IDEXX at Morgan Stanley Conference: Diagnostic Innovations Lead Growth

On Tuesday, 09 September 2025, IDEXX Laboratories (NASDAQ:IDXX) participated in the Morgan Stanley 23rd Annual Global Healthcare Conference. The company highlighted its strategic focus on innovation and global expansion, while addressing recent challenges in clinical visit trends. IDEXX remains committed to its growth targets, emphasizing diagnostics as a cornerstone of veterinary practice and aiming for continued profitability.

Key Takeaways

• IDEXX reaffirms long-term targets of 10%+ organic growth and 15%+ EPS growth.
• Clinical visit growth dipped by 2.5% in the first half of the year, but stabilization is expected.
• New products like IDEXX Cancer DX and InView DX are driving innovation and market share gains.
• The company is expanding its commercial footprint internationally to boost diagnostic usage.
• IDEXX remains committed to reinvesting organically and returning excess capital through share repurchases.

Financial Results

• IDEXX targets 11% to 14% growth in CAG diagnostic recurring revenue.
• Software recurring revenue is expected to grow by 15%+.
• Water and LPD business projected to grow in the mid- to high-single digits.
• Operating margin expansion is anticipated at 50 to 100 basis points annually.
• Catalyst placements are projected to reach 5,500 units by year-end, generating $60 million in capital.

Operational Updates

• IDEXX is focusing on increasing bloodwork inclusion per clinical visit.
• The introduction of three new parameters, including SPARC PC, aims to drive growth.
• IDEXX Cancer DX is expanding its menu to cover more canine cancer types by 2026.
• InView DX has exceeded expectations with 5,500 placements expected by year-end.
• IDEXX 360 marketing program is enhancing contract extensions and renewals.
• Salesforce expansion is underway, particularly outside the U.S.

Future Outlook

• IDEXX expects clinical visits to revert to historical growth rates of 2% to 3%.
• Innovation is projected to contribute 200 basis points to CAG growth.
• IDEXX Cancer DX aims to cover a third of all cancer cases in dogs by 2026.
• Continued evaluation of international expansion opportunities for the salesforce.

Q&A Highlights

• InView DX addresses productivity challenges within practices.
• IDEXX Cancer DX is priced at $15, with rapid uptake from both IDEXX and competitive customers.
• IDEXX prioritizes organic reinvestment and share repurchases over dividends for capital deployment.

In conclusion, IDEXX Laboratories remains focused on innovation and strategic growth. For a detailed understanding, refer to the full transcript below.

Full transcript - Morgan Stanley 23rd Annual Global Healthcare Conference:

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Good afternoon, everyone. My name is Erin Wright. I’m the Healthcare Services Analyst at Morgan Stanley. For more important disclosures, please see the Morgan Stanley disclosure website at morganstanley.com/researchdisclosures. If you do have any questions, please reach out to your Morgan Stanley sales representative. With that, I’m happy to have IDEXX Laboratories with us today. We have the President and CEO, Jay Mazelsky, with us.

Jay Mazelsky, President and CEO, IDEXX Laboratories: Hi.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: As well as Andrea Emerson, EVP and CFO of IDEXX Laboratories. Thank you so much for joining us. We’re really happy to have you. It’s been quite a road this year and something we’re excited to dig into. I’ll turn it over to Jay. Could you tell us a little bit more about IDEXX Laboratories? Tell us about your positioning in this unique and attractive, what we like to call the diagnostics market.

Jay Mazelsky, President and CEO, IDEXX Laboratories: Sure. Thank you, Erin, for having us. We appreciate the chance to have a conversation and share a little bit about the company as a whole. You know, the thing to keep in mind about diagnostics, it’s just such a foundational aspect of the practice of medicine. You can’t treat it unless you first diagnose. You can’t uncover chronic disease without diagnosing. You can’t assess the basic health line status of a patient without diagnosis. It drives about 80% of the activity within the practice. If you think about the prescription, especially diets or therapeutics or vaccines, very often it starts with a diagnostic. Directly or indirectly, it’s about 80% of that activity. We’re a global leader.

Our strategy is to really provide best-in-breed solutions, both point of care and reference labs, integrate that with software, help support both the practice of clinical medicine, but also workflow optimization and client communication and staff productivity, all the things that are important to practices.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: All right. Let’s get right into it. Let’s talk a little bit about what happened in Maine. At your investor day, you highlighted new innovation drivers, you reaffirmed your long-term targets, 10%+ organic growth, 15%+ EPS growth, which is a little bit different. Can you talk a little bit about the moving pieces to bridge to that growth, the key drivers to get there, while the industry still kind of recovers from a vet office visit standpoint?

Jay Mazelsky, President and CEO, IDEXX Laboratories: Sure. Andrea, why don’t you talk about the growth algorithm, and I’ll talk about some of the individual pieces like innovation?

Andrea Emerson, EVP and CFO, IDEXX Laboratories: Yeah. It sounds great. We have a very consistent financial framework that we outlined. It really starts with having a really investable business focused on the long-term potential. You know, we see a really meaningful $45 billion opportunity in front of us within the diagnostics space. That’s what we’re focused on to Jay’s earlier comments. With that, our CAG diagnostic recurring revenue growth algorithm is really focused on continuing to align with new customers, continuing to expand globally and place core instruments while we focus on innovation and utilization over time. We’ve been really successful at expanding utilization within the diagnostic area. We look at the bloodwork inclusion per clinical visit as a key parameter of that. We shared that 50 basis points, which has been our long-term historic average, can contribute 1% to 1.5% growth associated with the diagnostic usage within our customer base.

Innovation, which Jay can highlight in a little bit more detail, we outlined an opportunity for about 2% growth with that. The combination of acquiring new customers and really focusing on expansion aligned with net price increases over time gives us the opportunity to continue to grow CAG diagnostic recurring revenue at 11% to 14% if you assume a more historic range of 3% clinical visits. Even if clinic visits were just flat, we see the opportunity to continue to grow the business 8.5% to 11% just in terms of execution and our core strategy. You pair that with the focus that we have in software where we see the opportunity to grow our recurring revenue base by 15% plus, in mid to high single digits in our water and LPD business. That really leads us to that 10% plus revenue growth that you had highlighted.

We’re benefit from, as we grow, we have really high incremental growth margins. That allows us to continue to expand our operating margin profile while reinvesting back into the business to achieve that long-term objective that we have. Finding that balance, we’re focused on the 50 to 100 basis points of annual comparable operating margin expansion over time, which leads us to the 15% EPS expansion. I think we feel really good about those parameters. We’ve been executing towards that today.

Jay Mazelsky, President and CEO, IDEXX Laboratories: Okay. Yeah. Maybe just a word about utilization. Our IS business model is based on growing utilization, and that’s really a function of a couple of different things. It’s the innovation, executing the innovation agenda and roadmap, and then the commercial engagement base. A lot of the innovations that we’ve introduced over time, whether it’s technology for life or new platforms like IDEXX Cancer DX or InView DX or future analyzers, comes down to driving bloodwork inclusion, driving testing inclusion. We do that by solving these unmet clinical problems or, in some cases, just workflow challenges that are being done manually or not being done as often as they might otherwise be done.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. How are trends from the vet office visit perspective progressing throughout the quarter? In your guidance, I think it’s a negative 2% level in terms of what you’re anticipating in terms of vet office visits for the balance of the year. Is that playing out according to plan, and how confident are you in that? What ultimately turns this market in your view?

Jay Mazelsky, President and CEO, IDEXX Laboratories: Yeah. We don’t provide intra-quarter updates. I think what we’ve said is that the first half clinical visits were down 2.5%. When you take a look at wellness versus non-wellness, they were pretty much moving in trend together. Our view is that both capacity and the macro impacts have largely stabilized. We’re at a point, on a go-forward basis, that we can begin to build off of that. Obviously, it’s a factor in the growth algorithm. It’s not the only factor. We’re driving through innovation and commercial engagement, the growth outside of what clinical visit, outside of the clinical visit base. What we guided to as part of our Q2 earnings call is that we assume clinical visits would remain in a comparable place or space that we saw in the first half.

I do think, to your question, there are longer-term trends that are extremely supportive of seeing clinical visit growth. We know that there is this huge pandemic puppy and kitten boom. They’re now at the five-plus year point. If you adopted a puppy in 2020 or maybe you adopted a pet that wasn’t a puppy but a young adult, they’re at the point now at that magic 6.5 or 7-year point where they just consume more healthcare, just like we as humans need more care as we get older. The percentage and absolute value of diagnostics in that equation grows in an outsized way as a pet ages. The other piece that we think is important, and we’ve now been tracking for almost three years, is pets are living longer as a result of what we’re doing and the specialty diet companies and the therapeutic companies. They’re living appreciably longer.

We know that’s a good thing. We love our pets and we want them to remain healthy and happy as long as they can. They consume more healthcare, too. It’s good tailwinds for the business. I think we’re looking at a trend line over time that reverts back to what we’ve seen historically between that 2% and 3%.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. You talked about utilization being an important part of that algorithm. I think utilization did tick up seemingly higher in the most recent quarter, depending on how you want to calculate your CAG premium net of pricing. How sustainable is this sort of level? We’re back to kind of pre-COVID levels in terms of utilization on that front in that high single-digit range. I guess, can you talk about what’s happening in the U.S. and outside of the U.S. on that front and how sustainable that is?

Jay Mazelsky, President and CEO, IDEXX Laboratories: Yeah. A couple of pieces that we think can help drive that outside of whatever clinical visits, you know, do. The innovation piece is extremely important, obviously. I keep coming back to that. If you take a look at catalysts, we’ve had three new parameters in really the space of a year. The SPARC PC, which is really a calibration test, but pancreatic lipase and cortisol, these are significant specialty tests that really support pretty pervasive clinical use cases. We think continuing to provide that menu expansion, we see at an enterprise level an uplift in the absolute number of tests. There’s an added to, it’s they’re typically done with broader panels, whether it’s chemistry and hematology. On the reference lab side, we’ve talked about IDEXX Cancer DX.

We think over time as that menu expands from canine lymphoma to canine lymphoma plus mast cell plus one other, in 2026, you reach a critical mass of panel tests that represent over a third of common cancer cases in dogs can pull through wellness testing at the reference lab. That’s extremely important. We also think that if you take a look at outside of the U.S., our commercial footprint is we’re expanding that with a number of different country market expansions that can help drive growth. We know when we visit customers, they use more diagnostics for awareness and education. They grow faster. We grow faster. All those pieces we think can contribute to a more sustainable growth profile as we outlined.

Andrea Emerson, EVP and CFO, IDEXX Laboratories: Just in terms of the guidance itself, as we just mentioned, we did say we updated the clinical visit outlook to be at the same level as the first half, and yet our total CAG diagnostic recurring midpoint is about 40 basis points ahead of what we saw in Q2. That gives you some indication about how you might want to think about the premium, at least for the rest of this year. We’ll certainly be continuing to report on those metrics going forward.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. Got it. On price, price realization and source use, in that 3% to 4% range, 4% to 4.5% is what’s expected for 2025. How are you thinking about price realization into 2026? Does it go back to that more normalized range?

Andrea Emerson, EVP and CFO, IDEXX Laboratories: Yeah. We’re obviously not updating a 2026 guide today. Just in terms of what we have seen over the more recent period, we start with the value that we deliver when it comes to our price expectations. From there, we also have to take into account the inflationary environment that we’re operating with in terms of costs that we’re having to see and manage within the business. That’s really what you saw, I think, in the recent past in 2023. What we’ve seen is, in 2023 and 2024 and 2025, it’s kind of stepped down. Right now, we’re at the high end of what we outlined in terms of a long-range financial plan, which was 2.5% to 4% price. That 4% to 4.5% range is really on the upper bound there. We know we’re still dealing with levels of inflation that are more elevated than history.

I think we’ll continue on that path and make sure we’re balancing that value equation and making sure we’re successfully keying ourselves up to achieve that long-term potential. We don’t want to get too far ahead of ourselves in terms of pricing. Really, we’re looking to expand the sector and be sure we’re driving volume.

Jay Mazelsky, President and CEO, IDEXX Laboratories: The one thing I would add to that, we’ve done a number of things relative to pricing that I think have also provided substantial value and may have mitigated being at some of the higher-end range. If you think about cancer diagnostics, pricing it at $15, as well as $15 when it’s included as a test, that’s a great example of, I think, expanding access. In other cases, fecal antigen and histopath for urine tests for acute kidney injury, we’ve included those at no additional price. Some of these very common high-volume tests, we’ve added value. We haven’t added price necessarily. I think that’s been a factor in driving volume.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. When you add on those new indications in terms of IDEXX Cancer DX, that is a price escalator for you on top of the $15 price.

Jay Mazelsky, President and CEO, IDEXX Laboratories: We haven’t communicated that except at Investor Day. We said in the case of mast cell, in addition to lymphoma, we’d like to keep it within the approximate price range of where we were, same approximate turnaround time and performance of price range.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay, got it.

Jay Mazelsky, President and CEO, IDEXX Laboratories: When it’s sold as part of a panel.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. Got it. And then on understanding your non-toxicology and specifics on 2026, you spoke to price. How do you think about some of those different headwinds and tailwinds as we go into 2026? Obviously, innovation being a key tailwind for you, but how do you kind of rank the key headwinds and tailwinds?

Andrea Emerson, EVP and CFO, IDEXX Laboratories: Yeah. We’re not providing a 2026 guidance, but I do think we’re on the early stages of innovation. We feel really good about the innovation cycle and being able to build that recurring revenue base. In the case of MultiQ instrument, we certainly see more capital revenue this year. We highlighted that we anticipate 5,500 placements and approximately $60 million on capital. That really builds the durable recurring revenue base over time. That will ramp as we get continued access into accounts from that perspective. That, along with expanding IDEXX Cancer DX and some of the new catalyst menu that we’ve launched, whether that’s pancreatic lipase last year or cortisol this year, gives us some nice tailwinds in terms of how we’d be thinking about our overall volumes. As Jay mentioned earlier, we’re focused still on continuing to expand our global reach.

Three OUS countries that we’re continuing to expand our sales force into and make sure we have reach and customer intimacy, help share best practices, and really build that belief in diagnostic usage over time. That’s how we tend to think about it. I think we have a good foundation that we can continue to build off of.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. I want to dig into InView DX here. I mean, this is an area that, I mean, you’ve significantly exceeded my initial expectations in terms of placement trends for this product, or this instrument by the end of the year at 5,500 placements. You’re still at 20,000, you’re still forecasting 20,000 by, you know, within that five-year time horizon. Is that still the right number given the trajectory that you’re on? Has this exceeded your internal expectations as well? Can you talk a little bit more about how we should expect kind of the placement cadence, which I do think there’s a little bit of overfocus on that placement quarterly cadence, and it should really be focused on the consumables flow-through as well.

Jay Mazelsky, President and CEO, IDEXX Laboratories: Yeah. We haven’t updated that five-year 20,000 unit placement goal or aspiration. We’ll do that. We tend to do that when we have some quarters behind us in terms of what that trajectory looks like. I think what we’ve learned is that we’ve hit the sweet spot with customers in terms of menu that addresses some of the productivity challenges within the practice in terms of 15, 20 minutes of preparing a slide. Also, clinically, your cytology, blood morphology, these are very well-understood, high-volume clinical use cases. An instrument that addresses the workflow bottlenecks as well as provides consistent and accurate output in those areas is something that a lot of veterinarians really welcome. You add FNA, lumps and bumps, and the whole dynamic around most dogs through their lifespan will have those. They’re challenging to diagnose whether deposits of fatty acid, fatty deposits, or cancers, so precancerous.

I think providing a solution that will give the veterinarian an indication within that practice window of when the pet is there is something that’s very well received, has been very well received in the market. We expect as we roll that out towards the end of the year, in addition to the existing menu, that the enthusiasm and momentum that we see in InView DX will continue. Hard to know quarter to quarter what that looks like, but we think we have a winning solution.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: I think the focus also is on that recurring revenue streams of flow-through in terms of the consumables. Can you talk about how you’re going and you’re recontracting, renewing these contracts under presumably IDEXX 360 relationships, locking them into minimum revenue commitments? This is driving a considerable amount or outsized consumables growth consistent with what we saw in the second quarter. Am I wrong to think that the consumables growth in the second quarter didn’t really have much to do with InView consumables specifically?

Jay Mazelsky, President and CEO, IDEXX Laboratories: No, it was the broader package.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Yeah. It’s the broader, a couple of things to keep in mind about how we think about IDEXX 360 and new instrument placements and the consumables stream. Just maybe a couple of details to anchor my comments. For InView, we’ve said the consumables brackets are between $3,500 and $5,500 FNA, lumps and bumps, inclusives. We’re still early in the launch. It’s tracking well against our expectations. At some point, we’ll provide an update in terms of what that looks like. The thing to keep in mind about instrument placements, there are a lot of direct and indirect benefits when we come out with a new instrument. It really is a very big deal. Most instruments are placed through some marketing program, IDEXX 360 being the predominant program that the customers use. To your point, it’s a placement. There’s no cost upfront, and then there’s a volume commitment connected with that.

We use that as a recontracting event for customers who may not be using any of our equipment. We may use that to gain access that we didn’t otherwise have. We potentially could place a broader suite that’s 100% brought through in those instances. For those cases where the customer may be an existing IDEXX customer, they use our chemistry, hematology, maybe Cetaphil, we can place an InView, use that as a contract extension, as a way of inspiring a deeper relationship. With that volume commitment, they may be inspired to use a broader portfolio of our testing solutions. We can satisfy that volume commitment either through our in-clinic solutions or reference labs or telemedicine or software if it’s a software as a service type model. There’s a lot of both direct and indirect benefits we have seen.

I shared this on the Q2 earnings call, a nice uptick in contract extensions and renewals using that as inspiration.

Andrea Emerson, EVP and CFO, IDEXX Laboratories: We continue to place, you know, catalysts at competitive clinics as well. We’re expanding our customer base, you know, more generally, you know, both in the U.S. and internationally. That certainly helps us, you know, continue to create a recurring revenue stream. We’ve had, you know, a new menu on something like catalysts with, you know, pancreatic lipase and SmartQC, you know, which we really benefit by having that large instrument base. There’s rapid adoption of, you know, some of these specialty tests over time. I think we benefit from those types of characteristics as well. The focus is really on continuing to drive utilization, you know, within our core customers, you know, through the expanded use of diagnostics.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Hopefully, this is all driving these durable recurring revenue streams. On top of that, you also have potentially upside from an InView DX utilization perspective, depending on how it shakes out relative to your expectation. Is $19 million really the right flow-through in terms of the high-margin consumables? Some of our survey work suggests that it should be higher. What are you seeing in terms of use cases, feedback, and what are the vets saying in terms of how you are seeing the traction in terms of consumables?

Jay Mazelsky, President and CEO, IDEXX Laboratories: Yeah. I’ll describe qualitatively what we’re seeing and what customers are telling us. You know, most, I would say the vast, vast majority of customers do vote ear cytology and blood morphology. You know, there are some customers who use, who think about InView DX primarily through one lens or the other. It depends a bit on the patient use case in terms of what they’re trying to determine. The receptivity has been great. The thing to keep in mind is that veterinary technicians are not lab technicians. I don’t think that’s a controversial statement. What they’ll tell you is too often they get trapped into spending 15 or 20 minutes trying to prepare a slide, doing a chemistry experiment. They just don’t have the training or the time to often do those well.

You know, all things being equal, that workflow benefit is something that’s very important to the practice and the technicians themselves. When you layer on top of that the fact that you’re getting consistency and high accuracy, it tends to drive more usage. We know in the case of blood morphology, for example, about two-thirds of the cases of a CBC standard bloodwork produces a result that suggests you should do a follow-on blood morphology. In only about 10% of the cases in the practice does that happen. The reason that doesn’t happen more often is it gets back to slide preparation. It gets back to you don’t have 20 minutes to stop and do a blood morphology. Maybe it needs something. Maybe it doesn’t.

It’s not like there’s this yawning clinical gap where veterinarians and technicians think we shouldn’t be doing this and now we’re going to be doing something that may not add a lot of value. They think they’re starting from a point of we should be doing this. We’d like to do it. There’s clinical value. We just don’t have the time or we’re just not happy with the variability that results. We think there’s a really nice utilization play there in terms of the quantification itself. Other than what we’ve provided, the 3,500 to 5,500 and the 20,000 placements, we haven’t updated that since the initial launch.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: We will wait on that.

Jay Mazelsky, President and CEO, IDEXX Laboratories: We’ll wait on that. That’s a long way of saying it to come.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Yes. Okay. You have IDEXX Cancer DX. You have InView DX. I want to say that this is probably the most robust pipeline I’ve seen from IDEXX Laboratories and probably covering the company. Now you also have on top of that MultiQ instrument, which you haven’t said much except for the name for us, but you’re really looking to announce anything.

Jay Mazelsky, President and CEO, IDEXX Laboratories: You never show a picture.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Yes. Can you talk a little bit about the timeline for the new platform? It’s non-cannibalizing, I think you confirmed. Yep. Will it have a material contribution in 2026, 2027?

Jay Mazelsky, President and CEO, IDEXX Laboratories: It is non-cannibalizable. We provided a profile of what we think from a placement standpoint in terms of the instrument placement standpoint it represents. We haven’t provided a timeline with MultiQ other than to say that we’re making very solid product development progress on it. Instruments are a bit different than, let’s say, tests that you add to a catalyst in the sense of we like to preview them because there’s some preparation from a customer and field standpoint around budgeting and things that are important that we think there’s some benefits of previewing it. We’re excited by the instrument. It very much fits the profile of what we think drives successful adoption, which is the performance is as good or better than what you can get in the reference labs. It’s very easy to use.

It solves sample preparation and overall management challenges that the practice may be saddled with. It fits within the workflow. We think the economics and turnaround time are attractive. We’re excited by it and will provide additional specificity in the future.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: On IDEXX Cancer DX, you did recently announce the expansion of the offering. It seems that other constituents here at the conference are also very excited about IDEXX Cancer DX and what cancer diagnostics, generally speaking, can do in terms of innovation across therapeutics and otherwise. Can you talk a little bit about the market opportunity, the reception of IDEXX Cancer DX thus far? It’s been still relatively early, but any insight you can give us? What is this doing to ultimately drive market share gains too across the competitive lab space?

Jay Mazelsky, President and CEO, IDEXX Laboratories: Yeah. This is a very significant unmet need. You know, cancer diagnostics, we’ve been in the cancer diagnostics business for almost three decades with pathology. The challenge is, and I think this is really well understood, if you wait until the patient is clinically symptomatic, they tend to be at stage three, stage four cancer. The lifespan, depending upon the cancer and the variance of it, may be a couple of months to five months, something in that range for the vast majority of cases. Being able to detect and screen earlier with high specificity, meaning you’re not getting false positives for common cancer cases, you’re starting off with dogs, is very significant. In the case of canine lymphoma, it represents almost a quarter of all cancer cases.

There are excellent treatments already on the market in terms of shot protocols, being able to do chemotherapy, do an infusion path that we’ve seen rapid uptake, not just from IDEXX Laboratories reference customers, but also from competitive customers who don’t use us as their primary provider, about 15% or so. We think that’s very significant. It requires a break in workflow and how they practice. I think veterinarians think about this as, "I don’t care who’s providing it. We just want to make sure we’re getting the best test for our customers." The way we break down cancer diagnostics is in two categories. One is an aiding diagnosis, so that’s the patient is suspected of having cancer. It’s a confirmatory test. The other one is a screening test.

We know both the veterinarians and pet owners understand cancer both at a visceral or emotive level, as well as the clinical benefits of early detection. There’s very high receptivity to doing cancer screening tests. There’s a very significant group or cohort of dogs that get cancer at early ages. When I say early, you know, four or greater, you start seeing a significant increase from an incident standpoint relative to more classic seven, eight years of age. Going from canine lymphoma, canine lymphoma plus mast cell plus one other in 2026, you get over that third of all cancer cases. Price, where we’ve priced it, including at screening, we think can drive a paradigm shift in terms of how you think about cancer and its inclusion in just wellness screening for dogs. We’re excited.

We think that over time can be a multiplier in our reference lab business from a volume standpoint. The early indications are very well received.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. You have over 1,000, I think, in your field, Salesforce and technical service representatives globally. How are you thinking about Salesforce expansion? You talked about some commercial initiatives at Investor Day and more recently. On that front, how do you think about other levers, too, from a margin expansion standpoint and balancing kind of some of those investments that you’re making on that front? What does peak margin look like for IDEXX longer term?

Jay Mazelsky, President and CEO, IDEXX Laboratories: Yeah. Why don’t I talk about the Salesforce? I’ll have Andrew address some of the initiatives that drive, you know, margin expansion. The Salesforce expansions are really around increasing the density, the footprint of our sales organization. In the U.S., we have approximately 115, 120 accounts per account manager, veterinary diagnostic consultant. Outside the U.S., it’s at least twice that, depending upon the country market. Just through experience and frequency of visits and the amount of time that they can spend with customers, the optimal reach and frequency metrics are achieved at that rate we see in the U.S. with our existing portfolio. Now, we’ve expanded in the U.S. as our portfolio has expanded in metropolitan areas from a population standpoint that’s gotten more dense. We think that that model and those metrics for the model are about right. Internationally, we’re not close to where we think we can be.

You don’t want to rush it. The market has and the sector has to be ready and developed. We know we can drive that. It’s a function of both innovation as an input and IDEXX Laboratories creating awareness, education, and then ultimately consideration, which has resulted in growth through that playbook. We’ll continue to evaluate where there are opportunities for expansion. We know from experience, the return on that is pretty quick. It’s not something that, generally speaking, is a high-risk strategy. Andrew, why don’t you talk about?

Andrea Emerson, EVP and CFO, IDEXX Laboratories: Yeah. Those investments are, to Jay’s point, very rapid and quite high. Those are the types of investments we look to make. Part of that is driven by our ability to continue to expand our gross margins. When we think about our comparable operating margin expansion of 50 to 100 basis points annually, really, that’s going to be gross margin led, as we see significant opportunity with incremental gross margins higher above our overall business across all our major modalities, including things like software over time. That growth and that recurring nature of the growth really enables us to expand our gross margin as we find the right balance to reinvest in operations, as well as expand into R&D and sales as well. We’re focused on expanding gross margins. That’s a key parameter for us.

We’ve talked about areas like reference labs with automation and digitization and leveraging newer technologies like AI to create efficiencies within the operation itself. We also benefit just, again, from that scale. We have a lot of initiatives that go on. We think there’s a long runway ahead of us in terms of gross margin expansion, and we’re trying to find that right balance of reinvestment to achieve our long-term objectives.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: You’re not new to IDEXX, but you’re newer to the CFO role. Any changes in philosophy around capital deployment? How do you think about, you know, potentially introducing a dividend as a use of capital here, or can it be a better use elsewhere?

Andrea Emerson, EVP and CFO, IDEXX Laboratories: Yeah. I’ve been part of the company, to your point, for about a decade. I’ve been part of the senior leadership team for quite a long time, so I’ve been able to influence that. I don’t think you’re going to see any major change within the strategy that we have. As I mentioned, we had a very consistent, long-term financial framework that we published at investor day a couple of weeks ago. In terms of the capital deployment front, we’ve been really successful at leveraging share repurchases over time to return excess capital to our shareholder base. We always want to be thoughtful about how we do that. We do assess things like dividends over time, but it really starts with reinvesting organically and then returning excess capital to shareholders through share repurchases. Excuse me.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay, and as you think about all of this combined, I think in your growth algorithm, and I want to go back to innovation just for the last question, just you have InView DX, IDEXX Cancer DX, MultiQ instrument, all that kind of contributing to the 200 basis points in CAG growth in terms of innovation contribution, or does that offer a potential upside longer term, just given, you know, how robust the pipeline is?

Andrea Emerson, EVP and CFO, IDEXX Laboratories: Excuse me. We have, obviously, better insight to our overall pipeline. We think that’s a good long-term metric to use on average for innovation. Certainly, it captures some of how we think about the currently announced items. Again, we’re continuing to invest in R&D over time.

Erin Wright, Healthcare Services Analyst, Morgan Stanley: Okay. All right. Thank you so much. Appreciate the time.

Andrea Emerson, EVP and CFO, IDEXX Laboratories: Thank you.

Jay Mazelsky, President and CEO, IDEXX Laboratories: Thank you. Appreciate it.

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