IDEXX LABORATORIES INC DE
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 31, 2024
IDXX$676.04+0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000874716-24-000121
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0000874716-24-000139
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 132 previous paragraphs and 133 current paragraphs.
74 unchanged; 49 reworded; 10 added; 8 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Operating Expenses. Sales and marketing expense increased primarily due to higher travel, meeting, and personnel-related costs. General and administrative expense increased primarily due to higher information technology, outside services, and acquisition-related costs. Research and development expense increased primarily due to higher project costs. The change in foreign currency exchange rates decreased operating expense growth by approximately 1.0%.
Current report
CAG Diagnostics Capital – Instrument Revenue. The decrease in instrument revenue was primarily due to lower premium instruments placements and, to a lesser extent, program effects on pricing. The change in foreign currency exchange rates increased revenue growth by 0.3%. Instrument revenue does not include our IDEXX inVue Dx TM Cellular Analyzer pre-orders, which will be recognized in revenue when the instruments are delivered, which is anticipated to begin in North America during the fourth quarter of 2024.
Current report
Gross Profit. Gross profit increased due to higher revenue and a 140 basis point increase in the gross profit margin. The increase in the gross profit margin reflected favorable business mix, lower instrument costs, recurring software and services gross margin gains, and the benefit from net price realization, offsetting inflationary cost impacts. The overall change in foreign currency exchange rates decreased the gross profit margin by approximately 10 basis points, including the impact of lower hedge gains during the current period compared to the prior period.
Current report
Operating Expenses. Sales and marketing expense increased primarily due to higher travel, meeting, and personnel-related costs. General and administrative expense increased primarily due to higher information technology and outside services, as well as higher acquisition-related costs. Research and development expense increased primarily due to project costs. The change in foreign currency exchange rates was not significant to operating expense growth.
Current report
Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs. General and administrative expense decreased primarily due to lower bad debt expense. Research and development expense decreased primarily due to lower personnel-related and project costs. The change in foreign currency exchange rates was not significant to operating expense growth.
Current report
Nine Months Ended September 30, 2024, Compared to Nine Months Ended September 30, 2023
Current report
Gross Profit. Gross profit increased due to higher revenue and a 120 basis point increase in the gross profit margin. The increase in the gross profit margin reflected favorable business mix, lower instrument costs, recurring software and services gross margin gains, and the benefit from net price realization, offsetting inflationary cost impacts. The change in foreign currency exchange rates on the gross profit margin was not significant.
Current report
Revenue. The decrease in revenue was primarily due to lower testing levels in Asia Pacific, partially offset by higher realized prices and volumes growth in the U.S. and Europe. Thechange in foreign currency exchange rates decreased revenue growth by 0.6%.
Current report
Our total capital expenditure outlook for 2024 is estimated to be approximately $160 million, which includes capital investments to support growth in manufacturing and operations facilities and in customer-facing software development.
Current report
During the third quarter of 2024, we remitted our final payment of $21.8 million for the deemed repatriation tax imposed by the U.S. Tax Cut and Jobs Act of 2017.
Removed paragraphs (8)
Previous report
Operating Expenses. Sales and marketing expense increased primarily due to higher travel costs. General and administrative expense increased primarily due to a $61.5 million expense related to an ongoing litigation matter, as well as higher outside service costs. Research and development expense increased primarily due to project costs and higher personnel-related costs. The overall change in foreign currency exchange rates was not significant to operating expense growth.
Previous report
Gross Profit. Gross profit increased due to higher revenue and a 100 basis point increase in the gross profit margin. The increase in the gross profit margin reflected benefits from net price realization, offsetting inflationary cost impacts, software services gross margin gains, and favorable business mix. The overall change in foreign currency exchange rates on the gross profit margin was not significant.
Previous report
Operating Expenses. Sales and marketing expense increased primarily due to higher travel costs, partially offset by lower compensation costs. General and administrative expense increased primarily due to a $61.5 million expense related to an ongoing litigation matter, as well as higher outside service costs. Research and development expense increased primarily due to project costs and higher personnel-related costs. The overall change in foreign currency exchange rates was not significant to operating expense growth.
Previous report
Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs. General and administrative expense increased primarily due to an increase in bad debt expense. Research and development costs were relatively constant compared to the prior year. The overall change in foreign currency exchange rates resulted in a decrease in operating expense growth by approximately 1%.
Previous report
Six Months Ended June 30, 2024, Compared to Six Months Ended June 30, 2023
Previous report
CAG Diagnostics Capital – Instrument Revenue. The increase in instrument revenue was primarily due to favorable sales mix and higher premium instrument placements, partially offset by program pricing effects. The overall change in foreign currency exchange rates decreased revenue growth by 0.8%.
Previous report
Gross Profit. Gross profit increased due to higher revenue and a 110 basis point increase in the gross profit margin. The increase in the gross profit margin reflected benefits from net price realization, offsetting inflationary cost impacts, lower instrument costs, software services gross margin gains, and favorable business mix. The overall change in foreign currency exchange rates on the gross profit margin was not significant.
Previous report
Revenue. Revenue decreased primarily due to lower testing and herd health screening levels in Asia Pacific, partially offset by higher realized prices and volume increases in the U.S. and Europe. Theoverall change in foreign currency exchange rates decreased revenue growth by 0.8%.
Reworded paragraphs (49)
Previous wording
This Quarterly Report on Form 10-Q contains statements which, to the extent they are not statements of historical fact, constitute “forward-looking statements.” Such forward-looking statements about our business and expectations within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), include statements relating to, among other things, our expectations regarding revenue recognition timing and amounts; business trends, earnings and other measures of financial performance; projected impact of foreign currency exchange rates and hedging activities; realizability of assets; future cash flow and uses of cash; future repurchases of common stock; future levels of indebtedness and capital spending; the working capital and liquidity outlook; critical accounting estimates; deductibility of goodwill; inflation; and an ongoing litigation matter. Forward-looking statements can be identified by the use of words such as “expects,” “may,” “anticipates,” “intends,” “would,” “will,” “plans,” “believes,” “estimates,” “should,” “project,” and similar words and expressions. These forward-looking statements are intended to provide our current expectations or forecasts of future events; are based on current estimates, projections, beliefs, and assumptions; and are not guarantees of future performance. Actual events or results may differ materially from those described in the forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, including, among other things, the adverse impact, and the duration, of macroeconomic events, conditions, and uncertainties, such as geopolitical instability (including wars, terrorist attacks, and armed conflicts), general economic uncertainty, inflationary pressures, severe weather and other natural conditions, and supply chain challenges on our business, results of operations, liquidity, financial condition, and stock price, as well as the other matters described under the headings “Business,” “Risk Factors,” “Legal Proceedings,” “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosure About Market Risk” in our 2023 Annual Report and in the corresponding sections of this Quarterly Report on Form 10-Q, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as well as those described from time to time in our other periodic reports filed with the SEC.
Current wording
This Quarterly Report on Form 10-Q contains statements which, to the extent they are not statements of historical fact, constitute “forward-looking statements.” Such forward-looking statements about our business and expectations within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), include statements relating to, among other things, our expectations regarding revenue recognition timing and amounts; business trends, earnings and other measures of financial performance; projected impact of foreign currency exchange rates and hedging activities; realizability of assets; future cash flow and uses of cash; future repurchases of common stock; future levels of indebtedness and capital spending; the working capital and liquidity outlook; critical accounting estimates; deductibility of goodwill; inflation; an ongoing litigation matter; and timing of delivery of pre-ordered IDEXX inVue Dx Cellular Analyzers in the U.S. Forward-looking statements can be identified by the use of words such as “expects,” “may,” “anticipates,” “intends,” “would,” “will,” “plans,” “believes,” “estimates,” “should,” “project,” and similar words and expressions. These forward-looking statements are intended to provide our current expectations or forecasts of future events; are based on current estimates, projections, beliefs, and assumptions; and are not guarantees of future performance. Actual events or results may differ materially from those described in the forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, including, among other things, the adverse impact, and the duration, of macroeconomic events, conditions, and uncertainties, such as geopolitical instability (including wars, terrorist attacks, and armed conflicts), general economic uncertainty, inflationary pressures, severe weather and other natural conditions, and supply chain challenges on our business, results of operations, liquidity, financial condition, and stock price, as well as the other matters described under the headings “Business,” “Risk Factors,” “Legal Proceedings,” “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosure About Market Risk” in our 2023 Annual Report and in the corresponding sections of this Quarterly Report on Form 10-Q, and the Quarterly Reports on Form 10-Q for the quarters ended June 30, 2024, and March 31, 2024, as well as those described from time to time in our other periodic reports filed with the SEC.
Previous wording
Description of Business Segments. We operate primarily through three business segments: diagnostic and information management-based products and services for the companion animal veterinary industry, which we refer to as the Companion Animal Group (“CAG”); water quality products (“Water”); and diagnostic products and services for livestock and poultry health and to ensure the quality and safety of milk and improve producer efficiency, which we refer to as Livestock, Poultry and
Current wording
Description of Business Segments. We operate primarily through three business segments: diagnostic and information management-based products and services for the companion animal veterinary industry, which we refer to as the Companion Animal Group (“CAG”); water quality products (“Water”); and diagnostic products and services for livestock and poultry health and to ensure the quality and safety of milk and improve producer efficiency, which we refer to as Livestock, Poultry and Dairy (“LPD”). Our Other operating segment combines and presents our human medical diagnostic products business (“OPTI Medical”) with our out-licensing arrangements because they do not meet the quantitative or qualitative thresholds for reportable segments.
Previous wording
The discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The critical accounting policies and the significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2024, are consistent with those discussed in our 2023 Annual Report in the section under the heading “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates and Assumptions.”
Current wording
The discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The critical accounting policies and the significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2024, are consistent with those discussed in our 2023 Annual Report in the section under the heading “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates and Assumptions.”
Previous wording
The following revenue analysis and discussion focuses on organic revenue growth, and references in this analysis and discussion to “revenue,” “revenues,” or “revenue growth” are references to “organic revenue growth.” Organic revenue growth is a non-GAAP financial measure and represents the percentage change in revenue during the three and six months ended June 30, 2024, as compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates, certain business acquisitions, and divestitures. Organic revenue growth should be considered in addition to, and not as a replacement for, or as a superior measure to, revenue growth reported in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers.
Current wording
The following revenue analysis and discussion focuses on organic revenue growth, and references in this analysis and discussion to “revenue,” “revenues,” or “revenue growth” are references to “organic revenue growth.” Organic revenue growth is a non-GAAP financial measure and represents the percentage change in revenue during the three and nine months ended September 30, 2024, as compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates, certain business acquisitions, and divestitures. Organic revenue growth should be considered in addition to, and not as a replacement for, or as a superior measure to, revenue growth reported in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers.
Previous wording
Total Company Revenue. The increase in organic revenue reflects growth in CAG Diagnostics recurring revenue, including benefits from higher realized prices and increased volumes globally. Increases in our veterinary software and diagnostic imaging services, supported by higher volumes and price gains, also contributed to higher revenue. Higher revenue in our Water business was primarily due to higher realized prices and increased volumes in the U.S. and Europe. The increase in LPD revenue was primarily due tohigher realized prices and to volume growth in North America, as well as in Europe. The overall change of foreign currency exchange rates decreased revenue growth by 0.7%. Acquisitions increased revenue growth by 0.3%.
Current wording
Total Company Revenue. The increase in organic revenue reflects growth in CAG Diagnostics recurring revenue, including benefits from higher realized prices and, to a lesser extent, increased volumes, supported by new business gains and sustained high customer retention rates offsetting constraints from macroeconomic and sector headwinds. Increases in our recurring veterinary software, services, and diagnostic imaging revenue, supported by higher volumes and price gains, also contributed to increased revenue. Higher revenue in our Water business was primarily due to higher realized prices and increased volume in the U.S. and, to a lesser extent, Europe. The decrease in LPD revenue was primarily due to lower testing levels in Asia Pacific, partially offset by higher volumes in North America, and benefits from higher realized prices. During the current quarter, the comparative impact of equivalent days, related to a shipping-day benefit, increased overall revenue growth by approximately 1%. Acquisitions increased revenue growth by 0.4%. The change in foreign currency exchange rates increased revenue growth by 0.1%.
Previous wording
Gross Profit. Gross profit increased due to higher revenue and a 100 basis point increase inthe gross profit margin. The increase in the gross profit margin reflected benefits from net price realization, offsetting inflationary cost impacts, software services gross margin gains, and favorable business mix. The overall change from foreign currency exchange rates increased the gross profit margin by approximately 10 basis points, including the impact of higher hedge gains during the current period compared to the prior period.
Current wording
Gross Profit. Gross profit increased due to higher revenue and a 120 basis point increase inthe gross profit margin. The increase in the gross profit margin reflected favorable business mix, lower instrument costs, recurring software and services gross margin gains, and the benefit from net price realization, offsetting inflationary cost impacts. The overall change in foreign currency exchange rates decreased the gross profit margin by approximately 20 basis points, including the impact of lower hedge gains during the current period compared to the prior period.
Previous wording
CAG Diagnostics Recurring Revenue. The increasein CAG Diagnostics recurring revenue was primarily due to higher realized prices and, to a lesser extent, higher volumes. The impact of foreign currency exchange rates decreased CAG Diagnostics recurring revenue growth by 0.7%.
Current wording
CAG Diagnostics Recurring Revenue. The increasein CAG Diagnostics recurring revenue was primarily due to higher realized prices and, to a lesser extent, increased volumes supported by new business gains and sustained high customer retention rates, offsetting constraints from macroeconomic and sector headwinds. The comparative impact of equivalent days, related to a shipping-day benefit in the current quarter, increased revenue growth by approximately 1%. The change in foreign currency exchange rates increased revenue growth by 0.1%.
Previous wording
The increase in IDEXX VetLab consumables revenue was primarily due to higher price realization and, to a lesser extent, volume increases supported by the expansion of our installed base of instruments and our expanded menu of available tests. The overall change of foreign currency exchange rates decreased revenue growth by 1.0%.
Current wording
The increase in IDEXX VetLab consumables revenue was primarily due to higher price realization and, to a lesser extent, volume increases, supported by the expansion of our installed base of instruments and our expanded menu of available tests, and a shipping-day benefit in the current quarter. The change in foreign currency exchange rates increased revenue growth by 0.1%.
Previous wording
The increasein rapid assay revenue resulted primarily from higher price realization, partially offset by lower volumes. The overall change of foreign currency exchange rates decreased revenue growth by 0.4%.
Current wording
The increasein rapid assay revenue resulted primarily from higher price realization and, to a lesser extent, a shipping-day benefit in the current quarter, partially offset by lower volumes. The change in foreign currency exchange rates decreased revenue growth by 0.2%.
Previous wording
The increase in reference laboratory diagnostic and consulting services revenue was due to higher testing volumes, primarily in the U.S., and, to a lesser extent, Europe and Asia Pacific, and higher price realization. The overall change of foreign currency exchange rates decreased revenue growth by 0.5%.
Current wording
The increase in reference laboratory diagnostic and consulting services revenue was due to higher global price realization and higher testing volumes, primarily in the U.S., and, to a lesser extent, in Asia Pacific and Europe. The change in foreign currency exchange rates increased revenue growth by 0.1%.
Previous wording
The increase in CAG Diagnostics services and accessories revenue was primarily a result of the 11% growth in our active installed base of instruments. The impact of foreign currency exchange rates decreased revenue growth by 1.0%.
Current wording
The increase in CAG Diagnostics services and accessories revenue was primarily a result of the 10% growth in our active installed base of premium instruments. The change in foreign currency exchange rates increased revenue growth by 0.1%.
Previous wording
Veterinary Software, Services and Diagnostic Imaging Systems Revenue. The increase in revenue was primarily due to higher recurring revenue from the expansion of our active installed base, resulting in higher subscription and support revenue, and higher realized prices. The decrease in our systems and hardware revenue was due to lower hardware sales associated with new software placements, which are primarily cloud-based. The overall change of foreign currency exchange rates decreased revenue growth by 0.1%. Acquisitions increased revenue growth by 4.5%.
Current wording
Veterinary Software, Services and Diagnostic Imaging Systems Revenue. The increase in revenue was primarily due to higher recurring revenue from subscriptions and support revenue from an expanded SaaS installed base, and higher realized prices. The decrease in our systems and hardware revenue was due to lower system, accessories, and hardware sales. Acquisitions increased revenue growth by 5.2%. The change in foreign currency exchange rates increased revenue growth by 0.1%.
Previous wording
Revenue. The increase in revenue was primarily due to higher realized prices and higher volumes. The increase in volumes in U.S. and Europe is primarily from our Colilert test products and related accessories used in coliform and E. coli testing. The overall change offoreign currency exchange rates decreased revenue by approximately 0.9%.
Current wording
Revenue. The increase in revenue was due to higher realized prices and higher volumes. The increase in volumes in the U.S. and, to a lesser extent, Europe, was primarily from our Colilert test products and related accessories used in coliform and E. coli testing. The change inforeign currency exchange rates decreased revenue by approximately 0.3%.
Previous wording
Gross Profit. Gross profit increased due to higher revenue, partially offset by a 190 basis point decrease in the gross profit margin. The decrease in the gross profit margin was primarily due to higher product costs, partially offset by higher realized prices. The overall change from foreign currency exchange rates increased the gross profit margin by approximately 10 basis points, includingthe impact of higher hedge gains during the current period compared to the prior period.
Current wording
Gross Profit. Gross profit increased due to higher revenue, partially offset by a 50 basis point decrease in the gross profit margin. The decrease in the gross profit margin was primarily due to higher product costs, partially offset by higher realized prices. The overall change in foreign currency exchange rates decreased the gross profit margin by approximately 50 basis points, includingthe impact of hedge losses during the current period compared to hedge gains in the prior period.
Previous wording
Operating Expenses. Sales and marketing expense increased primarily due to increases in personnel-related costs. General and administrative expense decreased primarily due lower personnel-related costs. Research and development expense increased primarily due to higher personnel-related costs, partially offset by lower project costs. The overall change in foreign currency exchange rates resulted in a decrease in operating expense growth by less than 1%.
Current wording
Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs and marketing initiatives. General and administrative expense decreased primarily due to lower bad debt expense. Research and development expense increased primarily due to higher personnel-related cost. The change in foreign currency exchange rates decreased operating expense growth by less than 1.0%.
Previous wording
Revenue. The increase in revenue was primarily due to higher realized prices, as well as higher volumes in North America and Europe, partially offset by lower testing levels in Asia Pacific. The overall change in foreign currency exchange rates decreased revenue growth by 1.6%.
Current wording
Revenue. The decrease in revenue was primarily due to lower testing levels in Asia Pacific, partially offset by higher volumes in North America and benefits from higher realized prices. The change in foreign currency exchange rates decreased revenue growth by 0.2%.
Previous wording
Gross Profit. The decrease in gross profit was primarily due to a 250 basis point decrease in the gross profit margin, partially offset by higher revenue. The overall change from foreign currency exchange rates increased the gross profit margin approximately 70 basis points, including the impact of hedge gains during the current period compared to hedge losses during the prior period. Excluding the impact of foreign currency exchange rates, the decrease in the gross profit margin was primarily due to higher product costs, partially offset by higher realized prices.
Current wording
Gross Profit. The decrease in gross profit was primarily due to a 270 basis point decrease in the gross profit margin and lower revenue. The decrease in the gross profit margin was primarily due to higher product and distribution costs, partially offset by higher realized prices. The overall change in foreign currency exchange rates decreased the gross profit margin by approximately 70 basis points, including the impact of lower hedge gains during the current period compared to the prior period.
Previous wording
Revenue. The increase in revenue was primarily due to higher realized prices of our OPTI Medical consumables, partially offset by lower instrument volumes.
Current wording
Revenue. The increase in revenue was primarily due to higher realized prices of our OPTI Medical consumables, partially offset by lower consumables volumes.
Previous wording
Gross Profit. Gross profit increased primarily due to a 3,960 basis point increase in the gross profit margin. The increase in the gross profit margin was largely due to lower product costs, including a favorable comparison to prior-year costs associated with the discontinuation of OPTI COVID-19 PCR testing products. The overall change in foreign currency exchange rates did not have a significant impact on the gross profit margin.
Current wording
Gross Profit. Gross profit increased primarily due to a 620 basis point increase in the gross profit margin. The increase in the gross profit margin was largely due to higher realized prices. The change in foreign currency exchange rates did not have a significant impact on the gross profit margin.
Previous wording
Operating Expenses. Sales and marketing expense decreased due to lower compensation costs. General and administrative expense increased primarily due to higher foreign exchange losses on settlements of foreign currency denominated transactions compared to the prior year. Foreign exchange gains and losses on settlements for all operating segments are reported within Other.
Current wording
Operating Expenses. Sales and marketing expense decreased due to lower personnel-related costs. General and administrative expense decreased primarily due to foreign exchange gains on settlements of foreign currency denominated transactions compared to losses in the prior period. Foreign exchange gains and losses on settlements for all operating segments are reported within Other. Research and development expense decreased due to lower activities that were not attributable to our three primary business segments.
Previous wording
Interest Expense. Interest expense was $8.1 million for the three months ended June 30, 2024, as compared to $10.5 million for the same period during the prior year. The decrease in interest expense was primarily due to lower average debt levels and, to a lesser extent, lower interest rates. Interest income was $3.4 million for the three months ended June 30, 2024, compared to $0.3 million for the same period during the prior year. This increase in interest income is primarily due to the increase in money market investments, compared to the same period during the prior year.
Current wording
Interest Expense and Income. Interest expense was $7.7 million for the three months ended September 30, 2024, as compared to $8.6 million for the same period during the prior year. The decrease in interest expense was primarily due to lower average debt levels and lower interest rates. Interest income was $2.7 million for the three months ended September 30, 2024, compared to $1.3 million for the same period during the prior year. This increase in interest income is primarily due to the increase in money market investments, as compared to the same period during the prior year.
Previous wording
Provision for Income Taxes. Our effective income tax rate was 21.5% for the three months ended June 30, 2024, compared to 21.6% for the three months ended June 30, 2023. The decrease in our effective tax rate was primarily due to comparative tax rate benefits related to research and development tax credits and geographical income mix, partially offset by lower tax benefits related to share-based compensation.
Current wording
Provision for Income Taxes. Our effective income tax rate was 22.1% for the three months ended September 30, 2024, compared to 20.8% for the three months ended September 30, 2023. The increase in our effective tax rate was primarily due to lower tax benefits related to share-based compensation, partially offset by the tax impact of differences in geographical income mix.
Previous wording
Total Company Revenue. The increase in organic revenue reflects growth in CAG Diagnostics recurring revenue, including benefits from higher realized prices and increased volumes globally. Higher volumes and price gains in veterinary software and diagnostic imaging systems recurring revenue also contributed to higher revenue, supported by demand for subscription-based software. Higher revenue in our Water business was primarily due to the benefit of price increases and increased volume in the U.S. and certain international regions. The decline in our LPD business was primarily due to lower demand in China, partially offset by higher realized prices and volume growth in the U.S. and Europe. The decrease in Other revenue was primarily due tolower volumes of our OPTI Medical instruments and consumables. The overall change in foreign currency exchange rates decreased revenue growth by 0.4%. Acquisitions increased revenue growth by 0.3%.
Current wording
Total Company Revenue. The increase in organic revenue reflects growth in CAG Diagnostics recurring revenue, including benefits from higher realized prices and, to a lesser extent, increased volumes, supported by new business gains and sustained high customer retention rates offsetting constraints from macroeconomic and sector headwinds. Higher volumes and price gains in recurring veterinary software, services, and diagnostic imaging also contributed to increased revenue, supported by demand for subscription-based software. Higher revenue in our Water business was primarily due to the benefit of price increases and increased volume in the U.S. and Europe. The decrease in LPD revenue was primarily due to lower testing levels in Asia Pacific, partially offset by higher realized prices and volume growth in the U.S. and Europe. The decrease in Other revenue was primarily due tolower volumes of our OPTI Medical instruments and consumables. Acquisitions increased revenue growth by 0.3%. The change in foreign currency exchange rates decreased revenue growth by 0.2%.
Previous wording
Gross Profit. Gross profit increased due to higher revenue and a 110 basis point increase in the gross profit margin. The increase in the gross profit margin reflected benefits from net price realization, offsetting inflationary cost impacts, lower instrument costs, software services gross margin gains, and favorable business mix. The overall change in foreign currency exchange rates on the gross profit margin was not significant.
Current wording
Gross Profit. Gross profit increased due to higher revenue and a 110 basis point increase in the gross profit margin. The increase in the gross profit margin reflected favorable business mix, lower instrument costs, recurring software and services gross margin gains, and the benefit from net price realization, offsetting inflationary cost impacts. The change in foreign currency exchange rates on the gross profit margin was not significant.
Previous wording
Operating Expenses. Sales and marketing expense increased primarily due to higher travel costs. General and administrative expense increased primarily due to a $61.5 million expense related to an ongoing litigation matter, the comparison to the prior year benefit of a $16 million customer contract resolution gain, and higher outside service costs. Research and development expense increased primarily due to project costs and higher personnel-related costs. The overall change in foreign currency exchange rates was not significant to operating expense growth.
Current wording
Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related, meeting, and travel costs. General and administrative expense increased primarily due to a $61.5 million expense related to an ongoing litigation matter, the comparison to the prior year benefit of a $16.0 million customer contract resolution gain, higher information technology and outside services, and acquisition-related costs. Research and development expense increased primarily due to higher project costs. The change in foreign currency exchange rates was not significant to operating expense growth.
Previous wording
CAG Diagnostics Recurring Revenue. The increase in CAG Diagnostics recurring revenue was primarily due to higher realized prices and, to a lesser extent, higher volumes. The impact of foreign currency exchange rates decreased CAG Diagnostics recurring revenue growth by 0.3%.
Current wording
CAG Diagnostics Recurring Revenue. The increase in CAG Diagnostics recurring revenue was primarily due to higher realized prices and, to a lesser extent, increased volumes, supported by new business gains and sustained high customer retention rates, offsetting constraints from macroeconomic and sector headwinds. The impact in foreign currency exchange rates decreased CAG Diagnostics recurring revenue growth by 0.2%.
Previous wording
The increase in IDEXX VetLab consumables revenue was primarily due to higher price realization and, to a lesser extent, volume increases supported by the expansion of our installed base of instruments and our expanded menu of available tests. Theoverall change in foreign currency exchange rates decreased revenue growth by 0.5%.
Current wording
The increase in IDEXX VetLab consumables revenue was primarily due to higher price realization and, to a lesser extent, volume increases, supported by the expansion of our installed base of instruments and our expanded menu of available tests. Thechange in foreign currency exchange rates decreased revenue growth by 0.3%.
Previous wording
The increase inrapid assay revenue resulted primarily from higher price realization, partially offset by lower volumes. Theoverall change in foreign currency exchange rates decreased revenue growth by 0.2%.
Current wording
The increase inrapid assay revenue resulted primarily from higher price realization, partially offset by lower volumes. Thechange in foreign currency exchange rates decreased revenue growth by 0.2%.
Previous wording
The increase in reference laboratory diagnostic and consulting services revenue was due to higher price realization and higher testing volumes, primarily in the U.S. and, to a lesser extent, Europe and Asia Pacific. Theoverall change in foreign currency exchange rates decreased revenue growth by 0.2%.
Current wording
The increase in reference laboratory diagnostic and consulting services revenue was due to higher global price realization and higher testing volumes, primarily in the U.S. and, to a lesser extent, Asia Pacific and Europe. Thechange in foreign currency exchange rates decreased revenue growth by 0.1%.
Previous wording
The increase in CAG Diagnostics services and accessories revenue was primarily a result of the 11% growth in our active installed base of instruments. Theoverall change in foreign currency exchange rates decreased revenue growth by 0.7%.
Current wording
The increase in CAG Diagnostics services and accessories revenue was primarily a result of the 10% growth in our active installed base of premium instruments. Thechange in foreign currency exchange rates decreased revenue growth by 0.4%.
Previous wording
CAG Diagnostics Capital – Instrument Revenue. The increase in instrument revenue was primarily due to favorable sales mix and higher premium instrument placements, partially offset by program pricing effects. The overall change in foreign currency exchange rates decreased revenue growth by 1.2%.
Current wording
CAG Diagnostics Capital – Instrument Revenue. The decrease in instrument revenue was primarily due to program effects on pricing, largely offset by higher premium instrument placements. The change in foreign currency exchange rates decreased revenue growth by 0.4%.
Previous wording
Veterinary Software, Services and Diagnostic Imaging Systems Revenue. The increase in revenue was primarily due to higher realized prices and higher recurring revenue from the expansion of our active installed base, resulting in higher subscription and support revenue. The decrease in our systems and hardware revenue was due to lower hardware sales associated with new software placements, which are primarily cloud-based. Theoverall change in foreign currency exchange rates was not significant to revenue growth. Acquisitions increased revenue growth by 3.9%.
Current wording
Veterinary Software, Services and Diagnostic Imaging Systems Revenue. The increase in revenue was primarily due to higher realized prices and higher recurring revenue from subscription and support revenue from an expanded SaaS installed base. The decrease in our systems and hardware revenue was due to lower hardware sales associated with new software placements, which are primarily cloud-based, and lower accessories sales. Thechange in foreign currency exchange rates was not significant to revenue growth. Acquisitions increased revenue growth by 4.4%.
Previous wording
Operating Expenses. Sales and marketing expense increased primarily due to higher travel costs and, to a lesser extent, higher personnel-related costs. General and administrative expense increased primarily due to a $61.5 million expense related to an ongoing litigation matter, the comparison to the prior year benefit of a $16 million customer contract resolution gain, and higher outside service costs. Research and development expense increased primarily due to project costs and higher personnel-related costs. The overall change in foreign currency exchange rates was not significant to operating expense growth.
Current wording
Operating Expenses. Sales and marketing expense increased primarily due to personnel-related, meeting, and travel costs. General and administrative expense increased primarily due to a $61.5 million expense related to an ongoing litigation matter, the comparison to the prior year benefit of a $16.0 million customer contract resolution gain, and higher information technology and outside services, as well as higher acquisition-related costs. Research and development expense increased primarily due to project costs. The change in foreign currency exchange rates was not significant to operating expense growth.
Previous wording
Revenue. The increase in revenue was due to higher realized pricesand higher volumes. The increase in volumes in U.S. and Europe was primarily from our Colilert test products and related accessories used in coliform and E. coli testing, which included a benefit in the first quarter from order timing delayed from the prior year, as well as higher Tecta instrument placements. Theoverall change in foreign currency exchange rates decreased revenue growth by 0.4%.
Current wording
Revenue. The increase in revenue was due to higher realized pricesand higher volumes. The increase in volumes in the U.S. and Europe was primarily from our Colilert test products and related accessories used in coliform and E. coli testing. The change in foreign currency exchange rates decreased revenue growth by 0.4%.
Previous wording
Gross Profit. Gross profit increased due to higher revenue, partially offset by a 60 basis point decrease in the gross profit margin. The decrease in the gross profit margin was primarily due to higher product costs, partially offset by higher realized prices. Theoverall change in foreign currency exchange rates increased the gross profit margin by approximately 10 basis points, includingthe impact of higher hedge gains during the current period compared to the prior period.
Current wording
Gross Profit. Gross profit increased due to higher revenue, partially offset by a 60 basis point decrease in the gross profit margin. The decrease in the gross profit margin was primarily due to higher product costs, partially offset by higher realized prices. Theoverall change in foreign currency exchange rates decreased the gross profit margin by approximately 10 basis points, includingthe impact of lower hedge gains during the current period compared to the prior period.
Previous wording
Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs. General and administrative expense increased primarily due to an increase in bad debt expense and higher personnel-related costs. Research and development expense increased primarily due to higher outside service costs. The overall change in foreign currency exchange rates was not significant to operating expense growth.
Current wording
Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs and marketing initiatives. General and administrative expense increased primarily due to higher personnel-related costs and an increase in bad debt expense. Research and development expense increased primarily due to higher outside service costs. The change in foreign currency exchange rates was not significant to operating expense growth.
Previous wording
Gross Profit. The decrease in gross profit was primarily due to lower revenues and, to a lesser extent, a 10 basis point decrease in the gross profit margin. Theoverall change in foreign currency exchange rates increased the gross profit margin by approximately 60 basis points, including the impact of hedge gains during the current period compared to hedge losses during the prior period. Excluding the impact of foreign currency exchange rates, the decrease in the gross profit margin was primarily due to higher product costs and unfavorable sales mix, partially offset by higher realized prices.
Current wording
Gross Profit. The decrease in gross profit was primarily due to a 100 basis point decrease in the gross profit margin and lower revenue. The decrease in the gross profit margin was primarily due to higher product and distribution costs and unfavorable business mix, partially offset by higher realized prices. Theoverall change in foreign currency exchange rates increased the gross profit margin by approximately 20 basis points, including the impact of hedge gains during the current period compared to hedge losses during the prior period.
Previous wording
Operating Expenses. Sales and marketing expense increased primarily due to increases in personnel-related costs. General and administrative expense decreased primarily due to lower personnel-related costs. Research and development costs decreased primarily due to lower project costs. The overall change in foreign currency exchange rates resulted in a decrease in operating expense growth by approximately 1%.
Current wording
Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs. General and administrative expense decreased primarily due to lower bad debt expense and personnel-related costs. Research and development expense decreased primarily due to lower project costs. The change in foreign currency exchange rates was not significant to operating expense growth.
Previous wording
Gross Profit. Gross profit increased due to a 1,600 basis point increase in the gross profit margin, which offset lower revenue. The increase in the gross profit margin was primarily due to lower product costs, including a favorable comparison to prior-year costs associated with the discontinuation of OPTI COVID-19 PCR testing products, lower service costs, and higher realized prices. The overall change in foreign currency exchange rates did not have a significant impact on the gross profit margin.
Current wording
Gross Profit. Gross profit increased due to a 1,310 basis point increase in the gross profit margin, which offset the impact from lower revenue. The increase in the gross profit margin was largely due to higher realized prices. The change in foreign currency exchange rates did not have a significant impact on the gross profit margin.
Previous wording
Operating Expenses. Sales and marketing expense decreased due to lower compensation costs. General and administrative expense increased primarily due to higher foreign exchange losses on settlements of foreign currency denominated transactions compared to the prior year. Foreign exchange gains and losses on settlements for all operating segments are reported within Other.
Current wording
Operating Expenses. Sales and marketing expense decreased due to lower compensation costs. General and administrative expense decreased primarily due to lower foreign exchange losses on settlements of foreign currency denominated transactions compared to the prior period. Foreign exchange gains and losses on settlements for all operating segments are reported within Other. Research and development expense decreased due to lower activities that were not attributable to our three primary business segments.
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Previous report — wording carried elsewhere
Dairy (“LPD”). Our Other operating segment combines and presents our human medical diagnostic products business (“OPTI Medical”) with our out-licensing arrangements because they do not meet the quantitative or qualitative thresholds for reportable segments.