IDEXX Laboratories — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 revenue was $1,214 million, representing a 10% increase as reported and organic compared to the prior year.
• Earnings per diluted share (EPS) were $4.01, an 18% increase as reported and a 22% increase on a comparable basis.
• Gross profit increased 12% as reported and on a comparable basis, with gross margin expanding to 62.9% (up 110 basis points as reported and 90 basis points on a comparable basis).
• Operating margin was 33.1% for the quarter, up 100 basis points as reported and 60 basis points on a comparable basis.
• Operating expenses increased 10% as reported and 11% on a comparable basis.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $1,063 million.
• Free cash flow for the nine months ended September 30, 2026, was $978 million.
• Cash and cash equivalents stood at $198 million as of September 30, 2026.
• Total debt (line of credit and long-term debt) was $774 million as of September 30, 2026.
• Deferred revenue was $40 million as of September 30, 2026.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance raised to $4,741 million – $4,767 million (midpoint up $32 million), reflecting reported growth of 10.1% – 10.8%.
• Full-year 2026 organic revenue growth guidance raised to 9.3% – 10.0%.
• CAG Diagnostics recurring revenue reported growth guidance raised to 11.0% – 11.7%; organic growth guidance raised to 10.3% – 11.0%.
• Full-year 2026 operating margin guidance lowered to 32.1% – 32.3%, projecting margin expansion of 50 – 70 basis points.
• Full-year 2026 EPS guidance raised to $14.96 – $15.16, reflecting reported growth of 14% – 16% and comparable growth of 15% – 16%.
• Projected 2026 net interest expense is approximately $32 million.
• Projected 2026 capital expenditures are approximately $160 million.
• Projected 2026 operating cash flow conversion is 110% – 120% of net income; free cash flow conversion is 95% – 100%.
• Foreign currency exchange rate assumptions for 2026 include: euro at $1.12, British pound at $1.32, Canadian dollar at $0.70, Australian dollar at $0.69, Japanese yen at ¥160, Chinese renminbi at ¥6.80, and Brazilian real at R$5.05.

Business Segments and Product Lines:

• Companion Animal Group (CAG) revenue grew 10% as reported and organic.
• CAG Diagnostics recurring revenue grew 11% as reported and organic, with International regions up 13% reported/14% organic and U.S. up 10% reported/organic.
• IDEXX VetLab™ consumables revenues grew 14% reported and 15% organic.
• Reference laboratory diagnostic and consulting services generated 10% reported and organic revenue growth.
• Rapid assay products revenues increased 1% as reported and organic.
• CAG Diagnostics capital instrument revenues were flat as reported and organic, with over 1,900 IDEXX inVue Dx™ analyzers placed during the quarter.
• Veterinary software, services, and diagnostic imaging systems revenues grew 11% reported and 10% organic.
• Water revenues grew 8% as reported and organic.
• Livestock, Poultry and Dairy (LPD) revenues increased 3% as reported and organic.
• The Company acquired CoVet, an AI clinical assistant, during the period.

Market and Competitive Landscape:

• CAG Diagnostics recurring revenue growth outpaced sector growth levels.
• Strong same-store volume growth, net customer gains, and premium instrument installed base expansion drove performance.
• The global premium instrument installed base expanded by 11%.
• The installed base of IDEXX inVue Dx™ analyzers reached nearly 11,000 instruments.

Risks and Challenges:

• Forward-looking statements involve risks including macroeconomic events, geopolitical instability, trade policies, severe weather, supply chain challenges, and the ability to successfully integrate CoVet.
• Actual results may differ from projections due to foreign currency exchange rate volatility and acquisition impacts.
• A concluded litigation matter in 2025 resulted in a $80 million payment, which impacted prior year comparability.

Management Commentary and Tone:

• Mike Erickson, President and CEO, stated the Company delivered "exceptional third quarter results" reflecting strong commercial execution and momentum from an innovation-driven growth strategy.
• Management highlighted innovations including IDEXX inVue Dx with FNA and IDEXX Cancer Dx becoming a multi-cancer panel.
• Management noted the acquisition of CoVet supports veterinary team productivity and diagnostics utilization.

Other Key Points:

• The Company repurchased $816 million of common stock during the nine months ended September 30, 2026.
• Average shares outstanding are projected to reduce by approximately 2% in 2026.
• The effective tax rate for 2026 is projected at approximately 20.5%.
• The Company hosts an Investor and Analyst Session at VMX in Orlando on January 18, 2027, to highlight the IDEXX MultiCue Dx™ analyzer.
• Days sales outstanding were 46.7 days as of September 30, 2026.
• Inventory turns were 1.5 as of September 30, 2026.