Veterinary diagnostics specialist Idexx Laboratories (IDXX -0.46%) reported fourth-quarter earnings on Monday, Feb. 3, that topped analysts' consensus top- and bottom-line estimates. Revenue for the quarter came in at $954 million against the expected $935 million. Earnings per share (EPS) came in at $2.62, exceeding the forecasted $2.40. The positive results were largely driven by strong growth in its Companion Animal Group (CAG) segment.
Overall, Idexx enjoyed a solid quarter, reflecting its continuous progress and success in its markets.
| Metric | Q4 2024 | Q4 Estimate | Q4 2023 | Change (YOY) |
|---|---|---|---|---|
| EPS (diluted) | $2.62 | $2.40 | $2.32 | 13% |
| Revenue | $954 million | $935 million | $901.6 million | 5.8% |
| Gross margin | 59.8% | N/A | 58.4% | 1.4 pps |
| Operating margin | 27.4% | N/A | 27.2% | 0.2 pps |
Source: Idexx Laboratories. Note: Analyst consensus estimates for the quarter provided by FactSet. YOY = Year over year. pps = Percentage points.
Idexx Laboratories offers a variety of products and diagnostic services globally, primarily catering to the veterinary market. Its Companion Animal Group leads the company’s revenue generation, providing in-clinic diagnostic tests, laboratory services, and practice management platforms.
Focusing its efforts on innovation, Idexx recently introduced the inVue Dx™ Cellular Analyzer to streamline veterinary workflows. With strong R&D investments, the company continues to expand its diagnostics portfolio, including the anticipated launch of a canine lymphoma diagnostic tool. Securing success in international markets, and emphasizing high-margin consumables, remains key to its growth strategy.
Idexx's expectations beat was aided by significant contributions from the CAG diagnostics segment, which reported 6% growth. Revenue growth was positively affected by robust VetLab consumables sales, which increased by 12%, highlighting the strength of its recurring revenue model.
The Water segment grew a solid 8% year over year, backed by effective pricing strategies and increased international demand. Despite the gains, operating expenses grew by 10%, primarily due to strategic investments in research and development (R&D) and expanding commercial capabilities.
Additionally, Idexx commenced shipping its new inVue Dx™ cellular analyzer, which is positioned to improve diagnostic efficiencies. This development aligns with Idexx's ongoing innovation initiatives which are crucial for maintaining its competitive edge. Idexx’s gross margin increased to 59.8%, up from 58.4% last year, benefiting from favorable pricing and a stronger business mix. Operating margins saw a slight improvement to 27.4%, underscoring operational efficiency gains.
Looking at dividends, no notable changes were announced, thus maintaining Idexx’s historical payout trends. One-time events were not a significant factor during this quarter, contributing to a broadly stable financial picture.
Management projections for 2025 remain optimistic, with anticipated revenue ranging from $4.06 billion to $4.17 billion and EPS guided between $11.74 and $12.24. This outlook is supported by anticipated continuous growth in the CAG segment as well as international market expansions.
Investors should monitor the company’s planned share repurchases, approximately $1.5 billion, indicating confidence in future cash flow and financial health. As Idexx deepens its focus on high-growth areas such as oncology diagnostics and emerging markets, stakeholders are encouraged to pay attention to these strategic shifts.
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