IDEXX Laboratories Lifts 2025 Outlook as Diagnostics Drive Double-Digit Growth
Strong Execution Powers 13% Revenue Growth and Expanded Margins
IDEXX Laboratories posted a standout third quarter, reporting 13% revenue growth (12% organic) and 21% year-over-year EPS growth. At the heart of these results: an uptick in Companion Animal Group (CAG) Diagnostics and international demand, fueled by product innovation and customer expansion. Third-quarter revenue landed at $1.11 billion, up from $976 million last year, with EPS rising to $3.40. These figures underline management’s upbeat revision to full-year guidance, with revenue and earnings projections both moving higher.
| Q3 2025 | Q3 2024 | YoY Change | |
|---|---|---|---|
| Revenue | $1,105M | $976M | +13.3% |
| EPS (Diluted) | $3.40 | $2.80 | +21.4% |
| Gross Margin | 61.8% | 61.1% | +70 bps |
| Operating Margin | 32.1% | 31.2% | +100 bps |
| Free Cash Flow | $371M | $192M | +93.2% |
Diagnostic Recurring Revenue Surges: Key Growth Driver
Recurring revenue from CAG Diagnostics rose 11.5% year-over-year (10.1% organic), notably driven by a 17.8% gain internationally and 8.3% growth in the U.S. Growth was supported by expanding test frequency, strong customer retention, and an expanding premium instrument base, including 1,700+ new inVue Dx placements. The IDEXX VetLab consumables category stood out, posting nearly 18% growth as veterinarians continued to increase in-clinic diagnostic usage.
| CAG Segment Detail (Q3) | 2025 | 2024 | YoY Change |
|---|---|---|---|
| CAG Diagnostics Recurring Revenue | $873M | $783M | +11.5% |
| VetLab Consumables | $388M | $329M | +17.8% |
| Reference Lab Services | $363M | $328M | +10.5% |
| Diagnostics Instruments | $51M | $30M | +74.3% |
| Vet Software & Imaging | $88M | $79M | +11.1% |
International Demand Outpaces U.S.; Livestock and Water Segments Strengthen
International markets continued to outperform domestic growth across segments. CAG revenue outside the U.S. jumped nearly 20%, supported by rising adoption of diagnostic instruments and laboratory services. Meanwhile, Livestock, Poultry and Dairy revenue rose 17% (14% organic), and Water grew 8% (7% organic), reinforcing the company's diversified demand picture. Each division saw margin expansion, reflecting successful cost discipline and pricing strategies.
2025 Guidance Moves Higher: More Revenue and Margin Expansion
On the back of third-quarter momentum, IDEXX now projects 2025 revenue in the $4.27B–$4.30B range (up 1% at the midpoint), EPS between $12.81 and $13.01 (up $0.33 at the midpoint), and operating margin between 31.6% and 31.8%. CAG Diagnostics recurring revenue is now seen growing 8.3%–9.0% (reported), with organic revenue growth of 7.5%–8.2%. Free cash flow conversion remains robust, now expected to exceed 95% of net income. Key assumptions include favorable international currency rates, solid test adoption, and expanded placements of innovative instruments like the inVue Dx platform.
| 2025 Outlook | Updated | Prior |
|---|---|---|
| Revenue (Millions) | $4,270–$4,300 | $4,205–$4,280 |
| Reported Growth | 9.6%–10.3% | 7.7%–9.7% |
| Organic Growth | 8.8%–9.5% | 7.0%–9.0% |
| EPS | $12.81–$13.01 | $12.40–$12.76 |
| Operating Margin | 31.6%–31.8% | 31.3%–31.6% |
| Free Cash Flow (% of Net Income) | 95%–100% | 80%–85% |
Key Takeaway: Diagnostic Innovation Fuels Upbeat Financial Trajectory
IDEXX’s sustained performance demonstrates the power of its innovation-driven strategy and commercial execution—especially in diagnostic instruments and services. Margin expansion, solid cash generation, and continued global uptake support a higher earnings bar into 2025. For investors and analysts, continued watch points include the pace of instrument placements, international test adoption, and any impact from macro or regulatory headwinds in the veterinary and food production markets.
This article reflects financial and operating results through the third quarter of 2025 as provided by IDEXX Laboratories, and summarizes their revised guidance and outlook.
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