• Organic Revenue Growth (Q4 2024): 6% overall, with 7% in CAG Diagnostic recurring revenues.
• Operating Profit Growth (Q4 2024): 7% as reported, 8% on a comparable basis.
• EPS (Q4 2024): $2.62, up 10% on a comparable basis.
• Full Year Organic Revenue Growth (2024): 7% in CAG Diagnostic recurring revenues, 11% in recurring software and digital imaging revenues, 11% in water business.
• Full Year EPS (2024): $10.67, up 12% on a comparable basis.
• Gross Margin (Q4 2024): 59.8%, up 130 basis points on a comparable basis.
• Free Cash Flow (2024): $808 million, 91% of net income.
• Share Repurchases (Q4 2024): $249 million for 564,000 shares.
• Leverage Ratios (End of 2024): 0.7 times gross, 0.4 times net of cash.
• International CAG Diagnostic Recurring Revenue Growth (Q4 2024): 12%.
• VetLab Consumable Revenues Growth (Q4 2024): 12% organically.
• Instrument Placements (Full Year 2024): Approximately 18,500 premium instruments.
• Operating Margin (Full Year 2024): 29%, up 60 basis points on a comparable basis.
• 2025 Revenue Guidance: $4.055 billion to $4.170 billion, 4% to 7% growth on a reported basis.
• 2025 EPS Guidance: $11.74 to $12.24 per share, 8% to 12% growth on a comparable basis.

• Warning! GuruFocus has detected 2 Warning Sign with IDXX.

Release Date: February 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• IDEXX Laboratories Inc (NASDAQ:IDXX) reported a 6% organic revenue growth in Q4 2024, with CAG Diagnostic recurring revenues increasing by 7% organically.
• The company achieved a full-year EPS of $10.67 per share, marking a 12% increase on a comparable basis.
• IDEXX's international CAG Diagnostic recurring revenue growth was strong at 12% in Q4, supported by net price gains and improved volume growth.
• The company successfully launched IDEXX inVue Dx, a new cellular analyzer, with nearly 1,600 preorders globally by the end of Q4.
• IDEXX's software business saw double-digit growth in cloud-native PIMS placements, enhancing clinic efficiency and fostering deeper connections with practices and pet owners.

Negative Points

• US same-store clinical visit levels declined nearly 3% in Q4 and 2% for the full year in 2024, posing a constraint on IDEXX's growth.
• Rapid assay revenue was flat on an organic basis in Q4, constrained by pressure on US wellness visits.
• Operating expenses increased by 10% as reported in Q4, reflecting higher R&D spending.
• Foreign exchange had a negative impact on Q4 EPS, contributing to a $0.03 per share headwind.
• The company faces a 2% negative impact on full-year 2025 revenue growth due to foreign exchange rates.

Q & A Highlights

Q: Can you speak to what guidance assumes now in terms of the innovation contribution in 2025? Is that adding about a point to CAG recurring growth assumptions for you? Also, why are you limiting preorders for inVue in the US? A: Andrew Emerson, Senior Vice President of Corporate and CAG Finance, explained that the guidance includes approximately $50 million from inVue Dx instrument revenue with 4,500 placements. Jonathan Mazelsky, CEO, added that customer interest is high with 1,600 preorders. The controlled launch process aims to ensure an exceptional customer experience, and manufacturing and installation capacity are ahead of plan.

Q: Does your guidance assume any notable changes from a customer account standpoint, at point of care or Ref Lab? A: Andrew Emerson noted that the guidance includes a 4% to 4.5% price realization for the full year, with Q1 expected to be at the lower end due to lapping large customer agreements. The company anticipates continued strong momentum in expanding its installed base both domestically and internationally.

Q: Can you elaborate on the vet visit trajectory you expect from here? A: Andrew Emerson stated that the guidance assumes a similar decline in US clinical visits as seen in 2024, approximately 2%. Q1 trends are expected to align with Q4 2024, which saw a 3% decline. The company will provide more information as the year progresses.

Q: What led to the uptick in IDEXX premium for the quarter, allowing you to offset the decline in clinical visits? A: Brian McKeon, CFO, attributed the strong volume growth to increased consumable growth, progress in instrument placements, and innovation benefits like the Pancreatic Lipase Slide. Strong international momentum also contributed to the growth.

Q: Are you still limiting preorders for inVue, or are you fully allowing those now? A: Jonathan Mazelsky confirmed that the company has opened the funnel for preorders in North America, while internationally, it remains limited to select countries. The situation will be revisited throughout the year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.