IDEXX LABORATORIES INC /DE

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; and inflation. 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, changes in U.S. and other countries’ tariff and trade policies, 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 2025 Annual Report and in the corresponding sections of this Quarterly Report on Form 10-Q, as well as those described from time to time in our other filings 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; and inflation. 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, changes in U.S. and other countries’ tariff and trade policies, 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 2025 Annual Report and in the corresponding sections of this Quarterly Report on Form 10-Q, as well as those described from time to time in our other filings with the SEC.

Previous wording

Global Conflicts. The current macroeconomic environment and current global conflicts, including hostilities in the Middle East, could cause further disruption to global energy markets, fuel prices, transportation networks, and supply chains particularly in the Asia Pacific and European regions, which may indirectly impact our operating costs and consumer availability and demand for our products and services.

Current wording

Global Conflicts. The current macroeconomic environment and ongoing global conflicts, including hostilities in the Middle East, have contributed to volatility in global energy markets and higher fuel prices, and could further disrupt transportation networks and supply chains, particularly in the Asia Pacific and European regions. Higher fuel prices increase our freight and distribution costs. These conditions may also cause other impacts on our operating costs and consumer availability and demand for our products and services, and contribute to foreign currency exchange rate volatility.

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 disclosures 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, 2026, are consistent with those discussed in our 2025 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 disclosures 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, 2026, are consistent with those discussed in our 2025 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 includes organic revenue growth, and references in this analysis and discussion to “revenue,” “revenues,” or “revenue growth” apply equally to revenue growth reported in accordance with U.S. GAAP and 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, 2026, 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 includes organic revenue growth, and references in this analysis and discussion to “revenue,” “revenues,” or “revenue growth” apply equally to revenue growth reported in accordance with U.S. GAAP and 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, 2026, 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

We exclude from organic revenue growth the effect of changes in foreign currency exchange rates because changes in foreign currency exchange rates are not under management’s control, are subject to volatility, and can obscure underlying business trends. We calculate the impact on revenue resulting from changes in foreign currency exchange rates by applying the difference between the weighted average exchange rates during the current period and the comparable prior year period to foreign currency denominated revenues for the prior year period.

Current wording

We exclude from organic revenue growth the effect of changes in foreign currency exchange rates because changes in foreign currency exchange rates are not under management’s control, are subject to volatility, and can obscure underlying business trends. We calculate the impact on revenue resulting from changes in foreign currency exchange rates by applying the difference between the weighted average exchange rates during the current period and the comparable prior year period to foreign currency denominated revenue for the prior year period.

Previous wording

Total Company Revenue. The increase in revenue primarily reflected growth in CAG Diagnostics recurring revenue, including benefits from higher volumes and higher realized prices. Volume growth was supported by high customer retention rates with increased testing by existing customers, including our expanded menu of available tests, as well as new customer additions. Lower instrument revenue was primarily due to the lower placements of our IDEXX inVue Dx TM Analyzer, compared to the broad commercial availability during the second quarter of 2025. Higher volumes and realized prices in recurring veterinary software subscriptions, services, and diagnostic imaging also contributed to revenue growth. Revenue growth in our Water business was primarily due to higher volumes and realized prices. The increase in LPD revenue was primarily due to higher volumes and higher realized prices. The impact of changes in foreign currency exchange rates increased revenue growth by 0.7%.

Current wording

Total Company Revenue. The increase in revenue primarily reflected growth in CAG Diagnostics recurring revenue, including benefits from higher volumes and higher realized prices. Volume growth was supported by high customer retention rates with increased testing by existing customers, including our expanded menu of available tests, as well as new customer additions. Instrument revenue was relatively constant primarily due to higher instrument placements offset with lower price realization. Higher volumes and realized prices in recurring veterinary software subscriptions, services, and diagnostic imaging also contributed to revenue growth. Revenue growth in our Water and LPD businesses were primarily due to higher realized prices and volumes. The impact on revenue from our acquisition of CoVet on September 15, 2026, was immaterial for the period. Changes in foreign currency exchange rates did not have a significant impact on revenue growth.

Previous wording

Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related and travel costs, as well as higher costs related to commercial expansion. General and administrative expense increased primarily due to higher personnel-related costs, and higher depreciation and amortization related to technology and infrastructure investments. Research and development expense increased primarily due to higher personnel-related costs. Changes in foreign currency exchange rates increased operating expense growth by less than 1%.

Current wording

Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs, including costs to support our commercial expansion, and higher travel expenses. General and administrative expense increased primarily due to higher consulting and professional services fees, higher compensation and benefits expenses, and higher depreciation and amortization related to technology and infrastructure investments. Research and development expense increased primarily due to higher personnel-related and project costs. Changes in foreign currency exchange rates decreased operating expense growth by less than 1%.

Previous wording

CAG Diagnostics Recurring Revenue. The increase in CAG Diagnostics recurring revenue was primarily due to higher sales volumes of IDEXX VetLab consumables and reference laboratory testing, as well as higher realized prices. Changes in foreign currency exchange rates increased revenue growth by 1.8%.

Current wording

CAG Diagnostics Recurring Revenue. The increase in CAG Diagnostics recurring revenue was primarily due to higher sales volumes of IDEXX VetLab consumables and reference laboratory testing, as well as higher realized prices.

Previous wording

The increase in IDEXX VetLab consumables revenue was primarily due to higher volumes and higher realized prices. Volume gains were supported by increases in testing across major regions, reflecting growth in testing by existing customers, including sales of our expanded menu of available tests, and the benefits from 11% growth in our installed base of premium instruments. Changes in foreign currency exchange rates increased revenue growth by 2.6%.

Current wording

The increase in IDEXX VetLab consumables revenue was primarily due to higher volumes and higher realized prices. Volume gains were supported by increases in testing across major regions, reflecting growth in testing by existing customers, including sales of our expanded menu of available tests, and the benefits from 11% growth in our installed base of premium instruments. Changes in foreign currency exchange rates did not have a significant impact on revenue growth.

Previous wording

Rapid assay revenue increased from higher realized prices, moderated by lower volumes primarily due to lower vector-borne disease testing, and a shift of customers’ pancreatic lipase testing to our Catalyst instrument platform.

Current wording

Rapid assay revenue increased from higher realized prices, largely offset by lower volumes primarily due to reduced point-of-care vector-borne disease testing volumes, and a shift of customers’ pancreatic lipase testing to our Catalyst TMinstrument platform. Changes in foreign currency exchange rates did not have a significant impact on revenue growth.

Previous wording

The increase in reference laboratory diagnostic and consulting services revenue was due to higher testing volumes across all major regions and higher realized prices. Volume growth was supported by increased testing by existing customers, including sales of our expanded menu of tests, and by new customers.

Current wording

The increase in reference laboratory diagnostic and consulting services revenue was due to higher testing volumes across all major regions and higher realized prices. Volume growth was supported by increased testing by existing and new customers, including sales of our expanded menu of tests. Changes in foreign currency exchange rates did not have a significant impact on revenue growth.

Previous wording

effects on pricing. Changes in foreign currency exchange rates increased revenue growth by 1.4%.

Current wording

CAG Diagnostics Capital – Instrument Revenue. Instrument revenue was relatively constant compared to the prior period with higher instrument placements, primarily from higher placements of our SediVue Dx TM and IDEXX inVue Dx TM Analyzers, offset by lower price realization due to program effects on pricing. Changes in foreign currency exchange rates did not have a significant impact on revenue growth.

Previous wording

Veterinary Software, Services and Diagnostic Imaging Systems Revenue. The increase in recurring revenue was primarily due to higher subscription and integrated services volumes from our expanded SaaS installed base and from higher realized prices. The increase in our systems and hardware revenue was primarily due to higher diagnostic imaging system sales.

Current wording

Veterinary Software, Services and Diagnostic Imaging Systems Revenue. The increase in recurring revenue was primarily due to higher subscription and integrated services volumes from our expanded software installed base and from higher realized prices. The increase in our systems and hardware revenue was primarily due to higher diagnostic imaging system sales. The impact on revenue from our acquisition of CoVet on September 15, 2026, was immaterial for the period. Changes in foreign currency exchange rates did not have a significant impact on revenue growth.

Previous wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related and travel costs, as well as higher costs related to commercial expansion. General and administrative expense increased primarily due to higher personnel-related costs, and higher depreciation and amortization related to technology and infrastructure investments. Research and development expense increased primarily due to higher personnel-related costs. Changes in foreign currency exchange rates increased operating expense growth by less than 1%.

Current wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs, including costs to support our commercial expansion, and higher travel expenses. General and administrative expense increased primarily due to higher consulting and professional services fees, higher compensation and benefits expenses, and higher depreciation and amortization related to technology and infrastructure investments. Research and development expense increased primarily due to higher personnel-related and project costs. Changes in foreign currency exchange rates decreased operating expense growth by less than 1%.

Previous wording

Revenue. The increase in revenue was primarily due to higher realized prices and higher volumes, particularly in the Americas and Europe. The increase in volumes was primarily from higher demand for Colilert test products and related accessories used in coliform and E. coli testing. Changes in foreign currency exchange rates increased revenue growth by 2.8%.

Current wording

Revenue. The increase in revenue was primarily due to higher realized prices and higher volumes in the Americas. The increase in volumes benefited from higher demand for Colilert test products and related accessories used in coliform and E. coli testing. Changes in foreign currency exchange rates increased revenue growth by 0.6%.

Previous wording

Gross Profit. Gross profit increased due to higher revenue and a 340 basis point increase in the gross profit margin. The net increase in the gross profit margin was primarily due to lower product costs and higher realized prices, which offset inflationary costs. Changes in foreign currency exchange rates decreased the gross profit margin by approximately 5 basis points including the impact of hedge losses during the current period compared to hedge gains in the prior period.

Current wording

Gross Profit. Gross profit increased due to higher revenue and a 250 basis point increase in the gross profit margin. The net increase in the gross profit margin was primarily due to higher realized prices, partially offset by inflationary costs including higher freight and distribution costs. Changes in foreign currency exchange rates increased the gross profit margin by approximately 50 basis points, including the impact of hedge gains during the current period compared to hedge losses in the prior period.

Previous wording

Gross Profit. The increase in gross profit was primarily due to higher revenues and a 410 basis point increase in the gross profit margin. The increase in the gross profit margin was primarily due to lower per-unit costs from higher sales volumes and higher realized prices, which offset inflationary costs. Changes in foreign currency exchange rates increased the gross profit margin by approximately 5 basis points, including the impact of lower hedge gains during the current period compared to the prior period.

Current wording

Gross Profit. The increase in gross profit was primarily due to higher revenue and a 560 basis point increase in the gross profit margin. The increase in the gross profit margin was primarily due to lower per-unit costs and higher realized prices, which offset inflationary costs and higher depreciation expense. Changes in foreign currency exchange rates increased the gross profit margin by approximately 200 basis points, including the impact of hedge gains during the current period compared to hedge losses in the prior period.

Previous wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related and travel costs. General and administrative expense increased primarily due to higher personnel-related and project-related consulting costs. Research and development expense increased primarily due to higher personnel-related costs. Changes in foreign currency exchange rates increased operating expense growth by approximately 2%.

Current wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher travel costs, partially offset by lower personnel-related costs. General and administrative expense increased primarily due to project-related consulting costs and higher personnel-related costs. Research and development expense increased primarily due to higher consulting costs. Changes in foreign currency exchange rates did not have a significant impact on operating expenses.

Previous wording

Interest Expense and Income. Interest expense was $10.2 million for the three months ended June 30, 2026, compared to $11.3 million for the same period during the prior year. Interest income was $0.6 million for the three months ended June 30, 2026, and June 30, 2025.

Current wording

Interest Expense and Income. Interest expense was $7.5 million for the three months ended September 30, 2026, compared to $10.7 million for the same period during the prior year primarily due to lower average debt levels. Interest income was $1.0 million and $0.6 million for the three months ended September 30, 2026, and September 30, 2025, respectively.

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Gain (Loss) on Equity Investments. For the six months ended June 30, 2026, we recognized an unrealized gain on an equity investment of $1.2 million.

Current wording

Gain (Loss) on Equity Investments. For the three months ended September 30, 2026, we recognized realized and unrealized gains on an equity investment of $3.5 million.

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Provision for Income Taxes. Our effective income tax rates were 18.9% for the three months ended June 30, 2026, and June 30, 2025. Compared to the same period in the prior year, our current-period effective tax rate was favorably impacted by geographic earnings mix and higher tax benefits related to share-based compensation, which were offset by a prior-year tax benefit from the resolution of international tax audits.

Current wording

Provision for Income Taxes. Our effective income tax rates were 20.6% and 20.4% for the three months ended September 30, 2026, and September 30, 2025, respectively. The increase, compared to the prior period, was primarily due to lower tax benefits from share-based compensation and higher international taxes on foreign earnings. These unfavorable impacts were partially offset by the favorable comparative impact from a prior-year reduction in our U.S. tax benefit associated with FDII that resulted from the acceleration of research and development deductions permitted under changes in U.S. tax law that were enacted in July 2025, and by lower state income tax expense.

Previous wording

We anticipate reduced tax benefits related to share-based compensation, which is expected to increase our future effective tax rates. The anticipated reduction in these future tax benefits is due to the elimination of the exception for certain compensation deduction limits as a result of the Tax Cuts and Jobs Act of 2017.

Current wording

We anticipate reductions in share-based compensation tax benefits during the three months ending December 31, 2026, compared to the same period in the prior year, which increases our future effective tax rate. The anticipated reduction in these future tax benefits is due to the elimination of the exception for certain compensation deduction limits as a result of the Tax Cuts and Jobs Act of 2017.

Previous wording

Total Company Revenue. The increase in revenue primarily reflected growth in CAG Diagnostics recurring revenue, including benefits from higher volumes and higher realized prices. Volume growth was supported by high customer retention rates with increased testing by existing customers, including our expanded menu of available tests, as well as new customer additions. Lower instrument revenue was primarily due to program effects on pricing. Higher volumes and realized price gains in recurring veterinary software, services, and diagnostic imaging also contributed to revenue growth. Revenue growth in our Water business was primarily due to higher realized prices and volumes. The increase in LPD revenue was primarily due to higher volumes and higher realized prices. Changes in foreign currency exchange rates increased revenue growth by 1.8%.

Current wording

Total Company Revenue. The increase in revenue primarily reflected growth in CAG Diagnostics recurring revenue, including benefits from higher volumes and higher realized prices. Volume growth was supported by high customer retention rates with increased testing by existing customers, including our expanded menu of available tests, as well as new customer additions. Lower instrument revenue was primarily due to program effects on pricing. Higher volumes and realized price gains in recurring veterinary software, services, and diagnostic imaging also contributed to revenue growth. Revenue growth in our Water business was primarily due to higher realized prices and volumes. The increase in LPD revenue was primarily due to higher volumes and higher realized prices. Changes in foreign currency exchange rates increased revenue growth by 1.1%.

Previous wording

Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related and travel costs, as well as higher costs related to commercial expansion. General and administrative expense increased primarily due to a prior period reduction in accrued expense of approximately $9 million related to a litigation matter concluded in 2025, higher personnel-related costs, higher depreciation and amortization related to technology and infrastructure investments, and a $5 million expense for the full impairment of an equity investment in the first quarter of the current year. Research and development expense increased primarily due to higher personnel-related and project costs. Changes in foreign currency exchange rates increased operating expense growth by approximately 1%.

Current wording

Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs, including costs to support our commercial expansion, and higher travel expenses. General and administrative expense increased primarily due to higher personnel-related costs, higher consulting and professional services fees, a prior period reduction in accrued expense of approximately $9 million related to a litigation matter concluded in 2025, higher depreciation and amortization related to technology and infrastructure investments, and a $5 million expense for the full impairment of an equity investment in the first quarter of the current year. Research and development expense increased primarily due to higher personnel-related and project costs. Changes in foreign currency exchange rates increased operating expense growth by less than 1%.

Previous wording

CAG Diagnostics Recurring Revenue. The increase in CAG Diagnostics recurring revenue was primarily due to higher sales volumes of IDEXX VetLab consumables and reference laboratory testing, as well as higher realized prices. Changes in foreign currency exchange rates increased revenue growth by 0.7%.

Current wording

CAG Diagnostics Recurring Revenue. The increase in CAG Diagnostics recurring revenue was primarily due to higher sales volumes of IDEXX VetLab consumables and reference laboratory testing, as well as higher realized prices. Changes in foreign currency exchange rates increased revenue growth by 1.1%.

Previous wording

The increase in IDEXX VetLab consumables revenue was primarily due to higher volumes and higher realized prices. Volume gains were supported by increases in testing across major regions, reflecting growth in testing by existing customers, including sales of our expanded menu of available tests, and the benefits from 11% growth in our installed base of premium instruments. Changes in foreign currency exchange rates increased revenue growth by 1.1%.

Current wording

The increase in IDEXX VetLab consumables revenue was primarily due to higher volumes and higher realized prices. Volume gains were supported by increases in testing across major regions, reflecting growth in testing by existing customers, including sales of our expanded menu of available tests, and the benefits from 11% growth in our installed base of premium instruments. Changes in foreign currency exchange rates increased revenue growth by 1.6%.

Previous wording

Rapid assay revenue increased from higher realized prices, moderated by lower volumes primarily due to lower vector-borne disease testing, and a shift of customers’ pancreatic lipase testing to our Catalyst instrument platform. Changes in foreign currency exchange rates increased revenue growth by 0.7%

Current wording

Rapid assay revenue increased from higher realized prices, moderated by lower volumes primarily due to reduced point-of-care vector-borne disease testing volumes, and a shift of customers’ pancreatic lipase testing to our Catalyst instrument platform. Changes in foreign currency exchange rates increased revenue growth by 0.4%.

Previous wording

The increase in reference laboratory diagnostic and consulting services revenue was due to higher testing volumes across all major regions and higher realized prices. Volume growth was supported by increased testing by existing customers, including sales of our expanded menu of tests, and by new customers. The impact of changes in foreign currency exchange rates increased revenue growth by 1.4%.

Current wording

The increase in reference laboratory diagnostic and consulting services revenue was due to higher testing volumes across all major regions and higher realized prices. Volume growth was supported by increased testing by existing and new customers, including sales of our expanded menu of tests. The impact of changes in foreign currency exchange rates increased revenue growth by 0.8%.

Previous wording

CAG Diagnostics Capital – Instrument Revenue. The decrease in instrument revenue was primarily due to program

Current wording

CAG Diagnostics Capital – Instrument Revenue. The decrease in instrument revenue was primarily due to program effects on pricing, partially offset by instrument sales mix. Changes in foreign currency exchange rates increased revenue growth by 0.8%.

Previous wording

Veterinary Software, Services and Diagnostic Imaging Systems Revenue. The increase in recurring revenue was primarily due to higher subscription and integrated services volumes from our expanded SaaS installed base and from higher realized prices. The increase in our systems and hardware revenue was primarily due to higher diagnostic imaging system sales. Changes in foreign currency exchange rates increased revenue growth by 0.7%

Current wording

Veterinary Software, Services and Diagnostic Imaging Systems Revenue. The increase in recurring revenue was primarily due to higher subscription and integrated services volumes from our expanded SaaS installed base and from higher realized prices. The increase in our systems and hardware revenue was primarily due to higher diagnostic imaging system sales. Changes in foreign currency exchange rates increased revenue growth by 0.5%. The impact on revenue from our acquisition of CoVet on September 15, 2026, was immaterial for the period.

Previous wording

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 proportionally higher IDEXX VetLab consumable and reference laboratory volumes growth, the business mix impact associated with lower premium instrument revenue, operational productivity improvements, and net price realization, which offset inflationary costs. Changes in foreign currency exchange rates increased the gross profit margin by approximately 10 basis points, including the impact of hedge losses during the current period compared to hedge gains in the prior period.

Current wording

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 higher IDEXX VetLab consumable volume growth and the business mix impact associated with proportionally higher revenue; operational productivity improvements, partially offset by higher depreciation costs; and net price realization, which offset inflationary costs. Changes in foreign currency exchange rates increased 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.

Previous wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related and travel costs, as well as higher costs related to commercial expansion. General and administrative expense increased primarily due to a prior period reduction in accrued expense of approximately $9 million related to a litigation matter concluded in 2025, higher personnel-related costs, higher depreciation and amortization related to technology and infrastructure investments, and a $5 million expense for the full impairment of an equity investment in the first quarter of the current year. Research and development expense increased primarily due to higher personnel-related and project costs. Changes in foreign currency exchange rates increased operating expense growth by approximately 1%.

Current wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs, including costs to support our commercial expansion, and higher travel expenses. General and administrative expense increased primarily due to higher personnel-related costs, higher consulting and professional services fees, a prior period reduction in accrued expense of approximately $9 million related to a litigation matter concluded in 2025, higher depreciation and amortization related to technology and infrastructure investments, and a $5 million expense for the full impairment of an equity investment in the first quarter of the current year. Research and development expense increased primarily due to higher personnel-related and project costs. Changes in foreign currency exchange rates increased operating expense growth by less than 1%.

Previous wording

Revenue. The increase in revenue was primarily due to higher volumes, particularly in the Americas and Europe, and, to a lesser extent, higher realized prices. The increase in volumes was primarily from higher demand for Colilert test products and accessories used in coliform and E. coli testing. International volumes were favorably impacted by the timing of shipments in the current period that had been delayed from the prior quarter as a result of conflict in the Middle East. Changes in foreign currency exchange rates increased revenue growth by 1.9%.

Current wording

Revenue. The increase in revenue was primarily due to higher realized prices and higher volumes in North America. The increase in volumes benefited from higher demand for Colilert test products and related accessories used in coliform and E. coli testing. Changes in foreign currency exchange rates increased revenue growth by 2.0%.

Previous wording

Gross Profit. Gross profit increased due to higher revenue and a 480 basis point increase in the gross profit margin. The net increase in the gross profit margin was primarily due to lower product costs, higher realized prices, which offset inflationary costs, and the favorable impact of changes in product mix. Changes in foreign currency exchange rates increased the gross profit margin by approximately 30 basis points, including the impact of lower hedge losses during the current period compared to the prior period.

Current wording

Gross Profit. Gross profit increased due to higher revenue and a 320 basis point increase in the gross profit margin. The net increase in the gross profit margin was primarily due to higher realized prices, partially offset by inflationary costs including higher freight and distribution costs. Changes in foreign currency exchange rates increased the gross profit margin by approximately 10 basis points including the impact of hedge losses during the current period compared to hedge gains in the prior period.

Previous wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs and commercial investments. General and administrative expense increased primarily due to higher bad debt costs and higher personnel-related costs. Research and development expense increased primarily due to higher personnel-related costs. Changes in foreign currency exchange rates increased operating expense growth by approximately 2%.

Current wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs. General and administrative expense increased primarily due to higher bad debt costs and higher personnel-related costs. Research and development expense increased primarily due to higher personnel-related costs. Changes in foreign currency exchange rates increased operating expense growth by approximately 2%.

Previous wording

Revenue. The increase in revenue was primarily due to increases in test volumes, particularly in Europe and the Americas, and, to a lesser extent, higher realized prices. The increase in volumes was primarily due to new customers, favorable timing impacts in Europe due to changes in customer ordering patterns compared to the prior year, and growth in testing by existing customers. Changes in foreign currency exchange rates increased revenue growth by 4.0%.

Current wording

Revenue. The increase in revenue was primarily due to higher test volumes, particularly in Europe and the Americas, and higher realized prices. The increase in volumes was largely attributable to new customers and favorable timing impacts in Europe due to changes in customer ordering patterns compared to the same period during the prior year. Changes in foreign currency exchange rates increased revenue growth by 2.3%.

Previous wording

Gross Profit. The increase in gross profit was primarily due to higher revenue and a 600 basis point increase in the gross profit margin. The increase in the gross profit margin was primarily due to lower per-unit costs from higher sales volumes and higher realized prices, which offset inflationary costs. Changes in foreign currency exchange rates increased the gross profit margin by approximately 160 basis points, including the impact of hedge gains during the current period compared to hedge losses in the prior period.

Current wording

Gross Profit. The increase in gross profit was primarily due to higher revenue and a 460 basis point increase in the gross profit margin. The increase in the gross profit margin was primarily due to lower per-unit costs from higher sales volumes, and higher realized prices, which offset inflationary costs and higher depreciation expense. Changes in foreign currency exchange rates increased the gross profit margin by approximately 80 basis points, including the impact of hedge gains during the current period compared to hedge losses in the prior period.

Previous wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher personnel-related costs. General and administrative expense increased primarily due to higher personnel-related and project-related consulting costs. Research and development expense increased primarily due to higher personnel-related costs. Changes in foreign currency exchange rates increased operating expense growth by approximately 1%.

Current wording

Segment Operating Expenses. Sales and marketing expense increased primarily due to higher travel costs. General and administrative expense increased primarily due to project-related consulting costs and higher personnel-related costs. Research and development expense increased primarily due to higher consulting costs. Changes in foreign currency exchange rates increased operating expense growth by approximately 1%.

Previous wording

Interest Expense and Income. Interest expense was $17.9 million for the six months ended June 30, 2026, compared to $19.0 million for the same period during the prior year. Interest income was $1.2 million for the six months ended June 30, 2026, compared to $1.8 million for the same period during the prior year.

Current wording

Interest Expense and Income. Interest expense was $25.4 million for the nine months ended September 30, 2026, compared to $29.6 million for the same period during the prior year primarily due to lower average debt levels and lower average interest rates. Interest income was $2.2 million for the nine months ended September 30, 2026, compared to $2.4 million for the same period during the prior year.

Previous wording

Gain (Loss) on Equity Investments. During the second quarter, we recognized an unrealized gain on an equity investment of $1.2 million.

Current wording

Gain (Loss) on Equity Investments. For the nine months ended September 30, 2026, we recognized realized and unrealized gains on an equity investment of $4.7 million.