Q1 2025 IDEXX Laboratories Inc Earnings Call

Operator: Good morning, and welcome to the IDEXX Laboratories' first quarter 2025 earnings conference call. As a reminder, today's conference is being recorded.

Good morning, and welcome to the IDEXX Laboratories first quarter 2025 earnings Conference call. As a reminder, today's conference is being recorded participating in the call. This morning are Jean Michel Ski President and Chief Executive Officer, Andrew Emerson.

Operator: Participating in the call this morning are Jay Mazelsky, President and Chief Executive Officer, Andrew Emerson, Chief Financial Officer, and John Ravis, Vice President, Investor Relations.

Andrew Emerson: Chief Financial Officer, and John <unk>, Vice President of Investor Relations IDEXX would like to preface the discussion today with a caution regarding forward looking statements listeners are reminded that our discussion during the call will include forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.

Operator: IDEXX would like to preface the discussion today with a caution regarding forward loss. Listeners are reminded that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed. Additional information regarding these risks and uncertainties is available under the forward-looking statements notice in our press release issued this morning, as well as in our periodic filings with the Securities and Exchange Commission, which can be obtained from the SEC or by visiting the Investor Relations section of our website, IDEXX.com.

Andrew Emerson: Information regarding these risks and uncertainties is available under the forward looking statements notice in our press release issued this morning as well as in our periodic filings with the Securities and Exchange Commission, which can be obtained from the SEC or by visiting the Investor Relations section of our website IDEXX Dot com.

Operator: During this call, we will be discussing certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is provided in our earnings release, which may also be found by visiting the investor relations section of our website. In reviewing our first quarter 2025 results and updated 2025 guidance, please note all references to growth, organic growth, and comparable growth refer to growth compared to the equivalent prior year period, unless otherwise noted.

Andrew Emerson: During this call we will be discussing certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is provided in our earnings release, which May also be found by visiting the Investor Relations section of our website.

Andrew Emerson: In reviewing our first quarter 2025 results and updated 2025 guidance. Please note all references to growth organic growth and comparable growth refer to growth compared to the equivalent prior year period, unless otherwise noted to allow broad participation in the Q&A, we ask that each participant limit their questions to one with one follow up as necessary.

Operator: To allow broad participation in the Q&A, we ask that each participant limit their questions to one with one follow-up as necessary. We appreciate you may have additional questions, so please feel free to get back into the queue, and if time permits, we'll take your additional questions.

Speaker Change: We appreciate you may have additional questions. So please feel free to get back into the queue and if time permits we'll take your additional questions. Today's prepared remarks will be posted to the Investor Relations section of our website. After the earnings conference call concluded I would now like to turn the call over to Andrew Emerson.

Operator: Today's prepared remarks will be posted to the investor relations section of our website after the earnings conference call concludes.

Andrew Emerson: I would now like to turn the call over to Andrew Emerson. Good morning, and welcome to our first quarter earnings call. Today, I'd like to update you on Q1 results and review our 2025 financial outlook. IDEXX achieved a solid start to 2025. In terms of key highlights for the quarter, overall revenues increased 5% organically, supported by a 4.5% organic growth in CAG diagnostic reoccurring revenues, net of an approximate 1.5% equivalent days headwind. Solid revenue gains were also a net of global same-store growth headwinds, including a 2.6% decline in U.S. clinical visits. IDEXX execution trends remain strong, reflecting a continued IDEXX CAG diagnostic recurring revenue growth premium.

Speaker Change: Good morning, and welcome to our first quarter earnings call today I'd like to update you on Q1 results and review, our 2025 financial outlook I'd.

Speaker Change: IDEXX achieved a solid start to 2025 in terms of key highlights for the quarter overall revenues increased 5% organically supported by a four 5% organic growth in CAG diagnostic recurring revenues net of an approximate one 5% equivalent days headwind.

Solid revenue gains were also net of global same store growth headwinds, including a two 6% decline in U S clinical visits.

Speaker Change: IDEXX execution trends remained strong, reflecting our continued IDEXX CAG diagnostic recurring revenue growth premium.

Andrew Emerson: a 9% expansion of the premium instrument install base, and a 9% organic reoccurring revenue gains in veterinary software and diagnostic imaging. Profit delivery was aligned with our outlook, supported by gross margin gains while we invested in innovation priorities. Operating margin performance enabled EPS delivery of $2.96 per share delivering 5% growth as reported and 7% growth on a comparable basis. We're pleased with the progress in expanding our business as we work through sector and macro factors that have pressured recent visit growth at the veterinary clinic level. We're confident in the long-term growth potential of our business, supported by ongoing focus on innovation, including our recent IDEXX Cancer DX launch, starting with canine lymphoma.

Speaker Change: 9% expansion of the premium instrument installed base and a 9% organic recurring revenue gains in veterinary software and diagnostic imaging.

Speaker Change: Profit delivery was aligned with our outlook supported by gross margin gains, while we invested in innovation priorities.

Speaker Change: Operating margin performance enabled EPS delivery of $2 96 per share delivering 5% growth as reported and 7% growth on a comparable basis.

We're pleased with the progress in expanding our business as we worked through sector and macro factors that have pressured recent visit growth at the veterinary clinic level.

Speaker Change: We're confident in the long term growth potential of our business supported by ongoing focus on innovation, including our recent IDEXX cancer Dx launch starting with canine lymphoma.

Andrew Emerson: We've updated our 2025 financial outlook to incorporate positive changes from foreign exchange and a now-concluded litigation expense accrual adjustment, while reinforcing consistent 2025 goals for organic revenue growth and comparable operating margin improvement.

Speaker Change: We've updated our 2025 financial outlook to incorporate positive changes from foreign exchange and are now concluded litigation expense accrual adjustment, while reinforcing consistent 2025 goals for organic revenue growth and comparable operating margin improvement.

Andrew Emerson: Let's begin with a review of our first quarter results before transitioning to our full year outlook. First quarter organic revenue growth of 5% was driven by 4.5% organic revenue gains in our CAG business, 7% organic growth in water, and 4% organic growth in LPD. CAG organic revenue growth was supported by 7% organic gains in veterinary software and diagnostic imaging revenues, driven by 9% organic reoccurring revenues. CAG instrument revenues decreased 5% organically against high prior year placement levels while benefiting from initial placements of IDEXX InViewDX, which will ramp throughout the year. CAG diagnostic reoccurring revenues increased 4.5% organically in Q1, net of a 1.5% headwind from equivalent days.

Speaker Change: Let's begin with a review of our first quarter results before transitioning to our full year outlook.

Speaker Change: First quarter organic revenue growth of 5% was driven by four 5% organic revenue gains in our CAG business, 7% organic growth in water and 4% organic growth in L. P. J.

Speaker Change: CAGR organic revenue growth was supported by 7% organic gains in veterinary software and diagnostic imaging revenues driven by 9% organic recurring revenue growth.

CAG instrument revenues decreased 5% organically against high prior year placement levels, while benefiting from initial placements of IDEXX interview, Dx, which will ramp throughout the year.

Speaker Change: CAG diagnostic recurring revenues increased four 5% organically in Q1 net of a one 5% headwind from equivalent days.

Andrew Emerson: Global CAG diagnostic recurring revenue growth reflected solid gains across all major regions. On average, global net price improvement was 4%. And on a day's adjusted basis, volume gains were approximately 2%. International CAG diagnostic reoccurring revenue organic growth was eight and a half percent and on a days adjusted basis sustained double digit organic revenue growth, reflecting benefits from net price realization, and strong volume gains building on 2024 momentum. International results continue to be driven by IDEXX execution, reflected in strong new business gains, which supported double-digit year-over-year expansion of our premium instrument installed base. US CAG Diagnostic Reoccurring Revenue Organic Growth was 3% in Q1.

Speaker Change: Global CAG diagnostic recurring revenue growth reflected solid gains across all major regions.

Speaker Change: On the average global net price improvement was 4%.

Speaker Change: And on a days adjusted basis volume gains were approximately 2%.

Speaker Change: International CAG diagnostic recurring revenue organic growth was eight 5% and on a days adjusted basis sustained double digit organic revenue growth, reflecting benefits from net price realization and strong volume gains building on 2020 for momentum.

Speaker Change: International results continued to be driven by IDEXX execution reflected in strong new business gains, which supported double digit year over year expansion of our premium instrument installed base.

Speaker Change: U S CAG diagnostic recurring revenue organic growth was 3% in Q1 net of debt days' headwind.

Andrew Emerson: Net of the days had This reflects a continued solid growth premium compared to same-store U.S. clinic visit growth levels, which declined an estimated 2.6% overall in the quarter. IDEXX solid growth reflects increased levels of diagnostic frequency and increased diagnostic utilization for clinical visit at the practice level, along with strong execution, including solid new business gains, sustained high levels of customer retention, and net price realization of three and a half percent. Modality gains in the quarter were supported by strong growth in consumable revenues. IDEXX VetLab consumable revenues increased 10% organically, reflecting high single-digit gains in the U.S.

Speaker Change: This reflects our continued solid growth premium compared to same store U S clinical visit growth levels, which declined an estimated two 6% overall in the quarter.

Speaker Change: IDEXX solid growth reflects increased levels of diagnostic frequency and increased diagnostic utilization preclinical visit at the practice level, along with strong execution, including solid new business gains sustained high levels of customer retention and net price realization of three 5%.

Speaker Change: Modality gains in the quarter were supported by strong growth in consumable revenues IDEXX vet lab consumable revenues increased 10% organically, reflecting high single digit gains in the U S and double digit growth in international regions.

Andrew Emerson: and double-digit growth in international regions. Consumable gains were supported by 9% year-over-year growth in our global premium instrument install base. During Q1, we placed 4,163 CAG premium instruments, a decline of 13% against high prior year levels. Our focus on quality of instrument placement continues to be strong, reflected in sustained levels of competitive and greenfield catalysts, including 7% growth in the U.S. and 5% gains in Europe, along with double-digit growth in our global EVI metric. In the U.S., we placed 1,544 instruments, an increase of 12% year-over-year, supported by strong competitive and greenfield catalyst places. In North America, we placed 302 IDEXX NVDX analyzers as we moved from a controlled to full launch of our exciting new platform.

Speaker Change: Consumable gains were supported by 9% year over year growth in our global premium instrument installed base.

During Q1, we placed 4163 CAG premium instruments, a decline of 13% against high prior year levels.

Speaker Change: Our focus on quality of instrument placements continues to be strong reflected in sustained levels of competitive and greenfield catalyst, including 7% growth in the U S and 5% gains in Europe, along with double digit growth in our global Evi metric.

Speaker Change: In the U S. We placed 1544 instruments, an increase of 12% year over year supported by strong competitive and Greenfield catalyst placements.

Speaker Change: In North America, we placed 300 to IDEXX <unk> analyzers as we move from a control to full launch of our exciting new platform.

Andrew Emerson: Global rapid assay revenues declined 2% organically in Q1. Rapid assay results were constrained by customers shifting pancreatic lipase testing to our Catalyst instrument platform, which we estimated to be a 5% headwind in Q1 revenue growth. Global lab revenues increased 1% organically. When adjusting for equivalent days effects, international regions drove solid growth in the quarter, with the US at low single-digit growth. Global growth was supported by modest volume gains aided by new business. In Q1, net pricing gains in our Reference Lab line of business were moderated by impacts from previously highlighted major new customer agreements, which we will begin lapping during Q2.

Speaker Change: Global rapid assay revenues declined 2% organically in Q1.

Speaker Change: Assay results were constrained by customer shifting pancreatic lipase testing to our catalyst instrument platform, which we estimated to be a 5% headwind in Q1 revenue growth.

Speaker Change: Global lab revenues increased 1% organically when adjusting for equivalent days effects international regions drove solid growth in the quarter with the U S at low single digit growth.

Speaker Change: Global growth was supported by modest volume gains aided by new business.

Speaker Change: In Q1 net pricing gains in our reference lab line of business were moderated by impacts from previously highlighted major new customer agreements, which we will begin lapping during Q2.

Andrew Emerson: Veterinary software and diagnostic imaging revenues increased 9% as reported, including benefits from a software acquisition last year. 7% overall organic gains were driven by reoccurring revenues reflecting benefits from ongoing momentum and cloud based software placement. Water revenues increased 7% organically in Q1 against high prior year levels. Growth was driven by double-digit revenue expansion in our European region. Livestock, poultry and dairy revenues increased 4% again. Solid Gains in the U.S. built off of momentum in the second half of 2024.

Speaker Change: Veterinary software and diagnostic imaging revenues increased 9% as reported including benefits from our software acquisition last year.

Speaker Change: 7% overall organic gains were driven by reoccurring revenues, reflecting benefits from ongoing momentum in cloud based software placements.

Speaker Change: Water revenues increased 7% organically in Q1 against high prior year levels.

Speaker Change: It was driven by double digit revenue expansion in our European region.

Speaker Change: Livestock, poultry and dairy revenues increased 4% organically.

Speaker Change: Solid gains in the U S built off of momentum in the second half of 2024.

Andrew Emerson: Turning to our P&L, Q1 profit results were supported by solid gross margin gains. Gross profit increased 5% in the quarter as reported and 6% on a comparable basis. Gross margins were 62.4%, up 80 basis points on a comparable basis. Gross margin gains reflected benefits from business mix, including vet lab consumable growth and instrument Reported gross margin gains benefited by approximately 10 basis points related to foreign exchange impacts net of hedge position. Operating expenses increased 4% year over year as reported in the quarter and 8% on a comparable basis. This was net of a $9 million or 3% operating expense growth offset related to a favorable adjustment to the Discrete Litigation Expense Accrual and 1% from foreign exchange impact.

Speaker Change: Turning to our P&L Q1 profit results were supported by solid gross margin gains.

Speaker Change: Gross profit increased 5% in the quarter as reported and 6% on a comparable basis.

Speaker Change: Gross margins were 62, 4% up 80 basis points on a comparable basis.

Speaker Change: Gross margin gains reflected benefits from business mix, including that lab consumable growth and instrument mix.

Speaker Change: Reported gross margin gains benefited by approximately 10 basis points related to foreign exchange impacts net of hedge positions.

Speaker Change: Operating expenses increased 4% year over year as reported in the quarter and 8% on a comparable basis.

Speaker Change: This was net of a $9 million or 3% operating expense growth offset related to a favorable adjustment to the discrete litigation expense accrual and 1% from foreign exchange impacts.

Andrew Emerson: Q1 OPEX growth was driven by increases in R&D and commercial spending aligned with advancing our innovation roadmap. EPS was $2.96 per share in Q1, an increase of 5% as reported and 7% on a comparable basis, net of a 3% EPS growth benefit related to the adjustment of a discrete litigation expense accrual. foreign exchange reduced operating profits by $4 million and EPS of approximately four cents per share in the quarter net of a $4 million hedge gain. Free cash flow was $208 million in Q1, reflecting normal seasonality. On a trailing 12-month basis, our net income to free cash flow conversion ratio was 95%.

Speaker Change: Q1, Opex growth was driven by increases in R&D and commercial spending aligned with advancing our innovation roadmap.

Speaker Change: EPS was $2 96 per share in Q1, an increase of 5% as reported and 7% on a comparable basis net of a 3% EPS growth benefit related to the adjustment of a discrete litigation expense accrual.

Speaker Change: Foreign exchange reduced operating profit by $4 million and EPS of approximately <unk> four per share in the quarter net of a $4 million hedge gain.

Speaker Change: Free cash flow was $208 million in Q1, reflecting normal seasonality.

Speaker Change: On a trailing 12 month basis, our net income to free cash flow conversion ratio was 95%.

Andrew Emerson: For the full year, we're updating our outlook for net income to free cash flow conversion of 80 to 85%, reflecting the impact of the now concluded litigation matter and estimated impacts as a result of the tariff plan. Our balance sheet remains healthy. We ended the quarter with leverage ratios of 0.7 times gross and 0.6 times net of cash. We look to maintain full-year gross leverage ratios at similar levels. Share repurchases over the last year supported a 2.4% reduction in diluted shares outstanding, and we allocated $415 million in capital to share repurchases during the first quarter.

Speaker Change: For the full year, we're updating our outlook for net income to free cash flow conversion of 80% to 85%, reflecting the impact of the now concluded litigation matter and estimated impacts as a result of tariff planning.

Speaker Change: Our balance sheet remains healthy we ended the quarter with leverage ratios of <unk> seven times gross and <unk> six times net of cash.

Speaker Change: We look to maintain full year gross leverage ratios at similar levels.

Speaker Change: Share repurchases over the last year supported a two 4% reduction in diluted shares outstanding and we allocated $415 million in capital to share repurchases during the first quarter.

Andrew Emerson: Turning to our 2025 guidance, our outlook reinforces consistent full year goals for solid organic revenue growth, comparable operating margin improvement, and EPS gains. We revised estimates for foreign exchange impacts, reflecting the recent weakening of the U.S. dollar and Q1 Discrete Litigation Expense Accrual Adjustment. In terms of our revenue outlook, we've updated our full year guidance for reported revenues to $4,095,000,000 to $4,210,000,000, an increase of $40 million or approximately 1% growth rate improvement related to foreign exchange at the rates published in our press release. We've maintained a full-year organic growth outlook of 6% to 9%, supported by 5% to 8% gains in CAG diagnostic recurring revenues, including global net price realization of 4% to 4.5% at midpoint, and expectations for 4500 IDEXX and VUDX placement.

Speaker Change: Turning to our 2025 guidance or outlook reinforces consistent full year goals for solid organic revenue growth comparable operating margin improvement and EPS gains.

Speaker Change: We revised estimates for foreign exchange impacts, reflecting the recent weakening of the U S. Dollar in Q1 discrete litigation expense accrual adjustments.

Speaker Change: In terms of our revenue outlook, we've updated our full year guidance for reported revenues to 4.095 billion.

Speaker Change: It's a $4.210 billion, an increase of $40 million or approximately 1% growth rate improvement related to foreign exchange at the rates published in our press release.

Speaker Change: We have maintained our full year organic growth outlook of 6% to 9% supported by 5% to 8% gains in CAG diagnostic recurring revenues, including global net price realization of four to four 5% at midpoint and expectations for 4500, IDEXX and view Dx placements.

Andrew Emerson: We're increasing our outlook for reported operating margins to 31.1% to 31.6% for the full year. This outlook maintains consistent 30 to 80 basis points of comparable operating margin expansion for the full year net of 180 basis point operating margin benefit related to the discrete litigation expense accrual adjustment and updated for foreign exchange effect. With respect to the dynamic trade environment, we're well-positioned to navigate the changing tariff landscape. As previously highlighted, we captured high-level tariff estimates for internationally-sourced materials in our initial outlook. We have revised these estimates based on the current U.S. pronouncements and have incorporated estimates for China's retaliatory tariffs.

Speaker Change: We're increasing our outlook for reported operating margins to 31, 1% to 31, 6% for the full year.

Speaker Change: This outlook maintains consistent 30 to 80 basis points of comparable operating margin expansion for the full year net of 180 basis point operating margin benefit related to the discrete litigation expense accrual adjustment and updated for foreign exchange effects.

Speaker Change: With respect to say the dynamic trade environment, we're well positioned to navigate the changing tariff landscape as previously highlighted recaptured high level tariff estimates for internationally sourced materials and our initial outlook. We have revised these estimates based on the current U S pronouncements and have incorporated estimates for China's retaliatory.

Speaker Change: Roofs.

Andrew Emerson: Our primary objectives are focused on maintaining continuous supply to customers and minimizing tariff impacts through effective operational planning and balance sheet leverage. Our updated full-year EPS Outlook is $11.93 to $12.43 per share, an increase of $0.19 per share at midpoint, driven by $0.11 per share from foreign exchange and $0.08 per share from a favorable adjustment to the Discrete Litigation Expense Agreement. We now estimate foreign exchange will have a negative 10 cents per share full year EPS impact. Operationally, we're maintaining consistent outlook for 8% to 12% comparable EPS growth. For our second quarter, we're planning for reported revenue growth of 5% to 7.5% net of approximately a 1% growth headwind from foreign exchange.

Our primary objectives are focused on maintaining continuous supply to customers and minimizing tariff impacts through effective operational planning and balance sheet leverage.

Speaker Change: Our updated full year EPS outlook is $11 93.

Speaker Change: $12 43 per share.

Speaker Change: An increase of <unk> 19 per share at midpoint, driven by <unk> 11 per share from foreign exchange and <unk> <unk> per share from a favorable adjustment to the discrete litigation accrual expense.

Speaker Change: We now estimate foreign exchange will have a negative <unk> 10 per share full year EPS impact.

Speaker Change: Operationally, we're maintaining consistent outlook for 8% to 12% comparable EPS growth.

For our second quarter, we're planning for reported revenue growth of 5% to seven 5% net of approximately a 1% growth headwind from foreign exchange.

Andrew Emerson: This operational outlook aligns with overall organic revenue growth of 6% to 8.5% and organic CAG diagnostic revenue growth of 5% to 7.5%. At midpoint, the second quarter Organic Revenue Growth Outlook includes U.S. clinical visit growth in line with our full year estimates. We're planning for reported operating margins of 32.9% to 33.4% in Q2, reflecting expansion of 40 to 90 basis points on a comparable basis.

Speaker Change: This operational outlook aligns with overall organic revenue growth of 6% to eight 5% and organic CAG diagnostic revenue growth of 5% to seven 5%.

Speaker Change: At mid point, the second quarter organic revenue growth outlook includes U S clinical visit growth in line with our full year estimates.

Speaker Change: We're planning for a reported operating margins of 32, 9% to 33, 4% in Q2, reflecting expansion of 40 to 90 basis points on a comparable basis.

Jay Mazelsky: That concludes our financial review, and I'll now turn the call over to Jay for his comment. Thank you, Andrew, and good morning. 2025 is off to a solid start, as IDEXX's innovations gain commercial traction across the portfolio. At the end of March, we launched IDEXX Cancer DX through our reference labs in North America. This first-of-its-kind diagnostic panel for early detection of canine lymphoma brings exceptional levels of performance and is prized to our veterinarian partners in a way that is intended to support broad inclusion and access to pet owners. Adding to this excitement in the quarter, we continued our rollout of IDEXX InViewDX, our new-to-the-industry cellular analyzer.

Speaker Change: That concludes our financial review and I'll now turn the call over to Jay for his comments.

Jay: Thank you Andrew and good morning, 2025 is off to a solid start as IDEXX innovations gain commercial traction across the portfolio.

Jay: At the end of March we launched IDEXX cancer Dx to our reference labs in North America. This first of its kind diagnostic panel for early detection of canine lymphoma brings exceptional levels of performance and is priced to our veterinarian partners in a way that is intended to support broad inclusion and access to pet owners.

Jay: Adding to this excitement in the quarter. We continued our rollout of IDEXX <unk> are new to the industry cellular analyzer.

Jay Mazelsky: With strong pre-order momentum from last year, we placed over 300 instruments in Q1 and moved from a controlled rollout in Q1 to broad availability in April. Together, these two platforms, IDEXX CancerDX and IDEXX InViewDX, represent an important leap forward to embody our vision for innovation that elevates patient care, supports our customers, and fuels long-term sustainable growth for IDEXX.

Jay: Preorder momentum from last year, we placed over 300 instruments in Q1 and both from a controlled rollout in Q1 to broad availability in April.

Jay: Together these two platforms side ex cancer, Dx and IDEXX <unk> Dx represents and importantly forward. They embody our vision for innovation that elevates patient care supports our customers and fuel long term sustainable growth for IDEXX.

Jay Mazelsky: Let's now take a closer look at our commercial performance. Our commercial organization executed strongly in the quarter. We delivered solid growth and organic recurring revenue, including days adjusted double digit CAC diagnostics, recurring revenue growth, international. We have sustained high levels of customer retention and expanded our customer base while further expanding our commercial footprint in high potential retail. We delivered strong premium instrument placements in a quarter, including over 1,100 new and competitive catalysts, resulting in high single-digit growth in our worldwide premium instrument installed base and double-digit growth in future economic value. In the U.S., our commercial team delivered record Q1 placements in EVI, supported by early interest in IDEXX and VDX.

Jay: Let's now take a closer look at our commercial performance.

Jay: Our commercial organization executed strongly in the quarter, we delivered solid growth in organic recurring revenue, including days adjusted double digit CAG diagnostics recurring revenue growth internationally.

Jay: Stained high levels of customer retention and expanded our customer base, while further expanding our commercial footprint and high potential regions. We delivered strong premium instrument placements in the quarter, including over 1100, new and competitive catalyst, resulting in high single digit growth in our worldwide premium instrument installed base.

Jay: Double digit growth in future economic value in the U S. Our commercial team delivered record Q1 placements in evi supported by early interest in IDEXX N V. Dx in Europe, we lapped a record upgrade cycle in hematology from laser sight to <unk>, while delivering solid growth in competitive and greenfield catalyst placements.

Jay Mazelsky: In Europe, we locked a record upgrade cycle in hematology from LaserSight to ProSight1, while delivering solid growth in competitive and green-filled catalyst placements. We sustained high levels of customer retention in the high 90s across our diagnostic modalities, demonstrating the ongoing value and trust our customers place in IDEXX. This loyalty is foundational to our growth. as it enables predictable recurring revenue while providing a large customer base to introduce innovations like IDEXX CancerDX and IDEXX InView. Internationally, in addition to another strong quarter with double-digit instrument- and fault-based growth, recent innovations like Catalyst Pancreatic Lipase has been especially well-received, benefiting the strong IDEXX VentLab consumables performance.

Jay: We sustained high levels of customer retention in the high nineties across our diagnostic modalities, demonstrating the ongoing value and trust our customers place in IDEXX. This loyalty is foundational to our growth model.

Jay: Is it enables predictable recurring revenue, while providing a large customer base to introduce innovation like IDEXX cancer Dx, yet IDEXX envy IDEXX internationally. In addition to another strong quarter with double digit instrument installed base growth recent innovations like catalyst pancreatic lipase has been especially well received benefit.

Jay: The strong IDEXX that lab consumables performance. These reagents are responding favorably to our tailored commercial strategies, which combined local support with global innovation.

Jay Mazelsky: These regions are responding favorably to our tailored commercial strategies, which combine local support with global innovation. We completed onboarding and training for commercial expansion in South Korea, where our customers are primed to adopt IDEXX's innovative point-of-care solutions, while benefiting from our in-country reference laboratory capabilities. The traditional investment in Korea represents another example of investing towards growth aligned with regional readiness and commercial momentum. As practices continue to seek productivity improvements, our diagnostic solutions position not just as medical tools, but also as operational enablers. By providing fast, accurate results, our platforms help practices see more patients, reduce callbacks, and make better use of limited clinical time.

Jay: We completed Onboarding and training for our commercial expansion in South Korea, where our customers are prime to adopt IDEXX is innovative point of care solutions.

Jay: <unk> from our in country reference laboratory capabilities. They said this general investment in Korea represents another example of investing towards growth aligned with regional readiness and commercial momentum.

Jay: As practices continued to seek productivity improvements our diagnostic solutions positioned not just as medical tools, but also its operation enablers by providing fast accurate results our platforms help practices see more patients reduced callbacks and make better use of limited clinical attack our field teams partnered with.

Jay Mazelsky: Our field teams partner with customers to optimize workflows, bring up technicians and doctors to focus on care rather than coordinating.

Jay: Customers to optimize workflows, bringing up technicians and doctors to focus on care rather than coordination.

Jay Mazelsky: Altogether, the commercial performance of QWAD lays a solid foundation for the year ahead. While macroeconomic conditions remain dynamic, we're seeing strong demand signals and continued willingness by clinics to invest in diagnostics as a core part of animal health. Our commercial model, grounded in partnership, flexibility, and execution excellence remains a key differentiator and a critical enabler of our innovation-led growth strategy.

Jay: Altogether the commercial performance in Q1 lays a solid foundation for the year ahead, where macroeconomic conditions remain dynamic we're seeing strong demand signals and continued willingness by clinics to invest in diagnostics as a core part of animal health and our commercial model grounded in partnership flexibility and execution excellence remains a key.

Jay: <unk> got a critical enabler of our innovation led growth strategy.

Jay Mazelsky: This was a landmark quarter for IDEXX's diagnostic innovation strategy, as we brought some of our most ambitious, clinically impactful technologies to market. IDEXX Cancer DX marks a major evolution in our approach to diagnostics, making complex, molecular-level testing accessible to general practitioners through a simple, cost-effective blood test. Veterinarians now have a tool that allows them to incorporate cancer detection into a wellness Seamlessly, alongside other blood chemistry and hematology workups, with turnaround times of just two to three days in the U.S., at a price point as low as $15, this solution provides an affordable solution that delivers powerful clinical Since launch, we now have over 1,000 practices that have already ordered the test, representing broad awareness and strong initial involvement.

Jay: This was a landmark quarter for IDEXX diagnostic innovation strategy as we brought some of our most ambitious clinically impactful technologies to market IDEXX cancer Dx marks a major evolution in our approach to diagnostics, making complex molecular level testing accessible to general practitioners through a simple cost effective blood to.

Jay: Yes.

Jay: Veterinarians now have a tool that allows them to incorporate cancer detection into a wellness visit seamlessly alongside other blood chemistry, and hematology workshops with turnaround times of just two to three days in the U S. At a price point as low as $15. This solution provides an affordable solution that delivers powerful clinical insight since launch.

Jay: Have over a thousand practices that have already ordered the test representing broad awareness and strong initial interest.

Jay Mazelsky: Cancer is personal to many pet owners. The earlier we can detect cancer and determine the type of cancer, the better the chance for targeted treatments and improved outcomes, such as additional quality of months or years of life. This is only the beginning. Within three years, we intend to broaden the scope of our oncology menu to address the majority of canine cancer cases. With an established diagnostic footprint and strong relationships with general and specialty practitioners, IDEXX is uniquely positioned to lead in this high-impact area of veterinary medicine.

Jay: Cancerous personnel to many pet owners. The earlier, we can detect cancer and determined the type of cancer the better the chance for targeted treatments and improved outcomes such as additional quality of months four years of life.

Jay: This is only the beginning within three years, we intend to broaden the scope of our oncology menu to address the majority of canine cancer cases within established diagnostic footprint and strong relationships with general and specialty practitioners IDEXX is uniquely positioned to lead in this high impact area Veterinary medicine.

Jay Mazelsky: Similarly, IDEXX and BeautyX is poised to transform point-of-care diagnostics across several high-volume testing categories. As noted, we moved from a controlled rollout in Q1 to broad availability entering Q2. With gating controls removed, we've seen an acceleration of placements, with over 900 placements through the end of April, which supports the increase in consumables usage expected to grow throughout the year. This momentum highlights the high level of customer interest in this breakthrough AI-empowered, slide-free cytology system. By combining advanced optics with an AI model trained on millions of cellular images, IDEXX MUDX analyzes ear cytology and blood morphology in minutes while the patient is still in the practice.

Jay: Similarly, I would ask him beauty acts is poised to transfer our point of care diagnostics across several high volume testing categories. As noted we moved from a controlled Roth in Q1, the broad availability entering Q2 with gating controls removed, we've seen an acceleration of placements with over 900 placements.

Jay: The end of April which supports the increase in consumables usage are expected to grow throughout the year. This momentum highlights the high level of customer interest in this breakthrough AI empowered slide free cytology system.

Jay: By combining advanced optics with an AI model trained on millions of cellular images IDEXX, a beauty ex analyzes your cytology and blood morphology in minutes, while the patient is tail into practice seamless integration with IDEXX that lab station in fact connect plus allows teams to store view and share results for these.

Jay Mazelsky: Seamless integration with IDEXX VetLab Station and VetConnect Plus allows teams to store, view, and share results. Customer feedback has been especially enthusiastic around these reviews, confidence in results, and the way it enhances technician workflows by simplifying and automating what was once a time-consuming manual task. We're seeing exciting utilization trends across early adopters, with utilization for both ear cytology and blood morphology well aligned with our expectations.

Jay: Customer feedback has been especially enthusiastic around ease of use confidence and results in a way it enhances technician workflows by simplifying and automating what was once a time consuming manual task, we're seeing exciting utilization trends across early adopters with utilization for both ear cytology and blood morphology.

Jay: <unk> well aligned with our expectations.

Jay Mazelsky: We look forward to sharing additional insights on the utilization trends in the future. Looking ahead, we are in an excellent position for manufacturing, inventory, and commercial capacity to deliver our 4,500-plus placement goal in 2025. And our R&D and operations teams continue to make great progress as we plan to introduce 5-needle aspirate capabilities for lumps and bumps on IDEXX InView later in 2025. This high-interest menu expansion as part of our Technology for Life approach will unlock value in oncology diagnostics, as FNA is a key method for evaluating the ubiquitous lumps and bumps common to many docs.

Jay: Look forward to sharing additional insights and utilization trends in the future.

Jay: Looking ahead, we are in an excellent position for manufacturing inventory and commercial capacity to deliver our 4500 plus placement call. It 2025 into our R&D and operations teams continue to make great progress as we plan to introduce fine needle aspirate capabilities for lumps and bumps on IDEXX <unk> later in 2012.

Jay: Five this high interest menu expansion as part of our technology for life approach will unlock substantial value in oncology diagnostics. If M&A is a key method for evaluating these big lumps.

Jay: Lumps and bumps common to many docs.

Jay Mazelsky: Our software ecosystem continues to be an important growth driver and a source of strategic advantage. With deep integrations across diagnostics, imaging, communication, and practice operations, IDEXX software helps clinics unlock the full potential of their diagnostics, improve client engagement, and enhance operational efficiency. This quarter, we saw strong performance across our practice information management systems, as well as pet owner engagement tools like Bell. Our EasyVet and NEO platforms continue to grow as we deliver double-digit placement growth in our leading cloud-native PIMs during the quarter. With accelerated momentum, particularly in multi-location practices and corporate account customization. Customers are choosing our cloud-native platforms for their modern user interfaces, seamless integration with diagnostics, and ability to scale across locations with centralized data and workforce.

Jay: Our software ecosystem continues to be an important growth driver and a source of strategic advantage with deep integrations across diagnostics imaging communication and practice operations IDEXX software helps clinics unlock the full potential of their diagnostics improve client engagement and enhance operational efficiency.

Jay: This quarter, we saw strong performance across our practice information management systems.

Jay: Well as pet owner engagement tools like bell or easy that neo platforms continue to grow as we delivered double digit placement growth in our leading cloud native teams during the quarter with accelerated momentum, particularly in multilocation practices and our corporate account customer.

Jay: Customers are choosing our cloud data platforms for their modern user interfaces seamless integration with diagnostics and the ability to scale across locations with centralized data and workflows.

Jay Mazelsky: Dell, our cloud-native client engagement platform, continued its strong growth trajectory in Q1, increasing users over 20% from Q4. Dell users have experienced enhanced communications with pen owners, increased visit frequency, and improved compliance with diagnostics and treatment plans compared both to customers who are using other client engagement platforms or relying on a simple capability resident in their pen.

Jay: No our cloud native client engagement platform continued its strong growth trajectory in Q1.

Jay: Creasing users over 20% from Q4, <unk> users have experienced enhanced communications with pet owners increased visit frequency and improve compliance with diagnostics and treatment plants compared both to customers who are using other client engagement platforms are relying on a simple capability resident in their pants.

Jay Mazelsky: As we manage through ongoing uncertainty in the global trade environment, our top priority is to support our customers with uninterrupted access to the high-quality products and services they rely on IDEXX for. IDEXX is relatively well-positioned with 65% of consolidated revenues and a majority of our CAG industrial base located in the U.S., while less than 1% of company revenues come from China. While situated well, we are not immune to impacts from a highly dynamic tariff environment. As Andrew noted, we captured high-level tariff estimates for internationally sourced materials in our initial outlook and have now incorporated estimates for China retaliatory tariff Our supply chain and operations teams are intensely focused on navigating the shifting tariff landscape and broader economic challenge.

Jay: As we manage through ongoing uncertainty in the global trade environment, our top priority is to support our customers with an interrupted access to the high quality products and services. They rely on IDEXX for IDEXX is relatively well positioned with 65% of consolidated revenues and a majority of our cash.

Jay: <unk> industrial base located in the U S well less than 1% of company revenues come from China while.

Jay: Well situated well we are not immune to the impacts from a highly dynamic tariff environment as Andrew noted, we captured high level tariff estimates for internationally sourced materials and our initial outlook and have now incorporated estimates for China retaliatory tariff impacts our supply chain and operations teams are intensely focused.

Jay: Navigating the shifting tariff landscape and broader economic challenges, we have taken and are taking additional proactive steps to assure staging where appropriate and implementing plans to support high product developed availability, while also seeking to mitigate the financial impacts as we look to deliver our profit goals.

Jay Mazelsky: We have taken and are taking additional proactive steps to ensure staging where appropriate and implementing plans to support high product availability, while also seeking to mitigate financial impacts as we look to deliver our profit goals.

Jay Mazelsky: As noted, we're operating in a challenging environment, where both a broader macro and global trade environment, as well as continuing sector factors have moderated our growth. Though veterinary capacity constraints have largely stabilized, economic uncertainty continues to be a factor in pressure in clinical visits. We are pleased to share, as a point supporting the resiliency of the pet healthcare market, that the estimated pet population sustained in 2024 at similar levels to the prior year. Notably, this represents approximately 3% CAICR versus 2019 baseline, well ahead of the historical approximately 1% annual growth rate. This higher baseline of the absolute number of pets supports strong tailwinds to our business that gives us confidence in the opportunity to deliver solid organic revenue growth.

Jay: As noted we're operating in a challenging environment, we're about the broader macro and global trade environment as well as continuing secular factors have moderated our growth the veterinary capacity constraints have largely stabilized economic uncertainty continues to be a factor in pressure and clinical visits we are pleased to share that's a point supporting there.

Jay: Resiliency is a pet health care market that the estimated pet population sustained in 2024 at similar levels to the prior year, notably this represents approximately 3% kicker versus 2019 baseline well ahead of historical approximately 1% annual growth rate.

Jay: This higher baseline of the absolute number of pet support strong tailwind to our business that gives us confidence in the opportunity to deliver solid organic revenue growth pet ownership remains high pets are living longer and the expanded pet population is aging which are all positive factors for diagnostic peers.

Jay Mazelsky: Pet ownership remains high. Pets are living longer, and the expanded pet population is aging, which are all positive factors for diagnostics. Diagnostics sit at the center of the system of care and pet on our expectations for quality care continue to rise. IDEXX is uniquely positioned to lead, and our focus is on exceptional execution to deliver solid growth and profit gain.

Jay: Diagnostics sit at the center of the system of care and pet and our expectations for quality care continue to rise IDEXX.

Jay: <unk> is uniquely positioned to lead in our focus is on exceptional execution to deliver solid growth and profit gains.

Jay Mazelsky: I'll now conclude our prepared remarks by thanking the 11,000 IDEXX employers for your ongoing commitment and incredible passion for our purpose-driven work.

Jay: I'll now conclude our prepared remarks by thanking the 11000 IDEXX employees for your ongoing commitment and incredible passion for a purpose driven work now.

Operator: Now, let's please open the line for Q&A.

Jay: Now, let's please open the line for Q&A.

Jay: Yep.

Operator: Thank you, and if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open, so please state your name before posing your question. Again, you can press star 1 to ask a question, and we'll pause for just a moment to allow everyone an opportunity to signal for questions.

Jay: Thank you and if you would like to ask a question. Please signal by pressing star one on your telephone keypad.

Jay: If you're using a speaker phone. Please make sure your mute function is turned off to allow your signal to reach our equipment in.

Speaker Change: Hey boys popped on the phone line will indicate when your line is open. So please state your name before posing your question again, you can press star one to ask a question, we'll pause for just a moment to allow everyone an opportunity to take it up for questions.

Michael Ryskin: We will now move to your first question coming from Michael Ryskin with Bank of America. Great. Hey, can you hear me?

Speaker Change: We will now move to your first question coming from Michael Risking with Bank of America.

Speaker Change: Great.

Speaker Change: Hey.

Michael Ryskin: Thanks for taking the question, guys, and congrats on the quarter. I'll start with the high-level question on visits and the macro. I mean, total visits from your snapshot, you know, down 2.6 in the quarter, better than some third-party data actually indicated. But you saw pretty meaningful swings between wellness and non-wellness. It looks like non-wellness deteriorated. Wellness kind of snapped back after being down a little bit in 4Q. I was wondering if you could just talk about what you've seen there from a market perspective, you know, the changes over the last couple of months, and just an updated view for the rest of the year.

Speaker Change:

Speaker Change: Yeah, We got you.

Speaker Change: Hey, Thanks for taking the question guys and congrats on the quarter I'll start with the high level question on on visits and the macro.

Speaker Change: Total visits from your snapshot down to six in the quarter are better than some third party data actually indicated.

Speaker Change: When you saw pretty meaningful swings between wellness and non wellness looks like.

Speaker Change: Non wellness deteriorated, while I'm, just kind of snapped back after being down a little bit at <unk> I was wondering if you could just talk about what you're seeing there.

Speaker Change: From a market perspective, you know the changes over the last couple of months.

Speaker Change: And just an updated view for the rest of the year.

Andrew Emerson: Yeah, good morning, Mike. Thanks for that question. You know, largely, we've seen a, you know, consistent trend from both wellness, non wellness, it does, we do see some variation, quarter to quarter, obviously, you know, from a wellness standpoint, where the front end of the vector borne disease screening, part of the part of the year. So there's obviously some, some activity related to that. And you'd expect to see some snapback. We still think that the overall market overhang from a macro standpoint, you know, is providing some moderation, some headwinds that wellness visits. But, you know, in general, I think there's some level of optimism that the clinical visit moderation that we've seen has has stabilized.

Speaker Change: Yeah. Good morning, Mike. Thanks for that question, you know largely we've seen.

Speaker Change: Instant trend from a both up wellness not one on this it does we do see some variation quarter to quarter.

Speaker Change: He is a you know from a wellness standpoint, we're at the front end of the vector borne disease screening.

Speaker Change: Part of the part of the year. So there's obviously some some activity related to that and you'd expect to see some snapback, we still think that the overall <unk>.

Speaker Change: Market overhang from a macro standpoint, you know this is providing some moderation some headwinds that wellness visits but you know in general I think there's some level of optimism that the.

Speaker Change: The clinical visit moderation that we've seen has has stabilized.

Andrew Emerson: And, you know, more practices, both independent and corporates are really focused on trying to reengage customers, getting them back into the practice. And the wellness visit piece is a is a key strategy. Yeah, Mike, I would just add, you know, just in terms of the quality of the visits, right, something we pay close attention to, we saw increase in both frequency and utilization, you know, for those that are coming into the clinic. So while we continue to see a headwind on, you know, the actual pets coming in the door, you know, I think the quality remains strong in the use of diagnostics.

Speaker Change: And you know more practices, both independent and corporates are really focused on trying to re engage customers getting them back into the practice and the wellness visit piece is a is a key strategy for that.

Speaker Change: Mike I would just add just in terms of the quality of the visits read something we pay close attention to we saw an increase in both frequency and utilization for those that are coming into the clinic. So while we continue to see a headwind on you know the actual pets coming in the door you know I think the quality remains strong and the use of.

Andrew Emerson: And that's a key part of our strategy going forward.

Speaker Change: Diagnostics and that's a key part of our strategy going forward.

Andrew Emerson: The other thing I would just add quickly is part of our strategy with IDEXX Cancer, you know, DX and the initial launch of lymphoma is to include that as part of the screening offering. We know that there's been... A lot of receptivity on the part of customers to think about cancer screening and to include that as part of their wellness offering. And within a month, we've seen over 1,000 unique practices. Order the test. Is that something we think over time can provide a tailwind? Okay. That's helpful.

Speaker Change: The other thing I would just add quickly is part of our strategy with IDEXX cancer, you know Dx and in the initial launch of lymphoma is still include that as part of the screening offering.

Speaker Change: Know that Theres been.

Speaker Change: A lot of receptivity on the part of customers to think about cancer screening to include that you know as part of their wellness offering and you know within within a month, we've seen that over a thousand unique practices ordered the test is that something that we think you know overtime can provide a tailwind.

Andrew Emerson: And then my follow-up is just going to be on the in-view. You know, you did 302 in the quarter, but then you talked about, I think, 900 cumulative through the end of April. So, really picked up the pace in April as you removed the gating. Just what's been the feedback as you've opened it up to more broader release? And, you know, you're still sticking with the 4,500 for the year, but just sort of how should we think about pacing for that through the rest of the year? Thanks. Yeah.

Speaker Change: Okay. That's helpful. And then my follow up just going to be on the interview you know you did the real two in the quarter, but then you talked about I think 900 cumulative through the end of April so really picked up the pace in April as you remove the gating just what's been the feedback as you've opened it up.

Speaker Change: The more broader release and you're you're still sticking with the 4500 for the year, but just sort of how should we think about pacing for that through the rest of the year. Thanks.

Andrew Emerson: So, what I've got it to is 4,500 plus, but 4,500 is what is in the guidance. We're very enthusiastic about in-view because customers are enthusiastic about it. A couple pieces of feedback that I think are important. One is, you know, these are very well understood clinical use cases in terms of ear cytology, blood morphology. So, you don't have the, if you're bringing something that's new to the world or new to how they practice, there's obviously, you know, market or sector development activity connected with that. That's not the case here. Practices, you know, across the board do these type of tasks every day.

Speaker Change: So what what Ive got it too is 4500 plus.

Speaker Change: 45, hundreds what it is what it is what is in the guidance. They were very enthusiastic about about anvil because customers enthusiastic about it couple a couple of pieces of feedback that I think are important. One is you know these are very well understood clinical use cases.

Speaker Change: In terms of your cytology blood morphology said, you don't have the if you're bringing something that's new to the world or new to how they practice. This obviously you know marker market or sector development activity connected with that that's not the case here practices yeah.

Speaker Change: Across the board do these type of test every every day, so being able to eliminate work you don't have to do a slide that's a 15 to 20 minute exercise that captures the actual charge and voices the customer to being able to provide consistent and accurate results. These are all things that customers.

Andrew Emerson: So, being able to eliminate work, you don't have to do a slide. That's a 15 to 20 minute exercise that captures the actual charge and invoices the customer to being able to provide consistent and accurate results. These are all things that customers respond to. And the, you know, the initial feedback we've seen from a utilization standpoint, very much in line with where we thought it was going to be. You know, it's early days. To the earlier point of your question, we have moved from more of a gated approach to full volume and ramped up pretty significantly in April.

Speaker Change: <unk> respond to them.

Speaker Change: The you know the initial feedback we've seen from a utilization standpoint very much in line with where we thought it was going to be you know it's it's early days.

Speaker Change: What are your early the earlier point of your question, we have a move from more of a gated approach to full volume, yeah, and ramped up pretty significantly in April we'll continue to work through backlog get up at a fairly rapid pace, we have the capacity both in the field and in <unk>.

Andrew Emerson: We'll continue to work through backlog at a fairly rapid pace. We have the capacity both in the field and product ready. And we know that that's important to get it out into our customers' hands and get the recurring revenue flywheel going. Thanks.

Speaker Change: <unk> ready and we know that that's important to get it out into our customers hands and get the our recurring revenue flywheel going.

Michael Ryskin: I'll leave it there, guys.

Speaker Change: Thanks, I'll leave it there guys. Thank you.

Operator: Thank you.

Katerina: We will now take the next question from Chris Schott with J.P. Morton.

Speaker Change: We will now take the next question from Chris Schott with J P. Morgan.

Katerina: Hey, thank you so much.

Speaker Change: Hey, Thank you so much and does that actually katerina on for Christian J P. Morgan on thank you so much for taking your questions.

Andrew Emerson: This is actually Katerina on for Chris from J.P. Morgan. Thank you so much for taking your questions. So first, just on the theme of the macro, can you just maybe talk about the overall health of the pet owner demand in the U.S. at this point? And maybe if you're starting to see any changes, if you think about the broader economic environment as we potentially head into a recession.

Speaker Change: So first just on the theme of the macro can you just maybe talk about the overall health of the pet owner demanded in the U S. At this point and maybe if you're starting to see any changes when you think about the broader economic environment as we potentially head into a recession.

Andrew Emerson: And then the second question is just around tariffs. Can you elaborate a bit on your exposure and how you're thinking about potential impact, and if there's any ability to kind of mitigate some of that over time, and how you're thinking about potential future retaliatory tariffs after that 90-day pause, and what you're most kind of focused on there.

Speaker Change: And then the second question is just around tariffs.

Speaker Change: You know Rob worried a bit on your exposure and how youre thinking about potential impact if there's any ability to kind of mitigate some of that overtime and how youre thinking about potential future retaliatory tariffs after that 90 day pause and what is your most kind of focused on there. Thank you so much.

Andrew Emerson: Thank you so much. Good morning. Thanks for the question. So when we think about the macro and the consumer, just as we were highlighting, you know, we certainly are seeing some pressure in terms of the clinical visits. And that's, you know, more recently played out on the wellness side, I think, you know, as we look at the consumer, they on the margin are making trade offs, you know, in areas of elective type of procedures or visits for wellness. And we see that, you know, and pressure on our clinical visit metrics here overall. So, you know, that's, that's been an ongoing constraint.

Speaker Change: Good morning, Thanks for the question. So when we think about the macro and the consumer just as we were highlighting that you know we we certainly are seeing some pressure in terms of the clinical visits and that's you know more recently played out on the wellness side I think you know as we look at the consumer they are on the margin are making a trade.

Speaker Change: As you know in areas of elective type of procedures or ER visits for for wellness and we see that pressure on our clinical visit metrics here. Overall. So you know that's that's been an ongoing constraint I think we have that well factored in our outlook, we're not expecting any meaningful change you know.

Andrew Emerson: I think we have that well factored in our outlook, we're not expecting any meaningful change, you know, associated with that. Our guidance is a range, I think we capture, you know, positive improvement, or a little bit more of a decline associated with, you know, trends within that metric. But again, I come back to, you know, the quality of the visits that we continue to see, partnering with our customers at the veterinary clinic level, you know, the diagnostic frequency and the utilization continue to be a really important drivers for the business. And that comes back to execution, you know, from the teams, our ability to continue to drive, you know, new innovations.

Speaker Change: With that our guidance is a range I think recapture you know positive improvement order or in a little bit more of a decline associated with you know trends within that metric, but again I come back to the quality of the visits that we continue to see partnering with our customers at the veterinary clinic level the diagnostic frequency.

Speaker Change: And the utilization continue to be a really important drivers for the business and that comes back to execution from the teams our ability to continue to drive new innovations and I think we're really excited by some of the other more recent ones between N V. Dx in cancer Dx as Jay was highlighting are already seeing the early ramps.

Andrew Emerson: And I think we're really excited by, you know, some of the more recent ones, between InView DX and Cancer DX, as Jay was highlighting, already seeing the early ramps, you know, within those. So, you know, I think it's something we're continuing to monitor, but, you know, feel like we've had that captured in our outlook, ultimately. And, you know, it's not a major trend change in anything that we're seeing at this point in time. Just thinking about the tariff component, yeah, I think one of the things we highlighted was, you know, about 65% of our overall revenues are really U.S.-based, and our CAG industrial footprint is largely U.S.-based as well.

Speaker Change: Within those so you know I think it's something we're continuing to monitor but you don't feel like we'd have that captured in our outlook ultimately and you know it's not a major trend change in anything that we're seeing at this point in time.

Speaker Change: Just thinking about the tariff component yeah, I think you're one of the things. We highlighted was about 65% of our overall revenues are really U S based and our CAG industrial footprint is largely U S based as well so yeah, we're relatively well positioned from that perspective, Jay also highlighted that you know China represents less than 1% of our overall red.

Andrew Emerson: So, you know, we're relatively well-positioned, you know, from that perspective. Jay also highlighted that, you know, China represents less than 1% of our overall revenues here. You know, we're certainly focused at this point of just making sure that we can supply our customers and really, you know, have some operational plans put in place, leverage our balance sheet where possible to minimize the impacts of tariffs, including the, you know, post-90-day pause that you highlighted there. So, something we're working through. We're paying close attention to that, but, again, feel like we're well-positioned to manage that. And operationally, we're sticking with our guide that we had started with at the beginning of the year.

Speaker Change: As I hear you know what we're certainly focused at this point out of just making sure that we can supply our customers and really have some operational plans put in place a leverage our balance sheet, where possible to minimize the impacts of tariffs, including the post 90 day pause that you highlighted there so something we're working through we're paying close attention.

Speaker Change: And to that but again feel like we're well positioned to manage that operationally. We're we're sticking with our guide that we had started with at the beginning of the year. Yeah. I would add just a couple of other points. If you think about our reference lab business. So over 80 reference labs on a global basis, Yeah. Those are essentially local for local.

Jay Mazelsky: Yeah, I would add just a couple of other points. You know, if you think about our reference lab business, so over 80 reference labs on a global basis, you know, those are essentially local-for-local type factories within the countries. And so the tariff impact is, you know, pretty small, maybe related to, you know, some of the regions or what have you. But that's largely manageable, and it gives us good local reach. You know, to Andrew's point, what we learned during the pandemic is customers really value product and business continuity. They don't want to have to worry about, you know, tariffs and what it may mean from a product standpoint.

Speaker Change: The factories within within the countries and so the tariff impact is you know pretty pretty small maybe related to some of the reagents or what have you, but that's largely that's largely manageable and it gives us.

Speaker Change: It gives us good local rage.

Speaker Change: You know to Andrew's point, what we learned during the pandemic as customers really value product and business continuity. They don't want to have to worry about you know tariffs and what it may mean from a product standpoint, and so we're very focused our supply chains are resilient.

Jay Mazelsky: And so we're very focused. Our supply chains are resilient. focused on on really making sure that customers get what they want when they We have a high degree of confidence that we're well positioned to be able to do that.

Speaker Change: Pakistan on really making sure that our customers get what they want when they.

Speaker Change: Need it yet we have a high degree of confidence that we're well positioned to be able to do that.

Speaker Change: Thank you.

Erin Wright: We will now go to our next question from Erin Wright with Morgan Stanley. Great, thanks.

Speaker Change: We went out and go to our next question from Erin Wright with Morgan Stanley.

Yeah.

Erin Wright: Could you talk a little bit about CancerDX and the pull through that you're seeing, for instance, for those who have used it or familiar with it? And like, is it every wellness panel is becoming that premium wellness panel? Or what's the goal there in terms of that conversion rate and any sort of metrics you can give on that front? I know it's early, but I'd love to hear it. Thanks.

Erin Wright: Great. Thanks could you talk a little bit about cancer D acts in the pull through that you're seeing train thing for those of you that are familiar with it and like you said.

Speaker Change: Every walnuts peanuts can mean that premium wellness P&L or what's the goal there in terms of that conversion rate and any sort of metrics you can give on that front I know accurately but.

Erin Wright: Thanks.

Erin Wright: Good morning, Erin. Yeah, you know, we're, we're only a month in, so it is early. We have seen, you know, very, I think we're very pleased with the awareness and initial uptake with over 1000 unique customers ordering it. And there are many of those customers have ordered more than one. It's too early from a trend standpoint to understand the mix between aid in diagnosis versus part of the wellness panel. You know, we think that there's a role to play in each of those. And we've positioned both from a product offering and a pricing strategy standpoint, giving customers the option of doing both.

Eric: Sure. Good morning, Eric Yeah, you know, where we're only a month and so it is early.

Eric: We have seen in a very I think we're very pleased with the awareness and initial uptake with over 1000 unique customers ordering it and there are many of those customers have ordered more than one.

Eric: It's it's too early from a trend standpoint to understand the mix between eight and diagnosis versus part of the wellness Battle. You know, we think that there's a role to play in each of those and we've positioned both from a product offering and our pricing strategy standpoint, giving customers the option of doing.

Erin Wright: We've priced it in a way for inclusion in wellness so that it. from a performance and price standpoint, it can support practice strategies of including it more broadly as part of a wellness screen. I think a lot of veterinarians have resonated with that. They recognize that, you know, pet owners are looking, you know, for that and there's a lot of breeds, designer breeds, so to speak, that are at higher risk as, you know, young adults, four, five years of age. So, you know, the additional feedback has been great. I think customers see this as something that they, it's long overdue and that they're very enthusiastic about it and looking to really include it as part of their care strategy.

Eric: In both we've priced it in a way for inclusion in wellness of that yet.

Eric: From a performance and price standpoint, it can support.

Eric: Practice strategies of including it more broadly as part of a wellness screen I think a lot of veterinarians have resonated with that they recognize that pet.

Eric: Pet owners are looking for that then there is a lot of breeds designer bread so to speak that are at higher risk.

Eric: As you know young adults for five years of age. So you know the initial feedback has been great I think customers see this as something that they cause long overdue and that they're very enthusiastic about it and looking to really included as part of their care strategies.

Erin Wright: Okay, great.

Andrew Emerson: And then on guidance, I guess what gives you confidence right now in terms of, and it sounds like you do feel like you have some conviction in terms of underlying utilization trends, but I guess what gives you confidence in sort of the pickup and CAG recurring for the balance of the year? Like what's at the high end versus the low end of guidance from a vet office visit standpoint? And yeah, I know you spoke to the disconnect with some of the other industry in your guidance at this point. Thanks. Thanks for the question. Good morning, Erin.

Speaker Change: Okay, Great and then and then on guidance I guess, what gives you confidence right now in terms of any parent like you do you feel like you have some conviction in terms of underlying utilization trends, but I guess, what gives you confidence and tried to pick up any type of creating for the balance of the year like what's at the high end versus the low end of.

Eric: Guidance from US that also you did standpoint.

Eric: I know you spoke to that but it did come up with some of the other industry metrics, but just trying to understand what some of the buffers are in your in your guidance at this point.

Eric: Thanks for the question. Good morning, Erinn. This is Anders so from a guidance standpoint, you know if if I just come back to you how the underlying business in the trends that we're currently seeing a we're really expecting that to stay similar throughout the year at mid point, Yeah, We had highlighted.

Andrew Emerson: This is Andrew. So from a guidance standpoint, you know, if I just come back to, you know, the underlying business in the trends that we're currently seeing, we're really expecting that, you know, to stay similar throughout the year. At midpoint, you know, we had highlighted, you know, for the full year that we expected clinical visits to decline similar levels to 2024, which is approximately 2%. If you take a step back and think about the last four quarters, you know, it's still within that range, it's just over 2%. You know, from a metric standpoint. So, you know, we're not expecting any major change, you know, within the clinical visit component of this.

Eric: For the full year that we expected clinical visits to decline similar levels to 'twenty 'twenty, four which is approximately 2%. If you take a step back and think about the last four quarters. It's still within that range for you is just over 2% you know from a metric standpoint. So yeah, we're not expecting any major change you know within the clinical visit component.

Eric: This really what this comes down to is the our ability to you know continue to ramp innovations I get where you're really excited by and view Dx in cancer Dx, but we also have other menu expansions like our pancreatic lipase test, which continues to add positive momentum for our business.

Andrew Emerson: Really, what this comes down to is our ability to continue to ramp innovations. Again, we're really excited by InView DX and Cancer DX, but we also have other menu expansions like our pancreatic lipase test, which, you know, continues to add positive momentum, you know, for our business. You know, the other kind of components that, you know, we'll continue to see play out here, as we noted, the lapping of some of those large customer agreements. Yeah, I think we have the ability to both gain a little bit of price, you know, associated with that, as well as when we think about, you know, the ability to expand the relationships there and capture volumes over time.

Eric: Other kind of components that you know, we'll we'll continue to see play out here as we noted the lapping of some of those large customer agreements I think we have the ability to both gain a little bit of price you know associated with that as well as when we think about the ability to expand the relationships there and capture volumes over time. So we have a lot of really good.

Andrew Emerson: So we have a lot of, you know, really good building blocks that we're putting in place. You know, the guidance is a range, right? So we certainly have a range of outcomes here that we're expecting. It's a bit wider than we typically may be as well. So I think we're capturing that piece of it and that in Q1 in particular, you know, I think, you know, we also just had a day's headwind. And so when you normalize for that, you know, it's another component that you think about the overall outcome, you know, being pretty similar to the trends that we've seen in the 2nd half and what we're expecting for the full years.

Eric: Building blocks that we're putting in place you know the guidance is a range right and so we certainly have a range of outcomes here that we're expecting it's a bit wider than we typically may be as well. So I think we're capturing that piece of it and that in Q1 in particular.

Eric: We also just had a days' headwind so when you normalize for that you know it's a.

Eric: The other component that you think about the overall outcome being pretty similar to the trends that we've seen in the second half and what we're expecting for the full years. So overall I think we're well positioned and you know certainly a variety of variables that we're considering and I think the range allows us to stay consistent at the moment.

Andrew Emerson: So overall, I think we're well positioned and, you know, certainly a variety of variables that we're considering and I think the range allows us to, you know, stay consistent at that.

Operator: And again, if anyone would like to ask a question, it would be star 1 on your telephone keypad.

Speaker Change: And again, if anyone would like to ask a question it would be star one on your telephone keypad.

John Block: Your next question is coming from John Block from Stifel. Hey, guys. Good morning.

Jon Block: Your next question is coming from Jon block from Stifel.

Jon Block: Hey, guys good morning.

John Block: Maybe just the first one on InView, a small series of questions all wrapped into one. Jay, I think the InView order number was 1,600 last quarter. You gave more details around shipments, but is there an updated order number to share as of the end of the first quarter? And then regarding F&A timing, I think you said later in 25, but you've been saying later in 25. So anything more granular that you can give. And the final one is that additional metric in April of, I think the implied 600 shipments for the month of April. What led to that accelerating rate?

Speaker Change: Maybe just the first one in view of a small series of questions all wrapped into one G. I think the and view order number was 1600 last quarter.

Jon Block: Any more details around shipments, but is there an updated.

Speaker Change: Order number to share.

Speaker Change: As of the end of the first quarter and then regarding <unk> timing I think you said you are later in 'twenty five, but you've been saying later in 'twenty five show anything more granular that you can give and the final. One is you know that an additional metric in April of I think the implied 600 shipments for the month of April like what led.

Speaker Change: To that accelerating rate was at a component issue. There was rectified did you get the software in a better place paid place to accelerate the shipments maybe you can comment there and then I'll ask my follow up.

John Block: Was it a component issue that was rectified? Did you get the software in a better place to accelerate the shipments? Maybe you can comment there.

Jay Mazelsky: And that'll ask my follow-up. Yeah, good morning, John. You know, as I've described, you know, in the past, when we launched a new instrument, you know, typically, we go through a controlled launch process. And that's an opportunity to put at volume, you know, a product in the hands of customers, you always learn things that may involve, you know, some tweaks to an algorithm, or, you know, helping to refine the training and onboarding experience. And we got, we went through that process, we've done it with every instrument. And it tends not to be, you know, long process can be, you know, a couple months, you know, three, four months, something, something like that, we got confident that we were delivering the right experience with within view, and we opened up the gates.

Speaker Change: Yeah.

Speaker Change: Good morning, Josh Yes, as I've described it you know in the past when we launch a new instrument you know typically we go through a controlled launch process and that's an opportunity as you put ad volume.

Speaker Change: Product in the hands of customers you always learn things that may involve.

Speaker Change: Some tweaks to an algorithm or you know helping to refine the training and Onboarding experience and we got we went through that process. We've we've done that with every instrument and it tends not to be a long process. It can be you know a couple of months three four months something something like that we got.

Speaker Change: And then that we were delivering the right experience with with a view and we opened up the gates.

Jay Mazelsky: And so, you know, April represented, you know, confidence that we're down through the controlled launch period, and can deliver the experience we want to with customers. We're now that we're in volume launch, we're no longer disclosing backlogs, or, you know, the product itself, and we'll just continue to report, like we do for the other products, in terms of what we chip and put in the hands of customers. In terms of the Cancer DX, we You know, I've said I think consistently that F&A is an important part of the menu, that it's targeted later on in 2025.

Speaker Change: So you know April represented you know confidence that we're down through the controlled launch period and can deliver the experience we want to with customers, where now that we're in volume launch where it no longer disclosing backlogs.

Speaker Change: You know the product itself and we'll just continue to report like we do for the other products in terms of.

Speaker Change: What we chip and then put in the hands of customers in terms of the cancer Dx.

Speaker Change: We are.

Speaker Change: You know I have said I think consistently that M&A is an important part of the value that it's it's targeted later on in 2025, that's still our plan. We have teams working on it we know it's an important part of the menu that customers want.

Jay Mazelsky: That's still our plan. We have teams working on it. We know it's an important part of the menu that customers want and an integrated part of the overall company's cancer strategy. Okay, so no order number going forward. And the last part of that question, which was like what You know, resolve the bottleneck on the shipments and any commentary there if that was software components or did you sort of get after that? Well, I mean, it's just it's just part of as I was describing the controlled launch piece, where do you want to, you know, you want to exercise the system, there's always things you learn, there's tweaks you make to the algorithm, from, you know, manufacturing standpoint of the instrument and the consumable and field organization capacity, you know, is in place, you know, I can't point to a single thing and say, you know, that was it.

Speaker Change: And an integrated part of the overall company's cancer strategy.

Speaker Change: Okay. So no order number going forward and the last part of that question, which was like what.

Speaker Change: Resolve the bottleneck on the shipments that any commentary there if that was software components or did you sort of get after that.

Speaker Change: Well I mean, it's just it's just part of as I was describing the controlled launch piece, where do you want to you know you want to exercise the sysco Theres always say, what you've learned there because you make to the algorithm from manufacturing standpoint of the instrument and the consumable and our field organization.

Speaker Change: City, you know is in place.

Speaker Change: I can't point to a single thing and say yeah that was it its more just how we how we run product largest to deliver a very high customer experience.

Jay Mazelsky: It's more just how we how we run product launches that deliver a very high customer experience.

John Block: Okay, that was helpful. Thank you.

Speaker Change: Okay.

Andrew Emerson: And then maybe I'll ask a similar small series of more annoying questions for Andrew.

Speaker Change: That was helpful. Thank you and then maybe I'll ask a similar small series of more annoying question for Andrew So you don't have to just.

Andrew Emerson: So, you know, Andrew, just, maybe you could just help us out on a couple of things. The guidance that you gave or the metrics you gave for 2Q25, is that call it day neutral? I might've missed that. And if so, when we think about that acceleration in 2H, is that when you get that day or so back from 1Q?

Andrew Emerson: Maybe you could just help us out on a couple of things that the guidance that you gave for the metrics you gave for two Q 'twenty five.

Speaker Change: I call it gay neutral I might've missed that and if so when we think about that acceleration in two age is that when you get that day or so back from <unk> can you help us out on why the visit data. The sample size is down to 7500 from 8500 last quarter it moves around but.

Andrew Emerson: Can you help us out on why the visit data, the sample size is down to 7,500 from 8,500 last quarter? It moves around, but that was a pretty big move. Maybe you can give some clarity there.

Speaker Change: That was a pretty big move maybe you can give some clarity there and the last one is I thought I heard you say.

Andrew Emerson: And the last one is, I thought I heard you say, FX was a headwind. Q1Q, I might have missed that, but maybe we can just clarify the FX and the impact of the reported revenue for 2Q. Thanks, guys.

Speaker Change: FX was a headwind.

Speaker Change: Q1, Q I might have missed that but maybe if you can just clarify the FX and the impact to the reported revenue for <unk>. Thanks, guys.

Andrew Emerson: Yeah, good morning, John. So just in terms of days for Q2 in particular, we didn't highlight anything one way or the other. So you know, that any impact that we have from a day's perspective in Q2 wasn't something we called out and wouldn't be a material, you know, driver. So to your point, I think we will benefit in the second half related to you know, that compare if you're just looking at a half one to a half two type of metric that is part of, I think, the acceleration that you could think about, you know, as part of that second half benefit.

Speaker Change: Yeah. Good morning, John So just in terms of the days for Q2 in particular, we didn't highlight anything one way or the other so you know the any impact that we have from a days perspective in Q2 wasn't something we called out in and wouldn't be a material driver. So to your point I think we will benefit in the.

Speaker Change: Half related to that compare or if you're just looking at our.

Speaker Change: Half one half two type of metric that is part of I think the acceleration that you could think about you know as part of that second half benefit you know when you think about the FX component.

Andrew Emerson: You know, when we think about the FX component, again, we're planning for about a 1% headwind for foreign exchange year over year. Yeah, that's for the full year outlook. And, you know, Q2 at this point, it aligns with the rates that we published in our in our press release. Certainly foreign exchange has been relatively volatile lately. So I think it's, you know, something we're, you know, again, paying attention to, but we're being transparent about what we have in planned, just to give you a sense for sensitivities, you know, 1% change in foreign exchange rates would be about $11 million on the top line and $4 million of operating profits.

Speaker Change: Again, we're planning for about a 1% headwind from foreign exchange year over year, Yeah. That's for the full year outlook in Q2 at this point it aligns with the rates that we publish in our in our press release, certainly foreign exchange has been relatively volatile lately.

Speaker Change: It's something we're paying attention to but we're being transparent about what we have in planned just to give you a sense for sensitivity is a 1% change in foreign exchange rates that would be about $11 million on the top line and $4 million of operating profit so yeah.

Andrew Emerson: So, you know, we'll continue to provide that level of transparency. But, you know, just to give you a flavor for how we're, how we're, how we're seeing the planning rates play out here. And then on the visit data, you know, again, to your point, I think it changes from period to period, it gets largely in line with what we saw in terms of our Q4 numbers as well. So, you know, it's in that, you know, 7,000 to 8,000 range in the last, you know, several quarters here. And, you know, we'll pay attention to that, but nothing meaningful to call out there, you know, just tends to be, how do we make sure we have a comparable basis, and it's still a really material portion of the overall sector.

Speaker Change: Yeah.

Speaker Change: We'll continue to provide that level of transparency, but yeah, just to give you a flavor for how we're how we're how we're seeing the planning rates play out here and then on the visit data you know again to your point I think it changes from period to period. It gets largely in line with what we saw in terms of our Q4 numbers as well. So you know that's in that seven to 8000 range in the last you know.

Speaker Change: Quarters here, and you know well, we'll pay attention to that but nothing meaningful to call out there just tends to be how do we have to make sure. We have a comparable basis and it's still really a material portion of the overall sector. So I think it's a meaningful number.

Andrew Emerson: So, yeah, I think it's a meaningful number.

Brandon Vazquez: Next question is coming from Brandon Vazquez with William Blair. Hi, everyone. Thanks for taking the question.

Speaker Change: Next question is coming from Brandon Vazquez with William Blair.

Brandon Vazquez: Hi, everyone. Thanks for taking the question I'll ask two upfront because they're kind of related here. One is you guys were talking a lot about macros. So just kind of curious how things are trended more so in April I think a lot of us are trying to understand the consumer tea leaves are a little harder to read these days so curious how wellness.

Brandon Vazquez: I'll ask two up front because they're kind of related here. One is you guys were talking a lot about macros, so just kind of curious how things have trended more so in April. I think a lot of us are trying to understand the consumer. Tea leaves are a little harder to read these days, so curious how wellness visits especially have been trending more so in April and how you guys are feeling there. And the kind of interconnected question to that is despite kind of the noise around macro, your utilization X price has actually been pretty strong the past couple of quarters and has remained pretty resilient.

Brandon Vazquez: Especially you have been trending more so in the April and how you guys are feeling there the kind of interconnected question to that is.

Brandon Vazquez: Despite kind of annoys around macro your utilization X price.

Brandon Vazquez: Actually been pretty strong the past couple of quarters and has remained pretty resilient. So curious if you could talk a little bit about how that utilization is what's driving that utilization growth. Despite the macro how durable you think that can be as we go through 'twenty five thank you.

Andrew Emerson: So curious if you could talk a little bit about how that utilization is, what's driving that utilization growth despite the macro, how durable you think that can be as we go through 25. Thank you.

Andrew Emerson: Yeah, thanks, Brandon, for the question. I'll start. Maybe just to highlight it, we don't really typically talk about anything in period here. So, you know, while Jay highlighted the ramp that we had on IMVU-DX, which I think is really exciting, points to, you know, how we're thinking about that ramp going forward. You know, we're not necessarily going to get into visit, you know, metrics here, you know, for April. You know, the guide, again, if you just kind of think about where we're positioning for Q2 at midpoint, CAG diagnostic reoccurring revenue would be about six and a quarter.

Brandon Vazquez: Yeah. Thanks, Brandon for the question I'll start maybe just highlighted.

Speaker Change: Highlighted we don't really typically talk about anything in period here. So yeah, while Jay highlighted the ramp that we had on a N V Dx, which I think is really exciting and points to you know how we're thinking about that ramp going forward here and we're not necessarily going to get into visit metrics here for April yeah. The the guide again, if you just kind of think about where we are.

Speaker Change: Positioning for Q2, our midpoint CAG diagnostic recurring revenue would be about six and a quarter and so that's largely in line on a days adjusted basis with what we saw in Q1 and.

Andrew Emerson: And so that's largely in line on a days adjusted basis with what we saw in Q1. And we highlighted that, you know, again, for the Q2 at midpoint, we would expect, you know, similar clinical visit levels as the full year outlook, which, you know, approximates around 2% declines for the full year. So, yeah, I think those are those are probably the most important metrics to be thinking about in terms of how see this playing out over time. And to your point, I think on the utilization, you know, component here, that's really encouraging for us. Again, the frequency and the utilization are key aspects of our strategy overall.

Speaker Change: And we highlighted that you're getting for the Q2 at midpoint and we would expect similar clinical visit levels as the full year outlook, which approximates around 2% declines for the full year. So I think those are those are probably the most important metrics to be thinking about it in terms of how we see this playing out over time.

Speaker Change: Your point I think on the utilization component here, that's really encouraging for US again, the frequency and the utilization are key aspects of our strategy. Overall I think we do see a level of resiliency here. That's what we've always said about the businesses, we're not immune to some of these macro impacts and certainly we've seen that play out on <unk>.

Andrew Emerson: I think we do see a level of resiliency here. That's what we've always said about the business is we're not immune to some of these macro impacts. And certainly we've seen that play out on clinical visits. But, you know, we see a resilient business that people are willing to continue to make tradeoffs for their pet's health over time.

Speaker Change: Nickel visits but will receive a resilient business that people are willing to continue to make tradeoffs for their their pets' health overtime.

Dan Clark: Next question is coming from Dan Clark with Lerink Partners. Great, thank you. Just wanted to stick with the theme of macro here. Is that a topic that comes up at all when you're discussing, you know, potential in-view sales with your customers? Or like, what are they focusing on in addition to being broadly enthusiastic about the new block? Thank you. Yeah.

Dan Clark: Next question is going is coming from Dan Clark with Leerink partners.

Dan Clark: Great. Thank you just wanted to stick with it.

Dan Clark: Macro here is isn't it a topic that comes up at all when you're discussing a potential sales with your customers or like what are they focusing on in addition to being probably in beauty I think about that any longer.

Jay Mazelsky: Hi, Dan, this is Jay. The, you know, customers, I, what we see pretty much across the board, have a, you know, pretty significant appetite for new technology provided it hits a sweet spot in terms of delivering good clinical impact, but also workflow optimization. So we see practices, whether it's an independent, you know, practice or the corporate group, really willing to lean in to technology investment. We've seen this on the software side. We're seeing it on the capital side. They are, you know, I think discerning consumers, so to speak, they they want to know that it's not adding work or taking work away, you know, from from their practices, because though I think staffing has largely stabilized, what they don't want to do is put themselves in a position where they People need more staff.

J B: Yeah, Hi, Dan This is J B you know customers.

Dan Clark: What we see pretty much across the board.

Dan Clark: Have a pretty significant appetite for new technology provided it hits, a sweet spot in terms of delivering good clinical impact, but also workflow optimization. So we see practices, whether its an independent practice or the corporate groups.

Dan Clark: Really willing to lean in to technology investment we've seen this on the software side, we're seeing it on the you know the capital side.

They are you know I think discerning consumers so to speak they they want to note that it's not adding work, we're taking work away.

Dan Clark: From from their practices cause, though I think staffing has largely stabilized what they don't want to do is put themselves in a position where they are.

Dan Clark: Need more staff. They also want to note that the technology can be applied that to help them deliver more consistent and accurate care, so whether it's cancer dx or even view or pancreatic lipase or the types of things that we're offering a lot of I think a lot of enthusiasm for those type of solutions and we've seen that.

Jay Mazelsky: They also want to know that the technology can be applied to help them deliver more consistent and accurate care. So whether it's CancerDx or InView or Pancreatic Lipase or the type of things that we're offering. A lot of, I think a lot of enthusiasm for those type of solutions and we've seen that in a number of places.

Dan Clark: The numbers.

David Westenberg: Your next question is coming from David Westenberg with Piper Sandler. Hi, thanks for taking the question. So I wanted to hit on the pet adoption trends. Are you seeing, at least the data I think is suggesting there might be a little bit more cats than the dogs in the pet adoption trend? Can you talk about how that kind of changes the utilization dynamics? And if there's any innovation or drive or kind of like conversations with customers in terms of how to get these, the utilization of cats up? Yeah, good morning, David. We, you know, we were very, I think, pleased with the overall trend being flat.

Dan Clark: Your next question is coming from David Steinberg with Piper Sandler.

David Steinberg: Hi, Thanks for taking the question so I wanted to hit on the the pet adoption trends.

David Steinberg: Are you seeing them at least are the data I think it's suggesting there might be a little bit more cats and dogs in the pet adoption trend can you talk about how that kind of changes that utilization dynamics and if there's any innovation or driver or kind of like conversations with customers in terms of how to get these are the utilization of <unk>.

David Steinberg: Our cats Oh.

Speaker Change: Yeah. Good morning, David We you know we were very I picked up.

Speaker Change: Placed with the the overall trend bank being flat it had come off as you recall.

Jay Mazelsky: It had come off, as you recall, you know, through the pandemic and after the pandemic. really from a very significant adoption high. And as I've mentioned in my remarks, it's approximately a 3% CAGR going back to 2019. You know, historically, that's a 3x, that's a 3x figure. There is some mix in the cats, not surprisingly. You know, I think there's increasingly interest in being able to provide excellent care that cats in addition to the dogs. So, you know, we expect over time, you know, see higher standards of care, being able to provide. A lot of our solutions like SDMA, for example, are tailor-made towards cats because there's a higher incidence of chronic kidney disease in cats.

Speaker Change: And then after the pandemic.

Speaker Change: Really from a very significant adoption hi, yeah, and as I had mentioned it in my remarks, it's approximately a 3% CAGR going back to the 20th 19.

Speaker Change: Historically, that's a three X three I figure there is there some mix in that in the cat's not not surprisingly you know I think there's increasingly interested in being able to provide excellent care that our cats. In addition to the dogs. So you know we expect.

Speaker Change: I'll work overtime Uh huh.

Speaker Change: You don't see.

Speaker Change: Higher standards of care and being able to provide a lot of our solutions like S. DMA for example are tailor made towards.

Speaker Change: Cats, because there's a higher incidence of chronic kidney disease in cats. So we have a really nice portfolio our triple from rapid assay standpoint is the gold standard.

Jay Mazelsky: So we have a really nice portfolio. Our triple from rapid assay standpoint is the gold standard in being able to support cat health. And something that we continue to, you know, look at and really understand how better to support cat health.

Speaker Change: And being able to support Cat health and something that we continue to look at and really understand how better to support cat health.

Andrew Emerson: Thanks.

Andrew Emerson: And just another one on macro, but you guys specifically, you did mention the 10% growth in EVI. So I'm guessing maybe this leans towards 360. But I was just thinking about the dynamics and kind of the uncertain environment, whether or not they are gravitate toward 360 or a capital purchase, just, you know, the only I mean, consideration of maybe 360 is, you know, in an uncertain environment, you also want to have the minimum commitment. So just any color there on how to think about the purchase decisions that the customers are making. Thank you. Yeah, IDEXX 360 has always been, you know, our primary or the majority of placements occur through IDEXX 360 as a program, so there's a lot of the customer receptivity to it.

Speaker Change: Thanks.

Speaker Change: Just another one on macro but you guys specifically you'd make it you did mention the 10% growth in E. D. I. So I'm guessing maybe this means towards 360, but I was just thinking about the dynamics and kind of the uncertain environment, whether or not they are gravitate towards 360 or a capital purchase just you know the only I mean consideration of maybe $3 68.

Speaker Change: As you know in an uncertain environment. You also want to have the minimum commitment. So just any color there on how to think about.

Speaker Change: But the purchase decisions that our customers are making great. Thank you. That's my last one.

Speaker Change: I think 36, he's always been you know.

Speaker Change: Our our primary or the or the majority of placements occur through IDEXX 360, as a program. So there's a lot of I think customer receptivity to it what we said as we said the yeah. The evi placement was with double digits on a global basis. So obviously the quality of placements across our premium.

Jay Mazelsky: What we said is we said the EBI placement was double digits on a global basis, so obviously the quality of placements across our premium instrument portfolio was very high, which is what we shoot for. It's really driven by competitive and greenfield catalysts, both in the U.S. and international, so we pay a lot of attention to quality of placements. We continue to make great traction, and we'll provide updates throughout the year.

Speaker Change: Our instrument portfolio West was very high which is what we shoot for it it really driven by competitive and Greenfield catalyst of.

Speaker Change: Both in the U S and international so we pay a lot of attention.

Speaker Change: <unk> placements, we continue to make great great traction and Dan the.

Speaker Change: Well, we'll provide updates.

Speaker Change: The year on that.

Navann Dietschi: And your last question will be coming from Niven Tai with BNP Parabellum. Hi, good morning. Do you remain confident on the 4, 4.5% net price given the VET-VIVIT environment? And I have a question on InView as well. Is your confidence still based on the existing menu or would you say the SMA expansion will materially help to reach the 4500 target? Thank you.

Speaker Change: And your last question will be coming from.

Speaker Change: With BNP Paribas.

Speaker Change: Hi, good morning.

Speaker Change: You're not confident.

Speaker Change: Uh huh.

Speaker Change: Hi.

Speaker Change: And I have a question on U S barley.

Speaker Change: So that's terrible.

From you or would you.

Speaker Change: Oh I'm sorry.

Speaker Change: My pleasure to help do this.

Speaker Change:

Speaker Change: 500 pardon.

Andrew Emerson: Good morning, Navann. Maybe I'll just start with your first question. So as part of our 2025 outlook, we have said at midpoint that pricing is four to four and a half percent. In Q1, we highlighted that we delivered 4% from a global net price realization perspective. So I Yeah, you know, the menu on InView is, you know, ear cytology, blood morphology. And then we said later on in the year, you know, FNA for lumps and bumps. And, you know, customers who have purchased at this point have purchased based on the ear cytology and blood morphology.

Speaker Change: Good morning, Nevada, maybe I'll just start with your first question. So as part of our 2025 outlook. We have sat at mid point that pricing is a four to four 5% in Q1, we highlighted that we delivered 4% from a global net price realization perspective.

Jay: So I think you know where we're so confident with our overall focus on pricing at this point, maybe I'll hand, the call to Jay to talk to your next question. However, Yeah, you know that the menu.

Jay: You can view if you know your cytology blood morphology, and then we said later on in the year.

Jay: <unk> for for lumps and bumps and customers who have purchased.

Jay: At this point there have purchased based on that your cytology and blood morphology.

Andrew Emerson: And they recognize that we have a technology for life orientation. I think there's a lot of confidence that we'll continue to expand the menu. But our guidance and our outlook is based on, you know, what we've delivered in the hands of customers today. And that obviously, you know, as additional menu, you know, comes out, they'll be able to use that. And we provided, I think, back at yesterday, some guidance in terms of the overall value of that consumable stream between $3,500 and $5,500 annually, which includes FNA as part of that model.

Speaker Change: They recognize that we have a technology for life orientation, I think there's a lot of confidence that we will continue to expand.

Speaker Change: The video, but our guidance and our outlook is based on you know what what we've delivered in the hands of customers today and that obviously.

Speaker Change: As additional menu comes out.

Speaker Change: They'll be able to use that and again, we provided I think back at Investor day, some guidance in terms of the overall value of that consumable stream between 3500, 5500, which dollars annually, which includes M&A as part of that model.

Jay Mazelsky: Okay, so I'll now conclude our prepared remarks by thanking the 11,000 IDEXX employees for your ongoing commitment and incredible passion for our purpose-driven work. Once again, my pleasure to share how IDEXX executed against our organic growth strategy while delivering strong financial results in the first quarter.

Speaker Change: Okay. Thanks.

Speaker Change: So I will now conclude our prepared.

Remarks by thanking the 11000 IDEXX employees for your ongoing commitment and incredible passion for a purpose driven work.

Speaker Change: Once again, my pleasure to share how IDEXX executed against our organic growth strategy, while delivering strong financial results in the first quarter.

Operator: So with that, we'll conclude the call. Thank you.

Speaker Change: So with that we'll conclude the call thinking.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.

Speaker Change: This concludes today's call. Thank you for your participation you may now disconnect.

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