IDEXX Laboratories NASDAQ: IDXX reported first-quarter 2026 results that management described as an “exceptional start” to the year, driven by continued execution in its companion animal business and contributions from recent innovations.
First-quarter results driven by companion animal diagnostics
Chief Financial Officer Andrew Emerson said IDEXX’s first-quarter revenue increased 14% as reported and 11% organically. He attributed the performance to “continued execution in our companion animal business with benefits from IDEXX Innovations.”
Emerson highlighted that Companion Animal Group (CAG) Diagnostics recurring revenues grew more than 11% organically, including nearly 11% growth in the U.S. and approximately 12% internationally. He noted, however, that recurring revenue growth faced a headwind from U.S. same-store clinical visits declining about 1% in the quarter. Emerson said slightly positive growth in non-well visits “more than offset” pressure on wellness visits.
CAG Diagnostics instrument revenue rose 28% organically, supported by what Emerson called “strong premium instrument placements,” including 1,100 IDEXX InViewDX analyzers. Total CAG premium instrument placements were 4,650 units, up 12% year-over-year, and the premium instrument install base grew 12% year-over-year, according to Emerson.
Margins, EPS, and cash flow
Emerson said operating performance was “excellent,” with comparable operating margin improving by 100 basis points, supported by gross margin expansion and strong recurring revenue growth. Gross margin was 63.4%, up about 90 basis points on a comparable basis.
First-quarter earnings per share were $3.47, translating to 15% comparable EPS growth, Emerson said. He also noted several discrete items during the quarter, including:
- A $7 million, or $0.09 per share, benefit related to share-based compensation activity
- A $0.05 negative impact from a loss on an equity investment
- Foreign exchange adding $14 million to operating profit and $0.14 to EPS net of hedge effects
Free cash flow was $234 million, reflecting what Emerson described as normal seasonality. On a trailing 12-month basis, IDEXX’s net income to free cash flow conversion was 99%. The company maintained its full-year expectation for free cash flow conversion of 85% to 95% of net income, including approximately $180 million of capital spending.
IDEXX ended the quarter with leverage ratios of 0.6x gross and 0.5x net of cash. Emerson said the company repurchased $361 million of shares in the first quarter, contributing to a 2.1% year-over-year reduction in diluted shares outstanding through the quarter.
Business highlights: InViewDX, Cancer Dx, software, and imaging
President and CEO Jay Mazelsky said the quarter reflected “disciplined commercial execution, continued benefits from innovation and expanded diagnostics utilization across our global customer base,” despite “headwinds from clinical wellness visits.” Mazelsky added that customer retention remains “in the high nineties,” which he said reflects trust in IDEXX’s integrated model combining diagnostics, software, and medical support.
On InViewDX, Mazelsky said momentum continued with another “solid placement quarter,” and that international adoption is ramping as awareness grows. He said IDEXX is advancing the platform with monthly software updates, citing a first-quarter blood morphology update enabling detection and reporting of acanthocytes.
Management also discussed the controlled rollout of fine needle aspirate (FNA) on InViewDX. Mazelsky said early customer response remains “very encouraging,” and that lessons from the controlled launch are supporting a broader rollout in the second quarter, with a “full volume ramp in the second half.” Incoming CEO Michael Erickson said IDEXX is “very happy with controlled launch process for FNA,” and described the company’s staged approach as designed to ensure an “outstanding experience” across implementation and training. Erickson said IDEXX expects to move to a more “unconstrained launch posture later this year.”
On IDEXX Cancer Dx, Mazelsky said momentum continued and that in North America nearly 70% of Cancer Dx tests in the quarter were run as part of a panel. He said more than 7,500 practices have ordered Cancer Dx since launch, and noted an international launch of the canine lymphoma test in Europe and Australia. Mazelsky also referenced planned test expansion, including mast cell tumor detection “for later this year” and “a third test by the end of 2026.”
In software and imaging, Mazelsky said cloud-native practice information management system installations continued to grow double-digits, with “virtually all placements now cloud-based.” He said Vello, IDEXX’s pet owner engagement application, grew double-digits from the prior quarter. In diagnostic imaging, Mazelsky said the company launched its ImageVue DR50+ digital radiography system in January and delivered record imaging system placements for the quarter. Emerson separately reported roughly 330 diagnostic imaging system installations, supported by the DR50+ launch.
Updated 2026 outlook raised; visit trends still pressured by wellness
Based on first-quarter performance, Emerson raised IDEXX’s full-year 2026 revenue outlook to $4.675 billion to $4.76 billion, which he said represents reported growth of 8.6% to 10.6% and organic growth of 7.7% to 9.7%. The updated outlook includes organic CAG Diagnostics recurring revenue growth of 8.7% to 10.7%. Emerson said the organic growth ranges represent about a 70 basis point increase at the midpoint from prior guidance.
IDEXX also increased its full-year EPS outlook to $14.45 to $14.90. Emerson said the update reflects higher operational performance expectations, offset in part by the equity investment loss recorded in the first quarter.
For industry assumptions, Emerson said IDEXX now expects U.S. clinical visits to decline about 1.5% for the full year, following “a third sequential quarter” of visit trends between -1% and -2%. He said the weakness remains concentrated in wellness and discretionary categories, while non-well visits have been “relatively flat” in recent quarters. Both Emerson and Mazelsky pointed to what they described as “green shoots” tied to an aging pet population, with pets five years and older showing positive visit growth.
For the second quarter, Emerson guided to reported revenue growth of 7.3% to 9.3% (including an estimated 60 basis point foreign exchange benefit) and organic revenue growth of 6.7% to 8.7%. He said second-quarter organic growth includes a 50 basis point headwind from equivalent days and that CAG instrument revenues are expected to decline as the company laps elevated InViewDX placements from 2025.
Leadership transition
Mazelsky said the call was his final earnings call as CEO before transitioning to executive chair following IDEXX’s annual meeting. Erickson, currently executive vice president and incoming CEO, said he plans to build on the company’s “innovation-driven platform growth strategy,” emphasizing diagnostics, software, commercial expansion, and AI. Erickson said he expects to share more about AI priorities at the company’s August Investor Day.
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.
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