IDEXX Laboratories, Inc. (IDXX) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 1, 2023 8:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the IDEXX Laboratories Second Quarter 2023 Earnings Conference Call. As a reminder, today's conference is being recorded. Participating in the call this morning are Jay Mazelsky, President and Chief Executive Officer; Brian McKeon, Chief Financial Officer; and John Ravis, Vice President, Investor Relations.

IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today. Additional information regarding these risks and uncertainties is available under the forward-looking statements noticed in our press release issued this morning, as well as in our periodic filings with the Securities and Exchange Commission, which can be obtained from the SEC or by visiting the Investor Relations section of our website, idexx.com.

During this call, we will be discussing certain financial measures, not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable measures are provided in our earnings release, which may also be found by visiting the Investor Relations section of our website. In reviewing our second quarter 2023 results, please note all references to growth, organic growth, and comparable growth refer to growth compared to the equivalent period in 2022, unless otherwise noted. [Operator Instructions].

Today's prepared remarks will be posted to the Investor Relations section of idexx.com after the earnings conference call concludes.

I would now like to turn the call over to Brian McKeon.

Brian McKeon

Good morning and welcome to our second quarter earnings call. Today I'll take you to our Q2 results and review our updated financial outlook for 2023. In terms of highlights, IDEXX achieves strong growth and financial performance in the second quarter aligned with our full-year performance goals.

Overall revenues increased 10% organically supported by 12% organic growth and CAG diagnostic recurring revenues with double-digit gains in U.S. and international regions. Key execution metrics remain very strong globally, reflected in record second quarter premium instrument placements, continued solid new business gains, and sustained high growth in recurring veterinary software revenues.

Operating profit results were ahead of our expectations, reflecting solid gross margin gains and operating expense leverage, both benefiting from strong CAG recurring revenue growth. For the first half of 2023, we achieved 10% overall organic revenue growth and nearly 12% growth in CAG diagnostic recurring revenues.