IDEXX Laboratories, Inc. (NASDAQ:IDXX) Q1 2024 Earnings Call Transcript May 1, 2024
IDEXX Laboratories, Inc. beats earnings expectations. Reported EPS is $2.81, expectations were $2.7. IDXX isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning and welcome to the IDEXX Laboratories First Quarter 2024 Earnings Conference Call. As a reminder, today’s conference is being recorded. Participating in the call this morning are Jay Mazelsky, President and Chief Executive Officer; Brian McKeon, Chief Financial Officer; and John Ravis, Vice President, 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. Additional information regarding these risks and uncertainties is available under the forward-looking statements noticed in our press release issued this morning, as well as in our periodic filings with the Securities and Exchange Commission, which can be attained from the SEC or by visiting the Investor Relations section of our website, idexx.com.
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 2024 results and updated 2024 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. We appreciate you may have additional questions, please feel free to get back into the queue and if time permits we will take your additional questions.
Today’s prepared remarks will be posted to idexx.com investors after the earnings conference call concludes. I would like to turn the call over to Brian McKeon.
Brian McKeon: Good morning and welcome to our first quarter earnings call. Today, I’ll take you through our Q1 results and review our updated financial outlook for 2024. In terms of highlights, IDEXX achieved solid organic revenue growth and strong profit gains in the first quarter. Overall revenues increased 7% organically, supported by 7% organic growth in CAG Diagnostic recurring revenues. Solid revenue gains were net of negative growth effects from severe US weather in January, which we estimated lowered overall IDEXX organic revenue growth by 0.5% to 1% and added pressure to US same-store clinical visit growth levels. IDEXX execution trends remained strong, reflected in a continued high IDEXX CAG Diagnostic recurring revenue growth premium, 8% global gains in premium instrument placements, and 11% organic gains in recurring veterinary software and diagnostic imaging revenues.
Profit delivery was excellent in the quarter, supported by gross margin gains. Strong operating margin performance enabled EPS delivery of $2.81 per share. EPS was a 10% as reported and 9% on a comparable basis, net of a 7% negative EPS growth impact for the lapping of a prior year customer contract resolution payment. Overall, we’re pleased with our continued progress in expanding our business and delivering strong financial performance, as we continue to work through sector and macro factors that have constrained visit growth at veterinary clinics. We’ve updated our 2024 financial outlook to incorporate recent sector trends, which we estimate will constrain the high-end of our full year organic growth outlook this year. We’ve also incorporated updated estimates for foreign exchange effects to reflect the recent strengthening of the US dollar.
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