Key financial results
- Revenue increased 10% organically in the third quarter of 2026, supported by 11% organic growth in CAG Diagnostics recurring revenues.
Revenue increased 10% organically, supported by 11% organic growth in CAG Diagnostics recurring revenues
- Earnings per share reached $4.01 in the quarter, representing an increase of 18% as reported and 22% on a comparable basis.
earnings per share of $4.01 in the quarter, an increase of 18% as reported and 22% on a comparable basis.
- Comparable operating margin improved by approximately 60 basis points year-over-year, and reported operating margin was 33.1%, up 100 basis points.
comparable operating margin gains of approximately 60 basis points year-over-year
- Free cash flow was $421 million in the third quarter and $978 million year-to-date.
Free cash flow was $421 million in Q3 and $978 million year-to-date.
Business segment results
- CAG Diagnostics: CAG recurring revenues grew 11% organically, driven by volume gains, innovation contributions, and approximately 4% global net price improvement.
CAG Diagnostics recurring revenue growth of 11% organically, which was volume-led
- U.S. CAG: U.S. organic CAG Diagnostics recurring revenue grew 9.6% in the third quarter.
U.S. organic CAG Diagnostics recurring revenue grew 9.6% in Q3
- International CAG: International CAG diagnostic recurring revenues grew 14% organically with double-digit gains across major regions.
International CAG diagnostic recurring revenues grew 14% organically in Q3
- VetLab Consumables: IDEXX VetLab consumable revenues increased 15% organically, supported by installed base expansion and broader menu utilization.
IDEXX VetLab consumable revenues increased 15% on an organic basis
- Reference Labs: Global reference lab revenues increased 10% organically, led by volume gains from net new customers and competitive wins.
IDEXX global reference lab revenues increased 10% organically in Q3
- Rapid Assay: Global Rapid Assay revenues increased 1% organically, sustaining modest growth seen during the second quarter.
Global Rapid Assay revenues increased 1% organically in Q3
- Software and Imaging: Software and diagnostic imaging organic revenues increased 10%, driven by recurring growth and DR50 PLUS placements.
Veterinary software and diagnostic imaging organic revenues increased 10%
- Water and LPD: Water revenues increased 8% organically and livestock, poultry, and dairy revenues increased 3% organically.
Water revenues increased 8% organically in Q3 and livestock, poultry and dairy revenues increased 3% organically.
Capital allocation
- Management reported repurchasing $805 million of shares year-to-date, supporting a 2% year-over-year reduction in diluted shares outstanding.
bringing the year-to-date share repurchases to $805 million and supporting a 2% year-over-year reduction in diluted shares outstanding.
- The company repaid $75 million of senior notes in the quarter using strong free cash flow.
strong free cash flow supported repaying $75 million of senior notes in the quarter
- Total debt was aligned with the prior year-end while deploying approximately $335 million toward the CoVet acquisition and share repurchases.
- Full year capital spending is updated to approximately $160 million.
updated full year capital spending of approximately $160 million.
Industry trends and dynamics
- U.S. same-store clinical visits declined an estimated 1.8% in the quarter.
U.S. same-store clinical visits declined an estimated 1.8% in the quarter
- IDEXX achieved a U.S. CAG Diagnostics recurring revenue growth premium of approximately 1,100 basis points over visit declines.
reflecting a U.S. CAG Diagnostics recurring revenue growth premium of approximately 1,100 basis points
- Pets age 5-plus years where diagnostic frequency rises contributed to clinical visit growth.
pets age 5-plus years where diagnostic frequency rises contributed to clinical visit growth.
- A substantial majority of wellness visits still do not include blood work, which management cited as a long-duration growth lever.
With a substantial majority of wellness visits still not including blood work, increased diagnostic inclusion remains a long-duration growth lever
Competitive landscape
- Customer retention in CAG Diagnostics remains in the high 90s globally.
Customer retention and CAG Diagnostics remains in the high 90s globally
- Reference lab growth included competitive lab wins in the U.S.
led by volume gains from net new customers, including competitive lab wins in the U.S.
- Premium instrument placements reached 5,780 units globally in the quarter.
Premium instrument placements reached 5,780 units in the quarter
- The company placed 1,904 inVue Dx instruments globally along with nearly 1,200 competitive and greenfield Catalyst placements.
Globally, we placed 1,904 inVue Dx instruments with strong international demand and nearly 1,200 competitive and greenfield Catalyst placements
Macroeconomic environment
- Foreign exchange added $4 million to operating profit and $0.04 to EPS in the third quarter net of hedge effects.
foreign exchange added $4 million to operating profit and $0.04 to EPS in Q3 net of hedge effects.
- A 1% strengthening of the U.S. dollar would reduce revenue by approximately $4 million and EPS by $0.02 per share for the remainder of the year.
a 1% strengthening of the U.S. dollar would reduce revenue by approximately $4 million and EPS by $0.02 per share for the remainder of the year.
- Management noted that the macro environment continues to remain a little bit more of a challenge.
The macro environment continues to remain a little bit more of a challenge, and it's something we're paying close attention to.
- Inflationary cost pressures were noted, though offset by pricing benefits and operational productivity.
pricing benefits offsetting inflationary cost pressures.
Growth opportunities and strategies
- Commercial expansions in France, Spain, South Korea, and Canada were completed ahead of schedule.
The commercial expansions we announced on the Q2 call for France, Spain, South Korea and Canada were all completed ahead of schedule.
- Fine needle aspirate testing is now available across all North America inVue Dx customers.
making fine needle aspirate testing with canine mast cell thermal detection available across all North America customers
- Cancer Dx panel was expanded to include canine mast cell tumor detection in late September without increasing the price.
- Catalyst proBNP was launched in North America as the first dual species quantitative cardiac test at the point of care.
the North American launch of Catalyst proBNP, the first and only dual species quantitative cardiac test at the point of care.
Financial guidance and outlook
- Full year revenue outlook was raised to a range of $4,741 million to $4,767 million.
We are raising our full year revenue range to $4,741 million to $4,767 million
- Full year organic revenue growth outlook is updated to 9.3% to 10%.
Our updated full year overall organic revenue growth outlook is 9.3% to 10%
- Full year EPS outlook was increased to $14.96 to $15.16 per share.
We also increased our full year EPS outlook to $14.96 to $15.16 per share
- Full year free cash flow conversion is expected to be 95% to 100% of net income.
our updated outlook for free cash flow conversion is 95% to 100% of net income
Acquisition of CoVet
- IDEXX acquired CoVet in September, an AI native, ambient listening and clinical workflow software provider for veterinary practices.
In September, we acquired CoVet a leading and rapidly growing provider of AI native, ambient listening and clinical workflow software for veterinary practices.
- CoVet has an annualized revenue run rate of approximately $20 million and is growing at strong double-digit rates.
The CoVet revenue run rate is approximately $20 million annualized and growing at strong double-digit rates
- The acquisition contributes approximately $5 million of revenue to full year 2026 results.
approximately $5 million of revenue from CoVet.
- The updated operating margin outlook includes approximately 30 basis points of negative impact related to CoVet including integration costs and amortization.
includes approximately 30 basis points of negative impact related to CoVet including integration costs and one quarter of estimated amortization.
Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Total Revenue | $4,741 million to $4,767 million | 10.1% to 10.8% reported |
| Earnings Per Share | $4.01 | 18% reported and 22% comparable |
| CAG Diagnostics Recurring Revenue Growth | 11% organic | 11% organic growth |
| Operating Margin | 33.1% | Up 100 basis points as reported |
| Gross Margin | 62.9% | Up 110 basis points as reported |
How management sounded
Balanced (+35 on our -100 to +100 scale). Management expressed strong confidence in their execution, raised full year revenue and EPS guidance, and highlighted exceptional demand for new platforms like inVue Dx and Cancer Dx. Management sounded more upbeat than on 20% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- Integration and dilution impacts from the CoVet acquisition.
- Adoption and expansion of fine needle aspirate (FNA) on the inVue Dx platform.
- The upcoming launch of hemangiosarcoma detection for Cancer Dx and MultiQ Dx.
Earlier calls
- Q2 2026 (Aug 4, 2026), tone Balanced: IDEXX reported 9% organic revenue growth in the second quarter, driven by strong companion animal diagnostics recurring revenues and higher full year guidance.
