IDXX earnings analysis
What we found in IDXX's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
IDEXX delivered Q2 revenue of $1.216585 billion, up 9.7% year over year, with diluted EPS of $4.27 and expansion in gross margin to 64.0% and operating margin to 35.0%. Growth was broad-based across CAG, Water, and LPD, led by $96.718 million of CAG Diagnostics recurring-revenue growth, while six-month operating cash flow increased to $613.410 million. The principal offsets are a 19.5% decline in CAG instrument revenue, higher revolver borrowings of $519.0 million, and an expected approximately $13 million FX revenue headwind for the balance of 2026.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerated to $1.217 billion
- Q2 revenue rose $107.128 million, or 9.7%, year over year to $1.216585 billion. This also represents a sequential increase from $1.14 billion in Q1 2026.
- Margins and EPS improved materially
- Gross margin expanded 140 basis points year over year to 64.0%, while operating margin increased 140 basis points to 35.0%. Diluted EPS was $4.27, up from $3.63 in Q2 2025 and $3.47 in Q1 2026.
- Recurring CAG diagnostics led growth
- CAG revenue increased $95.793 million, or 9.4%, to $1.118236 billion, driven by CAG Diagnostics recurring revenue growth of $96.718 million, or 11.0%. VetLab consumables grew 14.7% to $430.337 million and reference-lab services grew 10.6% to $406.729 million.
- Water and LPD posted strong profit gains
- Water revenue increased 14.8% to $58.564 million and segment operating income increased 22.9% to $30.274 million. LPD revenue grew 10.8% to $35.181 million and moved from a $0.505 million operating loss to $2.411 million of operating income.
- Operating cash flow strengthened
- Six-month operating cash flow increased $189.705 million year over year to $613.410 million. Net investing cash outflow was $59.040 million, and management estimates total 2026 capital expenditures of approximately $180.0 million for facilities, operations, and customer-facing software.
- Liquidity remains ample despite borrowing
- Cash and equivalents rose to $196.933 million from $180.070 million at year-end, while net debt was $772.067 million and net debt-to-Adjusted EBITDA was 0.46x at June 30, 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- CAG instrument revenue declined sharply
- CAG Diagnostics capital-instrument revenue fell $11.426 million, or 19.5%, to $47.174 million in Q2, primarily because IDEXX inVue Dx Analyzer placements were lower than during the broad commercial availability in Q2 2025.
- Borrowings increased and working capital fell
- Working capital declined to $221.8 million from $265.0 million at December 31, 2025, primarily reflecting higher Credit Facility borrowings. Outstanding Credit Facility borrowings rose to $519.0 million from $398.0 million at year-end.
- Foreign exchange remains a revenue headwind
- Management expects FX at current assumptions to reduce revenue by approximately $13 million for the remainder of 2026. It also estimates that a 1% strengthening of the U.S. dollar would reduce revenue by approximately $8 million and operating income by approximately $3 million, net of hedges.
- Near-term debt maturities require funding
- The company must repay $75.0 million of 2026 Senior Notes on September 4, 2026 and $75.0 million of 2027 Series B Notes on February 12, 2027; management may use cash, revolver borrowings, new notes, or a combination to fund these repayments.
- No material risk-factor updates disclosed
- Item 1A states there were no material changes to risk factors from the 2025 Annual Report. Separately, management expects higher labor, commodity, energy, transportation, and supplier costs, which may not be fully offset through pricing or productivity.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.27
- Gross margin
- 64%
- Operating margin
- 35%
- Segment
- CAG: $1.118236 billion, up 9.4% year over year
- Segment
- Water: $58.564 million, up 14.8% year over year
- Segment
- LPD: $35.181 million, up 10.8% year over year
- Segment
- Other: $4.604 million, up 8.3% year over year
What they said about what is next.
The 10-Q does not provide a company-wide revenue or EPS guidance range. Its quantitative outlook is limited to foreign exchange: at current assumptions, FX is expected to decrease revenue by approximately $13 million for the remainder of 2026 but increase operating profit by approximately $2 million and diluted EPS by $0.02; hedging is expected to add approximately $7 million of operating profit and $0.07 of EPS.
The filing reads better than the one before it.
What came before.
- 10-Q · May 5, 2026
- IDEXX Laboratories reported strong Q1 2026 performance with revenues of $1.14 billion, exceeding estimates of $1.11 billion, and an EPS of $3.47, surpassing the expected $3.41. The results were mainly driven by a robust…
- 10-K · February 20, 2026
- IDEXX emphasizes a consumables- and software-driven recurring-revenue strategy anchored in its Companion Animal Group (CAG), with recurring diagnostics accounting for a large share of sales. Fiscal 2025 showed top-line…
- 10-Q · May 1, 2024
- IDEXX reported Q1 revenue of $964,095,000 (up $63,900,000 vs Q1 2023) and diluted EPS of $2.81 (up $0.26 vs Q1 2023). Gross profit was $593,070,000 (gross margin 61.5%) and operating income was $298,958,000 (operating…
- 10-Q · May 2, 2023
- IDEXX reported Q1 revenue of $900,195,000, up $63,646,000 (from $836,549,000) versus the prior-year quarter, with diluted EPS rising to $2.55 from $2.27. Gross profit increased to $542,971,000 and income from operations…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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