IDEXX Laboratories (NASDAQ:IDXX) reported double-digit fourth-quarter growth and laid out its initial 2026 outlook, emphasizing continued momentum in premium instrument placements, expanding diagnostic utilization, and ongoing investment in innovation and commercial capacity. Management also reiterated that pressure on U.S. veterinary visit volumes remains a key sector headwind, while diagnostics frequency and intensity per visit continue to rise.
Fourth-quarter performance driven by CAG Diagnostics and instrument placements
Chief Financial Officer Andrew Emerson said fourth-quarter revenue increased 14% as reported and 12% organically, supported by 10% organic growth in CAG Diagnostics recurring revenues. IDEXX posted fourth-quarter EPS of $3.08, up 17% on a comparable basis.
By segment, fourth-quarter organic revenue growth included:
- CAG: 13% organic growth
- Water: 10% organic growth
- Livestock, Poultry, and Dairy (LPD): 4% organic growth
Veterinary visit declines persist, but utilization per visit increases
Management said U.S. same-store clinical visit declines remained a headwind, with visits down approximately 1.7% in the fourth quarter and 1.9% for full-year 2025. Wellness and discretionary visits were more pressured than sick-patient visits; IDEXX cited wellness visits down 3.6% in the fourth quarter.
Even with those declines, Emerson said the company achieved a revenue growth premium versus U.S. clinical visit growth of roughly 1,100 basis points in the quarter, driven by price and volume per visit. IDEXX reported average global net price improvement of 4% in fourth-quarter CAG Diagnostics recurring revenue, with U.S. net price improvement also about 4% and U.S. volume growth about 5%.
In Q&A, management said wellness pressure appears more macro-driven, particularly among lower-income households, while non-wellness visits have been more resilient. CEO Jay Mazelsky noted “green shoots” for pets aged five years and older over the past two quarters, which the company attributes to aging pets from the pandemic adoption period. The company kept its 2026 baseline assumption for U.S. same-store clinical visits at roughly a 2% decline “until we have clear evidence that that’s going to improve.”
Mazelsky and Emerson also emphasized that diagnostics frequency and intensity have continued to expand. Management noted that non-wellness visits represent about 60% of visits but 70%–75% of diagnostics revenue, reinforcing the impact of mix and diagnostic utilization.
Innovation and portfolio pull-through: inVue Dx, Cancer Dx, and Catalyst menu expansions
IDEXX’s installed base expansion and menu additions were recurring themes. Emerson said worldwide VetLab consumable revenues increased 15% organically in the fourth quarter, supported by a 12% year-over-year increase in the global premium instrument install base. For the full year, the global premium instrument install base expanded 12%, including nearly 6,400 inVue Dx instruments.
Mazelsky characterized inVue Dx as “transformational,” citing nearly 6,400 placements in 2025 and calling it one of the most successful launches in IDEXX history. He said IDEXX reached a milestone in December with a controlled launch of fine needle aspirate (FNA) on inVue Dx, beginning with mast cell tumor detection. The company framed FNA as a capability that can automate key steps and provide results within minutes in-clinic, with an option for a “one-click pathologist evaluation” to review images and results.
On IDEXX Cancer Dx, Mazelsky said the company plans to expand the panel to include canine mast cell tumor detection, with North America availability expected mid-year 2026. He also said IDEXX is on track for a first-quarter international rollout of Cancer Dx. He added that evidence indicates the lymphoma marker can detect lymphoma signal up to eight months before clinical manifestation, and that the test can be used for monitoring remission during CHOP chemotherapy. Using “reasonable assumptions,” he described an addressable opportunity for canine lymphoma monitoring at about 130,000 tests per year in North America.
Management also highlighted Catalyst menu expansions in 2025, including adoption of Catalyst Pancreatic Lipase (introduced in late 2024) and the launch of Catalyst Cortisol in the third quarter of 2025, as well as Catalyst SmartQC. Mazelsky said more than 50% of Catalyst users in North America adopted the pancreatic lipase test in the first 12 months.
While management did not quantify Cancer Dx revenue, Emerson said its direct revenue contribution is “modest,” noting standalone test pricing of about $60 and about $15 when included in a broader diagnostic panel. He said IDEXX sees the long-term opportunity to expand the Cancer Dx profile at about $1.1 billion over time.
Margins, cash flow, and capital deployment
IDEXX posted fourth-quarter operating profit growth of 21% as reported and 17% on a comparable basis, supported by gross margin gains and modest operating expense leverage. Fourth-quarter gross margin was 60.3%, up 60 basis points on a comparable basis, with Emerson attributing the gain to strong consumable growth and higher reference lab gross margins, partially offset by mix headwinds from higher instrument revenue.
Operating expenses rose 11% as reported (10% comparable), reflecting higher R&D and commercial investments tied to the innovation roadmap and completion of global commercial expansions.
For the full year 2025, IDEXX reported:
- Organic revenue growth: 10%
- Operating margin: 31.6%, up 90 basis points comparable (including the effect of lapping and now-concluded litigation expense)
- EPS: $13.08, up 14% comparable
- Free cash flow: $1.1 billion, about 100% of net income
IDEXX repurchased $1.2 billion of shares in 2025 (2.4 million shares at an average cost of $506), reducing diluted shares outstanding by 2.7% year over year. The company ended 2025 with leverage ratios of 0.5x gross and 0.4x net of cash.
2026 outlook: organic growth of 7%–9%, higher recurring growth, and margin expansion
For 2026, Emerson guided to revenue of $4.632 billion to $4.72 billion, representing 7.6%–9.6% reported growth and 7%–9% organic growth. The outlook assumes foreign exchange provides about a 60-basis-point benefit to full-year reported revenue growth at current exchange rates, largely in the first half.
IDEXX expects CAG Diagnostics recurring revenues to grow 8%–10% organically in 2026, about 100 basis points higher at the midpoint versus 2025. At the midpoint, the company’s outlook includes global net price realization of about 4% (modestly lower than 2025) and U.S. net price improvement of about 3.5%, alongside an assumption of roughly a 2% decline in U.S. same-store clinical visits.
The company expects solid placement levels in 2026 across premium instrument categories, including about 5,500 inVue Dx instruments. However, Emerson said IDEXX expects declines in CAG instrument revenues in 2026 as it laps rapid expansion of inVue Dx placements and due to regional revenue mix dynamics.
On profitability, IDEXX guided to 2026 reported operating margins of 32.0%–32.5%. On a comparable basis, that implies 30–80 basis points of year-over-year improvement, net of a roughly 30-basis-point foreign exchange benefit and a roughly 20-basis-point headwind from lapping a prior-year litigation accrual adjustment in 2025. Emerson said the margin improvement is expected to be “largely…gross margin-led,” supported by recurring revenue growth, lab and operational productivity initiatives, and expansion of higher-margin cloud-based software.
For earnings, IDEXX guided to 2026 EPS of $14.29 to $14.80, representing 10%–14% comparable growth. The outlook includes $34 million of net interest expense and an expected foreign exchange benefit of about $0.22 per share year over year (net of hedge positions). Free cash flow conversion is expected to be 85%–95% of net income, with capital spending of $180 million (about 4% of revenue) and share repurchases expected to reduce diluted shares outstanding by 1%–2% year over year.
For the first quarter, IDEXX guided to reported revenue growth of 11.5%–13.5%, including about 2.5% benefit from foreign exchange, and organic revenue growth of 9%–11%. The company expects first-quarter CAG diagnostic recurring revenue growth of 8.5%–10.5% and first-quarter reported operating margin of 31.4%–31.9%, reflecting a headwind from lapping a litigation accrual adjustment and a benefit from foreign exchange.
About IDEXX Laboratories (NASDAQ:IDXX)
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.
