEXX's U.S. CAG Diagnostics recurring revenue grew nearly 11%, demonstrating an 1,100 basis point premium to clinical visit growth, attributed to increased diagnostic frequency and utilization per visit. Growth in clinical visits for pets 5-plus years old showed positive momentum for the third consecutive quarter.

    03

    Innovation and Product Adoption

    The company saw strong adoption of its innovations. InVue Dx placements reached 1,100 units in Q1, tracking towards the 5,500 full-year target, with utilization aligned to expectations. The controlled rollout of F&A is progressing well, with plans for a broader launch in Q2 and full volume ramp in H2. Cancer Dx saw a major international launch in Europe and Australia, with 7,500+ practices ordering since launch in North America, and a third test expected by end of 2026.

    04

    Software and Imaging Growth

    Veterinary software and diagnostic imaging organic revenues increased 11%, driven by double-digit growth in cloud-based PIMS installations and strong nonrecurring growth from diagnostic imaging systems. The new ImageVue DR50 PLUS led to a record 330 installations, marking the fifth consecutive quarterly placement record. Vello, the pet owner engagement application, also gained traction with double-digit growth.

    05

    Capital Allocation and Financial Strength

    IDEXX generated $234 million in free cash flow in Q1, maintaining a full-year outlook for 85% to 95% net income conversion. The company deployed $361 million towards share repurchases, reducing diluted shares outstanding by 2.1% year-over-year. Leverage ratios remain low at 0.6x gross and 0.5x net of cash.

    06

    Leadership Transition and Future Outlook

    Jay Mazelsky will transition to Executive Chair, with Mike Erickson taking over as CEO. The company remains optimistic about the multi-decade opportunity, emphasizing the deepening human-animal bond and the critical role of diagnostics. Future priorities include accelerating innovation, expanding commercial reach, and leveraging AI to drive deeper patient insights.

    AI-generated summary of the company’s earnings call. Not investment advice.