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Repurchases of common stock, net [USD, thousands]

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Net effect of changes in exchange rates on cash [USD, thousands]

Net (decrease) increase in cash and cash equivalents [USD, thousands]

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Cash and cash equivalents at end of period [USD, thousands]

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The significant jump in operating cash flow in **FY 2023** was driven by several key factors. First, there was a marked increase in **net income** from **$679,089 thousand** in FY 2022 to **$845,042 thousand** in FY 2023, boosting operating cash flows.  **[0001157523-24-000165_a53891750ex99_1.htm:12]** **[0000874716-24-000057_idxx-20231231.htm:112]**  Additionally, **cash used for changes in operating assets and liabilities** declined—largely due to lower cash expenditures for inventories and other liabilities, which reduced by **$201,101 thousand** overall.  **[0000874716-24-000057_idxx-20231231.htm:82]**  Also, the absence of a **one-time $65 million licensing payment** in FY 2023 (which was charged in FY 2022) and **lower tax payments** further contributed to the rise in operating cash flow.  **[0000874716-24-000057_idxx-20231231.htm:81]** **[0000874716-24-000057_idxx-20231231.htm:82]** 

What drove the substantial jump in operating cash flow in FY 2023?

The documents show that Q1 2024’s net cash provided by operating activities was **$198,585 thousand**  **[0000874716-24-000083_idxx-20240331.htm:6]**  compared to **$249,851 thousand** in Q4 2023.  **[0000874716-24-000057_idxx-20231231.htm:112]**  However, the detailed explanation provided focuses on the increase in operating cash flow from Q1 2023 to Q1 2024—not a decline from Q4 2023. Consequently, the documents do not offer a definitive explanation for why operating cash flow was notably lower in Q1 2024 compared to Q4 2023.  **[0000874716-24-000057_idxx-20231231.htm:112]** **[0000874716-24-000083_idxx-20240331.htm:6]** 

Why was operating cash flow notably lower in Q1 2024?

The documents indicate that while specific reasons are not provided, the positive shift in accounts receivable in Q3 2024 appears to be influenced by **6% organic revenue growth** and an **increase in days sales outstanding to 48.9 days** (from 45.6 days), which suggests that higher sales and extended payment terms may have contributed to this change in receivables.  **[IDXX_3405156_2]** **[0001104659-24-112826_tm2427157d1_ex99-1.htm:14]** **[0001104659-24-112975_tm2427217d1_ex99-1.htm:14]**  Additionally, the slight change in cash usage of **$1,530 thousand** year-over-year reflects a modest adjustment in collections dynamics.  **[0000874716-24-000139_idxx-20240930.htm:57]** **[0000874716-24-000139_idxx-20240930.htm:8]** 

What factors led to the positive shift in accounts receivable in Q3 2024?

The sharp deterioration in deferred income taxes in Q4 2023 was primarily driven by the **release of valuation allowances against deferred tax assets** in specific international and state jurisdictions. This release occurred because the company determined that, due to changes in circumstances during the period, it was more likely than not that those deferred tax assets would be realized, resulting in a significant negative adjustment that lowered its effective tax rate and contributed to an EPS increase of **$0.10 per share**.  **[0000874716-24-000057_idxx-20231231.htm:154]** **[0000874716-24-000057_idxx-20231231.htm:155]** **[0000874716-24-000057_idxx-20231231.htm:78]** 

What caused the sharp deterioration in deferred income taxes in Q4 2023?

The dramatic increase in repurchases of common stock in Q1 2024 was primarily driven by **IDEXX Laboratories' strategic capital allocation**, where the company dedicated **$155 million** to share repurchases as a way to return value to shareholders. This move, combined with **favorable market conditions**—evidenced by the repurchase of over **303,323 shares** at an average cost of **$550.90 per share**—set Q1 2024 apart from Q1 2023, during which no repurchases took place. In addition, these actions were executed under a **board-approved share repurchase program**, which provided the framework for substantial buyback activity.  **[IDXX_3381815_2]** **[0000874716-24-000083_idxx-20240331.htm:47]** **[0001104659-24-055201_tm2413183d1_ex99-1.htm:14]** **[0000874716-24-000083_idxx-20240331.htm:56]** 

Why did the repurchase of common stock increase dramatically in Q1 2024?

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The sharp increase in cash reserves in Q4 2023 was primarily driven by **higher net cash provided by operating activities**—increasing to **$906.5 million**—in combination with a **reduction in cash outflows from investing activities** (down to **$125.254 million**) and a **positive impact from exchange rate changes** (a gain of **$2.126 million**). These factors together resulted in an overall increase of **$341.386 million** in cash reserves.  **[0000874716-24-000057_idxx-20231231.htm:81]** 

What drove the sharp increase in cash reserves in Q4 2023?

The significant drop in cash reserves during Q3 2024 was primarily driven by **substantial financing outflows** and **increased investing expenditures**. Specifically, the company repurchased **$591.0 million** in common stock and made **$75.0 million** in senior note payments, which resulted in financing cash outflows of **$645.3 million**. In addition, the investing activities included a **$76.7 million** acquisition of a business and significant purchases of property and equipment, which further reduced cash reserves. Despite a modest increase in operating cash flows, these factors collectively led to the reduction in cash and cash equivalents from **$453.9 million** to **$308.6 million** in Q3 2024.  **[0001104659-24-112826_tm2427157d1_ex99-1.htm:15]** **[0001104659-24-112975_tm2427217d1_ex99-1.htm:15]** **[0000874716-24-000139_idxx-20240930.htm:57]** 

Why did cash reserves drop significantly in Q3 2024?

The decline in total assets in Q3 2024 was primarily driven by a **decrease in cash and cash equivalents**, which fell from **$453,932 thousand** to **$308,636 thousand**. Although there were increases in other asset categories such as **accounts receivable**, **goodwill**, **intangible assets**, and **other long-term assets**, these gains did not fully offset the significant cash outflows experienced during the period.  **[0000874716-24-000139_idxx-20240930.htm:3]** **[0001104659-24-112826_tm2427157d1_ex99-1.htm:15]** 

What factors contributed to the decline in total assets in Q3 2024?

The spike in Q2 2024 appears to result from a reclassification of long-term debt, where the current portion increased from **$74,997 thousand** in Q1 2024 to **$170,112 thousand** in Q2 2024. While the documents indicate that such changes are typically due to the debt approaching its maturity date or new refinancing activities, they do not provide specific details on the exact cause for this increase.  **[0001104659-24-086074_tm2420913d1_ex99-1.htm:15]** **[0000874716-24-000121_idxx-20240630.htm:3]** 

What caused the spike in current debt in Q2 2024?

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Cash and cash equivalents (USD, thousands)

Accounts receivable, net (USD, thousands)

Inventories (USD, thousands)

Other current assets (USD, thousands)

Total current assets (USD, thousands)

Property and equipment, net (USD, thousands)

Other long-term assets (USD, thousands)

TOTAL ASSETS (USD, thousands)

Accounts payable (USD, thousands)

Accrued liabilities (USD, thousands)

Credit facility (USD, thousands)

Current portion of long-term debt (USD, thousands)

Current portion of deferred revenue (USD, thousands)

Total current liabilities (USD, thousands)

Long-term debt, net of current portion (USD, thousands)

Other long-term liabilities (USD, thousands)

Total long-term liabilities (USD, thousands)

Total stockholders’ equity (USD, thousands)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (USD, thousands)

edea25bb7e6b6ab537c56ace8113beb45c40d8ae1f48964a1517be38311c86ac

The documents indicate that **Q3 2023** income from operations was **$275,283 thousand** and **Q4 2023** was **$245,302 thousand**.  **[0000874716-23-000128_idxx-20230930.htm:4]** **[0000874716-24-000057_idxx-20231231.htm:109]**  However, the only detailed explanation in the documents refers to the factors behind the change in Q4 2023 compared to **Q4 2022**—highlighting benefits from revenue growth, improved gross profit, and cost control measures.  **[IDXX_3371874_0]**  There is no explicit discussion or analysis provided on why Q4 2023 was lower than Q3 2023.

Why was Income from operations lower in Q4 2023?

The drop in operating income for Q2 2024 was primarily due to a significant **increase in operating expenses**. Notably, there was a **substantial rise in General and Administrative Expenses by $67,574 thousand**—including a **$61.5 million litigation expense** and higher outside service costs—coupled with an overall operating expense increase of **$78,652 thousand** due to heightened research and development, as well as sales and marketing expenses. While gross profit did increase, it was not enough to counterbalance these rising costs.  **[0000874716-24-000121_idxx-20240630.htm:40]** **[0001104659-24-086074_tm2420913d1_ex99-1.htm:11]** **[0000874716-24-000121_idxx-20240630.htm:42]** 

Why did operating income drop in Q2 2024?

The **unusually high EPS in FY 2023** was driven by several factors. IDEXX experienced **strong revenue growth** with **9% overall organic growth** and **10.5% organic growth in recurring diagnostics revenues**. This was complemented by an **operating margin expansion** of **330 to 390 basis points**, which was partly due to a **$16 million customer contract resolution payment** in Q1 2023 that accounted for roughly **12% of the EPS growth**. Additionally, **tax benefits**—including a **$0.10 per share benefit** from tax valuation allowances and a **$0.16 per share benefit** from share-based compensation—helped drive EPS higher. Finally, **solid volume gains and net price realization** across products and services supported the profitability, despite a **$0.24 per share negative impact** from foreign exchange.  **[IDXX_3371874_0]** **[0000874716-24-000057_idxx-20231231.htm:109]** **[0001157523-24-000165_a53891750ex99_1.htm:1]** **[IDXX_3371874_2]** **[0001157523-24-000165_a53891750ex99_1.htm:2]** **[IDXX_3371874_1]** 

What drove the unusually high EPS in FY 2023?

In Q2 2024, **net income was lower due to several factors**. The company recorded a **$62 million discrete litigation expense accrual**, which significantly reduced net income. Additionally, **operating expenses increased by 28% year-on-year**, largely driven by the litigation expense accrual, and although there was **6–7% revenue growth**, the gains were insufficient to offset these higher expenses. Moreover, **foreign exchange headwinds reduced revenues by about $7 million and operating profit by approximately $3 million**, further impacting net income.  **[IDXX_3396598_2]** **[0000874716-24-000121_idxx-20240630.htm:5]** **[0001104659-24-086074_tm2420913d1_ex99-1.htm:11]** **[0001104659-24-086074_tm2420913d1_ex99-1.htm:0]** 

Why was net income lower in Q2 2024?

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687fb613ed13d7da93b8d24e244ce4983ffea53f762872ce36f69c297c680b72

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Gross profit (USD, thousands)

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Diluted earnings per share (USD)

Weighted average shares outstanding basic (thousands)

Weighted average shares outstanding diluted (thousands)

773b059191b9dd3df0557c2d63ea1dbe73ad80e5da08848cc0469aecedd24d74

IDEXX Laboratories Inc (IDXX)

Financials