Idexx sees revenue growth in third quarter

IDEX Laboratory (IDXX -9.79%)a leader in veterinary diagnostic products and services, reported its third-quarter 2024 earnings on October 31, showing mixed results. Adjusted earnings per share were $2.80, beating analysts’ expectations of $2.68 and reflecting notable growth of 11% year-over-year. Total revenue for the quarter reached $976 million, representing an increase of 7% compared to the same quarter last year. However, the company revised its revenue forecast downward, citing broader market challenges and ongoing legal costs. Overall, Idexx’s results showed strong earnings but highlighted ongoing challenges that need to be carefully addressed.

Source: Analyst estimates for the quarter provided by FactSet.

Overview of Idexx laboratories

Idexx Laboratories, a global leader in veterinary diagnostics, specializes in providing a wide range of diagnostic products and services to veterinarians around the world. Its activities are primarily driven by the Companion Animal Group (CAG), which meets the growing demand for advanced diagnostics in pet care. The CAG segment includes products such as intraclinical diagnostics, laboratory services and information management systems. These offerings enable veterinary professionals to improve diagnostic accuracy and practice efficiency.

Lately, Idexx has been striving to strengthen its leadership by placing significant emphasis on innovation and product development. Key areas of focus include expanding diagnostic capabilities through the integration of artificial intelligence and proprietary technologies. Maintaining competitiveness requires ongoing investment in research and development, which amounted to $191 million in 2023, representing 5.2% of total revenue.

Third Quarter Performance Review

In the third quarter of 2024, Idexx Laboratories continued its positive growth trajectory, especially in the CAG segment. CAG recorded revenue growth of 7%, driven by strong demand for premium diagnostic products and installations. The international market contributed significantly to this growth, reporting a 10 percent increase in recurring revenue.

Technological advancements played a critical role in the quarter. The company has received approximately 700 pre-orders for its new Idexx inVue Dx™ cell analyzer. Additionally, VetLab’s consumables business experienced double-digit growth, with international markets supporting this expansion due to its strong installed base.

Looking to the future

The company adjusted its revenue forecast for 2024 downward. This revision was due to macroeconomic conditions affecting pet owner participation in the United States. Idexx now forecasts full-year revenue to range from $3.865 million to $3.890 million, with growth expectations lowered to 5.5% and 6.2%.

Earnings per share guidance was revised to a range of $10.37 to $10.53, reflecting continued operating margins amid challenging external factors. Notably, legal expenses for the previous quarter of $61.5 million weighed on financial results, while operating margin remained at 31.2%.

Idexx management maintains a cautious but optimistic outlook for the remainder of the year. Despite the lowered revenue forecast, the company remains focused on strengthening its technology and product offerings.

The company’s portfolio of innovations and market positioning, coupled with long-term favorable trends in the pet healthcare industry, are expected to provide a strong foundation for future growth.