IDEXX ups guidance after Q3 beat with 10% organic growth despite softer U.S. vet visits
IDEXX raises 2026 revenue and EPS guidance after Q3 beat with 10% organic growth despite softer U.S. vet visits
- Company issues full-year 2026 guidance of $14.96–$15.16 EPS on $4.74–$4.77 billion in revenue.
- Q3 2026 EPS was $4.01 and adjusted EPS $3.98, beating Zacks consensus earnings estimates.
- Q3 2026 revenue was $1.214B, up 10% year over year and above revenue estimates.
- Full-year 2026 revenue and EPS guidance raised on strong Q3 volume-led CAG Diagnostics performance.
- Q3 organic revenue grew 10%, with CAG Diagnostics recurring up 11% and international up 14%.
- Gross and operating margins expanded YoY even after absorbing early CoVet acquisition dilution.
- U.S. vet visits declined 1.8%, but diagnostics revenue again outgrew visits by ~1,100 bps.
- inVue Dx placements and Cancer Dx adoption are scaling faster than initially expected, supporting durable growth.
- CoVet adds a $20 million run-rate AI software asset but creates ~30 bps 2026 margin drag.
- Q4 guidance embeds lower operating margins of 28.4–29.3% from seasonality and integration spend.
- Management reiterated 50–100 bps annual operating margin expansion over time, including post-CoVet.
- Free cash flow generation is strong, with 110% TTM conversion and significant buybacks reducing share count.
- Key risk is U.S. visit softness and macro headwinds, weaker puppy/kitten cohorts pressuring volume growth if diagnostics mix gains slow.
- Strong quarter, driven by high-growth CAG Diagnostics innovations and international execution, supporting higher 2026 revenue and EPS guidance.
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