Skip to content
    IDXX
    Earnings call· Jun 2026(Q2 FY26)

    IDEXX LABORATORIES INC /DE Q2 FY26 earnings call IDXX

    Aug 4, 2026 Source

    Executive summary

    IDEXX Q2 FY26 — Strong Diagnostics Growth and Raised Full-Year Outlook

    IDEXX delivered strong Q2 FY26 results, driven by robust diagnostic utilization and innovation, despite continued declines in U.S. clinical visits. The company raised its full-year outlook, reflecting momentum in CAG Diagnostics recurring revenues and strategic investments in R&D and commercial capabilities. Management emphasized the long-term growth potential from an aging pet population and expanding diagnostic offerings.

    Highlights

    5

    • Revenue increased 10% as reported and 9% organically in Q2 FY26.

    • CAG Diagnostics recurring revenues grew over 10% organically, with double-digit gains in both U.S. and international regions.

    • Comparable operating margin gained 110 basis points, supported by gross margin expansion.

    • Comparable EPS grew 15% to $4.27 in Q2 FY26.

    • Free cash flow conversion on a trailing 12-month basis was 110%.

    Concerns

    3

    • U.S. same-store clinical visits declined an estimated 1.3% in Q2 FY26.

    • Wellness visits declined below 3% in the U.S. during Q2 FY26.

    • CAG Diagnostic instrument revenues declined 20% organically in Q2 FY26 due to lapping the broad commercial availability of inVue Dx in the prior year period.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full year revenue
    $4.7 billion to $4.745 billion
    high materiality
    High
    Full year overall organic revenue growth
    8.5% to 9.7%
    high materiality
    High
    Full year organic CAG Diagnostics recurring revenue growth
    9.5% to 10.7%
    high materiality
    High
    Full year EPS
    $14.69 to $14.94 per share
    high materiality
    High
    Full year free cash flow conversion
    90% to 100%
    medium materiality
    High
    Full year capital spending
    approximately $180 million
    medium materiality
    High
    Full year reported operating margin
    32.3% to 32.5%
    high materiality
    High
    Second half U.S. clinical visit declines
    approximately 1.5%
    medium materiality
    Medium
    Q3 organic revenue growth
    in line with the implied second half growth range
    medium materiality
    Medium
    Q3 comparable operating margin expansion
    20 to 50 basis points
    medium materiality
    Medium

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    CAG Diagnostics
    Strong recurring revenue growth driven by volume and net price realization, despite U.S. same-store clinical visits decline. Instrument placements declined YoY due to lapping inVue Dx launch.
    recurring revenues grew 10.3% organicallyU.S. organic CAG Diagnostics recurring revenues grew nearly 10%International CAG Diagnostics recurring revenues grew nearly 12% organicallyCAG premium instrument placements reached 5,265 units1,602 IDEXX inVue Dx instruments placedover 1,000 new and competitive catalyst instruments globallycustomer retention globally remains in the high 90sinstalled base grew 11% year-over-year
    		—nearly 9%——
    Water
    Strong double-digit growth in both U.S. and international regions, benefiting from order recovery in the Middle East.
    		—13% organically——
    Livestock, Poultry and Dairy (LPD)
    Solid gains across regions.
    		—9% organically——
    IDEXX VetLab Consumables
    Growth from net new customer gains, premium instrument installed base, and expanded testing utilization, supported by Catalyst menu and inVue Dx recurring revenue.
    double-digit growth in both the U.S. and international regions
    		—14% on an organic basis——
    IDEXX Global Reference Lab
    Led by volume gains, driven by net customer gains and increased same-store utilization, including IDEXX Cancer Dx. Higher correlation to wellness visits.
    U.S. wellness visits declined 3.4%
    		—over 10% organically——
    Global Rapid Assay
    Returned to growth as impact from customer shifting pancreatic lipase testing to Catalyst platform eases.
    		—approximately 1% organically——
    Veterinary software and diagnostic imaging
    Driven by recurring revenue growth and strong placements of DR 50+ platform.
    recurring revenue growth of approximately 10%cloud-native PIMS installed base grew double digitssixth straight record quarter of digital radiography system placements
    		—approximately 12%——

    Operational metrics

    21
    Adjusted EPS
    $4.2715% comparable growth
    Q2 FY26

    EPS in the quarter included a $0.14 per share benefit related to share-based compensation activity compared to a $0.10 benefit in the prior year period and foreign exchange added $6 million to operating profit and $0.06 to EPS in Q2, net of hedge effects.

    Operating margin
    35%110 basis points comparable gain
    Q2 FY26

    Supported by gross margin expansion with benefits from strong recurring revenue growth and favorable product costs.

    Gross margin
    64%up approximately 120 basis points on a comparable basis
    Q2 FY26

    Reflects benefits from strong recurring revenue growth in IDEXX VetLab Consumables and Reference Lab volumes, operational productivity, and favorable business mix, including strong margin gains in Water and LPD businesses. Pricing benefits offset inflationary cost pressures.

    Net income to free cash flow conversion rate
    110%
    Trailing 12-month
    Gross leverage ratio
    0.6x
    Q2 FY26 end
    Net leverage ratio
    0.5x
    Q2 FY26 end
    Share repurchases
    $332 million$693 million year-to-date
    Q2 FY26

    Supported approximately a 2% year-over-year reduction in diluted shares outstanding in Q2.

    Organic revenue growth
    9%10% as reported
    Q2 FY26
    CAG Diagnostics recurring revenue organic growth
    over 10%
    Q2 FY26

    Double-digit gains in both U.S. and international regions.

    U.S. same-store clinical visits
    declined 1.3%
    Q2 FY26

    Wellness visits declined 3.4% in the U.S. during the period. IDEXX U.S. CAG Diagnostics recurring revenue growth premium to U.S. clinical visits of approximately 1,100 basis points.

    Global net price improvement
    approximately 4%
    Q2 FY26

    Average global net price improvement.

    CAG Diagnostic instrument revenues organic growth
    declined 20%
    Q2 FY26

    As we lap the broad commercial availability of inVue Dx in the prior year period.

    IDEXX inVue Dx instruments placed
    1,6022,700 instruments through the first half
    Q2 FY26

    On pace for full year inVue Dx placement goal of 5,500 units.

    Catalyst instruments placed
    over 1,000
    Q2 FY26

    New and competitive catalyst instruments globally.

    IDEXX Cancer Dx clinics ordering
    over 10,000
    Since launch

    Approximately 70% of Cancer Dx tests are run as part of a broader blood work panel. Over 20% of Cancer Dx orders come from practices using a competitive lab.

    Wellness visits with bloodwork
    around 1 out of 10
    Today

    Outside the U.S., it's much less, around 1/3 or even less than that in most countries.

    SDMA patient tests
    nearly 120 million
    Since 2015

    Customers have run nearly 120 million patient tests globally since introducing IDEXX SDMA in 2015.

    Fecal Dx parasite groups covered
    7
    Current

    Platform now covers 7 of the most clinically relevant intestinal parasite groups, enabling detection of 2x more infections than fecal flotations.

    Cloud-native PIMS installed base growth
    double digits
    Q2 FY26
    Fellow active users growth
    double-digit sequential growth
    Q2 FY26
    DR 50+ radiation dose
    up to 60% lowerthan premium competitors
    Current

    Industry KPIs

    9
    MetricValueDetails
    Pricing realized priceapproximately 4%%
    New product launch ramp2,700 instrumentsunits
    Procedure volume growthdeclined 1.3%%
    FCF conversion leverage guidance90% to 100%%
    Installed base system placements5,265 unitsunits
    Segment franchise organic growth9%%
    Consumables recurring revenue mix14%%
    Sales force commercial capacity build4countries
    Indicated addressable patient populationaround 1 out of 10

    Product announcements

    6
    ProductTypeDetails
    inVue Dxupdate
    inVue Dx FNA (Fine Needle Aspirate)expansion
    IDEXX Cancer Dxexpansion
    Catalyst chemistry profiles (CLIPS)update
    Fecal Dx antigen testing platformexpansion
    DR 50+ platformlaunch

    Risks & headwinds

    5
    Decline in U.S. same-store clinical visitsQ2 FY26 and H2 FY26

    1.3% decline in Q2 FY26; approximately 1.5% expected in H2 FY26

    Mitigation: Focus on 'visit quality' (diagnostic frequency and utilization), innovation (Cancer Dx, inVue Dx), commercial execution, and leveraging aging pet population trend.

    Pressure on wellness visitsQ2 FY26

    declined 3.4% in Q2 FY26

    Mitigation: Focus on increasing diagnostic intensity within wellness visits (e.g., bloodwork inclusion, Cancer Dx panel), leveraging innovation.

    Foreign currency effectsFull year FY26, Q3 FY26

    $15 million headwind to full year revenue outlook; $0.05 headwind to full year EPS outlook; 70 basis point headwind to Q3 reported revenues

    Mitigation: None explicitly stated other than acknowledging the impact.

    Muted puppy impactOngoing

    Not quantified

    Mitigation: Focus on aging pet population, which drives demand for diagnostics.

    Economic pressure on consumersOngoing

    Not quantified

    Mitigation: Focus on essential nature of diagnostics, value proposition of innovations.

    What to watch in Q3 FY26

    5

    inVue Dx FNA broad availability

    By the end of the year (FY26)
    CurrentProgressing through controlled launch, meaningfully expanded customer base in Q3.
    TargetBroad availability

    Why it matters

    This expansion is expected to significantly increase the evaluation of lumps and bumps, driving future consumables revenue and expanding the inVue Dx platform's utility.

    Given the platform within a platform nature of F&A, we're providing clinical practice team training as part of the rollout process with planned broad availability by the end of the year.

    Q&A highlights

    5

    How is the FNA rollout progressing, is it fueling inVue placements, and what is the expected impact on consumables flow-through, especially with broad launch?

    FNA rollout is on track with controlled launch, expanding meaningfully into Q3 for broad availability by year-end. It's a 'platform within a platform' addressing workflow challenges, and early results show more masses being evaluated. This is expected to drive upside in consumables over time.

    “F&A is a whole new application. So it's like a platform within the platform of inVue Dx. And so we're taking the time to train customers as we roll this out to make sure that they get the very best experience.”

    asked by Erin Wilson Wright · answered by Michael Erickson

    2 min read5 chapters

    Detailed Narrative

    01

    Innovation and Product Momentum

    IDEXX continues to drive growth through innovation, with inVue Dx placements on track for the full-year goal and positive customer feedback on its slide-free workflow and AI-powered results. The expansion of inVue Dx to include fine needle aspirate (FNA) for lump and bump evaluation, with planned broad availability by year-end, is expected to increase evaluated masses due to reduced cost and complexity. The company also enhanced Catalyst chemistry profiles to include SDMA for North American customers, streamlining workflow and improving kidney function detection.

    02

    Cancer Dx Expansion and Impact

    IDEXX Cancer Dx has surpassed 10,000 global clinics, addressing a critical need for early cancer detection and monitoring. The upcoming expansion to a multi-cancer panel in late Q3 FY26, including mast cell tumor detection at no additional price increase, is anticipated to be a significant catalyst for broader adoption and market share gains. Notably, over 20% of Cancer Dx orders already originate from competitive labs, indicating strong clinical demand.

    03

    Diagnostic Utilization and Pet Demographics

    Despite a 1.3% decline in U.S. same-store clinical visits, IDEXX's CAG Diagnostics recurring revenue grew significantly, driven by increased diagnostic frequency and utilization within visits. The aging pet population, particularly pets aged 5 years and older, is a key tailwind, contributing positive growth to both well and non-well visits, as older pets inherently require more diagnostic care. Management emphasizes improving 'visit quality' through enhanced diagnostic protocols.

    04

    Commercial Strategy and International Growth

    IDEXX is expanding its field presence in four international countries and making targeted U.S. additions, building on a proven playbook that links closer customer engagement with higher adoption and utilization of innovations. This strategy, combined with investments in lab networks and software (e.g., VetConnect), is driving strong international CAG Diagnostics recurring revenue growth of nearly 12% organically, reflecting significant headroom for sector development abroad.

    05

    Strategic Capital Allocation

    The company maintains a strong balance sheet with gross leverage of 0.6x and net leverage of 0.5x. IDEXX deployed $332 million in share repurchases in Q2 FY26 and $693 million year-to-date, contributing to a 2% reduction in diluted shares outstanding. Management continuously assesses M&A opportunities, particularly in diagnostics and software, while prioritizing organic growth investments and leveraging strong free cash flow conversion.

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