IDXX

A month has gone by since the last earnings report for Idexx Laboratories (IDXX). Shares have lost about 7.8% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Idexx due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for IDEXX Laboratories, Inc. before we dive into how investors and analysts have reacted as of late. IDEXX Laboratories reported second-quarter 2026 earnings of $4.27 per share, up 18% year over year. The figure surpassed the Zacks Consensus Estimate by 8.1%. Comparable constant-currency EPS of $4.07 improved 15% year over year. Revenues rose 10% to $1.22 billion and topped the Zacks Consensus Estimate by 1.3%. Results benefited from volume-driven Companion Animal Group (“CAG”) Diagnostics’ recurring revenues, increased diagnostic utilization and continued adoption of IDEXX’s innovations. CAG Diagnostics’ recurring revenues advanced 11% as reported and 10% organically. CAG revenues increased 9.4% year over year to $1.12 billion. Organic growth was 8.7%. International CAG revenues climbed 13.4% as reported and 11.5% organically, while U.S. revenues advanced 7.4%. IDEXX VetLab consumables revenues increased 14.7% to $430.3 million, with organic growth of 13.6%. Performance was supported by higher testing utilization, recent product launches, net new customer gains and an 11% expansion of the global premium instrument installed base. Reference laboratory diagnostic and consulting services revenues rose 10.6% to $406.7 million. Organic growth was 10.3%, driven by higher testing volumes and customer additions. Rapid assay product revenues increased 1.3% to $101.6 million. Water revenues advanced 15% year over year to $58.6 million and 13% organically. This growth reflected solid performances in the United States and Europe. Livestock, Poultry and Dairy revenues increased 11% to $35.2 million, with organic growth of 9%. Strength in the Americas supported the improvement. Gross profit increased 12% to $779.1 million. Gross margin expanded 140 basis points to 64%, supported by recurring revenue volume gains, operational productivity initiatives and net price realization. Operating expenses rose 10% to $353.5 million as IDEXX invested in commercial capabilities, innovation and information technology. Operating profit climbed 14% to $425.6 million, while operating margin expanded 140 basis points to 35%. IDEXX exited the second quarter of 2026 with cash and cash equivalents of $196.9 million compared with $200.5 million at the end of the first quarter. Cumulative net cash provided by operating activities was $613.4 million compared with $423.7 million in the prior-year period. IDEXX has updated its 2026 revenue guidance to $4.70-$4.75 billion from $4.68-$4.76 billion. The midpoint increased $5 million despite a projected $15-million headwind from updated foreign exchange assumptions. The company now expects reported revenue growth of 9.1-10.3% and organic growth of 8.5-9.7%. The Zacks Consensus Estimate is currently pegged at $4.72 billion, indicating 9.6% year-over-year growth. IDEXX raised its 2026 earnings outlook to $14.69-$14.94 per share from $14.45-$14.90. The Zacks Consensus Estimate is currently pegged at $14.81. In the past month, investors have witnessed a downward trend in fresh estimates. At this time, Idexx has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Idexx has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Idexx is part of the Zacks Medical - Instruments industry. Over the past month, Glaukos (GKOS), a stock from the same industry, has gained 5%. The company reported its results for the quarter ended June 2026 more than a month ago. Glaukos reported revenues of $185.61 million in the last reported quarter, representing a year-over-year change of +49.5%. EPS of -$0.14 for the same period compares with -$0.24 a year ago. Glaukos is expected to post a loss of $0.12 per share for the current quarter, representing a year-over-year change of +25%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.8%. Glaukos has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report Glaukos Corporation (GKOS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

IDEXX Laboratories recently reported past second-quarter 2026 results showing higher revenue and earnings, and slightly raised its full-year 2026 guidance for revenue, operating margin and EPS. The company also introduced the Catalyst proBNP Test, the first dual-species, in-clinic NT-proBNP cardiac test, expanding its connected veterinary diagnostics portfolio and tapping into an underassessed companion-animal heart disease market. We’ll now examine how the new Catalyst proBNP Test and raised 2026 guidance may reshape IDEXX’s broader investment narrative. Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. To own IDEXX, you need to believe in a long runway for companion-animal diagnostics, driven by higher testing per visit and a sticky installed base. The near term catalyst is continued growth in high-margin recurring diagnostics, while the main risk is pressure on U.S. vet visit volumes and pricing. The Catalyst proBNP launch and slightly higher 2026 guidance modestly support the recurring-revenue story but do not fundamentally change these core drivers or risks. The most relevant announcement is IDEXX’s raised 2026 outlook, now calling for revenue of US$4,700 million to US$4,745 million and EPS of US$14.69 to US$14.94. This tighter, higher range reinforces the idea that product innovation like Catalyst proBNP, layered onto a large installed base and growing test menu, can help offset softer U.S. visit trends and competitive pressure by lifting test utilization and supporting margins in the near term. Yet for all the optimism around new tests and higher guidance, investors should still be mindful of how persistent U.S. visit softness could... Read the full narrative on IDEXX Laboratories (it's free!) IDEXX Laboratories' narrative projects $5.7 billion revenue and $1.5 billion earnings by 2029. This requires 8.7% yearly revenue growth and about a $0.4 billion earnings increase from $1.1 billion today. Uncover how IDEXX Laboratories' forecasts yield a $709.14 fair value, a 24% upside to its current price. Some of the most optimistic analysts already expected IDEXX to reach about US$5.9 billion of revenue and US$1.6 billion of earnings by 2029, and they see launches like Catalyst proBNP as supporting a much larger recurring diagnostics opportunity than consensus, even as others worry that cost conscious care models could still limit how far this upside really goes. Explore 4 other fair value estimates on IDEXX Laboratories - why the stock might be worth just $595.98! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your IDEXX Laboratories research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision. Our free IDEXX Laboratories research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate IDEXX Laboratories' overall financial health at a glance. The market won't wait. These fast-moving stocks are hot now. Grab the list before they run: Uncover the next big thing with 19 elite penny stocks that balance risk and reward. Invest in the nuclear renaissance through our list of 90 elite nuclear energy infrastructure plays powering the global AI revolution. Find 49 companies with promising cash flow potential yet trading below their fair value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include IDXX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8:30 a.m. ET President and Chief Executive Officer - Mike Erickson Chief Financial Officer - Andrew Emerson Vice President, Investor Relations - John Ravis Operator: Good morning, and welcome to the IDEXX Laboratories Second Quarter 2026 Earnings Conference Call. As a reminder, today's conference is being recorded. Participating in the call this morning are Mike Erickson, President and Chief Executive Officer; Andrew Emerson, Chief Financial Officer; and John Ravis, Vice President, Investor Relations. IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today. Additional information regarding these risks and uncertainties is available under the forward-looking statements notice in our press release issued this morning as well as in our periodic filings with the Securities and Exchange Commission, which can be obtained from the SEC or by visiting the Investor Relations section of our website, idexx.com. During this call, we will be discussing certain financial measures not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is provided in our earnings release, which may also be found by visiting the Investor Relations section of our website. In reviewing our second quarter 2026 results and updated 2026 guidance, please note all references to growth, organic growth and comparable growth refer to growth compared to the equivalent prior year period unless otherwise noted. [Operator Instructions] Today's prepared remarks will be posted to the Investor Relations section of our website after the earnings conference call concludes. I would now like to turn the call over to Andrew Emerson. Andrew Emerson: Good morning. I'm pleased to take you through our second quarter results and provide an updated outlook for our full year 2026 financial expectations. During the second quarter, IDEXX delivered excellent financial results, building on strong execution and expansion of IDEXX innovations in our Companion Animal business. Revenue increased approximately 10% as reported and 9% organically, supported by over 10% organic growth in CAG Diagnostics recurring revenues, with double-digit gains in both the U.S. and international regions, and strong global growth in our Water and LPD businesses. CAG Diagnostics recurring revenue growth was led by expanded volumes, while U.S. same-store clinical visits declined an estimated 1.3% in the quarter. Premium instrument placements reached over 5,200 units in the quarter, including approximately 1,600 IDEXX inVue Dx analyzers, on pace for our full year inVue Dx placement goal of 5,500 units. IDEXX's operating performance was excellent with comparable operating margin gains of 110 basis points, supported by gross margin expansion with benefits from strong recurring revenue growth and favorable product costs in the quarter. Operating profit gains enabled earnings per share of $4.27 in the quarter, resulting in EPS growth of 15% on a comparable basis. Strong second quarter performance supports an increase to our full year outlook while advancing incremental growth investments. We're updating our full year revenue range to $4,700 million to $4,745 million, an increase of $5 million at midpoint, net of a $20 million increase in operational performance, offset by a $15 million headwind from updated foreign currency effects. Our updated full year overall organic revenue growth outlook is 8.5% to 9.7%, and with organic CAG Diagnostics recurring revenue growth of 9.5% to 10.7%. These organic growth ranges represent an increase of approximately 40 basis points at midpoint to our previous guidance, aided by global momentum in our CAG Diagnostics recurring revenues. We're also increasing our full year EPS outlook to $14.69 to $14.94 per share, an increase of $0.14 per share at midpoint, reflecting a 13% to 15% comparable EPS growth range. We'll provide further details on our updated 2026 financial expectations later in my comments. Let's begin with a review of the second quarter results. Second quarter organic revenue growth of 9% was driven by nearly 9% CAG revenue gains, 13% growth in our Water business, and 9% growth in LPD. Strong CAG results were supported by CAG Diagnostics recurring revenue growth of 10.3% organically, net of a 50 basis point negative impact related to equivalent days and average global net price improvement of approximately 4%. As expected, CAG Diagnostics instrument revenues declined 20% organically as we lap the broad commercial availability of inVue Dx in the prior year period. U.S. organic CAG Diagnostics recurring revenues grew nearly 10% in Q2, including strong volume gains and net price realization aligned with our full year expectations. U.S. same-store clinical visits declined 1.3% in the quarter, reflecting an IDEXX U.S. CAG Diagnostics recurring revenue growth premium to U.S. clinical visits of approximately 1,100 basis points. Pressure on wellness visits remains the primary constraint to clinical visits, with non-wellness visits showing modest growth. We continue to see growth in pets 5 years and older across both categories. IDEXX benefits from quality of clinical visits with an increasing number, including diagnostics and broader use of diagnostic testing menu. With a substantial majority of wellness visits today not including bloodwork, we see inclusion as a long-duration volume lever that does not depend on visit recovery. International CAG Diagnostics recurring revenues grew nearly 12% organically in Q2, sustaining double-digit gains, led by volume growth. International performance continues to be driven by IDEXX execution with volume gains from net new customers, supported by expansion of our premium instrument installed base and same-store utilization, including benefits from IDEXX innovations. IDEXX continued to deliver strong organic revenue gains across our major global testing modalities in the second quarter. IDEXX VetLab consumable revenues increased 14% on an organic basis, reflecting double-digit growth in both the U.S. and international regions. Consumable revenue growth included benefits from net new customer gains in our premium instrument installed base and expanded testing utilization. IDEXX innovations, including our expanded Catalyst menu and growing benefits from inVue Dx recurring revenue continue to support utilization gains across our customer base. CAG premium instrument placements reached 5,265 units during the second quarter, resulting in an expected year-over-year decline as we lapped the broad commercial availability of inVue Dx in the prior year. Instrument placements remained high quality. Globally, we placed 1,602 IDEXX inVue Dx instruments in Q2 and over 1,000 new and competitive Catalyst instruments globally, with nearly 300 in the U.S. IDEXX Global Reference Lab revenues increased over 10% organically in Q2, led by volume gains. Reference Lab carries a higher index to wellness visits, which declined 3.4% in the U.S. during the period. Performance was driven by net customer gains and increased same-store utilization, as existing customers adopted broader testing menu, including IDEXX Cancer Dx. Global Rapid Assay revenues increased approximately 1% organically in Q2, returning to growth as the impact from customer shifting of pancreatic lipase testing to our Catalyst instrument platform eases. Veterinary software and diagnostic imaging organic revenues increased approximately 12%, driven by recurring revenue growth of approximately 10% during the quarter and continued strong placements of the DR50 Plus platform. Our cloud-native PIMS installed base grew double digits, creating an expanded customer footprint to improve workflow and enhance diagnostic protocols in the clinic. Water revenues increased 13% organically in Q2, with strong double-digit growth in both the U.S. and international regions, including benefits from order recovery in the Middle East. Livestock, Poultry and Dairy revenues increased 9% organically in the quarter, with solid gains across our regions. Turning to the P&L. Strong recurring revenue growth and favorable product costs enabled 12% comparable operating profit gains in the quarter, with reported operating margins achieving 35%. Gross profit increased 12% in the quarter as reported and 11% on a comparable basis. Gross margins were 64%, up approximately 120 basis points on a comparable basis. These gains reflect 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 our Water and LPD businesses. Pricing benefits offset inflationary cost pressures, which eased in the quarter compared to our expectations. On a reported basis, operating expenses increased 10% year-over-year and 9% on a comparable basis. We expect to maintain growth in operating expenses through the remainder of the year as we advance investments in our innovation agenda and global commercial capabilities given strong revenue performance. Q2 EPS was $4.27 per share, an increase of 18% as reported and 15% on a comparable basis. 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. Free cash flow was $323 million in Q2 and $557 million for the first half of 2026. On a trailing 12-month basis, our net income to free cash flow conversion rate was 110%. For the full year, we're increasing our outlook for free cash flow conversion to 90% to 100% of net income, including full year capital spending consistent at approximately $180 million. Our balance sheet remains strong, finishing the period with leverage ratios of 0.6x gross and 0.5x net of cash. We maintained deployment of excess capital towards share repurchases, allocating $332 million during the second quarter and $693 million year-to-date. Capital allocated to share repurchases supported approximately a 2% year-over-year reduction in diluted shares outstanding in Q2. Turning to our full year 2026 outlook. As noted, we're increasing our outlook for overall revenue to $4,700 million to $4,745 million. At midpoint, this reflects a $20 million operational improvement from our prior guidance, building on strong second quarter performance, including CAG Diagnostics recurring revenue expansion. Our updated reported revenue outlook includes a $15 million headwind related to foreign currency changes compared to our prior estimates. This reflects a reported revenue growth of 9.1% to 10.3%, including approximately a 60 basis point benefit to full year growth from foreign exchange at the rates outlined in our press release. As a sensitivity, a 1% strengthening of the U.S. dollar would reduce revenue by approximately $8 million and EPS by $0.03 per share for the remainder of the year. Our updated overall organic revenue growth outlook of 8.5% to 9.7% includes organic growth range of 9.5% to 10.7% for CAG Diagnostics recurring revenue, including approximately a 4% benefit for global net price realization. At midpoint, we're anticipating second half U.S. clinical visit declines of approximately 1.5%, reflecting similar Q2 trends. Business momentum combined with recent and upcoming product launches support our outlook for the second half and the full year. In terms of key financial metrics, we're updating our reported operating margin outlook to 32.3% to 32.5% for 2026, reflecting an increased expectation of 70 to 90 basis points for full year comparable operating margin improvement, supported by gross margin gains from strong recurring revenue growth. We're advancing incremental investments in commercial and R&D during the second half, supporting our long-term growth agenda. Our updated full year EPS outlook is $14.69 to $14.94 per share, an increase of $0.14 per share at midpoint, driven by operational performance compared to our prior guide. EPS also includes an increase of $0.05 per share related to share-based compensation benefits, offset by a $0.05 headwind from updated foreign exchange rates. For the third quarter, we're planning for organic revenue growth in line with the implied second half growth range, and foreign currency impacts creating a 70 basis point headwind to reported revenues at rates outlined in the press release. In the quarter, we're planning for modest comparable operating margin expansion of 20 to 50 basis points, with reported operating margins expected to be 32.5% to 32.8%. That concludes our financial review. I'll now turn the call over to Mike for his comments. Michael Erickson: Thank you, Andrew, and good morning. IDEXX delivered an exceptional second quarter with execution across all key growth drivers: expansion of diagnostic utilization, growth in our instrument and customer base, and continued advancement of our broad-based innovation pipeline. The structural importance of diagnostics in the veterinary practice supported increased diagnostic frequency and utilization, even as overall clinical visit growth remained a modest headwind. We continue to see tailwinds from the aging pet population, with pets aged 5 and older contributing positive growth across both well and non-well visits. Pets are living longer, and we know that pets, like humans, require more care, including diagnostics as they age. Turning to commercial execution. Instrument placements in both competitive conversions and greenfield accounts remain strong, and our installed base grew 11% year-over-year. Each new placement is a long-term platform investment, and with every menu expansion, the recurring value of that installed base grows. Customer retention globally remains in the high 90s for our CAG Diagnostics business. This is a metric that we work hard to earn every day, as it is a key part of our growth algorithm reflecting the trust veterinarians place in IDEXX and the durable value of our integrated diagnostics and software solutions. We know from experience that diagnostics is a performance category. Practices on our platform, point of care, reference labs, software and imaging, see materially higher growth in both their diagnostics and overall practice revenue. We are also advancing investments in our global commercial capabilities. During the remainder of the year, we will expand our field presence across 4 international countries, as well as targeted additions in the U.S. This builds upon last year's international and domestic expansions and is a statement of our confidence in these geographies, our innovative diagnostic portfolio, and the opportunity to grow testing utilization. We have a well-proven operating playbook for these expansions. When we work closely with customers in the practice, helping them integrate innovations into their everyday protocols, we see higher adoption, higher utilization and stronger long-term relationships. Turning to innovation. inVue Dx momentum continues to be strong. We placed 2,700 instruments through the first half and are on pace to achieve our full year placement goal. We're seeing a steady ramp internationally as our commercial teams support integration of inVue Dx into practice workflows and awareness builds across regions. Customer feedback is positive and consistent across geographies, with veterinarians highlighting the integrated slide-free workflow, the diagnostic confidence of objective AI-powered results, and the productivity gains of having cytology answers while the patient is in the clinic. We've also continued expanding the clinical value of inVue Dx through menu additions. In the second quarter, we added new pathologic red blood cell morphologies associated with underlying diseases of the liver, spleen and kidneys. These updates push automatically to every connected inVue Dx instrument worldwide, with no action required by the practice. As blood and ear cytology capabilities expand, customers find more reasons to run samples on inVue Dx, and utilization grows. In parallel, fine needle aspirate, or FNA, is progressing as expected through the controlled launch process and we've meaningfully expanded the base of customers entering Q3. With inVue Dx FNA, veterinarians can evaluate lumps and bumps for mast cell tumors during the patient visit with optional expert pathologist review available in a single click. Today, fewer than 10% of lumps and bumps ever get evaluated, largely due to the cost and workflow complexity of glass slides. We're seeing early indications that the slide-free workflow, real-time results and affordable pricing of inVue Dx FNA are associated with an increased number of masses evaluated. Given the platform within a platform nature of FNA, we're providing clinical practice team training as part of the rollout process with planned broad availability by the end of the year. IDEXX Cancer Dx reached another milestone, surpassing 10,000 global clinics ordering since launch, a reflection of how this test is addressing the critical need for early cancer detection and becoming part of routine veterinary care. Cancer Dx is now available in North America, Europe and Australia. Momentum in both screening and monitoring applications continues to build. Approximately 70% of Cancer Dx tests are run as part of a broader bloodwork panel, reflecting integration of cancer testing into everyday clinical protocols. Globally, over 20% of Cancer Dx orders come from practices using a competitive lab, an indication that clinicians are putting their patients first and breaking from their typical workflow to access this innovative test from IDEXX. As customers adopt Cancer Dx, they experience the broader value of our IDEXX Reference Lab ecosystem, contributing to strong new customer growth in the quarter. Cancer Dx will expand from a test to a panel in late Q3 with the addition of mast cell tumor detection. That means veterinarians will soon be able to screen at-risk dogs for 1/3 of all canine cancer types during a single routine wellness visit. Mast cell tumors are among the most common cancers in dogs, but also among the most frequently missed, as they can resemble benign lesions and go undetected, particularly in dogs with long coats. Importantly, this expansion comes at no increase in price to our customers. The full Cancer Dx panel, including mast cell tumor detection, will remain approximately $15 when run as part of a profile in our lab. We're committed to doing our part to support broadly available, affordable cancer screening that also inspires wellness bloodwork. Our Technology for Life strategy continues to create broad-based value for customers and for IDEXX, and Q2 delivered 2 meaningful expansions to our platform capabilities. In June, we enhanced our most common Catalyst chemistry profiles, known as CLIPs, to include IDEXX SDMA for all customers in North America. This built-in integration expands access to SDMA at the point of care, helping veterinarians identify kidney function loss earlier and detect up to 1/3 more renal dysfunction in sick pets, all within a more streamlined workflow. Since introducing IDEXX SDMA in 2015, customers have run nearly 120 million patient tests globally, a reflection of its widely recognized clinical importance. Early response to the new Catalyst CLIPs is positive, with strong adoptions and favorable feedback on workflow and inventory management. Catalyst menu additions, such as these SDMA CLIPs, Pancreatic Lipase, and Cortisol, expand the value of our nearly 80,000 Catalysts around the world. We also expanded our Reference Laboratory Fecal Dx antigen testing platform, adding taeniid tapeworm detection in late June for U.S. and Canadian customers at no additional cost. This is our third Fecal Dx menu expansion in 4 years, and the platform now covers 7 of the most clinically relevant intestinal parasite groups. Each expansion reinforces the clinical value of running this panel as part of every routine wellness visit, enabling detection of 2x more infections than fecal flotations. Our software and imaging business delivered strong results in Q2. Independent practices and corporate groups choose IDEXX software to drive productivity through workflow efficiency, deep diagnostic integrations, and the ability to centrally manage operations across a large-scale network. Vello, our pet owner engagement platform, continues to expand, with double-digit sequential growth in active users. Vello brings personalized outreach, diagnostic-driven campaigns, and forward booking capabilities that improve practice efficiency. Practices on ezyVet with Vello show higher wellness bloodwork inclusion rates than practices on competitive on-premise PIMS, a direct measurable impact from the convergence of software and diagnostics in support of expanded care. In diagnostic imaging, we saw our sixth straight record quarter of digital radiography system placements. These results reflect strong commercial execution and customer demand for the DR50 Plus launched in January, which combines AI-powered imaging quality with up to 60% lower radiation dose than premium competitors. Radiation safety leadership is an important area of focus for us, given that 75% of veterinary technicians working in practices are women of child-bearing age. As I reflect on IDEXX and the veterinary care industry we have the privilege to serve, I'm energized by the opportunity ahead. The long-term drivers of animal health remain sound. The bond between people and their pets continues to deepen. Pet owners remain committed to high-quality care and to being lifelong pet parents. The aging pet population supports durable, increasing demand for diagnostics across dogs and cats. And expectations for quality care continue to rise, with high-performing diagnostics at the center of clinical decision-making. We're in the early stages of an innovation cycle that is broad-based and building: inVue Dx, Cancer Dx, Catalyst menu, Fecal Dx expansions, DR50 Plus, software and AI. Our innovation support higher standards of care, increased diagnostic intensity, and expanded access to diagnostic insights for more pets globally. We look forward to sharing more on all of this at our Investor Day on August 13 at our headquarters in Maine and live-streamed for those unable to attend in person. Lastly, in my first few months as CEO, I've had the privilege of connecting with many IDEXXers around the world. Those conversations reinforce what I've long understood about the strength of our talent and our growth mindset culture. I want to thank our employees for their steadfast commitment to our customers and to advancing innovations that empower clinical teams to see more and do more in their practices. That singular focus, turning diagnostic, software, and AI innovations into everyday clinical value is, what will keep compounding into long-term durable growth for our customers and IDEXX. With that, I'll open the line for Q&A. Thank you. Operator: [Operator Instructions] We will take our first question from Erin Wright with Morgan Stanley. Erin Wilson Wright: Great. So can you speak a little bit about the rollout of FNA and how that's progressing relative to your expectations? Is that helping to fuel some of the inVue placements in the quarter? And can you remind us of just how the consumables flow-through is tracking relative to your expectations for inVue, and the overall consumables number was solid in the quarter. Just can you remind us of, I guess, in terms of potential upside even to the consumables targets that you have, especially as you kind of broadly launch FNA? Michael Erickson: Erin, thanks for the question. Yes. So the overall consumable revenue performance on inVue Dx is comfortably within the range that we've discussed around $3,500 to $5,500 per instrument. And so we're really happy with what we're seeing. And just overall, the launch and progression of inVue Dx has been just outstanding, really one of the most successful product rollouts that we've had at the company. As you heard, 2,700 placements in the first half of the year, 9,000 overall. You asked about the progression of FNA. It's going well. It's on track with our controlled launch process that we've talked about in the past. This is the process that we follow to make sure that we really get all the details of the customer experience nailed. That's what our customers expect from us. And it makes sense to do that because we know that these things have very long tails. So we want to make sure we get the flywheel running well. So we broadened the rollout, the controlled rollout of FNA as we headed into Q2. And based on the great feedback that we're getting from customers, we're broadening that again meaningfully as we go into Q3 with planned full availability by the end of the year. And I think it's just worth mentioning, each of these applications on inVue Dx is really a platform within a platform. When we rolled it out, we started with 2 large areas of testing with ear cytology and blood morphology, and we continue to add menu to those. And when we do that, we can just push that out to our customers. FNA 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. And as you heard me share in the comments, we're really excited to see that in the early results with FNA, we're seeing even more masses getting looked at, which just reflects the fact that we're addressing the real challenge in the practice around the cost and complexity of glass slides with this new application. So very excited. And as this continues to roll out, we do see upside in that consumable number over time. Erin Wilson Wright: Okay. That's great. And you hit double-digit growth in the Reference Lab for the first time since the beginning of 2023, if I have my numbers right. And I guess, can you break down the components of that growth and the sustained market share gains that you're seeing there? And we always seem to find that segment to be more correlated to vet office visits. And just on that front, there is this swirly narrative out there as well as some supportive analysis from the former CEO and Chairman of IDEXX calling out some sustained pressure in vet visits over the next several years. I guess, how do you think about that in the context of the data that you are seeing and the pushes and pulls you see there from an underlying demand standpoint, given some of the metrics you shared in terms of aging pet population and other metrics as well? How does that fit into your long-term growth algo? Michael Erickson: Great, Erin. So I'll talk a little bit about the Reference Lab and then Andrew can talk more about visit trends. So we're really happy with the growth in the lab. It really reflects a broad set of just execution and performance across the team, where we've added, obviously, to the lab offering with what I shared around Fecal Dx, adding taeniid tapeworm and then Cancer Dx has just really hit the mark this critical need for early cancer screening, monitoring and diagnosis. And as I shared, we're seeing 20% of the volume with Cancer Dx coming from practices that have been using a competitive lab. And so that means that they're putting their patients first, prioritizing their patients' needs over whatever existing workflows they have, and that's associated with record lab conversions. And we're seeing that worldwide. And so the growth in the lab really reflects the investments that we're making in innovation, very strong commercial execution, customer conversions and really, overall, the strong volume growth. Again, we're seeing that internationally, which we're very pleased to see. Andrew Emerson: Yes. And Erin, just on the sector, certainly, I think we've continued to see declines in U.S. same-store clinical visits, 1.3% within the quarter, largely on track with our expectations from our previous guidance. We are continuing to see pressure more on the discretionary areas, wellness visits being down below 3% compared to the prior year. And we're seeing some positive benefits on the non-well side. Certainly, I think the economic pressure that consumers are facing just on broad inflationary dynamics and challenges with things like gas prices and housing prices put pressure on those discretionary categories. But there's also certainly been a more muted puppy impact here just given the pace of adoptions that we have seen. I think we've called that out in the past during these times of economic pressure, we typically see consumers are slower to add or replace pets within their household, and I think that's playing out to some degree. But I think the foundation of the overall pet population continues to be positive. And I think we're paying close attention to that. Ultimately, we'll continue to provide updates for our longer-term growth algorithm at our Investor Day event here coming next week. So we're excited to provide more details at that point. Operator: We will take our next question from Chris Schott with JPMorgan. Christopher Schott: Just wanted to come back to vet visits and just a little bit more color on the trends you're seeing. I guess any big differences as you look at the trends that you're seeing from corporate versus independent practices or urban versus suburban locations? And maybe just a secondary question on that same topic. What do you think it's going to take to get wellness visits back to growth given the continued erosion there? It seems like the non-wellness trend is going the right way, but that wellness piece of the business, just any directional outlook of how to think about that going forward? Michael Erickson: Chris, we don't see differences looking across different parts of the country or across corporates or independents. And in fact, what we hear from, in particular, talking to CEOs at some of our large corporate partners, they're seeing exactly what Andrew talked about this wave of older pets coming through COVID pets. And by the way, that's driving growth not just in non-well, but in well and non-well within that particular age cohort. I think the key is and what we really focus on is, visit quality. Andrew talked a little bit about that. That's the diagnostic frequency and utilization within the visit. So we're focused on developing the sector to keep enhancing that quality, and that's what we're seeing happen. And that's a combination of innovations that provide new opportunities, new episodes of testing things like Cancer Dx, for example, and then also just commercial execution, working with our customers on education and really honing and optimizing their diagnostic protocols, including their well testing protocols. And there's massive headroom to keep growing this. I mean we know, for example, in the U.S., only around 1 out of 10 wellness visits are getting bloodwork today. And outside the U.S., it's much less, around 1/3 or even less than that in most countries. And so there's substantial headroom through innovation and commercial execution to continue to drive this kind of growth in wellness testing. So that's really where we're focused is driving that quality of visit. Operator: We will take our next question from Jonathan Block with Stifel. Jonathan Block: Mike, maybe you could talk a little bit more about these commercial investments that you called out. They've certainly yielded good returns in the past. But why now for the next tranche? I think you just did a recent tranche over the past 4 quarters or so. Are these different international markets? And then maybe most importantly, does it mean anything from an innovation standpoint? In other words, beefing up the sales force in certain areas as maybe that innovation bucket could continue to grow when we look forward? Michael Erickson: Jon, thanks for the question. We're just really excited about the opportunity internationally. We know that there's a lot of headroom to grow placements, utilization to develop the sector for diagnostics, particularly around wellness, for example, where that it's just a little less developed than in the U.S. And so we've been consistently making investments really across the board internationally to support that. This includes investing into expanding our field presence. And that ties to a playbook that we have, and we've seen a really reliable return on that. I mean the bottom line is when we're working more closely with customers, when we get our territory sizing dialed in right, then we can help them adopt these new innovations into their protocols. We see higher adoption. We see higher flow-through, stronger relationships, all the sort of positive things that really drive the flywheel for customers and for us. But it's not just innovation on that front. We've also invested significantly to expand our lab network around the world and to make sure our service levels are outstanding. We've invested in the software, for example, with VetConnect PLUS tuned for local geographies. We've invested into innovation specific to the needs around the world with SNAP 4Dx Leishmania, for example, or ProCyte One, which is successful globally, but really was developed in part to address specific kind of performance cost needs in different parts of the world. And then we're seeing things like inVue Dx also really pick up internationally with 40% of our placements coming abroad. So as we step back and look at the international opportunity, we just see a lot of opportunity, and we see a very reliable return on these investments. And so we're going to continue to make these investments to continue to develop the sector and help more pets globally. Jonathan Block: Fair enough. And I'll pivot for the second question. Andrew, a recurring theme here. The 2H '26 2-year stacks would not have had to accelerate further if you did not raise the guidance, but once again, you did. So I guess, I got to ask you the silly question that almost penalizes you for raising that guidance. When I look forward, it seems like visits are expected to be more of the same in the back part of the year as the first half; price at 4% is pretty much the same in 2H versus 1H. So like what aids that premium on that stack basis, if the question is making sense? Maybe I'll ask a question and maybe answer it. I mean, do we think those customer wins, which have been solid, they're growing recurring from inVue, Cancer Dx broadening? I'm just looking for maybe some color on the drivers behind that really solid stack 2-year CAG Dx recurring in 2H? Andrew Emerson: Yes. Jon, so as you highlighted, we are planning for continued strong CAG Diagnostics recurring revenue growth over the balance of the year. We did raise our expectations from our prior guidance. Some of that was certainly the strong Q2 that we had. And we're really continuing to build momentum here within the business, both in the U.S. and on the international region basis. As Mike highlighted, we continue to make investments in reaching our customers being able to translate the value of these innovations to our customers and help them leverage the different diagnostic capabilities and software capabilities in their clinic to support overall pet health. I think when we think about the guidance, certainly, it's a range that we've put out there. There is an increase at midpoint and reflects the strong first half performance that we had. But we also are really excited by some of the recent and upcoming product launches. Mike highlighted a few of them on the call here, both the new menu on SDMA within the CLIP, really simplifies some of the workflow in the clinic and helps with inventory management. We've also added to our Fecal Dx panel, which I think will be beneficial to our customers. We continue to broaden the rollout of FNA on inVue Dx, and we'll be adding mast cell tumor detection to Cancer Dx here. So we have a number of continued innovations that I think will support the back half and we maintain high customer loyalty levels in the high 90s really across our modalities. So the combination of factors here builds a strong case for the second half, and we feel good about the guidance that we have set. Operator: We will take our next question from Ryan Daniels with William Blair. Ryan Daniels: Sorry about that, guys. Can you hear me now? Andrew Emerson: We can. Michael Erickson: Yes, we got you, Ryan. Ryan Daniels: Great. A quick question for you regarding the SDMA move to the Catalyst. Do you think that will have any cannibalization on the reference lab? Michael Erickson: No, no. What we consistently see, Ryan, is whenever we invest into one modality, for example, at the point of care or vice versa, the reference labs, we actually see that testing begets testing and we drive overall more diagnostics. The types of things when you think about using SDMA at the point of care, certainly, it can include well pet types of situations. But very often, it's a more acute or sick pet kind of use case. And with SDMA combined with the CLIP, customers are able to see up to 1/3 more true renal dysfunction than if they're just using creatinine alone. And that's for a sick pet. So it really is a really valuable medical application. And what we've done is we've taken the SDMA slide on the Catalyst, which we could put manually into the CLIP, and we've just put it there for them. So it takes out all the work of having from a workflow standpoint to do that, streamlines inventory management. And so we're getting a great response from customers to this innovation at the point of care. While at the same time, for many years, we've included SDMA in every single chemistry panel that's run at the reference labs. And so the bottom line with SDMA is that it really is an integral part of every type of chemistry that you'd want to run, whether it's at the point of care or in the reference labs. It's just best medicine. Ryan Daniels: Okay. Perfect. Very helpful. And then as a follow-up, also on the lab. I think you mentioned 20% of Cancer Dx is coming from competitive labs. And I think that's helping you with some conversions. And we've heard during our conversations that expanding the panel later this year could really be a big Catalyst because it will identify more cancers and make it a more valuable panel. So I'm curious if you could talk a little bit about your expectations for that, both in regards to helping lab growth and then maybe what that could do to market share gains for the lab in the future? Michael Erickson: Yes. Thanks, Ryan. We're really excited about Cancer Dx moving from a test to really a multi-cancer panel with the addition of mast cell tumors. These are very common amongst the most common canine cancers, mast cell tumors are. And they often get missed, as I mentioned in my comments, because it can be hard to find them in -- particularly with dogs that have long coats. And so to be able to systemically detect those and to take early action when found. And then, of course, pairing that with inVue Dx because when you find a positive mast cell tumor, you want to know, okay, which of these masses is the one that I want to take action on and actually remove. And that's where FNA on inVue Dx comes in. So that pairing of those 2 is a particularly valuable kind of end-to-end solution tool set, if you will, for the general practice veterinarian. So we do see this as a tipping point, if you will, from a cancer screening standpoint, having multi-cancer screening that's affordable as part of bloodwork for all at-risk dogs. That's all dogs over 7 and at-risk breeds over 4. We really see that as over time becoming the de facto standard. And so yes, and we're hearing this from customers as well. One of our large partners in Australia, for example, has on their own now added Cancer Dx to all of their senior dog premium wellness program participants and has seen just a fantastic uptake, both in terms of enrollments and just overall bloodwork. So this is the type of thing that we think over time will really help to develop the sector further. Operator: We will take our next question from Daniel Clark with Leerink Partners. Daniel Christopher Clark: I wanted to ask about your second half expectations. How are you kind of thinking about in CAG growth between the U.S. and the international segments just given the strong run we've kind of seen ex-U.S.? Andrew Emerson: Yes. Thanks for the question here, Dan. This is Andrew. I think we've seen really strong momentum in the regions, both the U.S. and international. Again, as Mike highlighted, I think we see a lot of opportunity internationally to continue to develop the sector. We've made investments both from a commercial perspective as well as within the infrastructure to support our customers more over time. And so I think -- internationally, I think we're now multiple quarters of double-digit growth and continue to see, again, strong momentum across the region in areas like Europe and APO in particular. Overall, on the U.S. side, certainly, the clinical visit challenges that we've seen have been the key constraining factor. But from an overall IDEXX U.S. CAG Diagnostics recurring revenue growth premium to those clinical visits. Yes, we have been actually ramping that up here in the last several quarters and that has a lot to do with our ability to maintain customers with the high loyalty rates and continue to provide solutions for their everyday challenges with new innovations and continue to build out best practices alongside them in a partnership. So no specific kind of direction we're giving on the makeup of growth ranges within those areas. But again, I think we feel confident really across the regions on a global basis. Daniel Christopher Clark: Okay. Got it. Super helpful. And then just a quick follow-up on kind of the visit trends in pet aged 5 plus, where you said they're contributing to both well and non-wellness positively. Have you seen any changes on a quarterly basis from that cohort? Or is it just generally positive? Michael Erickson: It's generally -- Dan, this is Mike. It's generally positive, and we've now seen this trend for multiple quarters in a row. And as I shared also, we're not just seeing it in our data, but we're hearing about it from our customers as well. So we think it's a consistent trend. Operator: We will take our next question from Michael Ryskin with Bank of America. Michael Ryskin: Great. I want to touch on inVue placements in the quarter, a little over 1,600. You reiterate the full year guide, but it's still a really nice step-up versus your 1Q instrument placement number for inVue. Is this just sort of normal lumpiness that we should expect in the business? Is there anything that you kind of turned back on just related to FNA, lumps and bumps? Just kind of what drove that momentum? Or should we just sort of ignore it and just sort of assume this is the normal noise quarter-to-quarter on placement numbers? Andrew Emerson: Yes, Mike, this is Andrew. Thanks for the question. For the inVue Dx placements, again, you could see there's been a level of variability here throughout the quarters. I think when it comes to placements, really, it's about when the customer is ready to take on some new instruments and plan for that. We work, again, in partnership with them. And so there's always some level of variability that you're highlighting on the placement metrics. From a year-to-date perspective, about 2,700 placements this year. That puts us essentially 50% of the way towards the full year delivery. And so we didn't guide necessarily on Q3 or Q4 independently for the inVue placements, but we still anticipate about 5,500 for the full year. Q4 tends to be a little bit stronger capital quarter in general for us. And that's just one thing to keep in mind here as you think about the rest of the year just in terms of the placement metrics themselves. But again, it's really about the partnership and the demand that we're seeing pull-through on the inVue Dx analyzer. And I think we continue to see a lot of momentum on that front, both in the U.S. and again, internationally. Michael Erickson: And Michael, I think -- look, I think the overall feedback that we're getting is just really positive. I mean every practice does cytology. They're all challenged with the workflow -- hands-on workflow complexity and technique sensitivity of slides and getting repeatable results for things like ear rechecks. And so inVue Dx, it's hitting the mark. And that's why we're seeing overall these very strong results. And ear cytology and blood morphology are very large categories of cytology that we're addressing as we come on and expand with FNA on inVue Dx. We think that just further expands excitement for this, and we keep adding even in our core applications. As I mentioned, we added 2 new red cell morphologies to our blood morphology offering. So each of these platforms within a platform just keeps expanding. And we're really, really happy with the overall performance, and 9,000 placements since launch makes this one of the most successful launches we've ever had. Michael Ryskin: Okay. That's great. And then maybe a quick follow-up. You talked about the Analyst Day a number of times, looking forward to it, as always. One thing you haven't touched on is Multi-Q. It's something you kind of -- you announced a little while ago, but we haven't had a lot of updates. Maybe I'll just ask sort of conceptually, if you could talk about the bandwidth and the capacity to launch 2 platforms, to ramp 2 platforms. Obviously, you have things like FNA and lumps and bumps and Cancer Dx. So you're not unfamiliar with launching multiple solutions at the same time, but 2 instrument platforms would still be somewhat of a new venture. So just talk about sort of bandwidth and capacity to do that if that was to come about. Michael Erickson: Yes. We're very comfortable with our capacity from a commercial standpoint. I mean we -- of course, we keep investing internationally as we shared, which is really focused on sector development, not capacity constraints, if you will. It's really focused on opportunity and developing the sector. And we also make targeted additions here domestically. I shared some of that on the call as well. But overall, we're really comfortable with our capacity to launch and bring forward the innovations that we are, and to support customers as we do this and make sure that they've got the right information and data and workflow and that they can incorporate these into their protocols so that they can be successful. Andrew Emerson: Yes. I would just highlight, Mike. We do this on a number of fronts today already. We have core analyzers with our Catalyst chemistry analyzer and hematology as well as SediVue and inVue, and that's on top of some broader platforms like Cancer Dx that continue to take sector development work. So I think we've got a model here that we're highly focused on being able to do more than one thing at a time. And I think that's a key focus for us going forward. Operator: We will take our next question from Daniel Grosslight with Citi. Daniel Grosslight: Congrats on a strong quarter here. I wanted to double-click on the margin degradation in the second half of this year. Obviously, you've got investments, which you've outlined here, and you also have FX being a headwind in the second half. But I was hoping you can provide a little bit more detail on the phasing of incremental investments in the second half. And as we think about the split between 3Q and 4Q, how should we be modeling out the margin and investments you're making in the business? Andrew Emerson: Dan, so just in terms of the margin outlook that we have, I think one of the things I would highlight is we would continue to expect gross margins to really lead our overall operating margin profile here. And I think if you look at the first half of the year, gross margins continue to benefit from the strong recurring revenue growth. We see high incremental margins as we obtain the type of volume growth that we've seen. And we're really expecting that to continue in the second half. And so gross margins will likely lead the operating profit flow-through. But as we highlighted, we're going to continue to make incremental investments in the second half, really for the longer term overall growth projections. And Mike highlighted the different commercial investments we were talking about and there's always some level of variability on project timing within areas like R&D. And we have different dynamics around things like our information technology structure internally, how do we think about really enabling the base of the business and making the right investments in our IT infrastructure. Areas like AI continue to add into that as well. So not necessarily splitting out Q2 versus -- or excuse me, Q3 versus Q4. Here, we did highlight on a comparable basis in Q3, we expect 20 to 50 basis points of operating margin benefit in Q3. So that gives you a sense for how we're thinking about it. But we'll continue to make those investments throughout the second half of the year. Daniel Grosslight: Yes. Makes sense. And you guys also raised your free cash flow conversion, which is great to see. How are you balancing buybacks against potential M&A opportunities? Are there any specific capability gaps or geographic markets where inorganic investment may be more efficient than growing organically? Andrew Emerson: Yes. I think one of the things we're constantly doing is just making sure we are investing in our organic growth profile. That is the core that we focus on. We have active assessments associated with things outside of our 4 walls and business development continues to be an area that we look at opportunistically as we see assets that may make sense for us. We're highly focused on those core areas within diagnostics and software. We've seen more assets recently in the software space when I think back to the recent deals that we have done in the past, but it's something we continue to pay attention to. And certainly, we're willing to leverage our capital against business development type of opportunities or in-licensing types of targets as well. Any of our excess cash, we really continue to see a conviction in the long-term orientation of the business. And so the best way that we've leveraged share buybacks to kind of deliver capital back to our shareholders. That's been the best way that we've seen so far going forward, but it's something we constantly assess. Michael Erickson: Thank you for the questions. Well, thank you very much. I'll wrap up the call now. Thank everybody for the questions. We'll now conclude our Q&A portion of this morning's call. It's a pleasure to share IDEXX's continued strong execution against our organic growth strategy, while delivering strong financial results in the second quarter. And so thank you for your participation this morning. And now we'll conclude the call. Operator: Once again, this will conclude today's call. We thank you for your participation. You may now disconnect. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. If you’d invested $5,000 then, you’d be sitting on $2,824,765 today.* Now, for the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. It’s a key player in the $1.8 trillion space race, and with the stock recently sitting 20% off its highs, the window to get in early is closing fast. Continue » *Stock Advisor returns as of August 3, 2026 This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Idexx Laboratories. The Motley Fool has a disclosure policy. IDEXX (IDXX) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Idexx Laboratories (IDXX) came out with quarterly earnings of $4.27 per share, beating the Zacks Consensus Estimate of $3.95 per share. This compares to earnings of $3.63 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.10%. A quarter ago, it was expected that this Animal diagnostic and health care company would post earnings of $3.42 per share when it actually produced earnings of $3.47, delivering a surprise of +1.46%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Idexx, which belongs to the Zacks Medical - Instruments industry, posted revenues of $1.22 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.28%. This compares to year-ago revenues of $1.11 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Idexx shares have lost about 16.1% since the beginning of the year versus the S&P 500's gain of 11%. While Idexx has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Idexx was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $3.79 on $1.19 billion in revenues for the coming quarter and $14.68 on $4.72 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Instruments is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Delcath Systems, Inc. (DCTH), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly loss of $0.16 per share in its upcoming report, which represents a year-over-year change of -328.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Delcath Systems, Inc.'s revenues are expected to be $25.14 million, up 4.1% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report Delcath Systems, Inc. (DCTH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

IDEXX Laboratories Inc. (NASDAQ:IDXX) shares rose nearly 4% in pre-market trading after the veterinary diagnostics company reported second-quarter 2026 results that exceeded Wall Street expectations and increased its full-year earnings guidance. The company delivered stronger-than-expected profit and revenue growth, while also lifting its outlook for adjusted earnings per share for the remainder of the year. IDEXX reported adjusted earnings of $4.27 per share for the second quarter, outperforming the analyst consensus estimate of $3.96 by $0.31. Revenue reached $1.22 billion, ahead of market expectations of approximately $1.20 billion and representing a 10% increase from $1.11 billion in the same quarter last year. Following the results, the company’s shares gained 3.73% in pre-market trading. Management increased its full-year 2026 adjusted earnings per share forecast to a range of $14.69 to $14.94. The midpoint of the updated guidance, $14.82 per share, is above the current analyst consensus estimate of $14.66, reflecting confidence in the company’s continued operating performance. IDEXX also narrowed its full-year revenue guidance to between $4.70 billion and $4.75 billion. The midpoint of $4.73 billion is slightly ahead of analysts’ expectations of approximately $4.71 billion. President and Chief Executive Officer Mike Erickson said the company’s technology strategy continued to support customer adoption and stronger diagnostic demand. “Our second quarter results reflect the strength of our Technology for Life strategy, with continued innovation across our Catalyst, Fecal Dx, and IDEXX inVue Dx platforms supporting deeper customer adoption and higher diagnostic utilization,” he said. Recurring revenue from the Companion Animal Group Diagnostics business increased 11% on a reported basis and 10% organically, supported by higher testing volumes and continued expansion of the company’s premium diagnostic instrument installed base. The installed base of IDEXX inVue Dx systems exceeded 9,000 units after more than 1,600 new placements during the quarter. Operating margin improved by 140 basis points to 35.0%, while comparable operating margin increased by 110 basis points, highlighting continued operational efficiency. Looking ahead, IDEXX expects Companion Animal Group Diagnostics recurring revenue to grow between 10.1% and 11.3% on a reported basis during 2026, with organic growth projected at between 8.5% and 9.7%. The updated guidance and continued momentum across its diagnostics business reinforced investor confidence in the company’s long-term growth prospects. IDEXX Laboratories stock price

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was anchored by 10.3% organic growth in CAG Diagnostics recurring revenue, significantly outpacing a 1.3% decline in U.S. same-store clinical visits. Management attributes the growth premium to 'visit quality,' where diagnostic intensity per visit is increasing despite macro-driven pressure on discretionary wellness visits. The aging pet population (pets 5+) is a structural tailwind, as these animals require higher diagnostic frequency for both wellness and chronic care management. International momentum remains robust with nearly 12% organic recurring revenue growth, driven by net new customer gains and expanded instrument utilization. Innovation adoption is accelerating, with inVue Dx reaching 9,000 total placements since launch and Cancer Dx surpassing 10,000 ordering clinics globally. Strategic integration of software (Vello/ezyVet) and diagnostics is driving higher wellness bloodwork inclusion rates compared to practices on competitive legacy systems. Operating margin expansion of 110 basis points was fueled by favorable product costs and a high-margin mix of recurring consumables and reference lab volumes. Full-year organic revenue growth guidance was raised to 8.5%-9.7%, reflecting confidence in global recurring revenue momentum despite a $15 million FX headwind. Guidance assumes U.S. clinical visits will remain pressured, with an anticipated 1.5% decline in the second half of 2026. Management is accelerating commercial investments, expanding field presence in four international markets and the U.S. to drive long-term sector development. The inVue Dx platform is expected to reach 5,500 total placements for the year, supported by the broad commercial rollout of Fine Needle Aspirate (FNA) capabilities by year-end. Cancer Dx is slated to expand into a multi-cancer panel in late Q3 with the addition of mast cell tumor detection at no incremental cost to customers. Instrument revenues declined 20% organically, a planned result of lapping the prior year's broad commercial availability of the inVue Dx platform. Wellness visits remain the primary constraint on clinical volume, down 3.4% in the U.S., which management attributes to broader inflationary pressures on consumers. Foreign exchange volatility is expected to create a 70 basis point headwind to reported revenues in the third quarter. Incremental R&D and commercial spending in the second half will result in more modest operating margin expansion of 20-50 basis points in Q3. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Consumable revenue per inVue instrument is tracking within the expected $3,500 to $5,500 range. FNA is currently in a controlled launch to optimize customer experience, with a meaningful expansion planned for Q3 and full availability by year-end. Early data suggests the slide-free workflow is increasing the total number of masses evaluated in-clinic due to reduced cost and complexity. Reference Lab growth reached double digits for the first time since early 2023, driven by innovation like Cancer Dx and Fecal Dx expansions. Approximately 20% of Cancer Dx orders are coming from practices that otherwise use competitive labs, serving as a 'trojan horse' for full lab conversions. Management dismissed concerns over long-term visit erosion, citing massive headroom in wellness bloodwork inclusion (currently only 1 in 10 U.S. visits). Moving SDMA into standard chemistry CLIPs at the point of care streamlines workflow and inventory for veterinarians. Management does not expect cannibalization of Reference Lab volumes, as point-of-care testing typically addresses acute/sick pet use cases while labs handle routine screening. The integration helps identify up to one-third more renal dysfunction cases than creatinine testing alone. Management expressed high confidence in commercial bandwidth to support both inVue Dx and future platforms like Multi-Q. The strategy relies on a proven playbook of territory sizing and field education to help clinics integrate new technologies into daily protocols.

IDEXX Laboratories, Inc. IDXX reported second-quarter 2026 earnings of $4.27 per share, up 18% year over year. The figure surpassed the Zacks Consensus Estimate by 8.1%. Comparable constant-currency EPS of $4.07 improved 15% year over year. Revenues rose 10% to $1.22 billion and topped the Zacks Consensus Estimate by 1.3%. Results benefited from volume-driven Companion Animal Group (“CAG”) Diagnostics recurring revenues, increased diagnostic utilization and continued adoption of IDEXX’s innovations. CAG Diagnostics recurring revenues advanced 11% as reported and 10% organically. Following the earnings announcement, IDXX shares gained 3.5% in the pre-market trading today. CAG revenues increased 9.4% year over year to $1.12 billion. Organic growth was 8.7%. International CAG revenues climbed 13.4% as reported and 11.5% organically, while U.S. revenues advanced 7.4%. IDEXX VetLab consumables revenues increased 14.7% to $430.3 million, with organic growth of 13.6%. Performance was supported by higher testing utilization, recent product launches, net new customer gains and an 11% expansion of the global premium instrument installed base. Reference laboratory diagnostic and consulting services revenues rose 10.6% to $406.7 million. Organic growth was 10.3%, driven by higher testing volumes and customer additions. Rapid assay product revenues increased 1.3% to $101.6 million. Water revenues advanced 15% year over year to $58.6 million and increased 13% organically. This growth reflected solid performances in the United States and Europe. Livestock, Poultry and Dairy revenues increased 11% to $35.2 million, with organic growth of 9%. Strength in the Americas supported the improvement. Gross profit increased 12% to $779.1 million. Gross margin expanded 140 basis points to 64%, supported by recurring revenue volume gains, operational productivity initiatives and net price realization. Operating expenses rose 10% to $353.5 million as IDEXX invested in commercial capabilities, innovation and information technology. Operating profit climbed 14% to $425.6 million, while operating margin expanded 140 basis points to 35%. IDEXX exited the second quarter of 2026 with cash and cash equivalents of $196.9 million compared with $200.5 million at the end of first quarter. Cumulative net cash provided by operating activities was $613.4 million compared with $423.7 million in the prior-year period. IDEXX Laboratories, Inc. price-consensus-eps-surprise-chart | IDEXX Laboratories, Inc. Quote IDEXX has updated its 2026 revenue guidance to $4.70-$4.75 billion from $4.68-$4.76 billion. The midpoint increased by $5 million despite a projected $15-million headwind from updated foreign exchange assumptions. The company now expects reported revenue growth of 9.1-10.3% and organic growth of 8.5-9.7%. The Zacks Consensus Estimate is currently pegged at $4.72 billion, indicating 9.6% year-over-year growth. IDEXX raised its 2026 earnings outlook to $14.69-$14.94 per share from $14.45-$14.90. The Zacks Consensus Estimate is currently pegged at $14.68. IDEXX exited the second quarter of 2026 with both revenues and earnings beating estimates. The second-quarter results reflect the strength of the company’s Technology for Life strategy, with continued innovation across its Catalyst, Fecal Dx and IDEXX inVue Dx platforms supporting deeper customer adoption and higher diagnostic utilization. Given the encouraging results, the company raised its 2026 EPS guidance. Also, the expansion of both margins in the quarter is encouraging. IDXX currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the broader medical space are Intuitive Surgical ISRG, Quest Diagnostics DGX and Medpace MEDP. Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter 2026 adjusted EPS of $2.80, which surpassed the Zacks Consensus Estimate by 12.9%. Revenues of $2.89 billion beat the Zacks Consensus Estimate by 3.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. ISRG has an earnings yield of 3.1% compared to the industry’s negative 3% yield. The company beat earnings estimates in each of the trailing four quarters, the average surprise being 16.53%. Quest Diagnostics, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $3.12, exceeding the Zacks Consensus Estimate by 11%. Revenues of $3.04 billion topped the Zacks Consensus Estimate by 2.1%. DGX has an earnings yield of 4.7%, almost in line with the industry’s yield. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 5.77%. Medpace, carrying a Zacks Rank #2 at present, posted second-quarter 2026 adjusted EPS of $4.25, exceeding the Zacks Consensus Estimate by 4.17%. Revenues of $707.3 million outperformed the consensus mark by 1.12%. MEDP has a historical five-year earnings growth rate of 30.5% compared with the industry’s 5.6% growth. In the trailing four quarters, the company delivered an average earnings beat of 10.16%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report Quest Diagnostics Incorporated (DGX) : Free Stock Analysis Report Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report Medpace Holdings, Inc. (MEDP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Idexx Laboratories (IDXX) reported $1.22 billion in revenue for the quarter ended June 2026, representing a year-over-year increase of 9.7%. EPS of $4.27 for the same period compares to $3.63 a year ago. The reported revenue represents a surprise of +1.28% over the Zacks Consensus Estimate of $1.2 billion. With the consensus EPS estimate being $3.95, the EPS surprise was +8.1%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Idexx performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Percent of Revenue- Gross Profit - CAG: 64% versus the two-analyst average estimate of 63.2%. Percent of Revenue- Gross Profit - LPD: 53% versus 48% estimated by two analysts on average. Percent of Revenue- Gross Profit - Water: 74.4% versus the two-analyst average estimate of 69.5%. Revenue- Companion Animal Group (CAG)- United States: $734.89 million versus $735.21 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +7.4% change. Revenue- Companion Animal Group (CAG)- International: $383.34 million versus $377.49 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +13.4% change. Revenue- LPD- International: $28.57 million versus $27.47 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +9.9% change. Revenue- Water- International: $28.94 million versus the two-analyst average estimate of $27.06 million. The reported number represents a year-over-year change of +16.2%. Revenue- Companion Animal Group (CAG): $1.12 billion compared to the $1.11 billion average estimate based on four analysts. The reported number represents a change of +9.4% year over year. Revenue- Other: $4.6 million versus $4.26 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +8.3% change. Revenue- Livestock and poultry diagnostics (LPD): $35.18 million compared to the $33.57 million average estimate based on four analysts. The reported number represents a change of +10.8% year over year. Revenue- Water: $58.56 million compared to the $54.33 million average estimate based on four analysts. The reported number represents a change of +14.8% year over year. Revenue- CAG Diagnostics capital- instruments: $47.17 million versus $48.64 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -19.5% change. View all Key Company Metrics for Idexx here>>> Shares of Idexx have returned +0.5% over the past month versus the Zacks S&P 500 composite's +1.7% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in IDEXX Laboratories, Inc.? Here are five stocks we like better. IDEXX reported strong Q2 performance, with revenue up approximately 10% reported and 9% organically, while EPS rose 18% to $4.27. Companion animal diagnostics recurring revenue grew 10.3% organically despite a 1.3% decline in U.S. same-store clinical visits. The company’s product pipeline continued to gain traction: IDEXX placed 1,602 inVue Dx analyzers during the quarter and remains on track for 5,500 placements in 2026, while Cancer Dx surpassed 10,000 ordering clinics and FNA testing is set for broader rollout by year-end. IDEXX raised its 2026 outlook, projecting revenue of $4.70 billion to $4.745 billion, comparable EPS of $14.69 to $14.94, and free-cash-flow conversion of 90% to 100% of net income. Strong margins, cash flow and share repurchases supported the improved forecast. These 3 Water ETFs Could be Quiet Winners From Infrastructure Spending IDEXX Laboratories (NASDAQ:IDXX) reported second-quarter 2026 revenue growth of approximately 10% on a reported basis and 9% organically, driven by companion animal diagnostics, water and livestock, poultry and dairy businesses. The company raised its full-year revenue and earnings outlook, citing strong recurring diagnostics revenue, product-cost benefits and continued momentum from new product introductions. Chief Financial Officer Andrew Emerson said second-quarter revenue growth was supported by more than 10% organic growth in companion animal group, or CAG, Diagnostics recurring revenue. The company generated earnings per share of $4.27, up 18% as reported and 15% on a comparable basis. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Bullish or Bearish? Vetting Animal Health Care Stocks CAG Diagnostics recurring revenue rose 10.3% organically in the second quarter, including roughly 4% global net price improvement and a 50-basis-point negative impact from equivalent days. U.S. CAG Diagnostics recurring revenue increased nearly 10%, while international recurring revenue grew nearly 12% organically. The growth came despite an estimated 1.3% decline in U.S. same-store clinical visits. Emerson said IDEXX achieved an approximately 1,100-basis-point growth premium in U.S. CAG Diagnostics recurring revenue relative to clinical visits. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? The company said pressure on wellness visits remained the primary factor constraining overall clinical visits, while non-wellness visits posted modest growth. CEO Mike Erickson said pets ages five and older continued to contribute positive growth in both wellness and non-wellness visits, a trend the company has observed for multiple quarters. IDEXX emphasized that diagnostic utilization per visit remains a key opportunity. Erickson said only about one in 10 U.S. wellness visits includes blood work, while wellness-testing penetration is lower in most markets outside the U.S. IDEXX VetLab consumable revenue increased 14% organically. Global Reference Laboratory revenue rose more than 10% organically, led by volume growth, net customer gains and broader test-menu adoption. Rapid Assay revenue increased about 1% organically, returning to growth as the impact of customers shifting pancreatic lipase testing to Catalyst instruments eased. Veterinary software and diagnostic imaging revenue rose about 12% organically. → Why Rare Earth Processing Could Be the Real 2027 Opportunity IDEXX placed 5,265 premium diagnostic instruments during the quarter, including 1,602 inVue Dx analyzers. The company placed 2,700 inVue Dx instruments during the first half and said it remains on track to meet its full-year target of 5,500 placements. Its premium instrument installed base grew 11% year over year, according to Erickson. The company said inVue Dx consumable revenue remains within its previously discussed range of approximately $3,500 to $5,500 per instrument. Erickson said the controlled launch of fine needle aspirate, or FNA, testing is progressing as expected, with a broader customer rollout underway in the third quarter and planned broad availability by year-end. FNA testing on inVue Dx is intended to help veterinarians evaluate masses, including for mast cell tumors, during a patient visit. Erickson said IDEXX is seeing early indications that the platform’s slide-free workflow, real-time results and pricing are associated with more masses being evaluated. IDEXX Cancer Dx surpassed 10,000 global clinics ordering the test since launch and is now available in North America, Europe and Australia. About 70% of Cancer Dx tests are run as part of broader blood-work panels, while more than 20% of orders globally come from practices using a competing laboratory, the company said. In late September, IDEXX plans to expand Cancer Dx into a panel with mast cell tumor detection at no increase in customer pricing. The company said the expanded panel will remain approximately $15 when performed as part of a laboratory profile. Other additions included the integration of IDEXX SDMA into common Catalyst chemistry profiles for North American customers and the addition of Taeniid tapeworm detection to the Fecal Dx antigen platform for U.S. and Canadian customers. Reported operating margin was 35% in the second quarter. Comparable operating profit increased 12%, while comparable operating margin expanded 110 basis points. Gross margin was 64%, up approximately 120 basis points on a comparable basis, supported by recurring-revenue growth, operational productivity, business mix and favorable product costs. Emerson said pricing benefits offset inflationary pressures, which eased more than the company expected during the quarter. IDEXX plans to continue increasing operating expenses through the rest of the year to support commercial expansion, research and development, information technology and other growth initiatives. Free cash flow totaled $323 million in the quarter and $557 million for the first half. IDEXX repurchased $332 million of shares during the quarter and $693 million year to date, contributing to an approximately 2% year-over-year reduction in diluted shares outstanding during the second quarter. IDEXX raised its 2026 revenue outlook to $4.70 billion to $4.745 billion. The midpoint reflects a $20 million operational improvement from its prior outlook, partly offset by a $15 million foreign-exchange headwind. The company now expects overall organic revenue growth of 8.5% to 9.7% and CAG Diagnostics recurring revenue growth of 9.5% to 10.7%. It expects global net price realization to contribute approximately 4% to CAG Diagnostics recurring revenue growth for the year and anticipates U.S. clinical visits will decline about 1.5% in the second half. IDEXX increased its full-year EPS outlook to $14.69 to $14.94, representing comparable EPS growth of 13% to 15%. It also raised its free-cash-flow conversion expectation to 90% to 100% of net income, with capital spending expected to remain around $180 million. For the third quarter, the company expects organic revenue growth in line with its implied second-half range, reported operating margin of 32.5% to 32.8%, and comparable operating-margin expansion of 20 to 50 basis points. IDEXX Laboratories, Inc (NASDAQ: IDXX) is a global developer, manufacturer and provider of diagnostic products and services primarily for the animal health, water testing and food safety markets. Headquartered in Westbrook, Maine, the company supplies in-clinic diagnostic instruments, consumables, reference laboratory testing and practice-management tools that support veterinarians, livestock and dairy producers, and utilities and food producers worldwide. IDEXX's product portfolio includes point-of-care tests and immunoassays designed for rapid diagnosis in veterinary clinics, in-clinic chemistry and hematology analyzers, automated urinalysis systems, and digital diagnostic solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "IDEXX Laboratories Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: Increased approximately 10% as reported and 9% organically. CAG Diagnostics Recurring Revenue: Grew 10.3% organically, with double-digit gains in both the US and international regions. US Same-Store Clinical Visits: Declined an estimated 1.3% in the quarter. Premium Instrument Placements: Reached over 5,200 units, including approximately 1,600 IDEXX inVue Dx analyzers. Gross Margin: 64%, up approximately 120 basis points on a comparable basis. Operating Margin: Reported operating margins achieved 35%, with comparable operating margin gains of 110 basis points. Earnings Per Share (EPS): $4.27, up 18% as reported and 15% on a comparable basis. Free Cash Flow: $323 million in Q2 and $557 million for the first half of 2026. Full Year 2026 Revenue Outlook: Updated to $4.7 billion to $4.745 billion. Full Year 2026 EPS Outlook: Increased to $14.69 to $14.94 per share. Warning! GuruFocus has detected 5 Warning Signs with CTRI. Is IDXX fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. IDEXX Laboratories Inc (NASDAQ:IDXX) delivered excellent Q2 2026 results with 10% reported and 9% organic revenue growth, driven by over 10% organic growth in CAG Diagnostics recurring revenues. Strong innovation momentum with inVue Dx placements on track for full-year goal of 5,500 units, and the successful rollout of FNA and Cancer Dx panel expansion, which is expected to drive future growth. Comparable operating margin expanded by 110 basis points in Q2, supported by gross margin gains from strong recurring revenue growth and favorable product costs. International CAG Diagnostics recurring revenues grew nearly 12% organically, sustaining double-digit gains and reflecting successful commercial execution and market expansion. The company raised its full-year 2026 revenue and EPS guidance, reflecting confidence in continued strong performance and upcoming product launches. High customer retention rates (high 90s) and a growing installed base (up 11% year-over-year) provide a durable foundation for future recurring revenue growth. US same-store clinical visits declined 1.3% in Q2, with continued pressure on wellness visits, which remain a headwind to overall growth. CAG Diagnostic instrument revenues declined 20% organically in Q2 due to lapping the broad commercial availability of inVue Dx in the prior year. The company faces a $15 million headwind from updated foreign currency effects, which negatively impacts reported revenue and EPS for the full year. Inflationary cost pressures, though easing, continue to impact the business, and the company expects to increase operating expenses in the second half for investments. The second half of 2026 is expected to see modest operating margin expansion (20-50 basis points in Q3), reflecting increased investments in commercial and R&D initiatives. US same-store clinical visits are expected to decline approximately 1.5% in the second half, indicating persistent softness in the veterinary visit environment. Q: Can you discuss the rollout of inVue Dx and FNA, and how consumables flow-through is tracking relative to expectations?A: Mike Erickson, CEO, stated that inVue Dx has been one of the most successful product rollouts in company history, with 2,700 placements in the first half of the year. The FNA controlled launch is progressing well, with the rollout broadening meaningfully in Q3 and planned full availability by year-end. Early results show FNA is increasing the number of masses evaluated, and the company sees upside in consumable revenue over time as the platform expands. Q: What drove the double-digit growth in the reference lab, and how do you view the sustained pressure on vet visits?A: Mike Erickson, CEO, attributed the strong reference lab growth to innovation (Cancer Dx, Fecal Dx), strong commercial execution, and record lab conversions, with 20% of Cancer Dx volume coming from competitive lab users. Andrew Emerson, CFO, noted US same-store clinical visits declined 1.3% in Q2, with wellness visits down over 3% due to economic pressure and muted puppy adoptions, but the aging pet population (5+ years) is providing a positive offset. Q: Are there differences in visit trends between corporate and independent practices or urban and suburban locations? What will it take to get wellness visits back to growth?A: Mike Erickson, CEO, said there are no significant differences across practice types or geographies. The focus is on "visit quality" increasing diagnostic frequency and utilization within each visit. He highlighted massive headroom, noting only about 1 in 10 US wellness visits include bloodwork, and even fewer internationally. Innovation (like Cancer Dx) and commercial execution on diagnostic protocols are key levers to drive growth independent of visit recovery. Q: Why are you making another tranche of commercial investments internationally now, and does this signal more innovation to come?A: Mike Erickson, CEO, explained that international markets have significant headroom for diagnostic utilization growth, particularly in wellness testing. The investments follow a proven playbook: expanding field presence leads to higher adoption of innovations and stronger customer relationships. He noted 40% of inVue Dx placements are now international, and the company is investing in lab networks, software, and region-specific innovations to support long-term growth. Q: How is the company achieving strong two-year stacked CAG Diagnostics recurring revenue growth in the second half, given the guidance raise?A: Andrew Emerson, CFO, cited continued strong momentum in both US and international regions, supported by recent and upcoming product launches. These include the new SDMA Catalyst CLIPs, Fecal Dx panel expansion, broader FNA rollout, and the addition of mast cell tumor detection to Cancer Dx. High customer retention rates (high 90s) and strong commercial execution provide confidence in the back-half outlook. Q: Will the addition of SDMA to Catalyst CLIPs cannibalize reference lab volumes?A: Mike Erickson, CEO, stated that testing begets testing, and investments in one modality typically drive overall diagnostic growth. The SDMA Catalyst CLIP is primarily used for acute/sick pet cases, while SDMA remains an integral part of every reference lab chemistry panel. The innovation streamlines workflow and inventory management, and early customer response has been positive, with no expected cannibalization. Q: What are your expectations for the Cancer Dx panel expansion to include mast cell tumor detection, and how will it impact lab growth?A: Mike Erickson, CEO, said the expansion to a multi-cancer panel is a "tipping point" for cancer screening. Mast cell tumors are common but frequently missed, and the pairing with inVue Dx FNA provides an end-to-end solution. He believes multi-cancer screening will become the de facto standard for at-risk dogs, citing a large Australian partner that added Cancer Dx to all senior dog wellness programs with fantastic uptake. Q: How are you thinking about US versus international CAG growth in the second half?A: Andrew Emerson, CFO, noted strong momentum in both regions. International has delivered multiple quarters of double-digit growth, driven by commercial investments and sector development in Europe and APAC. In the US, clinical visit challenges are the key constraint, but IDEXX's recurring revenue growth premium to visits has been ramping up due to high loyalty rates and continuous innovation. No specific split was provided, but confidence is high globally. Q: Are the strong inVue Dx placements in Q2 (1,600) a sign of normal lumpiness or a step-change in momentum?A: Andrew Emerson, CFO, explained that placement timing depends on customer readiness, creating natural quarterly variability. Year-to-date placements of 2,700 put the company on pace for the 5,500 full-year goal, with Q4 typically a stronger capital quarter. Mike Erickson, CEO, added that customer feedback is overwhelmingly positive, and the 9,000 placements since launch make it one of the most successful launches in company history. Q: Can you provide more detail on the phasing of incremental investments and margin expectations for the second half?A: Andrew Emerson, CFO, said gross margins will continue to lead operating margin performance, driven by strong recurring revenue growth and high incremental margins. Incremental investments in the second half will focus on commercial expansion (as highlighted by Mike), R&D project timing, and IT infrastructure including AI. For Q3 specifically, the company expects 20-50 basis points of comparable operating margin expansion. Q: How are you balancing share buybacks against potential M&A opportunities?A: Andrew Emerson, CFO, stated that organic growth investment remains the core focus. Business development is assessed opportunistically, particularly in diagnostics and software, with recent activity seen in the software space. Excess capital continues to be deployed toward share repurchases, reflecting conviction in the long-term business outlook, though the company constantly evaluates the best use of capital. For the complete transcript of the earnings call, please refer to the full earnings call transcript.