John Block

John Block questioned the implied sequential decline in MUDX placements for Q4 2025 based on the updated full-year guidance, asking if IDEXX is caught up with orders and for an update on the longer-term goal of 20,000 MUDX placements over five years. He also sought more color on the strong international CAG diagnostic recurring revenue growth of nearly 14%, its drivers, and whether this run rate is sustainable given future tailwinds.

Answer

Andrew Emerson, CFO, confirmed the 6,000 MUDX placement target for 2025 and reiterated the 20,000 over five years goal, noting the strong start. Jay Mazelsky, President and CEO, attributed international growth to the embryonic use of diagnostics, sales force expansion, building out the reference lab network, software localization (e.g., VetConnect Plus), and robust customer support. He expressed confidence in the 13%-16% long-term international growth rate. Emerson added that Q3 international growth included a 100 basis point benefit from equivalent days.

John Block asked about the implied MUDX placement guidance for Q4 2025 (approximately 1,500 systems), whether IDEXX has caught up with orders, and the company's thoughts on the longer-term goal of 20,000 placements over five years given the strong start. He also inquired about the drivers behind the nearly 14% days-adjusted international CAG diagnostic recurring revenue growth, noting it's the highest since COVID and precedes significant MUDX, CancerDx, or new sales rep impact, asking if this is a sustainable run rate.

Answer

Andrew Emerson, CFO, confirmed the 20,000 over five years MUDX placement goal remains, noting the strong start with 6,000 placements targeted for 2025 (the first year of launch), exceeding the initial 4,500 guide. He stated the implied Q4 placements of 1,500-1,600 are a solid trajectory. Jay Mazelsky, President and CEO, attributed international growth to the embryonic use of diagnostics, a translatable sector development approach, increased sales organization (four to five years of investment), a synchronized commercial ecosystem, building out the reference lab network for next-day performance, and software localization. He reiterated the investor day guidance of international opportunity being a couple hundred basis points faster than the U.S. Emerson added that Q3 international business saw a 100 basis point benefit from equivalent days.