IDEXX Laboratories Inc.‘s (NASDAQ:IDXX) stock is trading higher on Monday after it reported better-than-expected third-quarter financial results and raised its 2025 forecast.
The animal health company reported third-quarter 2025 adjusted earnings of $3.22 per share, up 15% year over year, beating the consensus of $3.13.
The pet healthcare company reported sales of $1.105 billion, beating the consensus of $1.073 billion, up 13% on a reported and 12% on an organic basis, driven by Companion Animal Group (CAG) growth of 14% as reported and 12% organic, and Poultry and Dairy (LPD) revenue growth of 17% as reported and 14% organic.
CAG revenue reached $1.012 billion, up from $891.9 million, led by CAG Diagnostics’ recurring revenue growth of 11% as reported and 10% organic, including 18% reported and 14% organic gains in International regions, and 8% reported and organic growth in the U.S., outpacing sector growth levels.
U.S. growth was aided by higher diagnostic frequency and easing clinical visit pressures.
Water achieved revenue growth of 8.2% on a reported basis and 7% on an organic basis, reaching $54.29 million.
LPD revenue grew 17.1% on a reported basis and 14.2% on an organic basis to $33.94 million.
Gross profit increased to $683.35 million, 15% as reported and 13% on a comparable basis. Gross margin of 61.8% increased 70 basis points as reported and 80 basis points on a comparable basis, supported by Reference Labs’ productivity initiatives and volume gains, strong growth of IDEXX VetLab consumables revenue, and benefits from net price realization helping to offset inflationary impact.
Operating margin was 32.1% for the quarter, higher than the prior year period by 100 basis points as reported and by 120 basis points on a comparable basis.
Guidance:
IDEXX Laboratories raised fiscal 2025 earnings from $12.40-$12.76 per share to $12.81-$13.01 per share, versus the consensus of $12.62.
The company raised 2025 sales guidance from $4.205 billion-$4.28 billion to $4.27 billion-$4.30 billion, versus the consensus of $4.232 billion.
Updated guidance includes 2025 reported revenue growth to 9.6%-10.3% (prior 7.7%-9.7%) and organic growth of 8.8%-9.5% compared to the prior range of 7.0%-9.0%.
CAG Diagnostics’ recurring revenue growth is expected to be 8.3%-9.0% compared to the prior range of 6.5%-8.7%.
Analyst Take
William Blair noted that while investors recognize ongoing weakness in end markets, Idexx Laboratories shares remain near record highs amid a new product cycle.
Analyst Ryan Daniels said third-quarter results may not settle concerns over vet visit trends or pricing pressures, but should offer reassurance that the company has tools to meet expectations despite a challenging backdrop.
Analyst Daniels maintains the Outperform rating on shares and expects future EPS growth to drive shares higher.
Price Action: IDXX stock is up 13.99% at $717.55 at the last check on Monday.
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