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What changed in Idexx Laboratories's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Idexx Laboratories's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+424 added−438 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-21)

Top changes in Idexx Laboratories's 2025 10-K

424 paragraphs added · 438 removed · 349 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

93 edited+11 added−16 removed69 unchanged
Biggest change(“Ortho”) under supply agreements that are currently set to expire in December of 2044. The terms of the agreement allow for early termination in certain circumstances. In the event of a notice of non-extension, the agreement will continue for a period of twelve years through December 31 of the twelfth year after such notice, up to 2044.
Biggest changeIn the event of a notice of non-extension, the agreements will continue for a period of twelve years through December 31 of the twelfth year after such notice, up to 2044. We are obligated to purchase all of our requirements for our current menu of Catalyst chemistry slides from Ortho to the extent Ortho is able to supply those requirements.
Our reference laboratories offer a large selection of tests and diagnostic panels to detect a number of disease states and other conditions in animals, including all tests that can be run in-clinic at the veterinary practice with our instruments or rapid assays.
Our reference laboratories offer a large selection of tests and diagnostic panels to detect a number of disease states and other conditions in animals, including all tests that can be run in the clinic at the veterinary practice with our instruments or rapid assays.
In addition, we face robust competition as other companies have been successful in bringing competitive products and services to market, despite the protections afforded by these patent and license rights. In addition to seeking patent protection as appropriate, we also protect certain intellectual property (such as software and our manufacturing know-how) through U.S. and international trade secret and copyright laws.
We face robust competition as other companies have been successful in bringing competitive products and services to market, despite the protections afforded by these patent and license rights. In addition to seeking patent protection as appropriate, we also protect certain intellectual property (such as software and our manufacturing know-how) through U.S. and international trade secret and copyright laws.
In addition, we make available instructions and other information to help ensure the proper and safe use of our products. BACKLOG We do not generally maintain a significant backlog of orders and believe that our backlog at any particular date historically has not been indicative of future sales.
In addition, we make available instructions and other information to help ensure the proper and safe use of our products. BACKLOG We generally do not maintain a significant backlog of orders and believe that our backlog at any particular date historically has not been indicative of future sales.
Our in-clinic diagnostic solutions also include a broad range of single-use, IDEXX SNAP rapid assay test kits that provide quick, accurate, and convenient point-of-care diagnostic test results for a variety of companion animal disease-causing pathogens and health conditions. Additionally, we offer extended maintenance agreements in connection with the sale of our instruments. Blood and Urine Chemistry .
Our point-of-care diagnostic solutions also include a broad range of single-use, IDEXX SNAP rapid assay test kits that provide quick, accurate, and convenient point-of-care diagnostic test results for a variety of companion animal disease-causing pathogens and health conditions. Additionally, we offer extended maintenance agreements in connection with the sale of our instruments. Blood and Urine Chemistry .
We compete primarily on the basis of ease of use and speed of our products, diagnostic accuracy, product quality, breadth of our product line and services, differentiated product 12 innovations, fully integrated technology, information management capability, enhancement of veterinary practice efficiency, availability of medical consultation, effectiveness of our sales and distribution channels, quality of our technical and customer service, and our pricing relative to the value of our products and services in comparison with competitive products and services.
We compete primarily on the basis of ease of use and speed of our products, diagnostic accuracy, product quality, breadth of our product line and services, differentiated product innovations, fully integrated technology, information management capability, enhancement of veterinary practice efficiency, availability of medical consultation, effectiveness of our sales and distribution channels, quality of our technical and customer service, and our pricing relative to the value of our products and services in comparison with competitive products and services.
Our Purpose is to be a great company that creates exceptional long-term value for our customers, employees, and stockholders by enhancing the health and well-being of pets, people, and livestock. DESCRIPTION OF BUSINESS BY SEGMENT We operate primarily through three business segments: Companion Animal Group, Water quality products, and Livestock, Poultry and Dairy.
Our Purpose is to be a great company that creates exceptional long-term value for our customers, employees, and stockholders by enhancing the health and well-being of pets, people, and livestock. DESCRIPTION OF BUSINESS BY SEGMENT We operate primarily through three reportable business segments: Companion Animal Group, Water quality products, and Livestock, Poultry and Dairy.
All IDEXX products must comply with applicable global product regulations, including those governing consumer product safety and materials requirements such as the Europeans Union's Electromagnetic Compatibility (“EMC”) Directive, the European Regulation for Registration, Evaluation, Authorization and Restriction of Chemical Substances (“REACH”), the Restriction of Hazardous Substances (“RoHS”) Directive, and the Waste Electrical and Electronic Equipment (“WEEE”) Directive.
All IDEXX products must comply with applicable global product regulations, including those governing consumer product safety and materials requirements such as the Europeans Union's Electromagnetic Compatibility (“EMC”) Directive, the European Regulation for Registration, Evaluation, Authorization and Restriction of Chemical Substances (“REACH”), the Restriction of Hazardous Substances (“RoHS”) Directive, and the Waste Electrical and Electronic Equipment Directive.
We also sell our Alertys Milk Pregnancy Test, Alertys Ruminant Pregnancy Test, Alertys On-Farm Pregnancy Test, and Rapid Visual Pregnancy Test for cattle and other ruminants, which can detect pregnancy 28 days after breeding using milk, serum, or whole blood samples. We also offer herd health screening services to livestock veterinarians and producers. 9 Dairy products .
We also sell our Alertys Milk Pregnancy Test, Alertys Ruminant Pregnancy Test, Alertys On-Farm Pregnancy Test, and Rapid Visual Pregnancy Test for 9 cattle and other ruminants, which can detect pregnancy 28 days after breeding using milk, serum, or whole blood samples. Additionally, we offer herd health screening services to livestock veterinarians and producers. Dairy products .
The agreements also prohibit Ortho from promoting and selling these chemistry slides in the veterinary sector, excluding the EU, other than to IDEXX. We purchase other analyzers and consumables under supply agreements with terms extending through 2034, which in some cases may be extended at our option.
The agreements also prohibit Ortho from promoting and selling these chemistry slides in the veterinary sector, excluding the EU, other than to IDEXX. 11 We purchase other analyzers and consumables under supply agreements with terms extending through 2034, which in some cases may be extended at our option.
We have minimum purchase obligations under some of these agreements, and our failure to satisfy these obligations may result in loss of some or all of our rights under these agreements. Refer to “Part I, Item 1A. Risk Factors.” Other components . We purchase certain other products, raw materials, and components from sole and single-source suppliers.
We have minimum purchase obligations under some of these agreements, and our failure to satisfy these obligations may result in the loss of some or all of our rights under these agreements. Refer to “Part I, Item 1A. Risk Factors.” Other components . We purchase certain other products, raw materials, and components from sole and single-source suppliers.
We believe that the breadth of our full diagnostic solution, including novel products and services developed and made available only by IDEXX, as well as the seamless software integration of our offering, provide a differentiated competitive advantage by giving veterinarians the tools and services to offer advanced veterinary medical care.
We believe that the breadth of our full diagnostic solution, including novel products and services developed and made available only by IDEXX, as well as the software integration of our offering, provide a differentiated competitive advantage by giving veterinarians the tools and services to offer advanced veterinary medical care.
However, compliance with extensive country-specific regulatory processes is required in connection with importing and marketing diagnostic products in Japan, Germany, Canada, Brazil, the Netherlands, China, and many other countries. We are 13 also required to have a facility license from APHIS to manufacture USDA-licensed products.
However, compliance with extensive country-specific regulatory processes is required in connection with importing and marketing diagnostic products in Japan, Germany, Canada, Brazil, the Netherlands, China, and many other countries. We are also required to have a facility license from APHIS to manufacture USDA-licensed products.
In addition, certain states have their own chemical regulations, such as California's Proposition 65, which requires businesses to provide warnings to California residents 14 about significant risk of exposures to chemicals in products that are known to cause cancer, birth defects, or other reproductive harm.
In addition, certain states have their own chemical regulations, such as California's Proposition 65, which requires businesses to provide warnings to California residents about significant risk of exposures to chemicals in products that are known to cause cancer, birth defects, or other reproductive harm.
Our products that use generative or other forms of artificial intelligence may also be subject to new and emerging law and regulations, including the European Union’s Artificial Intelligence Act enacted in August 2024. Development or acquisition of new products and technologies may subject us to additional areas of government regulation.
Our products that use generative or other forms of artificial intelligence (“AI”) may also be subject to new and emerging law and regulations, including the European Union’s Artificial Intelligence Act enacted in August 2024. Development or acquisition of new products and technologies may subject us to additional areas of government regulation.
Our hematology analyzers assess the cellular components of blood, including red blood cells, white blood cells, and platelets (also called a complete blood count). These analyzers include the ProCyte One and ProCyte Dx hematology analyzers. We also sell the Coag Dx Analyzer, which permits the detection and diagnosis of blood clotting disorders.
Our hematology analyzers assess the cellular components of blood, including red blood cells, white blood cells, and platelets (also called a complete blood count). These analyzers include the ProCyte One and ProCyte Dx hematology analyzers. We also sell the Coag Dx Analyzer, which permits the detection and diagnosis of blood clotting disorders. Urinalysis .
We also compete in certain international geographies with Zoetis Inc.; Mars, Incorporated brands including Heska, Antech Diagnostics, scil animal care, and Asia Veterinary Diagnostics; Fujifilm Holdings Corporation; Arkray, Inc.; Mindray; and BioNote, Inc. • Water, livestock, poultry, and dairy testing products .
We also compete in certain international geographies with Zoetis Inc.; Mars, Incorporated brands including Heska, Antech Diagnostics, scil animal care, and Antech-Asia Veterinary Diagnostics; Fujifilm Holdings Corporation; Arkray, Inc.; Mindray; and BioNote, Inc. 12 • Water, livestock, poultry and dairy testing products .
Our Quanti-Tray Sealer PLUS, and Quanti-Tray Sealer 2X are used with the Quanti-Tray products for the determination of bacterial density in water samples. Our SimPlate and EasyDisc for HPC products detect the total number of the most common bacteria in a water sample. IDEXX Tecta Systems .
Our Quanti-Tray Sealer PLUS and Quanti-Tray Sealer 2X instruments are used with the Quanti-Tray products for the determination of bacterial density in water samples. Our SimPlate and EasyDisc for HPC products detect the total number of the most common bacteria in a water sample. IDEXX Tecta Systems .
While the sale of these products does not require premarket approval by the FDA and does not subject us to FDA inspections or the FDA's current Good Manufacturing Practice regulations (“cGMP”), the FDA Act specifies that these products must not be adulterated, mislabeled, or misbranded.
While the sale of these products does not require premarket approval by the FDA and does not subject us to FDA inspections or the FDA's current Good Manufacturing Practice regulations (“cGMP”), the FDC Act specifies that these products must not be adulterated, mislabeled, or misbranded.
PFAS (per- and polyfluoroalkyl substances), which may be contained in certain IDEXX products, are a subject of increasing regulatory attention. The European Union had proposed draft regulations regarding PFAS, which include restrictions and/or phase-out requirements.
PFAS (per- and polyfluoroalkyl substances), which may be contained in certain IDEXX products, are a subject of increasing regulatory attention. The European Union proposed draft regulations regarding PFAS, which include restrictions and/or phase-out requirements.
Outside the U.S., we sell our companion animal diagnostic products through our direct sales force and, in certain countries, through distributors and other resellers. We sell our veterinary reference laboratory diagnostic and consulting services worldwide, generally through our direct sales force. We market our diagnostic imaging products primarily through our direct sales force in the U.S. and Canada.
Outside the U.S., we sell our companion animal diagnostic products through our direct sales force and, in certain countries, through distributors and other resellers. We sell our veterinary reference laboratory diagnostic and consulting services worldwide, generally through our direct sales force. We market our diagnostic imaging products primarily through our direct sales force in the U.S.
Foreign Corrupt Practices Act and the UK Bribery Act, import and export laws and regulations, including U.S. import and export control and sanctions laws, and laws and regulations governing the collection, use, retention, sharing and security of data such as the EU General Data Protection Regulation and the EU Data Act.
Foreign Corrupt Practices Act and the UK Bribery Act; import and export laws and regulations, including U.S. import and export control and sanctions laws; and laws and regulations governing the collection, use, retention, sharing and security of data such as the EU General Data Protection Regulation and the EU Data 14 Act.
The EPA approval process involves submission of extensive product performance data in accordance with an EPA-approved protocol, evaluation of the data by the EPA, and publication for public comment of any proposed approval in the Federal Register before final approval.
The EPA approval process involves submission of extensive product performance data in accordance with an EPA-approved protocol, evaluation of the data by the EPA, and typically publication for public comment of any proposed approval in the Federal Register before final approval.
We sell these products primarily in North America and Europe. Our largest competitor in North America and the U.K. is Covetrus, Inc., which offers several systems and leverages its animal health distribution business in sales and service. We also compete with numerous highly focused smaller companies throughout the geographies in which we offer veterinary software, including those offering cloud-based solutions.
We sell these products primarily in North America and Europe. Our largest competitor in North America and the U.K. is Covetrus, Inc., which offers several systems and leverages its animal health distribution business in sales and service. We also compete with numerous smaller companies throughout the geographies in which we offer veterinary software, including those offering cloud-based solutions.
These integrated diagnostic results provide the veterinarian with a visualization of patient-specific information, allowing the veterinarian to easily see and trend diagnostic results, enabling greater medical insight and enhanced decision-making through IDEXX DecisionIQ, an analytical tool incorporated in VetConnect PLUS that utilizes proprietary technology, including AI, to aid practitioners in making medical diagnoses.
These integrated diagnostic results provide the veterinarian with a visualization of patient-specific information, allowing the veterinarian to easily see and trend diagnostic results. VetConnect PLUS enables greater medical insight and enhanced decision-making through IDEXX DecisionIQ, an analytical tool incorporated in VetConnect PLUS that utilizes proprietary technology, including AI, to aid practitioners in making medical diagnoses.
Several of our direct and potential competitors have substantially greater financial and managerial resources than us, as well as greater experience in manufacturing, marketing, research and development, and obtaining regulatory approvals than we do. For more information on risks related to our competition, refer to “Part I, Item 1A.
Some of our direct and potential competitors have substantially greater financial and managerial resources than us, as well as greater experience in manufacturing, marketing, research and development, and obtaining regulatory approvals than we do. For more information on risks related to our competition, refer to “Part I, Item 1A.
We believe that these capabilities, enabled by the use of IDEXX products and services, improve the effectiveness and financial health of the veterinary practice. 8 Water quality products (“Water”) - Water provides innovative testing solutions for easy, rapid, and accurate detection and quantification of various microbiological parameters in water. Water testing .
We believe that these capabilities, enabled by the use of IDEXX products and services, improve the effectiveness and financial health of the veterinary practice. 8 Water quality products (“Water”) - Water provides innovative testing solutions and related instrumentation for easy, rapid, and accurate detection and quantification of various microbiological parameters in water. Water testing .
These patents, patent applications, and technologies relate to intellectual property embodied in certain of our CAG products and services (including our Catalyst instruments and consumables and certain reference laboratory tests), LPD diagnostic products, and Water testing products, as well as other subject matters relevant to the manufacture and commercialization of these products and services.
These patents, patent applications, and technologies relate to intellectual property embodied in certain of our CAG products and services (including our Catalyst instruments and consumables and certain reference laboratory tests), LPD diagnostic products, and Water testing products, as well as other technologies relevant to the manufacture and commercialization of these products and services.
Accordingly, our well-being programs have strong utilization by our employee base, and we review these programs from time to time to ensure they are achieving the anticipated outcomes. We provide free counseling for employees and their dependents globally through our mental wellness partner.
Accordingly, our well-being programs have strong utilization by our employee base, and we review these programs from time to time to confirm they are achieving the anticipated outcomes. We provide free counseling for employees and their dependents globally through our mental wellness partner.
In addition to monitoring and managing compliance with environmental, health and safety laws and regulations, we strive to reduce our environmental footprint, although our greenhouse gas emissions from our operations are not significant. We have developed and are implementing a greenhouse gas emissions reduction strategy.
In addition to monitoring and managing compliance with environmental, health and safety laws and regulations, we strive to reduce our environmental footprint, although greenhouse gas emissions from our operations are not significant. We have developed and are executing a greenhouse gas emissions reduction strategy.
Livestock, Poultry and Dairy (“LPD”) - LPD provides diagnostic tests, services, and related instrumentation that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to ensure the quality and safety of milk. Livestock, Poultry, Herd Health Screening and Production Management .
Livestock, Poultry and Dairy (“LPD”) - LPD provides diagnostic tests, services, and related instrumentation that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to measure the quality and safety of milk. Livestock, Poultry, Herd Health Screening and Production Management .
These factors include, but are not limited to: • publications, including peer-reviewed third-party studies, that demonstrate the performance and benefits of our products and services; • our brand strength and reputation in the marketplace; • the breadth, quality and integration of our product and service offerings; • our existing customer relationships and our customer service and support; • our sales force; • our online ordering platform that enables direct ordering of (including establishing automatic reorder schedules for) our consumables, tests and other products by our customers; • the applicable regulatory approval status for certain products; • our continued investments in innovative product and service improvements that result in new technologies, features, functionalities, enhancements, integrations, and/or additional patents and other intellectual property rights; • our investment in diagnostic innovations that results in new product and service offerings that are patentable and that expand the test menu for our in-clinic instruments and/or reference laboratory business; and • our significant know-how, scale and investments related to the product design and manufacturing processes of associated product offerings and certain supply arrangements for consumables that are compatible with our instruments.
These factors include, but are not limited to: • publications, including peer-reviewed third-party studies, that demonstrate the performance and benefits of our products and services; • our brand strength and reputation in the marketplace; • the breadth, quality and integration of our product and service offerings; 10 • our existing customer relationships and our customer service and support; • our sales force; • our online ordering platform that enables direct ordering of (including establishing automatic reorder schedules for) our consumables, tests and other products by our customers; • the applicable regulatory approval status for certain products; • our continued investments in innovative product and service improvements that result in new technologies, features, functionalities, enhancements, integrations, and any related patents or other intellectual property rights; • our investment in diagnostic innovations that results in new product and service offerings that expand the test menu for our point-of-care instruments and/or reference laboratory business, and any related patents or other intellectual property rights; and • our significant know-how, scale and investments related to the product design and manufacturing processes of associated product offerings and certain supply arrangements for consumables that are compatible with our instruments.
Our Other operating segment combines and presents our human medical diagnostic products business with our out-licensing arrangements because they do not meet the quantitative or qualitative thresholds for reportable segments.
Our Other operating segment combines and presents our human medical diagnostic products business with our out-licensing arrangement because they do not meet the quantitative or qualitative thresholds for reportable segments.
These requirements include the Biocidal Products Regulation, which requires the use of only approved biocides in our products imported to or used in the European Union, and REACH, which regulates and restricts the use of certain chemicals in the European Union.
These regulations include the Biocidal Products Regulation, which requires the use of only approved biocides in our products imported to or used in the European Union, and REACH, which regulates and restricts the use of certain chemicals in the European Union.
In addition, we offer cloud-based client communication (Pet Health Network Pro, Pet Health Network 3D, and Vello) and preventive care plan management software (Petly Plans) designed to strengthen the relationship between the veterinarian and the pet owner. To support the communication needs between general practices and specialty referral practices, IDEXX offers rVetLink software.
Client marketing and wellness plan management . In addition, we offer cloud-based client communication (Vello and Pet Health Network Pro) and preventive care plan management software (Petly Plans) designed to strengthen the relationship between the veterinarian and the pet owner. To support the communication needs between general practices and specialty referral practices, IDEXX offers rVetLink software.
The ongoing costs of complying with such laws and regulations is significant and may increase in the future, particularly in the European Union, 16 where we are required to comply with increasingly extensive regulations. We continue to monitor legislative and regulatory actions and their potential impacts on the areas where we conduct business.
The ongoing cost of complying with such laws and regulations is significant and may increase in the future, particularly in the European Union, where we are required to comply with increasingly extensive regulations. We continue to monitor legislative and regulatory actions and their potential impacts on the areas where we conduct business.
Our IDEXX Tecta system instruments automate several steps in water testing workflows, allowing multiple samples to be tested simultaneously, with remote notification capability. Tecta detects total coliforms and E. coli , E. coli only, fecal coliforms, and enterococci .
Our IDEXX Tecta system instruments automate several steps in water testing workflows, allowing multiple samples to be tested simultaneously, with remote notification capability. Tecta detects total coliforms and E. coli , E. coli only, fecal coliforms, and enterococci . UV Viewer Plus .
COMPETITION We compete with many companies ranging from large human and animal health pharmaceutical and medical diagnostics companies to small businesses focused on animal health. Our companion animal veterinary diagnostic products and services compete with both reference laboratory service and in-clinic product providers. Our competitors vary in our different business areas and regions.
COMPETITION We compete with many companies ranging from large human and animal health pharmaceutical and medical diagnostics companies to small businesses focused on animal health. Our companion animal veterinary diagnostic products and services compete with both reference laboratory service and point-of-care product providers. Our competitors vary in our different business areas and regions.
In the U.S., the EPA has published a PFAS rule under the Toxic Substance Control Act, requiring manufacturers of PFAS and importers of products containing PFAS to file certain information from January 1, 2011, including PFAS chemical identity and structure, production, imports of products containing PFAS, use, byproducts, exposure, disposal, and health and environmental effects.
In the U.S., the EPA has published a PFAS rule under the Toxic Substance Control Act, requiring manufacturers of PFAS and importers of products containing PFAS to file certain information, including PFAS chemical identity and structure, production, imports of products containing PFAS, use, byproducts, exposure, disposal, and health and environmental effects.
In addition, all employees have access to financial education and our employees, their spouses, and adult dependents in North America can engage with a financial coach for help reaching their personal financial goals. We are committed to enabling managers, teams, and employees to identify the most effective work arrangements to accomplish their goals.
In addition, employees have access to financial education and our employees, their spouses, and adult dependents in North America can engage with a financial coach for help reaching their personal financial goals. We are focused on enabling managers, teams, and employees to identify the most effective work arrangements to accomplish their goals.
ITEM 1. BUSINESS COMPANY OVERVIEW IDEXX was incorporated in Delaware in 1983. We develop, manufacture, and distribute products and provide services primarily for the companion animal veterinary, livestock and poultry, dairy and water testing industries. We also provide human medical point-of-care and laboratory diagnostics.
ITEM 1. BUSINESS COMPANY OVERVIEW IDEXX was incorporated in Delaware in 1983. We develop, manufacture, and distribute products and provide services primarily for the companion animal veterinary; livestock, poultry and dairy; and water testing industries. We also manufacture and sell human medical point-of-care diagnostic products.
Our primary products and services are: • Point-of-care veterinary diagnostic products, comprised of instruments, consumables, and rapid assay test kits; • Veterinary reference laboratory diagnostic and consulting services; • Practice management and diagnostic imaging systems and services used by veterinarians; • Health monitoring, biological materials testing, laboratory diagnostic instruments, and services used by the biomedical research community; • Diagnostic and health-monitoring products for livestock, poultry, and dairy; • Products that test water for certain microbiological contaminants; and • Point-of-care electrolytes and blood gas analyzers.
Our primary products and services are: • Point-of-care veterinary diagnostic products, comprised of instruments, consumables, and rapid assay test kits; • Veterinary reference laboratory diagnostic and consulting services; • Practice management systems, software and diagnostic imaging systems and services used by veterinarians; • Health monitoring, biological materials testing, laboratory diagnostic instruments, and services used by the biomedical research community; • Diagnostic and health-monitoring products for livestock, poultry, and dairy; and • Products that test water for certain microbiological contaminants.
Regardless of modality utilized, veterinarians are provided with clinically relevant data which is integrated within our information management technologies. The result is a comprehensive view of patient diagnostic information that is easily accessible by both the veterinarian and pet owner. In-Clinic Diagnostic Solutions .
Regardless of modality utilized, veterinarians are provided with clinically relevant data which is integrated within our information management technologies. The result is a comprehensive view of patient diagnostic information that is easily accessible by both the veterinarian and pet owner. Point-of-Care Diagnostic Solutions .
Our research and development expenses, which consist of salaries, employee benefits, certain licensing agreements, materials and external consulting and development costs, were $219.8 million for the year ended December 31, 2024, or 5.6% of our consolidated revenue, $191.0 million for the year ended December 31, 2023, or 5.2% of our consolidated revenue and $254.8 million for the year ended December 31, 2022, or 7.6% of our consolidated revenue.
Our research and development expenses, which consist of salaries, employee benefits, certain licensing agreements, materials and external consulting and development costs, were $251.2 million for the year ended December 31, 2025, or 5.8% of our consolidated revenue, $219.8 million for the year ended December 31, 2024, or 5.6% of our consolidated revenue, and $191.0 million for the year ended December 31, 2023, or 5.2% of our consolidated revenue.
Other countries, including China, the United Arab Emirates, and Turkey, have implemented or anticipate implementing regulatory regimes similar to the RoHS Directive. Our veterinary diagnostic instrument systems are not subject to regulation under the EU Medical Device Regulation or In Vitro Diagnostic Medical Device Regulation, which are both strictly applicable to human use products.
Other countries, including China, have implemented or anticipate implementing regulatory regimes similar to the RoHS Directive. Our veterinary diagnostic instrument systems are not subject to regulation under the EU Medical Device Regulation or In Vitro Diagnostic Medical Device Regulation, which are both strictly applicable to human use products.
Our most recent Corporate Responsibility Report, which is available on our website, is aligned with the Sustainability Accounting Standards Board and the Task Force on Climate-Related Financial Disclosures frameworks and provides our most recent sustainability highlights for our products and operations.
Our most recent Corporate Responsibility Report, which is available on our website, is informed by the Sustainability Accounting Standards Board and the Task Force on Climate-Related Financial Disclosures frameworks and provides our most recent sustainability highlights for our products and operations.
Companion Animal Group (“CAG”) - Diagnostic and information management-based products and services for the companion animal veterinary industry, including in-clinic diagnostic solutions, outside reference laboratory services, and veterinary software and services. CAG Diagnostics We provide diagnostic capabilities that meet veterinarians’ diverse needs through a variety of modalities, including in-clinic diagnostic solutions and outside reference laboratory services.
Companion Animal Group (“CAG”) - Diagnostic and information management products and services for the companion animal veterinary industry, including point-of-care diagnostic solutions, outside reference laboratory services, and veterinary software and services. CAG Diagnostics We provide diagnostic capabilities that meet veterinarians’ diverse needs through a variety of modalities, including point-of-care diagnostic solutions and outside reference laboratory services.
Our in-clinic diagnostic solutions are comprised of our IDEXX VetLab suite of in-clinic chemistry, hematology, immunoassay, electrolyte, urinalysis, cytology, blood gas, and coagulation analyzers, as well as associated consumable products that provide real-time reference lab quality diagnostic results.
Our point-of-care diagnostic solutions are comprised of our IDEXX VetLab suite of point-of-care chemistry, hematology, immunoassay, electrolyte, urinalysis, cytology/morphology, blood gas, and coagulation analyzers, as well as associated consumable products that provide real-time reference lab quality diagnostic results.
Several of these in-clinic analyzers, including the Catalyst One Chemistry analyzer, ProCyte One hematology analyzer, SediVue Dx Analyzer, and IDEXX inVue Dx Cellular Analyzer, utilize proprietary artificial intelligence (“AI”) capabilities in their image capture systems to analyze samples. IDEXX in-clinic analyzers feature load-and-go sample handling and integration with a cloud-enabled software ecosystem, including the IDEXX VetLab Station and VetConnect PLUS.
Several of these point-of-care analyzers, including the Catalyst One Chemistry analyzer, ProCyte One hematology analyzer, SediVue Dx Analyzer, and IDEXX inVue Dx Cellular Analyzer, utilize proprietary AI capabilities in their image capture systems to analyze samples. IDEXX point-of-care analyzers feature load-and-go sample handling and integration with a cloud-enabled software ecosystem, including the IDEXX VetLab Station and VetConnect PLUS.
Because our strategy includes developing strong, deep relationships with our veterinary customers around the world, we have focused on growing our companion animal diagnostics field-based organization globally. Inclusive, Ethical Culture. IDEXX promotes an inclusive, ethical culture that values the different skills, perspectives and backgrounds that each employee brings in pursuit of our Purpose.
Because our strategy includes developing strong, deep relationships with our veterinary customers around the world, we have focused on growing our companion animal diagnostics field-based organization globally. Culture of Inclusion and Equal Opportunity. IDEXX promotes a culture of inclusion and equal opportunity that values the different skills, perspectives, and backgrounds that each employee brings in pursuit of our Purpose.
Risk Factors.” HUMAN CAPITAL As innovation and customer focus are important parts of our strategy to create long-term value, we aim to attract, motivate, develop, and retain talented employees at all levels who are aligned with and passionate about our Purpose by: • Building and sustaining an inclusive, ethical culture that welcomes, respects and supports all employees; • Offering competitive and locally relevant compensation and benefits; and • Providing growth and development opportunities for all our employees.
Risk Factors.” HUMAN CAPITAL As innovation and customer focus are important parts of our strategy to create long-term value, we aim to attract, motivate, develop, and retain talented employees at all levels who are aligned with and passionate about our Purpose by: • Building and sustaining an inclusive culture of equal opportunity that welcomes, respects, and supports all employees; • Offering competitive and locally relevant compensation and benefits that support our employees’ overall well-being; and • Providing growth and development opportunities for our employees, including leadership training.
We file applications for and obtain patents, copyrights, and trademarks in the U.S. and other countries as we believe appropriate, and we seek to protect our trade secrets and proprietary know-how.
We file applications for and obtain patents, copyrights, and trademarks in the U.S. and other countries as we believe appropriate, and we seek to protect our trade secrets and proprietary know-how. We also license patents and technologies from third parties.
We rely on third parties in our supply chain to supply us, and our direct suppliers, with certain important components, raw materials, and consumables used in or with our products. In some cases, these third parties are sole or single-source suppliers. From time to time, we seek to qualify alternative suppliers. Instruments and consumables .
We rely on third parties in our supply chain to supply us, and our direct suppliers, with certain important components, raw materials, and consumables used in or with our products and services. In some cases, these third parties are sole or single-source suppliers.
The FDA’s Quality System regulations set forth standards for our product design and manufacturing processes, require the maintenance of certain records, and provide for inspections of our facilities by the FDA.
The FDA’s Quality System regulations set forth standards for our product design and manufacturing processes, require the maintenance of certain records, and provide for inspections of our facilities by the FDA. Other Chemical, Environmental, and Human Health Safety Regulations .
We also license patents and technologies from third parties. 10 While we consider ownership of these intellectual property rights in the aggregate to be important to us, we do not believe that any single patent, copyright, trademark, trade secret, or license is material to our business as a whole, except for licenses related to our Catalyst instruments and consumables, and we primarily rely on the innovative skills, technical expertise, customer focus and knowledge, and marketing abilities of our employees for our business success.
While we consider ownership of these intellectual property rights in the aggregate to be important to us, we do not believe that any single patent, copyright, trademark, trade secret, or license is material to our business as a whole, and we primarily rely on the innovative skills, technical expertise, customer focus and knowledge, and marketing abilities of our employees for our business success.
We are steadfast in our focus on cultivating the leaders of tomorrow and making career development opportunities more accessible across the company. We offer in-person and virtual training; our goal is to ensure robust training development options are accessible to all levels, geographies, and in multiple languages. Our career development programs are designed to build capabilities and enable career progression.
We are steadfast in our focus on cultivating the leaders of tomorrow and making career development opportunities accessible across the company. We offer in-person and virtual training; our goal is to provide robust training development options that are accessible to all levels and geographies and in multiple languages.
Significant products supplied by sole and single-source providers include certain Catalyst Dx and Catalyst One consumables (other than electrolyte consumables and the fructosamine, thyroxine, canine C-reactive protein, progesterone, SDMA, and Bile Acid slides), LaserCyte Dx consumables, ProCyte Dx Analyzers and consumables, InVue Dx cytology consumables, SediVue Dx urinalysis instruments and consumables, and certain components of our internally manufactured analyzers. 11 Certain Catalyst chemistry slides are supplied by Ortho-Clinical Diagnostics, Inc.
Significant products, components, and raw materials supplied by sole and single-source providers include certain Catalyst Dx and Catalyst One consumables (other than electrolyte consumables and the fructosamine, thyroxine, canine C-reactive protein, progesterone, SDMA, and Pancreatic Lipase, Cortisol, and Bile Acid slides), ProCyte Dx Analyzers and consumables, IDEXX inVue Dx cytology consumables, SediVue Dx urinalysis instruments and consumables, and certain components of our internally manufactured analyzers.
Our Environmental Health & Safety (“EH&S”) team oversees the IDEXX EH&S management system and our company-wide safety programs, ensuring that all of our locations implement health and safety processes to maintain and improve employee safety, reduce workplace risks, and drive continuous improvement. Growth and Development .
Our Environmental Health & Safety (“EH&S”) team oversees the IDEXX EH&S management system and our company-wide safety programs, and is responsible for the implementation at all of our locations of health and safety processes designed to maintain and improve employee safety, reduce workplace risks, and drive continual improvement. Growth and Development .
Through OPTI Medical, we sell point-of-care analyzers and related consumables for use in human medical hospitals and clinics to measure electrolytes, blood gases, acid-base balance, glucose, lactate, blood urea nitrogen and ionized calcium, and to calculate other parameters such as base excess and anion gap.
We sell point-of-care analyzers and related consumables for use in human medical hospitals and clinics to measure electrolytes, blood gases, acid-base balance, glucose, lactate, blood urea nitrogen and ionized calcium, and to calculate other parameters such as base excess and anion gap. Additional information about our products and services can be found on our website.
In addition, VetConnect PLUS provides instant mobile or browser-based access to results, which can be printed or emailed to pet owners and other veterinarians. Reference Laboratory Diagnostic and Consulting Services .
In addition, VetConnect PLUS provides instant mobile and browser-based access to results, which can be shared with pet owners and other veterinarians directly from the VetConnect PLUS application. Reference Laboratory Diagnostic and Consulting Services .
This menu of tests also includes a number of specialized tests that we have developed that allow practitioners to diagnose increasingly relevant diseases and conditions in dogs and cats, including parasites, heart disease, allergies, pancreatitis, diabetes, renal disease, and infectious diseases.
This menu of tests also includes a number of specialized tests that we have developed that allow practitioners to diagnose relevant diseases and conditions in dogs and cats, including parasites, heart disease, allergies, pancreatitis, diabetes, renal disease, and infectious diseases. We also offer cancer screening to aid in diagnosis, assist in therapy selection, and support therapy management and monitoring.
IDEXX Telemedicine services are accessed through IDEXX VetMedStat, a cloud-based software platform for case submission and interpretation that embeds proprietary AI capabilities aiding analysis of images and electrocardiogram results. Veterinary Software and Services & Diagnostic Imaging Systems Veterinary Software and Services . We develop, market, and sell a portfolio of software and services for independent veterinary clinics and corporate groups.
IDEXX Telemedicine services are accessed through IDEXX Web PACS, ezyVet, and VetMedStat, a cloud-based software platform for case submission and interpretation that embeds proprietary AI capabilities aiding analysis of images and electrocardiogram results. Veterinary Software and Services & Diagnostic Imaging Systems Veterinary Software and Services .
Our OPTI instrument systems are classified by the FDA as Class I and/or Class II medical devices, and their design, manufacture, and marketing are regulated by the FDA. Accordingly, we must comply with cGMP in the manufacture of our OPTI products.
Our human point-of-care electrolyte and blood gas analyzers are classified by the FDA as Class I and/or Class II medical devices, and their design, manufacture, and marketing are regulated by the FDA. Accordingly, we must comply with cGMP in the manufacture of these products.
We sell our OPTI products and services both directly and through independent human medical product distributors. RESEARCH AND DEVELOPMENT Our business includes the development and introduction of new products and services and may involve entry into new business areas. We maintain active research and development programs in each of our three primary business segments.
RESEARCH AND DEVELOPMENT Our business strategy includes the development and introduction of new products and services and may involve entry into new business areas. We maintain active research and development programs in each of our three primary business segments.
In addition to the foregoing, our business is generally subject to various U.S. and foreign regulatory authorities, including the U.S. Federal Trade Commission (the “FTC”) and other anti-competition authorities, and we are also subject to anti-bribery and anti-corruption laws, such as the U.S.
Federal Trade Commission (the “FTC”) and other anti-competition authorities, and we are also subject to anti-bribery and anti-corruption laws, such as the U.S.
Our major competitors in most geographic locations in North America are Mars, Incorporated brands Antech Diagnostics and Heska; and Zoetis Inc. (including its wholly-owned subsidiary Abaxis, Inc.).
We compete with a number of companies in most geographic locations in North America including Mars, Incorporated brands Antech Diagnostics and Heska; and Zoetis Inc. (including its wholly-owned subsidiary Abaxis, Inc.).
The IDEXX inVue Dx Cellular Analyzer uses advanced optics and AI technology in a slide-free, load-and-go platform. Rapid Assay . The SNAP rapid assays are single-use, handheld test kits that can work without the use of instrumentation, although many kits may also be activated with results automatically captured and interpreted by the SNAP Pro Analyzer.
The SNAP rapid assays are single-use, handheld test kits that can work without the use of instrumentation, although many kits may also be activated with results automatically captured and interpreted by the SNAP Pro Analyzer.
For some teams this consists of 100% onsite work, while others employ remote or hybrid models. Our goal is to promote a positive workplace environment where everyone can contribute to their fullest potential. We strive to build a collaborative culture through in-person and virtual events, including town halls, in-office celebrations, and employee-led communities.
For some teams this consists of 100% onsite work, while others employ remote or hybrid models. Our goal is to promote a positive workplace environment where everyone can contribute to their fullest potential.
Our Tecta Systems, Colilert, Colilert-18, Colisure, Quanti-Tray, Filta-Max xpress , Enterolert, and SimPlate for heterotrophic plate counts products have been approved by the EPA for use under various regulatory programs. Water testing products are subject to similarly extensive regulatory processes in other countries around the world. Dairy testing products .
Our Tecta Systems with the Tectalert EC/TC medium, Colilert, Colilert-18, Colisure, Quanti-Tray, Filta-Max xpress , Enterolert, and SimPlate for heterotrophic plate counts products have been approved by the EPA for use under various regulatory programs.
The principal feline SNAP rapid assay tests include SNAP Feline Triple, which tests for feline immunodeficiency virus (“FIV”) (which is similar to the virus that leads to AIDS in humans), feline leukemia virus (“FeLV”) and heartworm, and SNAP FIV/FeLV Combo Test, which tests for FIV and FeLV. IDEXX VetLab Station .
The principal feline SNAP rapid assay tests include SNAP Feline Triple, which tests for feline immunodeficiency virus (“FIV”), feline leukemia virus (“FeLV”) and heartworm, and SNAP FIV/FeLV Combo Test, which tests for FIV and FeLV. IDEXX VetLab Station . The IDEXX VetLab Station (“IVLS”) connects and integrates the diagnostic information from all the IDEXX VetLab analyzers.
Dairy products used in National Conference on Interstate Milk Shipments (“NCIMS”) milk-monitoring programs in the U.S. are regulated by the FDA as veterinary medical devices.
When used for compliance monitoring, water testing products are subject to similarly extensive regulatory processes in other countries around the world. 13 Dairy testing products . Dairy products used in National Conference on Interstate Milk Shipments (“NCIMS”) milk-monitoring programs in the U.S. are regulated by the FDA as veterinary medical devices.
We believe that this culture helps drive both innovation and a better understanding of our increasingly global customer base aligned with long-term value creation. We employ inclusive recruitment practices to source highly qualified candidates, regardless of race, sex, gender, religion, national origin, or any other characteristic protected by law.
We believe that this culture helps drive both innovation and a better understanding of our increasingly global customer base aligned with long-term value creation. We employ inclusive recruitment practices to source highly qualified candidates and we maintain an environment where advancement is determined by demonstrated performance, capability, and contribution.
In addition, a number of states, including Maine, where we manufacture many of our products, have also developed product reporting and/or phase-out requirements.
Other countries have proposed similar regulations, including Australia, Canada, and Brazil. In addition, a number of U.S. states have also developed product reporting and/or phase-out requirements. While statutory exemptions exist in Maine, where we manufacture many of our products, some U.S. states have developed a range of product reporting, labeling and/or phase-out requirements.
This portfolio includes: Practice management systems . We provide software, hardware, and integrated services that run key functions of veterinary clinics, including managing patient electronic health records, scheduling, client communication, billing, and inventory management. Our practice management systems offerings include cloud-based ezyVet, Animana, and IDEXX Neo, and on-premises Cornerstone.
We develop, market, and sell a portfolio of software and services for independent veterinary clinics and corporate groups. Practice management systems . We provide software, hardware, and integrated services that run key functions of veterinary clinics, including managing patient electronic health records, scheduling, client communication, billing, and inventory management.
Our SmartFlow cloud offering works in conjunction with major veterinary practice management systems, including ezyVet, Cornerstone, Animana, IDEXX Neo, and certain third-party practice management systems, and VetRadar provides workflow capability for ezyVet. Client marketing and wellness plan management .
We are able to improve overall patient management and workflow optimization through coordination and tracking of every step of a patient during a hospital stay. Our SmartFlow cloud offering works in conjunction with major veterinary practice management systems, including ezyVet, Cornerstone, Animana, IDEXX Neo, and certain third-party practice management systems, and VetRadar provides workflow capability for ezyVet.
Ensuring the health, safety, and well-being of our employees is a top priority at IDEXX. We provide our employees with the training, tools, and resources they need to safeguard their health, and we empower them to put safety first.
We strive to build a collaborative culture through in-person and virtual events, including town halls, in-office celebrations, and employee-led communities. 15 The health, safety, and well-being of our employees is a top priority at IDEXX. We provide our employees with the training, tools, and resources to help safeguard their health, and we empower them to put safety first.
Our livestock and poultry diagnostic products are purchased by government and private laboratories that provide testing services to livestock veterinarians, producers, and processors, and also directly by livestock veterinarians and producers.
Our livestock and poultry diagnostic products are purchased by government and private laboratories that provide testing services to livestock veterinarians, producers, and processors, and also directly by livestock veterinarians and producers. Our principal livestock and poultry diagnostic products include tests for Bovine Viral Diarrhea Virus (“BVDV”), Porcine Reproductive and Respiratory Syndrome (“PRRS”), and Transmittable Spongiform Encephalopathies (“TSE”).
We are an equal opportunity employer, and we aim to have talent management processes that provide equal career advancement opportunities for all our employees. Our policies strictly prohibit any form of employment discrimination, and pursuant to applicable law, we annually collect certain demographic data regarding our U.S. workforce, which we report in our EEO-1 report to the U.S.
Our policies strictly prohibit any form of employment discrimination, and pursuant to applicable law, we annually collect certain demographic data regarding our U.S. workforce, which we report in our EEO-1 report to the U.S. Equal Opportunity Commission. Our summarized EEO-1 survey data is disclosed on our website. Compensation, Benefits and Well-being .
We also offer cancer screening to aid in diagnosis, assist in therapy selection, and support therapy management and monitoring. 7 IDEXX Telemedicine . Additionally, we provide specialized veterinary consultation, telemedicine, and advisory services, including radiology, dental radiography, cardiology, internal medicine, and ultrasound consulting. These services enable veterinarians to obtain diagnostic interpretations, and radiology and cardiology assessments.
We currently anticipate launching the IDEXX Cancer Dx test for canine lymphoma internationally in the first half of 2026. IDEXX Telemedicine . We provide specialized veterinary consultation, telemedicine, and advisory services, including radiology, dental radiography, cardiology, internal medicine, and ultrasound consulting. These services 7 enable veterinarians to obtain diagnostic interpretations, and radiology and cardiology assessments.
IDEXX Web PACS is our cloud-based software-as-a-service (“SaaS”) offering for viewing, accessing, storing, and sharing multi-modality diagnostic images. IDEXX Web PACS is integrated with Cornerstone, ezyVet, IDEXX Neo, and IDEXX VetConnect PLUS to provide centralized access to diagnostic imaging results alongside patient diagnostic results from any internet-connected device.
IDEXX Web PACS enables practice workflows across all imaging modalities, including advanced image analysis, image sharing, and storage. IDEXX Web PACS is integrated with Cornerstone, ezyVet, IDEXX Neo, and IDEXX VetConnect PLUS to provide centralized access to diagnostic imaging results alongside patient diagnostic results from any internet-connected device.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurther, our information systems and our business partners’ and suppliers’ information systems have experienced, and will likely continue to experience, attacks by hackers and other threat actors and other cybersecurity breaches and incidents, including, among other things, computer viruses and malware, ransomware, denial of service actions, phishing schemes, the compromise, misappropriation and/or unauthorized acquisition or disclosure of confidential or otherwise protected information and similar events through the internet (including via devices and applications connected to the internet), and through email attachments and persons with access to these information systems, such as our employees or third parties with whom we do business.
Biggest changeWe, and some of our third-party vendors, have experienced cybersecurity attacks by threat actors (which may include state-sponsored organizations or nation state actors) and other cybersecurity breaches and incidents in the past, including, among other things, computer viruses and malware, ransomware, denial of service actions, phishing schemes, social engineering, the compromise, misappropriation and/or unauthorized access to (or acquisition or disclosure of) confidential or 25 otherwise protected information, and similar events, and will likely experience further attacks, breaches and incidents in the future, potentially with more frequency.
We also cannot predict whether any product or service offering, once launched, will achieve market acceptance, or achieve sales and revenue consistent with our expectations. We rely on a combination of patent, trade secret, trademark, and copyright laws to protect our proprietary rights.
We also cannot predict whether any product or service offering, once launched, will achieve market acceptance, or achieve sales and revenue consistent with our expectations. We rely on a combination of patent, trademark, copyright, and trade secret laws to protect our proprietary rights.
Factors that may impact the market price of our common stock include the factors described in this “Risk Factors” section and elsewhere in this Form 10-K, as well as: • Our stock repurchase program and changes in our capital structure or cost of capital, including the issuance of additional debt; • Public announcements (including the timing of these announcements) regarding our business, financial performance and prospects or new products or services, product enhancements or technological advances by our competitors or us; • Trading activity in our stock, including portfolio transactions in our stock by the company, our executive officers and directors, and significant stockholders; trading activity that results from the ordinary course rebalancing of stock indices in which we may be included, such as the S&P 500 Index; trading activity related to our inclusion in, or removal from, any stock indices; and short interest in our common stock, which could be significant from time to time; • Investor perception of the company and the industry and sectors in which we operate, including changes in earnings estimates or buy/sell recommendations by securities analysts; and whether or not we meet earnings estimates of securities analysts; and • General financial, domestic, international, economic, and market conditions, including overall fluctuations in the U.S. equity and credit markets, which may experience extreme volatility that, in some cases, is unrelated or disproportionate to the operating performance of particular companies. 32
Factors that may impact the market price of our common stock include the factors described in this “Risk Factors” section and elsewhere in this Form 10-K, as well as: • Our stock repurchase program and changes in our capital structure or cost of capital, including the issuance of additional debt or equity; • Public announcements (including the timing of these announcements) regarding our business, financial performance and prospects or new products or services, product enhancements or technological advances by our competitors or us; • Trading activity in our stock, including portfolio transactions in our stock by the company, our executive officers and directors, and significant stockholders; trading activity that results from the ordinary course rebalancing of stock indices in which we may be included, such as the S&P 500 Index; trading activity related to our inclusion in, or removal from, any stock indices; and short interest in our common stock, which could be significant from time to time; • Investor perception of the company and the industry and sectors in which we operate, including changes in earnings estimates or buy/sell recommendations by securities analysts; and whether or not we meet earnings estimates of securities analysts; and • General financial, domestic, international, economic, and market conditions, including overall fluctuations in the U.S. equity and credit markets, which may experience extreme volatility that, in some cases, is unrelated or disproportionate to the operating performance of particular companies. 32
If we are unable to obtain 19 adequate quantities of products, components, or raw materials in the future from sole and single-source suppliers, or if such sole and single-source suppliers are unable to obtain the components or other materials required to manufacture the products, we may be unable to supply our customers, which could have a material adverse effect on our results of operations and damage our reputation, and any longer-term disruptions could potentially result in the permanent loss of customers, which could reduce our recurring revenues and long-term profitability.
If we are unable to obtain adequate quantities of products, components, or raw materials in the future from sole and single-source suppliers, or if such sole and single-source suppliers are unable to obtain the components or other materials required to manufacture the products, we may be unable to supply our customers, which could have a material adverse effect on our results of operations and damage our reputation, and any longer-term disruptions could potentially result in the permanent loss of customers, which could reduce our recurring revenues and long-term profitability.
In addition, public health issues and crises may adversely impact our customers’ businesses due to business lockdowns, decreased companion animal clinical visits, labor shortages, the delay of elective procedures and wellness visits, and disruption of veterinary clinic and other customer operations, all of which 28 could cause a decline in demand for our products and services.
In addition, public health issues and crises may adversely impact our customers’ businesses due to business lockdowns, decreased companion animal clinical visits, labor shortages, the delay of elective procedures and wellness visits, and disruption of veterinary clinic and other customer operations, all of which could cause a decline in demand for our products and services.
We are exposed to physical risks (such as extreme weather conditions or rising sea levels), risks in transitioning to a low-carbon economy (such as additional legal or regulatory requirements, changes in 27 technology, market risk and reputational risk) and social and human effects (such as harm to health and well-being) associated with climate change.
We are exposed to physical risks (such as extreme weather conditions or rising sea levels), risks in transitioning to a low-carbon economy (such as additional legal or regulatory requirements, changes in technology, market risk, and reputational risk) and social and human effects (such as harm to health and well-being) associated with climate change.
Any transfers by us or our vendors of personal data are subject to potential regulatory scrutiny and may increase our exposure under the GDPR, UK GDPR, and similar laws which contain cross-border personal data transfer heightened requirements and restrictions (such as the new Chinese government standard contract for cross-border personal data transfers).
Any transfers by us or our vendors of personal data are subject to potential regulatory scrutiny and may increase our exposure under the GDPR, UK GDPR, and similar laws which contain cross-border personal data transfer heightened requirements and restrictions (such as the Chinese government standard contract for cross-border personal data transfers).
We have adopted measures to mitigate potential risks associated with information technology disruptions and cybersecurity threats; however, given the unpredictability of the timing, nature and scope of such disruptions and the evolving nature of cybersecurity threats, which vary in technique and sources, if we or our business partners or suppliers were to experience a system disruption, attack or security breach or incident that impacts any of our critical functions, or our customers were to experience a system disruption, attack or security breach or incident via any of our software or connected products and services, we could potentially be subject to production downtimes, operational and/or productivity delays, other detrimental impacts on our operations or ability to provide products and services to our customers, the compromise, misappropriation and/or unauthorized acquisition or disclosure of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or misuse of our systems or networks, financial losses and additional costs from remedial actions, repairs to infrastructure, physical systems or data processing systems, increased cybersecurity and information technology protection costs, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our business strategy, competitive position, results of operations, cash flows, financial condition, or prospects.
We have adopted measures to mitigate potential risks associated with information technology disruptions and cybersecurity threats; however, given the unpredictability of the timing, nature, and scope of such disruptions and the evolving nature of cybersecurity threats, which vary in technique and sources, if we or our business partners or suppliers were to experience a system disruption, attack or security breach or incident that impacts any of our critical functions, or our customers were to experience a system disruption, attack or security breach or incident via any of our software or connected IoT products and services, we could be subject to production downtimes, operational and/or productivity delays, other detrimental impacts on our operations or ability to provide products and services to our customers, the compromise, misappropriation and/or unauthorized access to (or acquisition or disclosure of) confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or misuse of our systems or networks, financial losses and additional costs from remedial actions, repairs to infrastructure, physical systems or data processing systems, increased cybersecurity and information technology protection costs, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our business strategy, competitive position, results of operations, cash flows, financial condition, or prospects.
There can also be no assurance that confidential, proprietary information provided to foreign regulatory agencies may not be accessed by unauthorized persons or otherwise stolen, which could negatively impact our ability to protect our proprietary rights in our innovative products and our future success.
There can also be no 21 assurance that confidential, proprietary information provided to foreign regulatory agencies may not be accessed by unauthorized persons or otherwise stolen, which could negatively impact our ability to protect our proprietary rights in our innovative products and our future success.
If we do not have adequate protection of our proprietary rights or are unable to license third-party patents and technologies on reasonable terms, our business may be adversely affected by competitors who utilize substantially equivalent technologies to compete with us.
If we do not have adequate protection of our proprietary rights or are unable to license third-party patents and technologies on reasonable terms, our business may be restricted or adversely affected by competitors who utilize substantially equivalent technologies to compete with us.
Our ability to achieve any of these goals is subject to numerous risks, many of which are outside of our control and depend in part on third-party performance or data, and there can be no assurance that we will achieve them.
Our ability to achieve any of these goals is subject to numerous risks, many of which are outside of our control and depend in part on third-party performance or data, and there can be no assurance that we will achieve or maintain them.
Similarly, a prolonged government shutdown or other disruption could prevent the timely review of 20 patent applications by the U.S. Patent and Trademark Office, which could delay the issuance of U.S. patents to which we would otherwise be entitled.
Similarly, a prolonged government shutdown or other disruption could prevent the timely review of patent applications by the U.S. Patent and Trademark Office, which could delay the issuance of U.S. patents to which we would otherwise be entitled.
In addition, under some contracts with suppliers we have minimum purchase obligations, and our failure to satisfy those obligations may result in loss of some or all of our rights under these contracts or require us to compensate the supplier.
In addition, under 19 some contracts with suppliers we have minimum purchase obligations, and our failure to satisfy those obligations may result in loss of some or all of our rights under these contracts or require us to compensate the supplier.
Furthermore, updates or other software changes can lead to software or system inoperability or inadvertently introduce security vulnerabilities, including vulnerabilities 25 that had been previously remedied or from malicious code injected in a “supply chain” cyberattack.
Furthermore, updates or other software changes can lead to software or system inoperability or inadvertently introduce security vulnerabilities, including vulnerabilities that had been previously remedied or from malicious code injected in a “supply chain” cyberattack.
The market price of our common stock may be highly volatile, and you may not be able to resell your shares at or above the price you paid The trading price of our common stock may be volatile. Securities markets worldwide experience significant price and volume fluctuations.
The market price of our common stock may be volatile, and you may not be able to resell your shares at or above the price you paid The trading price of our common stock may be volatile. Securities markets worldwide experience significant price and volume fluctuations.
We depend on the continuous and reliable operation and security of our information technology systems and our products and services that incorporate or rely on information technology, and any disruption or significant cybersecurity breach or other incident could adversely affect our business We rely on our information systems, as well as third-party information systems, to provide access to our web-based products and services, keep financial records, analyze results of operations, process orders and shipments, manage inventory, store confidential or proprietary information, and operate other critical functions.
We depend on the continuous and reliable operation and security of our information technology systems and our products and services that incorporate or rely on information technology, and any disruption or significant cybersecurity breach or other incident could adversely affect our business We rely on our information systems and third-party information systems to provide access to our web-based products and services, keep financial records, analyze results of operations, process orders and shipments, manage inventory, store confidential or proprietary information, and operate other critical functions.
Regulators in the U.S., Europe, and elsewhere are considering or have proposed or adopted various laws, directives or regulations regarding these matters, which include specific, target-driven disclosure requirements or obligations, including the European Union’s Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive and California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act.
Regulators in the U.S., Europe, and elsewhere are considering or have proposed or adopted various laws, directives or regulations regarding these matters, which include specific, target-driven disclosure requirements or obligations, including the European Union’s Corporate Sustainability Reporting Directive and California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act.
Factors and events beyond our control could disrupt our operations, supply chain, and logistics network and adversely affect our business Our business and results of operations could be negatively affected by certain factors and events beyond our control, such as natural disasters, severe weather conditions and/or climate change-related events (such as hurricanes, earthquakes, fires, and floods); public health issues (such as outbreaks, epidemics, or pandemics); civil or military unrest; geopolitical conditions and developments; war, terrorism, armed conflict, or other man-made disasters (including cyberwar, cyberterrorism, or state-sponsored attacks); inflationary pressures, which may increase costs for materials and finished goods; adverse or uncertain macroeconomic conditions, including fears of a global economic downturn or recession; increases in wages that drive up prices; rising interest rates; workforce disruptions; labor shortages or stoppages; the imposition of regulations, trade protection measures, tariffs, duties, import/export restrictions, quotas or embargoes on key components; transportation failures affecting the supply and shipment of materials and finished goods; and the unavailability of raw materials.
Factors and events beyond our control could disrupt our operations, supply chain, and logistics network and adversely affect our business Our business and results of operations could be negatively affected by certain factors and events beyond our control, such as natural disasters, severe weather conditions and/or climate change-related events (such as hurricanes, earthquakes, fires, and floods); public health issues (such as outbreaks, epidemics, or pandemics); civil or military unrest; geopolitical conditions and developments; war, terrorism, armed conflict, or other man-made disasters (including cyberwar, cyberterrorism, or state-sponsored attacks); disruption or loss of service from our cloud service providers; inflationary pressures, which may increase costs for materials and finished goods; adverse or uncertain macroeconomic conditions, including fears of a global economic downturn or recession; increases in wages that drive up prices; rising interest rates; workforce disruptions; labor shortages or stoppages; the imposition of regulations, trade protection measures, tariffs, duties, import/export restrictions, quotas or embargoes on key components; transportation failures affecting the supply and shipment of materials and finished goods; and the unavailability of raw materials.
Consolidation in our customer base, including through increased corporate hospital ownership, and prevalence of buying consortiums could negatively affect our business Veterinarians are our primary customers for our CAG products and services, and the veterinary services industry in the U.S. and abroad has become increasingly consolidated in recent years.
Consolidation in our customer base, including through increased corporate hospital ownership, and prevalence of buying consortiums could negatively affect our business Veterinarians are our primary customers for our CAG products and services, and the veterinary services industry in the U.S. and abroad has become increasingly consolidated.
Our competitors in the veterinary diagnostic sector in the United States and abroad include companies that develop, manufacture, and sell veterinary diagnostic tests; commercial veterinary reference laboratories; certain large and well-funded animal health pharmaceutical companies; and corporate hospital chains that operate reference laboratories that serve both their hospitals and unaffiliated hospitals, such as VCA Inc., which is wholly-owned by Mars, Incorporated, another operator of corporate hospital chains that also sells veterinary in-clinic diagnostic instruments.
Our competitors in the veterinary diagnostic sector in the United States and abroad include companies that develop, manufacture, and sell veterinary diagnostic tests; commercial veterinary reference laboratories; certain large and well-funded animal health pharmaceutical companies; and corporate hospital chains that operate reference laboratories that serve both their hospitals and unaffiliated hospitals, such as VCA Inc., which is wholly-owned by Mars, Incorporated, another operator of corporate hospital chains that also sells veterinary point-of-care diagnostic instruments.
For more information regarding personal data and information privacy and data protection risks, refer to “Our operations and reputation may be impaired if we, our products, or our services do not comply with our global privacy policy or evolving laws and regulations regarding data privacy and protection” below.
For more information regarding personal data and information privacy and data protection risks, refer to “Our operations and reputation may be impaired if we, our products, or our services do not comply with our global privacy policy or evolving laws, regulations, and industry standards regarding data privacy and protection” below.
Pet owners generally pay cash out of pocket for health care services for their pets from veterinary practices.
Pet owners generally pay cash out of pocket for health care services for their pets from veterinary 27 practices.
Additionally, public perception and standards related to the privacy of personal data can shift rapidly, in ways that may affect our reputation or influence regulators in the U.S. and abroad to expand or adopt more stringent regulations and laws.
Additionally, public perception and standards related to the privacy of personal data can shift rapidly, in ways that may affect our reputation or influence regulators and industry groups in the U.S. and abroad to expand or adopt more stringent regulations, laws, and standards.
Similarly, our future operating results may vary significantly from quarter to quarter or year to year due to these and other factors. If our operating results or projected operating results do not meet the expectations of securities analysts or investors in future periods, our stock price may fall.
Similarly, our future operating results may vary significantly from quarter to quarter or year to year due to these and other factors. If our operating results or projected operating results do not meet the expectations of securities analysts or investors in future periods, our stock price may decline.
Failure to meet current or evolving environmental, social, and governance regulations, standards, or expectations or to achieve our environmental, social, or governance goals could adversely affect our business, results of operations, financial condition, reputation, or stock price Regulators, as well as our investors, customers, employees, and other stakeholders, are increasingly focused on environmental, social, and governance matters, including climate-related issues; human capital matters; and responsible sourcing, human rights, and supply chain.
Failure to meet current or evolving environmental, social, and governance regulations, standards, or expectations or to achieve our environmental, social, or governance goals could adversely affect our business, results of operations, financial condition, reputation, or stock price Regulators, investors, customers, employees, and other stakeholders are focused on environmental, social, and governance matters, including climate-related issues; human capital matters; and responsible sourcing, human rights, and supply chain.
Our ability to maintain or enhance our growth rates and our profitability depends on our successful execution of many elements of our strategy, including: • Developing, manufacturing, and marketing innovative new or improved and cost competitive in-clinic laboratory analyzers that drive sales of IDEXX VetLab instruments, grow our installed base of instruments, and increase demand for related recurring sales of consumable products, services, and accessories; • Developing and introducing new or improved innovative diagnostic tests and services for both our reference laboratories and in-clinic applications that provide valuable medical information to our customers and effectively differentiate our products and services from those of our competitors; • Developing and introducing new or improved innovative, data-insightful software solutions that enable our veterinary customers to improve practice management and efficiency, staff productivity, and client communications and that increase the value to our veterinary customers of our other companion animal products and services by enhancing the integration of the information and transactions of these products and services and supporting the interpretation and management of diagnostic information derived from these products and services; • Maintaining premium pricing, including by effectively implementing price increases, for our products and services through, among other things, effective communication and promotion of their value in an environment where many of our competitors promote, market, and sell lesser offerings at lower prices; • Providing our veterinary customers with the medical and business tools, information, and resources that enable them to grow their practices and increase utilization of our diagnostic products and services, through increased pet visits, use of preventive care protocols, enhanced practice of real-time care, and improved practice efficiency; • Achieving cost improvements in our worldwide network of reference laboratories by implementing global best practices, including lean processing techniques, incorporating technological enhancements, including laboratory automation and a global laboratory information management system, employing purchasing strategies to maximize leverage of our global scale, increasing the leverage of existing infrastructure and consolidating testing in high volume laboratory hubs; • Achieving cost improvements in the manufacture and service of our in-clinic laboratory analyzers by employing the benefits of economies of scale in both negotiating supply contracts and leveraging manufacturing overhead, and by improving reliability of our instruments; • Continuing to expand, develop, and advance the productivity of our companion animal diagnostic sales, marketing, customer support, and logistics organizations in the U.S. and international regions in support of, among other things, our all-direct sales strategies; • Attracting, developing, and retaining key leadership and talent necessary to support all elements of our strategy; • Strengthening our sales and marketing activities to continue to grow our profitability both in and outside the U.S.; • Identifying, completing, and integrating acquisitions that enhance our existing businesses, create new businesses for us or expand the geographic areas in which we do business; • Continuing to incorporate AI, machine learning, and automation into our products and services and associated business processes, such as customer support and software development; 18 • Developing and implementing new technology and licensing strategies; and • Continuing to effectively manage our growth and expansion on a global scale through, among other things, designing and implementing cost-effective improvements to our processes, procedures, and infrastructure.
Maintaining or enhancing our growth rates and profitability depends on successful execution of many elements of our strategy, including: • Developing, manufacturing, and marketing innovative new or improved and cost competitive point-of-care laboratory analyzers that drive sales of IDEXX VetLab instruments, grow our installed base of instruments, and increase demand for related recurring sales of consumable products, services, and accessories; • Developing and introducing new or improved innovative diagnostic tests and services for both our reference laboratories and point-of-care applications that provide valuable medical information to our customers and effectively differentiate our products and services from those of our competitors; • Developing and introducing new or improved innovative, data-insightful software solutions that enable our veterinary customers to improve practice management and efficiency, staff productivity, and client engagement and communications and that increase the value to our customers of our other companion animal products and services by enhancing the integration of the information and transactions of these products and services and supporting the interpretation and management of diagnostic information derived from these products and services; • Maintaining premium pricing, including by effectively implementing price increases, for our products and services through, among other things, effective communication and promotion of their value in an environment where many of our competitors promote, market, and sell lesser offerings at lower prices; • Providing our veterinary customers with the medical and business tools, information, and resources that enable them to grow their practices and increase utilization of our diagnostic products and services through increased pet visits and preventive care protocol use, enhanced practice of real-time care, and improved practice efficiency; • Achieving cost improvements in our worldwide reference laboratory network by implementing global best practices, including lean processing techniques, technological enhancements (e.g., automation and a global laboratory information management system), purchasing strategies that maximize leverage from our global scale, increasing the leverage of existing infrastructure, and consolidating testing in high volume laboratory hubs; • Achieving cost improvements in the manufacture and service of our point-of-care laboratory analyzers by employing the benefits of economies of scale in both negotiating supply contracts and leveraging manufacturing overhead, and by improving reliability of our instruments; • Continuing to expand, develop, and advance the effectiveness and productivity of our companion animal diagnostic sales, marketing, customer support, and logistics organizations in the U.S. and international regions in support of, among other things, our all-direct sales strategies and best-in-class customer experience goals; • Attracting, developing, and retaining key leadership and talent necessary to support all elements of our strategy; • Strengthening our sales and marketing activities to reach customers and expand diagnostic and software use both in and outside the U.S.; • Identifying, completing, and integrating acquisitions that enhance our existing businesses, create new businesses for us, or expand the geographic areas in which we do business; 18 • Continuing to responsibly incorporate AI, machine learning, and automation into our products and services and associated business processes, such as customer support and software development; • Developing and implementing new technology and licensing strategies; and • Continuing to effectively manage our growth and expansion on a global scale through, among other things, designing and implementing cost-effective improvements to our processes, procedures, and infrastructure.
Our future financial results could be significantly affected by a strengthening value of the U.S. dollar in relation to the foreign currencies in which we conduct business. The degree to which our financial results are affected for any given time period will depend in part upon our hedging activities.
Our future financial results could be significantly affected by a strengthening value of the U.S. dollar in relation to the foreign currencies in which we conduct business. The degree of this effect for any given time period will depend in part upon our hedging activities.
A weak economy may also cause deterioration in the financial condition of our distributors and customers, which could inhibit their ability to pay us amounts owed for products delivered or services provided in a timely fashion or at all.
A weak economy may also cause deterioration in the financial condition of our distributors and customers, which could inhibit their ability to meet their performance obligations or pay us amounts owed for products delivered or services provided in a timely fashion or at all.
Our failure to successfully execute certain strategies within this competitive environment could have a material negative impact on our future growth and profitability The companion animal healthcare industry is highly competitive, and we anticipate increasing levels of competition from both existing competitors and new sector entrants given our performance and the industry’s strong growth and returns.
Our failure to successfully execute certain strategies in this competitive environment could have a material negative impact on our future growth and profitability The companion animal healthcare industry is highly competitive, and we anticipate increasing competition from both existing competitors and new sector entrants given our performance and the industry’s strong growth and returns.
There can be no assurance that our R&D, licensing, or acquisition efforts will achieve expected results, when or whether any of our products or services now under development will be launched, or whether we may be able to develop, license or otherwise acquire new products or technologies or successfully incorporate AI capabilities into our products, services or associated business processes.
There can be no assurance that our research and development, licensing, or acquisition efforts will achieve expected results, when or whether any of our products or services now under development will be launched, or whether we may be able to develop, license or otherwise acquire new products or technologies or successfully incorporate AI capabilities into our products, services or associated business processes.
Any hospitals acquired by these companies generally attempt to shift all or a large portion of their testing to the reference laboratories operated by these companies, and may attempt to shift their in-clinic diagnostic testing, as well, and there can be no assurance that hospitals that otherwise become affiliated with these companies would not shift all or a portion of their diagnostic testing.
Any hospitals acquired by these companies generally attempt to shift all or a large portion of their testing to the reference laboratories operated by these companies, and may attempt to shift their point-of-care diagnostic testing, as well, and there can be no assurance that hospitals that otherwise become affiliated with these companies would not shift all or a portion of their diagnostic testing.
Issues in the use of AI in our product offerings may result in reputational harm or liability We have built, and expect to continue to build, AI into many of our product and service offerings, and we expect this element of our business to grow.
Issues in our use of AI may result in reputational harm or liability and adversely affect our business We have built, and expect to continue to build, AI into many of our product and service offerings, and we expect this element of our business to grow.
In addition, concerns about our practices with regard to the collection, use, retention, disclosure, or security of personal data or other privacy-related matters, even if unfounded and even if we are in compliance with applicable laws and regulations, could damage our reputation and harm our business.
In addition, concerns about our practices with regard to the collection, use, retention, transmission, disclosure, or security of personal data or other privacy-related matters, even if unfounded and even if we are in compliance with applicable laws, regulations, standards, and contractual obligations, could damage our reputation and harm our business.
Changes in testing patterns could negatively affect our operating results Demand for our companion animal, livestock and poultry diagnostic tests and our dairy and water testing products could be negatively impacted by a number of factors impacting testing practices.
Changes in testing patterns could negatively affect our operating results Demand for our companion animal, livestock and poultry diagnostic tests and our dairy and water testing products could be negatively impacted by factors impacting testing practices.
Strengthening of the rate of exchange for the U.S. dollar has a negative effect on our business We are a global business, with 35% of our revenue during the year ended December 31, 2024, attributable to sales of products and services to customers outside of the U.S.
Strengthening of the rate of exchange for the U.S. dollar has a negative effect on our business We are a global business, with 36% of our revenue during the year ended December 31, 2025, attributable to sales of products and services to customers outside of the U.S.
For the year ended December 31, 2024, approximately 22% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 21% for the years ended December 31, 2023, and December 31, 2022.
For the year ended December 31, 2025, approximately 23% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 22% and 21% for the years ended December 31, 2024, and December 31, 2023, respectively.
We seek to mitigate sole and single-source suppliers risks on a risk-prioritized basis and in a variety of ways, including, when possible, by identifying and qualifying alternative suppliers, developing applicable in-house manufacturing capabilities and expertise, and entering into escrow arrangements for manufacturing information for certain single or sole-sourced products.
We seek to mitigate sole and single-source supplier risks on a risk-prioritized basis and in a variety of ways, including, when possible, by identifying and qualifying alternative suppliers, developing applicable in-house manufacturing capabilities and expertise, entering into escrow arrangements for manufacturing information for certain single or sole-sourced products, and strategically maintaining safety stock.
Actions taken by third-party suppliers in operating their business, as well as any disruptions to their business operations (or their suppliers' business operations), could disrupt our supply chain or operations and materially negatively impact our ability to supply the market, substantially decrease sales, lead to higher costs, and damage our reputation with our customers.
Actions taken by third-party suppliers in operating their business, as well as any disruptions to their business operations (or their suppliers' business operations), could disrupt our supply chain or operations and materially negatively impact our ability to supply the market or deliver our cloud-based software solutions, substantially decrease sales, lead to higher costs, and damage our reputation with our customers.
Our operations and reputation may be impaired if we, our products, or our services do not comply with our global privacy policy or evolving laws and regulations regarding data privacy and protection Our business operations involves the receipt, storage and use of information, including personal data, about our customers, pet owners, suppliers, and employees.
Our operations and reputation may be impaired if we, our products, or our services do not comply with our global privacy policy or evolving laws, regulations, and industry standards regarding data privacy and protection Our business operations involve the receipt, storage, transmission, and use of information, including personal data, about our customers, pet owners, suppliers, and employees.
The focus of our various stakeholders may also change and evolve over time, and they may have very different (and sometimes contradictory) views on which matters should be prioritized or even undertaken at all.
The focus of our various stakeholders remains inconsistent and may also change and evolve over time, and they continue to have very different (and sometimes contradictory) views on which matters should be prioritized or even undertaken at all.
Availability of funds also affects demand by government laboratories and cattle, swine and poultry producers that utilize our livestock and poultry diagnostic products, and by users of our human diagnostic products and services.
Availability of funds also affects demand by government laboratories and cattle, swine and poultry producers that utilize our livestock and poultry diagnostic products.
As a result, we invest substantial funds and efforts into R&D, investigating new products and technologies being developed by third parties, and obtaining certain such new products and technologies through licenses or acquisitions.
As a result, we invest substantial funds and efforts into research and development, investigating new products and technologies being developed by third parties, and obtaining certain such new products and technologies through licenses or acquisitions.
While we have strong supplier relationships with several corporate hospital groups and buying consortiums, decisions by larger corporate owners and buying consortiums to shift their purchasing of products and services away from us and to a competitor would have a negative impact on our results of operations from the loss of future business.
While we have strong supplier relationships with several corporate hospital groups and buying consortiums, decisions by larger corporate owners and buying consortiums to shift their purchases to a competitor would have a negative impact on our results of operations from the loss of future business.
The rapid evolution of AI will require the application of resources to develop, test, and maintain our products and services to help ensure that AI is implemented in a manner to minimize unintended, harmful impact and to comply with applicable law.
The rapid evolution of AI combined with the evolving and unharmonized legal and regulatory landscape will require the application of resources to develop, test, and maintain our products and services to help ensure that AI is implemented in a manner to minimize unintended, harmful impact and to comply with applicable law.
Our failure to adequately update, accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation and expose us to increased scrutiny from the investment community, special interest groups and enforcement authorities.
Our failure (actual or perceived) to adequately update, accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation and expose us to increased scrutiny from investors, special interest groups, and enforcement authorities.
In addition, even if we effectively develop and implement succession plans and make key leadership transitions, we cannot provide assurances as to whether we may experience management or other challenges in connection with any of those leadership transitions that could adversely affect our future success and could otherwise materially adversely affect our business, reputation, results of operations, and financial condition.
In addition, even if we effectively develop and implement succession plans and make key leadership transitions, such as our planned CEO transition in May 2026 that we announced on January 13, 2026, we cannot provide assurances as to whether we may experience management or other challenges in connection with any of those leadership transitions that could adversely affect our future success and could otherwise materially adversely affect our business, reputation, results of operations, and financial condition.
Since our business is global in nature, geopolitical risks and other risks associated with doing business internationally could negatively affect our business, financial condition, and operating results For the year ended December 31, 2024, approximately 35% of our overall revenue and approximately 33%, 82% and 48% of our CAG, LPD, and Water revenues, respectively, were attributable to sales of products and services to customers outside the U.S.
Since our business is global in nature, geopolitical risks and other risks associated with doing business internationally could negatively affect our business, financial condition, and operating results For the year ended December 31, 2025, approximately 36% of our overall revenue and approximately 34%, 81% and 50% of our CAG, LPD, and Water revenues, respectively, were attributable to sales of products and services to customers outside the U.S.
In addition, certain corporate owners also operate reference laboratories that serve both 23 their hospitals and unaffiliated hospitals and, in some cases, sell veterinary in-clinic diagnostic instruments.
In addition, certain corporate owners also operate reference laboratories that serve both their hospitals and unaffiliated hospitals and, in some cases, sell veterinary point-of-care diagnostic instruments.
Furthermore, because these companies compete with us in the reference laboratory services marketplace, hospitals acquired by these companies or those that establish other affiliations with these companies may cease to be customers or potential customers of our other companion animal products and services, which would cause our sales of these products and services to decline.
Furthermore, hospitals acquired by these companies or those that establish other affiliations with these companies may cease to be customers or potential customers of our other companion animal products and services, which would cause our sales of these products and services to decline.
Meeting these emerging and evolving regulations, standards and expectations will require us to make strategic choices and investments, incur compliance costs, and create new practices, processes, and procedures.
Meeting these emerging and evolving regulations, standards and expectations exposes us to unpredictable reporting obligations or business requirements and will require us to make strategic choices and investments, incur compliance costs, and create new practices, processes, and procedures.
Additionally, other countries have proposed legal frameworks to regulate artificial intelligence, which is a trend that may continue to increase. Any failure or perceived failure by us to comply with such requirements could have an adverse impact on our business.
Additionally, other countries have proposed legal frameworks to regulate AI, which is a trend that may continue to increase, and Japan enacted AI-related legislation in May 2025. Any failure or perceived failure by us to comply with such requirements could have an adverse impact on our business.
Additionally, the post-acquisition integration process of acquired companies that may have less sophisticated information systems, cybersecurity practices, or training, may result in an increased risk of cybersecurity incidents. Our customers and/or employees could also face negative consequences such as the compromise of sensitive or critical information or systems.
Additionally, we have acquired, and in the future may acquire, companies or assets that have less sophisticated information systems, cybersecurity practices, or training, which may result in an increased risk of cybersecurity attacks, breaches, or incidents. Our customers and/or employees could also face negative consequences such as the compromise of sensitive or critical information or systems.
Our diagnostic tests for animal health applications that involve the detection of infectious diseases, including most rapid assay canine and feline SNAP tests and livestock and poultry diagnostic tests, must be approved by the USDA prior to sale in the U.S.
Our diagnostic tests for animal health applications that involve the detection of infectious diseases, including most rapid assay canine and feline SNAP tests and livestock and poultry diagnostic tests, must be approved by the USDA prior to sale in the U.S. Our dairy testing products require approval by the FDA before they may be sold commercially in the U.S.
Even if our patents cover products or services sold by our competitors, the time and expense of litigating to enforce our patent rights could be substantial and could have an adverse effect on our results of operations. In addition, expiration of patent rights could result in substantial new competition for products or services previously covered by those patent rights.
Even if our patents cover products or services sold by our competitors, the time and expense of litigating to enforce our patent rights could be substantial and could have an adverse effect on our results of operations.
Furthermore, an increasing percentage of individually owned veterinary hospitals in the U.S. are participating in buying consortiums. Corporate owners of veterinary hospitals and buying consortiums often seek to improve profitability by leveraging the buying power they derive from their scale to obtain favorable pricing from suppliers, which could have a negative impact on our profitability and results of operations.
Corporate owners of veterinary hospitals and buying consortiums often seek to improve profitability by leveraging the buying power they derive from their scale to obtain favorable pricing from suppliers, 23 which could have a negative impact on our profitability and results of operations.
Any failure or perceived failure by us, the third parties with whom we work or our products and services to comply with all applicable privacy-related laws and regulations, as well as our contractual obligations, could result in damage to our reputation or legal proceedings or actions against us by governmental entities or others, any of which could have an adverse 29 effect on our business.
Any failure or perceived failure by us, the third parties with whom we work, or our products and services to comply with all applicable privacy-related laws, regulations, and standards, as well as our contractual obligations, could result in damage to our reputation, legal proceedings or actions against us by governmental entities or others, fines and other penalties, damage to our ability to enable access to credit card processing functionality for our veterinary customers, and revenue losses, any of which could have an adverse effect on our business.
Some examples of privacy laws include (but are not limited to) the California Consumer Privacy Act, as amended by the California Privacy Rights Act (“CPRA”), various U.S. state consumer privacy laws that apply to our business operations within a respective state and/or a U.S. federal privacy law that may be passed in the future; and the European Union’s General Data Protection Regulation (“GDPR”) and similar requirements adopted by the United Kingdom (“UK”) following the UK’s withdrawal from the European Union (“EU”) and the European Economic Area (“EEA”), which impose stringent operational requirements for controllers and processors of personal data of individuals in the EEA and UK.
Some examples include (but are not limited to) the California Consumer Privacy Act, as amended by the California Privacy Rights Act; various U.S. state consumer privacy laws that apply to our business operations within a respective state and/or a U.S. federal privacy law that may be passed in the future; the European Union’s General Data Protection Regulation (“GDPR”), Switzerland’s Federal Act on Data Protection, and the United Kingdom’s General Data Protection Regulation (“UK GDPR”), which impose stringent operational requirements for controllers and processors of personal data of individuals in the European Economic Area (“EEA”), Switzerland, and the United Kingdom (“UK”); the Brazilian General Data Protection Law; the Chinese Personal Information Protection Law; the Japanese Act on the Protection of Personal Information; and the Australian Privacy Act.
In addition, if we fail to comply with applicable regulations, or our practices do not meet evolving investor, customer or other stakeholder expectations and standards, then our reputation, ability to attract, retain employees, relationships with some customers and attractiveness as an investment, business partner, acquiror or product or service provider could be negatively impacted, which could adversely affect our business, results of operations, financial condition, reputation, or stock price.
In addition, if we fail (or are perceived to fail) to comply with applicable regulations, or our practices do not meet evolving and sometimes contradictory investor, customer or other stakeholder expectations and standards, then our reputation, ability to attract and retain employees, relationships with some customers, and attractiveness as an investment, business partner, acquiror, or product or service 29 provider could be negatively impacted, and we may be exposed to government enforcement actions, private litigation, and increased scrutiny from investors, special interest groups, government regulators, and other stakeholders, any of which could adversely affect our business, results of operations, financial condition, reputation, or stock price.
While we maintain a cyber risk insurance policy intended to address risk of loss due to certain types of cybersecurity events, it may not cover any or all claims, costs or losses associated with such events.
While we maintain a cyber risk insurance policy, it may not cover any or all claims, costs or losses associated with all cybersecurity events.
Any such result could have an adverse effect on our results of operations. 22 Increased competition from and technological advances by our competitors could negatively affect our operating results We face intense competition, and we expect that future competition will become even more intense as new products, services and technologies become available, the use of AI and machine learning expands, and new competitors enter the space.
Increased competition from and technological advances by our competitors could negatively affect our operating results We face intense competition, and we expect that competition will further intensify as new products, services and technologies become available, the use of AI and machine learning expands, and new competitors enter the space.
Data Privacy Framework (the “Swiss-U.S. DPF”), and the UK Extension to the EU-U.S. DPF. We expect the EU-U.S. DPF adequacy decision, adopted in July of 2023, to be challenged and international transfers to the U.S. and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators.
Data Privacy Framework, and the UK Extension to the EU-U.S. DPF. A challenge to the EU-U.S. DPF adequacy decision, adopted in July of 2023, will be reviewed by the European Court of Justice, and international transfers to the U.S. and other jurisdictions generally continue to be subject to enhanced scrutiny by regulators.
In addition, European Union regulatory authorities and certain European countries are contemplating regulations to restrict and phase-out PFAS.
In addition, European Union regulatory authorities and certain European countries are contemplating regulations to restrict and phase-out PFAS. Other countries have proposed similar regulations, including Australia, Canada, and Brazil.
While we maintain a program to monitor, assess, and comply with applicable global data privacy laws, compliance with these evolving requirements can be costly, require us to change our business practices in a manner adverse to our business or delay or impede the development and offering of innovative products and services.
Further, some of our customer contracts require us to comply with industry standards adopted by industry groups related to the storage, processing, and transmission of individual cardholder data. 28 While we maintain a program to monitor, assess, and comply with applicable global data privacy laws and relevant industry standards, compliance with these evolving requirements is costly, may require us to change our business practices in a manner adverse to our business, and may delay or impede the development and offering of innovative products and services.
Our ability to recruit and retain such talent will depend on a number of factors, including compensation and benefits, work location, flexibility regarding virtual and hybrid work arrangements, work environment, corporate culture, and development opportunities.
Competition for experienced leaders and employees, particularly for persons with specialized skills, such as software and AI, can be intense. Our ability to recruit and retain such talent will depend on a number of factors, including compensation and benefits, work location, flexibility regarding virtual and hybrid work arrangements, work environment, corporate culture, and development opportunities.
In addition, adverse changes in credit markets could increase our cost of borrowing and make it more difficult for us to obtain financing, which could limit our ability to execute certain strategies and have an adverse effect on our revenue growth and profitability. 31 Our senior notes require payment of a prepayment penalty in the event that we elect to repay the notes prior to their stated maturity dates.
In addition, adverse changes in credit markets could increase our cost of borrowing and make it more difficult for us to obtain financing, which could limit our ability to execute certain strategies and have an adverse effect on our revenue growth and profitability.
In addition, changes and trends in local dairy, poultry, or other food sectors around the world could negatively affect the related production markets resulting in a decline in demand for our testing products.
In addition, changes and trends in local dairy, poultry, or other food sectors around the world could negatively affect the related production markets resulting in a decline in demand for our testing products. The growth of our CAG business relies in part on a stable pet population and evolving testing patterns of increasing frequency and depth of diagnostic testing.
This market volatility, as well as other general economic, market, or political conditions, could reduce the market price of our common stock rapidly and unexpectedly, in spite of our operating performance.
This market volatility, as well as other general economic, market, or political conditions, could reduce the market price of our common stock rapidly and unexpectedly, in spite of our operating performance as demonstrated during 2025 where the range of our stock price was from a low of $361.04 to a high of $766.68.
We envision a future in which responsible AI operating in our devices, applications, and the cloud, helps our customers be more productive in their business activities and interactions with consumers. As with many disruptive innovations, AI presents risks and challenges that could affect its adoption, and therefore our business. AI algorithms and models may be flawed.
We envision a future in which responsible AI operating in our devices, applications, and the cloud helps our customers be more productive in their business activities and interactions with consumers, and we effectively use AI in our operations to improve innovation, efficiency, and customer experience and value. As with many disruptive innovations, AI presents risks and challenges.
Should we elect to repay some or all of the outstanding principal balance on our senior notes prior to their stated maturity dates, the prepayment penalty we incur could adversely affect our results of operations and cash flows.
Should we elect to repay some or all of the outstanding principal balance on our senior notes prior to their stated maturity dates, the prepayment penalty we incur could adversely affect our results of operations and cash flows. 31 We fund our operations, capital purchase requirements, and strategic growth needs through cash on hand, funds generated from operations, amounts available under our Credit Facility and senior note financings.
If the ultimate determination of taxes owed is for an amount in excess of amounts previously accrued, our business, results of operations and financial condition could be materially adversely affected.
Any reduction in these contingent liabilities or additional assessments would increase or decrease income, respectively, in the period such determination is made. 30 If the ultimate determination of taxes owed is for an amount in excess of amounts previously accrued, our business, results of operations and financial condition could be materially adversely affected.
If interest rates were to continue to increase, our debt service obligations under our variable-rate Credit Facility would increase even if the principal amount borrowed remained the same.
Borrowings under our Credit Facility bear interest at variable rates, including rates based on the Secured Overnight Financing Rate (“SOFR”), exposing us to interest rate risk. If interest rates were to increase, our debt service obligations under our variable-rate Credit Facility would increase even if the principal amount borrowed remained the same.
Our collection, transfer, protection, security, retention, storage, disclosure, sharing and use of personal data are subject to expanding and increasingly complex laws and regulations in the U.S. and abroad.
In addition, we transfer information, including personal data, among IDEXX, our subsidiaries and third parties with which we have commercial relations for business purposes. Our collection, transfer, protection, security, retention, storage, disclosure, sharing and use of personal data are subject to expanding and increasingly complex laws and regulations in the U.S. and abroad.
Our future tax expense could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities or changes in tax laws or their interpretation. Specifically, many jurisdictions have committed to adopting the Organisation for Economic Co-operation and Development (“OECD”) Pillar Two Global Minimum Tax.
Our future tax expense could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.
As a result, we are dependent on these distributors to promote and create demand for our products. Our distributors often offer products from several different companies, including our competitors, and may promote our competitors’ products over our own products.
Our distributors often offer products from several different companies, including our competitors, and may promote our competitors’ products over our own products.
In addition, some of our products and services include information systems that collect and use data on behalf of customers (e.g., veterinary practice management systems and customer communication tools and services), and some products and services rely on third-party providers for cloud computing and storage.
In addition, some of our products and services are cloud-based and connect to the “Internet of Things” (“IoT”), including information systems that collect and use data on behalf of customers (e.g., veterinary practice management systems and customer communication tools and services) and our connected IoT devices (e.g., IDEXX VetLab Stations and analyzers) that enable our integrated, comprehensive diagnostic solution for veterinary practices, and these products and services rely on third-party providers for cloud computing and storage.
For more information about the risks related to the protection of our proprietary rights in our products and services, refer to “Our success is heavily dependent on our continued differentiated product and service innovation” below. 21 There has been a recent focus in the U.S. on laws and regulations related to artificial intelligence, which cover, among other things, algorithm accountability, privacy, and transparency.
For more information about the risks related to the protection of our proprietary rights in our products and services, refer to “Our success is heavily dependent on our continued differentiated product and service innovation” below.
Declines in testing for any reason, including the reasons described above, along with lost opportunities associated with a reduction in veterinary visits, could have an adverse effect on our results of operations. We sell many products through distributors, which presents risks that could negatively affect our operating results Some of our international product sales occur through third-party distributors.
Declines in testing for any reason, including the reasons described above, along with lost opportunities associated with a reduction in the pet population or veterinary visits, could have an adverse effect on our results of operations.
Significant judgment 30 is required in determining our worldwide provision for income taxes. We regularly assess our exposures related to our worldwide provision for income taxes to determine the adequacy of our provision for taxes. Any reduction in these contingent liabilities or additional assessments would increase or decrease income, respectively, in the period such determination is made.
Significant judgment is required in determining our worldwide provision for income taxes. We regularly assess our exposures related to our worldwide provision for income taxes to determine the adequacy of our provision for taxes.
For example, use of artificial intelligence and machine learning may be subject to laws and evolving regulations regarding, among other things, data bias and anti-discrimination. For example, the Federal Trade Commission (“FTC”) enforces consumer protection laws such as Section 5 of the FTC Act, which prohibits unfair and deceptive practices.
For example, the Federal Trade Commission (“FTC”) enforces consumer protection laws such as Section 5 of the FTC Act, which prohibits unfair and deceptive practices.
Delays by government agencies in approving new products or product upgrades or taking action with respect to other regulatory matters could have a negative impact on our growth and profitability.
The methods used by our water testing products must be approved by the EPA, as a part of its water quality monitoring program, before they can be used by customers in the U.S. 20 Delays by government agencies in approving new products or product upgrades or taking action with respect to other regulatory matters could have a negative impact on our growth and profitability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CISO reports to our Senior Vice President and CIO, and oversees a team of information security professionals within the Information Security Group. Our CISO joined IDEXX in 2024 and has more than twenty years of business and technical experience leading information technology teams, including cybersecurity teams, at high tech, marketing and healthcare companies.
Biggest changeOur CISO joined IDEXX in 2024 and has more than twenty years of business and technical experience leading information technology teams, including cybersecurity teams, at high tech, marketing, and healthcare companies. Our CISO is responsible for our cybersecurity-related governance programs, overseeing testing of our compliance with standards and remediation of known risks, and leads our employee training program.
Risk Factors, General Risks, We depend on the continuous and reliable operation and security of our information technology systems and our products and services that incorporate or rely on information technology, and any disruption or significant cybersecurity breach or other incident could adversely affect our business.” Governance of our Cybersecurity Risk Management Program Role of Management Our cybersecurity risk management program and activities are led by a dedicated CISO who is also our Vice President of Information Technology.
Risk Factors, General Risks, We depend on the continuous and reliable operation and security of our information technology systems and our products and services that incorporate or rely on information technology, and any disruption or significant cybersecurity breach or other incident could adversely affect our business.” Governance of our Cybersecurity Risk Management Program Role of Management Our cybersecurity risk management program and activities are led by a dedicated CISO who is also a Vice President of Information Technology.
In addition, the Audit Committee regularly reviews and discusses with management, including the CIO and CISO, cybersecurity program assessments and audits, planned improvements and the status of any information security initiatives, as well as risks from cybersecurity threats pertinent to us and any previous cybersecurity incidents experienced by us, including any material impact or reasonably likely material impact on the Company, our business strategy, results of operations, or financial condition.
In addition, the Audit Committee regularly reviews and discusses with management, including the CISO, cybersecurity program assessments and audits, planned improvements, and the status of any information security initiatives, as well as risks from cybersecurity threats pertinent to us and any previous cybersecurity incidents experienced by us, including any material impact or reasonably likely material impact on the Company, our business strategy, results of operations, or financial condition.
In accordance with the Audit Committee’s charter, the Audit Committee at least annually reviews and discusses with management, including the CIO and CISO, our processes, policies, procedures, and protocols related to cybersecurity and information security.
In accordance with the Audit Committee’s charter, the Audit Committee at least annually reviews and discusses with management, including the CISO, our processes, policies, procedures, and protocols related to cybersecurity and information security.
Within our cybersecurity risk governance model, the steering committee, which includes our CIO, CISO, General Counsel, Chief Compliance Officer, Chief Audit Executive, Chief Human Resources Officer and other senior functional and business leaders, meets quarterly, and more frequently as warranted, to review and discuss, among other things, our cybersecurity risk assessments, prioritization of initiatives, training plans and incident response plan, protocols and testing.
Within our cybersecurity risk governance model, the steering committee, which includes our CDIO, CISO, General Counsel, Chief Compliance Officer, Chief Audit Executive, Chief Human Resources Officer, and other senior functional and business leaders, meets quarterly, and more frequently as warranted, to review and discuss, among other things, our cybersecurity risk assessments, prioritization of initiatives, training plans and incident response plan, protocols and testing.
Our annual enterprise risk assessment process involves the identification and assessment by senior line-of-business and functional leaders, as well as our Chief Information Security Officer (“CISO”) and Chief Information Officer (“CIO”), of the risks relevant to their lines of business and functional areas, the materiality of those risks, our risk tolerances and our plans to manage and mitigate the risks to the extent prudent and feasible.
Our annual enterprise risk assessment process involves the identification and assessment by senior line-of-business and functional leaders, including our Chief Information Security Officer (“CISO”) and Chief Digital and Information Officer (“CDIO”), of the risks relevant to their lines of business and functional areas, the materiality of those risks, our risk tolerances and our plans to manage and mitigate the risks to the extent prudent and feasible.
Our CISO, in close collaboration with our CIO is responsible for our cybersecurity-related governance programs, overseeing testing of our compliance with standards and remediation of known risks, and leads our employee training program. Our CISO is responsible for providing information regarding our cybersecurity risk management program, as well as cybersecurity risks and incidents, to a senior management-level cybersecurity steering committee.
Our CISO is responsible for providing information regarding our cybersecurity risk management program, as well as cybersecurity risks and incidents, to a senior management-level cybersecurity steering committee.
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Our CISO reports to our Executive Vice President and General Manager, Global Reference Laboratories, Diagnostic Solutions and Information Technology, and oversees a team of information security professionals within the Information Security Group.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePrimary Facility Locations Location Functions Own/Lease Westbrook, Maine Worldwide Headquarters, principal executive offices Own Hoofddorp, Netherlands Distribution center, warehousing, International administrative offices Lease Baar, Switzerland EMEA administrative offices Lease Scarborough, Maine Water, LPD and Supply Chain Own Memphis, Tennessee Distribution Center and Reference Lab Lease North Grafton, Massachusetts Reference Lab Own West Sacramento, California Reference Lab Own Kornwestheim, Germany Reference Lab Own Wetherby, United Kingdom Reference Lab Own Markham, Ontario, Canada Reference Lab Lease Elmhurst, Illinois Reference Lab Lease Newmarket, United Kingdom Water manufacturing Lease Bern, Switzerland LPD manufacturing Lease Montpellier, France LPD manufacturing Lease Roswell, Georgia CAG and OPTI Medical manufacturing Lease Including the locations above, we have over 50 reference laboratories throughout the United States and over 25 reference laboratories internationally, including locations in Europe, Canada, Australia, New Zealand, Asia, and South Africa.
Biggest changePrimary Facility Locations Location Functions Own/Lease Westbrook, Maine Worldwide Headquarters, principal executive offices, and CAG manufacturing Own Hoofddorp, Netherlands Distribution center, warehousing, International administrative offices Lease Baar, Switzerland EMEA administrative offices Lease Scarborough, Maine Water, LPD and Supply Chain Own Memphis, Tennessee Distribution center, warehousing, and Reference Lab Lease North Grafton, Massachusetts Reference Lab Own West Sacramento, California Reference Lab Own Kornwestheim, Germany Reference Lab Own Wetherby, United Kingdom Reference Lab Own Markham, Ontario, Canada Reference Lab Lease Elmhurst, Illinois Reference Lab Lease Newmarket, United Kingdom Water manufacturing Lease Bern, Switzerland LPD manufacturing Lease Montpellier, France LPD manufacturing Lease Roswell, Georgia CAG and other manufacturing Lease Including the locations above, we have over 50 reference laboratories throughout the United States and over 25 reference laboratories internationally, including locations in Europe, Canada, Australia, New Zealand, Asia, and South Africa.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer During the three months ended December 31, 2024, we repurchased shares of common stock as described below: Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (c) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) (d) October 1, 2024 to October 31, 2024 177,643 $ 469.14 177,640 6,519,346 November 1, 2024 to November 30, 2024 183,300 $ 427.23 183,300 6,336,046 December 1, 2024 to December 31, 2024 202,602 $ 429.80 202,500 6,133,546 Total 563,545 (2) 563,440 6,133,546 (1) As of December 31, 2024, our Board of Directors had approved the repurchase of up to 78 million shares of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program, which amount includes the approval of an additional 5 million shares on December 3, 2024.
Biggest changePurchases of Equity Securities by the Issuer During the three months ended December 31, 2025, we repurchased shares of common stock as described below: Period Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (c) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) (d) October 1, 2025 to October 31, 2025 162,760 $ 639.30 162,760 3,915,170 November 1, 2025 to November 30, 2025 89,600 $ 721.16 89,600 3,825,570 December 1, 2025 to December 31, 2025 103,481 $ 709.39 103,400 3,722,170 Total 355,841 (2) 355,760 3,722,170 (1) As of December 31, 2025, our Board of Directors had approved the repurchase of up to 78 million shares of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program.
Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 20. Repurchases of Common Stock” to the consolidated financial statements for the year ended December 31, 2024, included in this Annual Report on Form 10-K for further information. 36 Dividends We have never declared or paid any cash dividends on our common stock.
Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 20. Repurchases of Common Stock” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K for further information. 36 Dividends We have never declared or paid any cash dividends on our common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is quoted on the NASDAQ Global Select Market under the symbol IDXX. Holders of Common Stock As of February 18, 2025, there were 313 holders of record of our common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is quoted on the NASDAQ Global Select Market under the symbol IDXX. Holders of Common Stock As of February 18, 2026, there were 280 holders of record of our common stock.
This graph assumes the investment of $100 on December 31, 2019, in IDEXX’s common stock, the S&P 500 Index, the S&P 500 Health Care Index, and the NASDAQ Index and assumes dividends, if any, are reinvested. Measurement points are the last trading days of the years ended December 2019 to 2024.
This graph assumes the investment of $100 on December 31, 2020, in IDEXX’s common stock, the S&P 500 Index, the S&P 500 Health Care Index, and the NASDAQ Index and assumes dividends, if any, are reinvested. Measurement points are the last trading days of the years ended December 2020 to 2025.
There were no other repurchase programs outstanding during the three months ended December 31, 2024, and no repurchase programs expired during the period.
There were no other repurchase programs outstanding during the three months ended December 31, 2025, and no repurchase programs expired during the period.
(2) During the three months ended December 31, 2024, we received 105 shares of our common stock that were surrendered by employees in payment for the required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units.
(2) During the three months ended December 31, 2025, we received 81 shares of our common stock that were surrendered by employees in payment for the required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units.
During the year ended December 31, 2024, we repurchased approximately 1.74 million shares of our common stock in transactions made pursuant to our repurchase program and received approximately 0.02 million shares of our common stock that were surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units.
During the year ended December 31, 2025, we repurchased approximately 2.4 million shares of our common stock in transactions made pursuant to our repurchase program and received approximately 0.02 million shares of our common stock that were surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units.
Historic stock price performance should not be relied on as being indicative of future stock price performance. 2019 2020 2021 2022 2023 2024 IDEXX Laboratories, Inc. $100.00 $191.43 $252.16 $156.23 $212.56 $158.33 NASDAQ Index $100.00 $144.92 $177.06 $119.45 $172.77 $223.87 S&P 500 Index $100.00 $118.40 $152.39 $124.79 $157.59 $197.02 S&P 500 Health Care Index $100.00 $113.45 $143.09 $140.29 $143.18 $146.87
Historic stock price performance should not be relied on as being indicative of future stock price performance. 2020 2021 2022 2023 2024 2025 IDEXX Laboratories, Inc. $100.00 $131.73 $81.61 $111.04 $82.71 $135.34 NASDAQ Index $100.00 $122.18 $82.43 $119.22 $154.48 $187.14 S&P 500 Index $100.00 $128.71 $105.40 $133.10 $166.40 $196.16 S&P 500 Health Care Index $100.00 $126.13 $123.67 $126.21 $129.46 $148.36

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeUnless otherwise stated, the analysis and discussion of our financial condition, results of operations and liquidity, including references to growth and organic growth and increases and decreases, are being compared to the equivalent prior year period. 47 Twelve Months Ended December 31, 2024, Compared to Twelve Months Ended December 31, 2023 Total Company The following table presents revenue by operating segment by U.S. and non-U.S., or international, geographies: For the Years Ended December 31, Net Revenue (dollars in thousands) 2024 2023 Dollar Change Reported Revenue Growth (1) Percentage Change from Currency Percentage Change from Acquisitions Organic Revenue Growth (1) CAG $ 3,574,044 $ 3,352,356 $ 221,688 6.6 % (0.2 %) 0.4 % 6.4 % United States 2,409,152 2,282,507 126,645 5.5 % — 0.6 % 5.0 % International 1,164,892 1,069,849 95,043 8.9 % (0.7 %) — 9.6 % Water $ 185,112 $ 168,149 $ 16,963 10.1 % (0.5 %) — 10.6 % United States 95,347 83,838 11,509 13.7 % — — 13.7 % International 89,765 84,311 5,454 6.5 % (1.0 %) — 7.5 % LPD $ 122,060 $ 121,659 $ 401 0.3 % (0.9 %) — 1.2 % United States 22,250 18,961 3,289 17.3 % — — 17.3 % International 99,810 102,698 (2,888) (2.8 %) (1.0 %) — (1.8 %) Other $ 16,288 $ 18,789 $ (2,501) (13.3 %) — — (13.3 %) Total Company $ 3,897,504 $ 3,660,953 $ 236,551 6.5 % (0.3 %) 0.4 % 6.4 % United States 2,533,174 2,391,427 141,747 5.9 % — 0.5 % 5.4 % International 1,364,330 1,269,526 94,804 7.5 % (0.8 %) — 8.2 % (1) Reported revenue growth and organic revenue growth may not recalculate due to rounding.
Biggest changeUnless otherwise stated, the analysis and discussion of our financial condition, results of operations and liquidity, including references to growth and organic growth and increases and decreases, are being compared to the equivalent prior year period. 46 Twelve Months Ended December 31, 2025, Compared to Twelve Months Ended December 31, 2024 Total Company The following table presents revenue by operating segment by U.S. and non-U.S., or international, geographies: For the Years Ended December 31, Net Revenue (dollars in thousands) 2025 2024 Dollar Change Reported Revenue Growth (1) Percentage Change from Currency Percentage Change from Acquisitions Organic Revenue Growth (1) CAG $ 3,953,285 $ 3,574,044 $ 379,241 10.6 % 0.8 % — 9.8 % United States 2,619,461 2,409,152 210,309 8.7 % — 0.1 % 8.7 % International 1,333,824 1,164,892 168,932 14.5 % 2.5 % — 12.0 % Water $ 201,149 $ 185,112 $ 16,037 8.7 % 0.6 % — 8.0 % United States 101,314 95,347 5,967 6.3 % — — 6.3 % International 99,835 89,765 10,070 11.2 % 1.3 % — 9.9 % LPD $ 131,787 $ 122,060 $ 9,727 8.0 % 1.8 % — 6.1 % United States 25,453 22,250 3,203 14.4 % — — 14.4 % International 106,334 99,810 6,524 6.5 % 2.2 % — 4.3 % Other $ 17,481 $ 16,288 $ 1,193 7.3 % — — 7.3 % Total Company $ 4,303,702 $ 3,897,504 $ 406,198 10.4 % 0.8 % — 9.6 % United States 2,752,785 2,533,174 219,611 8.7 % — 0.1 % 8.6 % International 1,550,917 1,364,330 186,587 13.7 % 2.3 % — 11.3 % (1) Reported revenue growth and organic revenue growth may not recalculate due to rounding.
When standalone selling prices for our products or services are not directly observable, we determine the standalone selling prices using relevant information available and apply suitable estimation methods including, but not limited to, the cost plus a margin approach.
When standalone selling prices for our products or services are not directly observable, we determine the standalone selling prices for products and services using relevant information available and apply suitable estimation methods including, but not limited to, the cost plus a margin approach.
We calculate the impact on revenue resulting from changes in foreign currency exchange rates by applying the difference between the weighted average exchange rates during the current year period and the comparable prior year period to foreign currency denominated revenues for the prior year period.
We calculate the impact on revenue resulting from changes in foreign currency exchange rates by applying the difference between the weighted average exchange rates during the current period and the comparable prior year period to foreign currency denominated revenues for the prior year period.
Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 13, Debt” for additional information about our Credit Facility, Senior Notes, and Senior Note Agreements. Effect of Currency Translation on Cash .
Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 13, Debt” for additional information about our Senior Notes, Senior Note Agreements, and Credit Facility. Effect of Currency Translation on Cash .
Profitability in our lab business is supported, in part, by our expanding business scale globally. Profit improvements also reflect benefits from price increases and our ability to achieve operational efficiencies. When possible, we utilize core reference laboratories to service samples from other states or countries, expanding our customer reach without an associated expansion in our reference laboratory footprint.
Profitability in our laboratory business is supported, in part, by our expanding business scale globally. Profit improvements also reflect benefits from price increases and our ability to achieve operational efficiencies. When possible, we utilize core reference laboratories to service samples from other states or countries, expanding our customer reach without an associated expansion in our reference laboratory footprint.
Revenues related to the placement of the IDEXX VetLab suite of instruments are non-recurring in nature, in that the customer will buy an instrument once over its respective product life cycle, but will purchase consumables for that instrument on a recurring basis as they use that instrument for diagnostic testing purposes.
Revenues related to the placement of the IDEXX VetLab suite of instruments are non-recurring in nature, because the customer will buy an instrument once over its respective product life cycle, but will purchase consumables for that instrument on a recurring basis as they use that instrument for diagnostic testing purposes.
Our future income tax expense could also be affected by changes in the mix of earnings, including as a result of changes in the rate of exchange for the U.S. dollar relative to currencies in countries with differing statutory tax rates. Refer to “Part I, Item 1A.
Our future 44 income tax expense could also be affected by changes in the mix of earnings, including as a result of changes in the rate of exchange for the U.S. dollar relative to currencies in countries with differing statutory tax rates. Refer to “Part I, Item 1A.
We believe that building and maintaining a well-managed and disciplined infrastructure has helped minimize impacts of supply chain constraints, including product and component availability issues, logistics challenges, including extended shipping periods and delays, and inflationary pressures.
We believe that building and maintaining a well-managed and disciplined infrastructure has helped minimize impacts of supply chain constraints, including product and component availability issues; logistics challenges, including extended shipping periods and delays; and inflationary cost pressures.
If during a quarter or year, distributors’ inventories grew by less than those inventories grew in the comparable period of the prior year, then changes in distributors’ inventories would have an unfavorable impact on our reported sales growth in the current period.
If during a quarter or year, distributors’ inventories grow by less than those inventories grew in the comparable period of the prior year, then changes in distributors’ inventories would have an unfavorable impact on our reported sales growth in the current period.
Conversely, if during a quarter or year, distributors’ inventories grew by more than those inventories grew in the comparable period of the prior year, then changes in distributors’ inventories would have a favorable impact on our reported sales growth in the current period.
Conversely, if during a quarter or year, distributors’ inventories grow by more than those inventories grew in the comparable period of the prior year, then changes in distributors’ inventories would have a favorable impact on our reported sales growth in the current period.
Financial Statements and Supplementary Data, Note 2. Summary of Significant Accounting Policies” to the consolidated financial statements included in this Annual Report on Form 10-K for a description of the significant accounting policies used in preparation of these consolidated financial statements.
Financial Statements and Supplementary Data, Note 2. Summary of Significant Accounting Policies” to the consolidated financial statements included in this Annual Report 41 on Form 10-K for a description of the significant accounting policies used in preparation of these consolidated financial statements.
If our judgment as to the likely resolution of the uncertainty changes, if the uncertainty is ultimately settled, or if the statute of limitations related to the uncertainty expires, the effects of the change would be recognized in the period in which the change, resolution, or expiration occurs.
If our judgment as to the likely resolution of an uncertainty changes, if an uncertainty is ultimately settled, or if the statute of limitations related to an uncertainty expires, the effects of the change would be recognized in the period in which the change, resolution, or expiration occurs.
A typical acquisition that we do not consider a business is a customer list asset acquisition, which does not have all elements necessary to operate a business, such 46 as employees or infrastructure.
A typical acquisition that we do not consider a business is a customer list asset acquisition, which does not have all elements necessary to operate a business, such as employees or infrastructure.
The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, investments, transactions with affiliates, and certain restrictive agreements and violations of laws and regulations. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, and share-based compensation not to exceed 3.5-to-1.
The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental 55 changes, investments, transactions with affiliates, certain restrictive agreements, and violations of sanctions laws and regulations. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, and share-based compensation not to exceed 3.5-to-1.
Revenues from the associated IDEXX VetLab consumables, SNAP rapid assay test kits, reference laboratory and consulting services, and extended maintenance agreements and accessories related to our IDEXX VetLab instruments, and our SNAP Pro Analyzer are recurring in nature, in that they are regularly purchased by our customers, typically as they perform diagnostic testing as part of ongoing veterinary care services.
Revenues from the associated IDEXX VetLab consumables, SNAP rapid assay test kits, reference laboratory and consulting services, and extended maintenance agreements and accessories related to our IDEXX VetLab instruments and our SNAP Pro Analyzer are recurring in nature, because they are regularly purchased by our customers, typically as they perform diagnostic testing as part of ongoing veterinary care services.
The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, and share-based compensation, as defined in the Senior Note Agreements and Credit Facility, not to exceed 3.5-to-1. As of December 31, 2024, we were in compliance with the covenants of the Senior Note Agreements and Credit Facility.
The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, and share-based compensation, as defined in the Senior Note Agreements and Credit Facility, not to exceed 3.5-to-1. As of December 31, 2025, we were in compliance with the covenants of the Senior Note Agreements and Credit Facility.
We operate primarily through three business segments: diagnostic and information management-based products and services for the companion animal veterinary industry, which we refer to as the Companion Animal Group (“CAG”); water quality products (“Water”); and diagnostic products and services for livestock and poultry health and to ensure the quality and safety of milk and improve producer efficiency, which we refer to as Livestock, Poultry and Dairy (“LPD”).
We operate primarily through three business segments: diagnostic and information management-based products and services for the companion animal veterinary industry, which we refer to as the Companion Animal Group (“CAG”); water quality products (“Water”); and diagnostic products and services for livestock and poultry health and to measure the quality and safety of milk and improve producer efficiency, which we refer to as Livestock, Poultry and Dairy (“LPD”).
Cash and cash equivalents as of December 31, 2024, included approximately USD $1.0 million in cash denominated in non-U.S. currencies held in a country with currency control restrictions, which limit our ability to transfer funds outside of the country in which they are held without incurring costs.
Cash and cash equivalents as of December 31, 2025, included approximately USD $1.0 million in cash denominated in non-U.S. currencies held in a country with currency control restrictions, which limit our ability to transfer funds outside of the country in which they are held without incurring costs.
We have historically experienced proportionally lower net cash flows from operating activities during the first quarter and proportionally higher cash flows from operating activities for the remainder of the year and for the annual period driven primarily by payments related to annual employee incentive programs in the first quarter following the year for which the bonuses were earned. 56 Investing Activities .
We have historically experienced proportionally lower net cash flows from operating activities during the first quarter and proportionally higher cash flows from operating activities for the remainder of the year and for the annual period, driven primarily by payments related to annual employee incentive programs in the first quarter following the year for which the bonuses were earned. 54 Investing Activities .
Debt” for more information about our Credit Facility and for more information on our repayment of our Senior Notes. We also have purchase obligations that include agreements and purchase orders to purchase goods or services that are contractually enforceable and that specify all significant terms, including fixed or minimum quantities, pricing, and approximate timing of purchases.
Debt” for more information about our Credit Facility and Senior Notes. We also have purchase obligations that include agreements and purchase orders to purchase goods or services that are contractually enforceable and that specify all significant terms, including fixed or minimum quantities, pricing, and approximate timing of purchases.
To increase utilization, we seek to educate veterinarians about best medical practices that emphasize the importance of chemistry, hematology, and urinalysis testing for a variety of diagnostic purposes, as well as by introducing new testing capabilities that were previously not available to veterinarians.
To increase utilization, we seek to educate veterinarians about best medical practices that emphasize the importance of chemistry, hematology, cytology/morphology, and urinalysis testing for a variety of diagnostic purposes, as well as by introducing new testing capabilities that were previously not available to veterinarians.
Strengthening of the rate of exchange for the U.S. dollar relative to other currencies has a negative impact on our revenues derived in currencies other than the U.S. dollar and on profits of products manufactured or purchased in U.S. dollars and sold internationally, and a weakening of the U.S. dollar has the opposite effect.
Strengthening of the rate of exchange for the U.S. dollar relative to other currencies has a negative impact on our revenues derived in currencies other than the U.S. dollar and on profits of products manufactured or purchased in U.S. dollars and sold internationally, and a weakening of the U.S. dollar has the opposite effects.
We consider acquisitions to be a business when all three elements of inputs, processes, and outputs are present, consistent with ASU 2017-01, “ Business Combinations: (Topic 805) Clarifying the Definition of a Business. ” In a business combination, if substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, we do not consider these assets to be a business.
We consider acquisitions to be a business when all three elements of inputs, processes, and outputs are present, consistent with ASU 2017-01, “ Business Combinations: (Topic 805) Clarifying the Definition of a Business. ” We do not consider acquired assets to be a business if substantially all the fair value of the assets acquired is concentrated in a single 45 identifiable asset or group of similar identifiable assets.
We seek to differentiate these tests from those of other in-clinic test providers and reference laboratory diagnostic service providers based on critically important sensitivity and specificity, as demonstrated by peer-reviewed third-party research, as well as overall superior performance and ease of use by providing our customers with combination tests that test a single sample for up to six diseases at once, including the ability to utilize our SNAP Pro Analyzer.
We seek to differentiate these tests from those of other point-of-care test providers and reference laboratory diagnostic service providers based on critically important sensitivity and specificity, as demonstrated by peer-reviewed third-party research, as well as overall superior performance and ease-of-use by providing our customers with combination tests that test a single sample for up to six diseases at once, including the ability to utilize our SNAP Pro Analyzer.
We attempt to differentiate our reference laboratory testing services from those of competitive reference laboratories and competitive in-clinic offerings primarily on the basis of a differentiated test menu, technology employed, quality, turnaround time, customer service, and tools such as VetConnect PLUS that demonstrate the complementary manner in which our laboratory services work with our in-clinic offerings.
We attempt to differentiate our reference laboratory testing services from those of competitive reference laboratories and competitive point-of-care offerings primarily on the basis of a differentiated test menu, technology employed, quality, turnaround time, customer service, and tools such as VetConnect PLUS that demonstrate the complementary manner in which our laboratory services work with our point-of-care offerings.
We believe we are well-positioned to enable sustained high growth in our businesses and to effectively manage the impacts of potentially relatively higher costs in certain areas to support these growth plans. However, there can be no assurance as to the duration or severity of the supply chain and logistics challenges or the effectiveness of our mitigating activities.
We believe we are well-positioned to enable sustained high growth in our businesses and to effectively manage the impacts of potentially higher costs in certain areas to support these growth plans. However, there can be no assurance as to the duration or severity of the supply chain and logistics challenges or the effectiveness of our mitigation activities.
Financial Statements and Supplementary Data, Note 13 Debt” and “Part II, Item 8. Financial Statements and Supplementary Data. Note 16. Commitments, Contingencies and Guarantees” to the consolidated financial statements for the year ended December 31, 2024, included in this Annual Report on Form 10-K, respectively. 58 Financial Covenant .
Financial Statements and Supplementary Data, Note 13 Debt” and “Part II, Item 8. Financial Statements and Supplementary Data. Note 16. Commitments, Contingencies and Guarantees” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K, respectively. Financial Covenant .
We believe the increased number of customer visits by our sales professionals as a result of the growth in our field sales organization has led to increased reference laboratory opportunities with customers who already use one of our in-clinic diagnostic modalities.
We believe the increased number of customer visits by our sales professionals as a result of the growth in our field sales organization has led to increased reference laboratory opportunities with customers who already use one of our point-of-care diagnostic modalities.
The general availability of funds under the Credit Facility was further reduced by $1.9 million and $1.5 million for letters of credit that were issued primarily in connection with our workers' compensation policy as of December 31, 2024, and December 31, 2023, respectively. The Credit Facility contains affirmative, negative, and financial covenants customary for financings of this type.
The general availability of funds under our Credit Facility was further reduced by $1.8 million and $1.9 million for letters of credit that were issued primarily in connection with our workers' compensation policy as of December 31, 2025, and December 31, 2024, respectively. Our Credit Facility contains affirmative, negative, and financial covenants customary for financings of this type.
We further augment our product development and customer service efforts with sales and marketing programs that enhance medical awareness and understanding regarding certain diseases and the importance of diagnosti c testing. 39 The prevalence of in-clinic testing, as opposed to outside reference laboratories such as IDEXX Reference Laboratories, may vary by region.
We further augment our product development and customer service efforts with sales and marketing programs that enhance medical awareness and understanding regarding certain diseases and the importance of diagnosti c testing. 39 The prevalence of point-of-care testing, as opposed to outside reference laboratories such as IDEXX Reference Laboratories, may vary by region.
The manufacture of these testing products leverages the SNAP platform and production assets that also support our rapid assay business, which also leverages the SNAP platform. The dairy SNAP products incorporate customized reagents for antibiotic and contaminant detection. Other OPTI Medical .
The manufacture of these testing products leverages the SNAP platform and production assets that also support our rapid assay business, which also leverages the SNAP platform. The dairy SNAP products incorporate customized reagents for antibiotic and contaminant detection.
We continuously seek opportunities to enhance the care that veterinary professionals give to their patients and clients through supporting the implementation of real-time care testing workflows, which is performing tests and sharing test results with the client at the time of the patient visit.
We continually seek opportunities to enhance the care that veterinary professionals give to their patients and clients through supporting the implementation of real-time care testing workflows, which are performing tests and sharing test results with the client at the time of the patient visit.
The discussion of our financial condition and results of operations and liquidity and capital resources for the year ended December 31, 2022, and year-over-year comparisons between 2023 and 2022, is included in our Annual Report on Form 10-K for the year ended December 31, 2023, within Item 7.
The discussion of our financial condition and results of operations and liquidity and capital resources for the year ended December 31, 2023, and year-over-year comparisons between 2024 and 2023, is included in our Annual Report on Form 10-K for the year ended December 31, 2024, within Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
When selling our products through distributors, changes in distributors’ inventory levels can impact our reported sales, and these changes may be affected by many factors, which may not be directly related to underlying demand for our products by veterinary practices, which are the end users.
When selling our products through distributors, changes in distributors’ inventory levels can impact our reported sales, and these changes may be affected by many factors which may not be directly related to underlying demand for our products by veterinary practices.
The net effect of changes in foreign currency exchange rates are related to changes in exchange rates between the U.S. dollar and the functional currencies of our foreign subsidiaries. These changes will fluctuate each year as the value of the U.S. dollar relative to the value of foreign currencies changes.
The net effects of changes in foreign currency exchange rates are related to changes in exchange rates between the U.S. dollar and the functional currencies of our foreign subsidiaries with non-U.S. dollar functional currencies. These changes will fluctuate each year as the value of the U.S. dollar relative to the value of foreign currencies changes.
In certain countries, we sell our products through third-party distributors and may be unable to obtain data for sales to end users. We do not believe the impact of changes in these distributors’ inventories had or would have a material impact on our growth rates. Refer to “Part I, Item 1.
In certain countries, we sell our products through third-party distributors and may be unable to obtain data about sales to veterinary practices. We do not believe the impact of changes in these distributors’ inventories have had or would have a material impact on our growth rates. Refer to “Part I, Item 1.
Our cash disbursements are primarily related to compensation and benefits for our employees, inventory and supplies, repurchase of our common stock, taxes, research and development, capital expenditures, rents, occupancy-related charges, interest expense, and business acquisitions. As of December 31, 2024, we had $288.3 million of cash and cash equivalents, compared to $453.9 million as of December 31, 2023.
Our cash disbursements are primarily related to compensation and benefits for our employees, inventory and supplies, repurchase of our common stock, taxes, research and development, capital expenditures, rents, occupancy-related charges, interest expense, and business acquisitions. As of December 31, 2025, we had $180.1 million of cash and cash equivalents, compared to $288.3 million as of December 31, 2024.
For the year ended December 31, 2024, approximately 22% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 21% for both the years ended December 31, 2023, and December 31, 2022.
For the year ended December 31, 2025, approximately 23% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 22% and 21% for the years ended December 31, 2024, and December 31, 2023, respectively.
Therefore, in the short term, new and acquired reference laboratories generally may have a negative effect on our operating margin. Recurring reference lab revenue growth is achieved both through increased testing volumes with existing customers and through the acquisition of new customers, net of customer losses.
Therefore, in the short term, new and acquired reference laboratories generally may have a negative effect on our operating margin. Recurring reference laboratory revenue growth is achieved both through increased testing volumes, including new test menu additions, with existing customers and through the acquisition of new customers, net of customer losses.
The currency control restricted cash is generally available for use within the country where it is held. 55 The following table presents additional key information concerning working capital: For the Three Months Ended December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Days sales outstanding (1) 47.1 48.9 47.3 45.7 46.1 Inventory turns (2) 1.3 1.3 1.4 1.3 1.3 (1) Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that quarter, the result of which is then multiplied by 91.25 days.
The currency control restricted cash is generally available for use within the country where it is held. 53 The following table presents additional key information concerning working capital: For the Three Months Ended December 31, 2025 September 30, 2025 June 30, 2025 March 31, 2025 December 31, 2024 Days sales outstanding (1) 46.8 46.5 44.7 45.7 47.1 Inventory turns (2) 1.6 1.5 1.5 1.3 1.3 (1) Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that quarter, the result of which is then multiplied by 91.25 days.
With our SmartFlow and Vet Radar cloud technology, we are able to improve overall patient management through coordination and tracking of every step in a patient workflow. Our Pet Health Network Pro and Vello software provide online client communication and engagement functionality integrated into practice management system workflow.
Our SmartFlow and Vet Radar cloud technology help to improve overall patient management through coordination and tracking of every step in a patient workflow. Our Pet Health Network Pro and Vello software provide online client communication and engagement functionality integrated into our practice management system workflows.
Our latest generation of chemistry, hematology, cytology, and urinalysis instruments demonstrates this commitment by offering enhanced ease of use, faster time to results, broader test menu, and connectivity to various information technology platforms that enhance the value of the diagnostic information generated by the instruments.
Our latest generation of chemistry, hematolo gy, cytology/morphology, an d urinalysis instruments demonstrates this commitment by offering enhanced ease-of-use, faster time to results, broader test menu, and connectivity to various information technology platforms that enhance the value of the diagnostic information generated by the instruments.
Our in-clinic diagnostic solutions also include SNAP rapid assay tests that address important medical needs for particular diseases prevalent in the companion animal population.
Our point-of-care diagnostic solutions also include SNAP rapid assay tests that address important medical needs for particular diseases prevalent in the companion animal population.
Global trends in companion animal healthcare, including growth in demand for clinical services, continue to support solid growth for companion animal diagnostic products and services across regions. In the U.S., average diagnostics revenue per practice grew approximately 4% on a same-store basis during 2024, faster than approximately 3% growth in overall practice revenues.
CAG Trends . Global trends in companion animal healthcare, including growth in demand for clinical services, continue to support growth for companion animal diagnostic products and services across regions. In the U.S., average diagnostics revenue per practice grew approximately 6% on a same-store basis during 2025, faster than approximately 2% growth in overall practice revenues.
The obligations under the Credit Facility may be accelerated upon the occurrence of an event of default under the Credit Facility, which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, (“ERISA”), the failure to pay specified indebtedness, cross-acceleration to specified indebtedness, and a change of control default.
The obligations under our Credit Facility may be accelerated upon the occurrence of an event of default under our Credit Facility, which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under ERISA, the failure to pay specified indebtedness, and a change of control default.
This increase in the projected 2025 effective tax rate is primarily due to estimated reductions in tax benefits, compared to 2024, from share-based compensation and from the release of tax reserves related to uncertain tax positions. 54 LIQUIDITY AND CAPITAL RESOURCES We fund the capital needs of our business through cash on hand, funds generated from operations, proceeds from long-term senior note financings, and amounts available under our Credit Facility.
This increase in the projected 2026 effective tax rate is primarily due to estimated reductions in share-based compensation tax benefits, as compared to 2025. 52 LIQUIDITY AND CAPITAL RESOURCES We fund the capital needs of our business through cash on hand, funds generated from operations, proceeds from long-term senior note financings, and amounts available under our Credit Facility.
We believe the efforts required to convert and retain these acquired customers are similar in nature to our existing customer base and therefore are included in organic revenue growth.
Revenue from these customers acquired is included in organic revenue growth because we believe the efforts required to convert and retain these acquired customers are similar in nature to our efforts to obtain and retain our existing customer base.
For the year ended December 31, 2024, recurri ng diagnostic revenue, which is both highly durable and profitable, accounted for approximately 80% of our consolidated revenue. Our in-clinic diagnostic solutions, consisting of our IDEXX VetLab consumable products and SNAP rapid assay test kits, provide real-time reference lab quality diagnostic results for a variety of companion animal diseases and health conditions.
For the year ended December 31, 2025, recurri ng diagnostic revenue, which is both highly durable and profitable, accounted for approximately 79% of our consolidated revenue. Our point-of-care diagnostic solutions, consisting of our IDEXX VetLab consumable products and SNAP rapid assay test kits, provide real-time reference laboratory quality diagnostic results for a variety of companion animal diseases and health conditions.
We believe that, if necessary, we could obtain additional borrowings to fund our growth objectives. We further believe that current cash and cash equivalents, funds generated from operations, and committed borrowing availability will be sufficient to fund our operations, capital purchase requirements, and anticipated growth needs for the next twelve months.
We further believe that current cash and cash equivalents, funds generated from operations, and committed borrowing availability will be sufficient to fund our operations, capital purchase requirements, and anticipated growth needs for the next twelve months.
Although this data is a limited sample, and may be susceptible to short-term impacts, we believe that this data provides a fair and meaningful long-term representation of the trend in patient visit activity in the U.S., providing us insight regarding demand for our products and services.
Although this data is a limited sample, and may be susceptible to short-term impacts, we believe that this data provides a fair and meaningful long-term representation of the trend in patient visit activity in the U.S., providing us insight regarding demand for our products and services. Economic conditions may also affect the purchasing decisions of our Water and LPD customers.
As of December 31, 2024, we were in compliance with the covenants of the Credit Facility.
As of December 31, 2025, we were in compliance with the covenants of our Credit Facility.
Our net liability for uncertain tax positions was $18.1 million as of December 31, 2024, and $22.3 million as of December 31, 2023. We also accrue for estimated interest expense and penalties on our uncertain tax positions. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 14.
Our net liability for uncertain tax positions was $12.7 million as of December 31, 2025, and $18.1 million as of December 31, 2024. We also accrue for estimated interest expense and penalties on our uncertain tax positions to the extent possible. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 14.
As of December 31, 2024, we had approximately $211.0 million in purchase obligations due in 2025. Our purchase obligations beyond 2025 are approximately $168.7 million. These purchase obligation amounts do not 59 include amounts recorded in accounts payable, as of December 31, 2024. The expected timing of payments of our purchase obligations is estimated based on current information.
As of December 31, 2025, we had approximately $207.3 million in purchase obligations due in 2026. Our purchase obligations beyond 2026 are approximately $136.7 million. These purchase obligation amounts do not include amounts recorded in accounts payable as of December 31, 2025. The expected timing of payments of our purchase obligations is estimated based on current information.
IDEXX Retirement and Incentive Savings Plan” for our future benefits expected to be paid. As of December 31, 2024, current liabilities include $250.0 million outstanding borrowing on our Credit Facility and the current portion of long-term debt of $167.8 million recorded as current liabilities. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 13.
IDEXX Retirement and Incentive Savings Plan” for our future benefits expected to be paid. As of December 31, 2025, current liabilities include $398.0 million in outstanding borrowings under our Credit Facility and the current portion of long-term debt of $75.0 million recorded as current liabilities. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 13.
The change in foreign currency exchange rates decreased the gross profit margin by approximately 30 basis points, including the impact of higher hedge gains in the current year compared to the prior year. Operating Expenses . Sales and marketing expense increased primarily due to higher personnel-related costs.
The impact from changes in foreign currency exchange rates decreased the gross profit margin by approximately 90 basis points, including the impact of hedge losses in the current year, compared to hedge gains in the prior year. Segment Operating Expenses . Sales and marketing expense increased primarily due to higher personnel-related and higher trade show and sales meeting costs.
Revenue” to the consolidated financial statements for the year ended December 31, 2024, included in this Annual Report on Form 10-K for additional information about our revenue recognition policy and criteria for recognizing revenue. We enter into contracts where customers purchase combinations of IDEXX products and services.
Revenue” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K for additional information about our revenue recognition policy and criteria for recognizing revenue. We enter into arrangements with multiple performance obligations where customers purchase a combination of IDEXX products and services.
U.S. same-store clinical visits at veterinary practices declined approximately 2% in 2024, impacted by ongoing veterinary practice capacity challenges from the influx of higher volumes during the pandemic, as well as macroeconomic headwinds. Our initial 2025 financial outlook anticipates a decline in U.S. same-store clinical growth levels reflecting these near-term sector and macroeconomic dynamics.
U.S. same-store clinical visits at veterinary practices declined approximately 2% in 2025, impacted by ongoing veterinary practice capacity challenges, as well as macroeconomic headwinds. Our initial 2026 financial outlook anticipates a similar decline in U.S. same-store clinical growth levels as in 2025, reflecting these near-term sector and macroeconomic dynamics.
As of December 31, 2024, we had $250.0 million outstanding on our line of credit, all of which was on our $250.0 million Term Loan under the Credit Facility.
As of December 31, 2025, we had $398.0 million in borrowings outstanding under our Credit Facility, of which $250.0 million was on our Term Loan under our Credit Facility. As of December 31, 2024, we had $250.0 million in borrowings outstanding under our Credit Facility, all of which was on our $250.0 million Term Loan under our Credit Facility.
The obligations under the senior notes may be accelerated upon the occurrence of an event of default under the applicable Senior Note Agreements, each of which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency-related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under ERISA, the failure to pay specified indebtedness, and cross-acceleration to specified indebtedness.
The obligations under our senior notes may be accelerated upon the occurrence of an event of default under the applicable Senior Note Agreements, each of which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency-related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the failure to pay specified indebtedness, and a change of control default.
The following revenue analysis and discussion focuses on organic revenue growth, and references in this analysis and discussion to “revenue,” “revenues” or “revenue growth” are references to “organic revenue growth.” Organic revenue growth is a non-GAAP financial measure and represents the percentage change in revenue during the current year, compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates, certain business acquisitions, and divestitures.
GAAP and to “organic revenue growth.” Organic revenue growth is a non-GAAP financial measure and represents the percentage change in revenue during the current year, compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates, certain business acquisitions, and divestitures.
Revenues related to capital placements of our in-clinic IDEXX VetLab suite of instruments and our SNAP Pro Analyzer are non-recurring in nature in that they are sold to a particular customer only once.
Our diagnostic capabilities generate both recurring and non-recurring revenues. Revenues related to capital placements of our point-of-care IDEXX VetLab suite of instruments and our SNAP Pro Analyzer are non-recurring in nature because they are sold to a particular customer only once.
Placements of imaging systems are important to the growth of revenue streams that are recurring in nature, including extended maintenance agreements and IDEXX Web PACS, which is our cloud-based SaaS offering for viewing, accessing, storing, and sharing multi-modality diagnostic images. We derive relatively higher margins from our subscription-based products.
Placements of imaging systems are important to the growth of revenue streams that are recurring in nature, including extended maintenance agreements and IDEXX Web PACS, which is our cloud-based SaaS offering using proprietary AI capabilities to enable optimal sharing, analysis, and storage of diagnostic images. We derive relatively higher margins from our subscription-based products.
Our total capital expenditure plan for 2025 is estimated to be approximately $160.0 million, which includes capital investments in manufacturing and operations facilities to support growth, as well as investments in customer-facing software development. Financing Activities . Cash used by financing activities was $878.1 million during 2024, compared to $442.0 million used during 2023.
Our projected capital expenditures for 2026 are estimated to be approximately $180.0 million, which includes capital investments in manufacturing and operations facilities to support growth, as well as investments in customer-facing software development. Financing Activities . Cash used by financing activities was $1.2 billion during 2025, compared to $878.1 million used during 2024.
Our diagnostic imaging systems offer a convenient radiographic solution that provides superior image quality and the ability to share images with clients virtually anywhere. IDEXX imaging software enables enhanced diagnostic features and streamlined integration with our other products and services.
Our diagnostic imaging systems offer a convenient radiographic solution that provides superior image quality and the ability to share images with clients virtually anywhere. IDEXX imaging software enables enhanced diagnostic features, including AI-powered tools, reduced manual steps, and time savings on diagnosis, as well as streamlined integration with our other products and services.
The increase in CAG Diagnostics services and accessories revenue was primarily a result of the 9% increase in our installed base of premium instruments. The change in foreign currency exchange rates decreased revenue growth by 0.4%. CAG Diagnostics Capital – Instrument Revenue .
The impact from changes in foreign currency exchange rates increased revenue growth by 0.7%. The increase in CAG Diagnostics services and accessories revenue was primarily a result of the expansion of our installed base of premium instruments. The impact from changes in foreign currency exchange rates increased revenue growth by 1.0%. CAG Diagnostics Capital – Instrument Revenue .
Segment Reporting” to the consolidated financial statements for the year ended December 31, 2024, included in this Annual Report on Form 10-K, for financial information about our segments, including our product and service categories, and our geographic areas.
Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 3. Revenue and Note 17. Segment Reporting” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K, for financial information about our segments, including our product and service categories, and our geographic areas.
Cash used by investing activities was $207.1 million during 2024, compared to $125.3 million used during 2023. The increase in cash used by investing activities during 2024, compared to 2023, was primarily due to the acquisition of a software business during the current year.
Cash used by investing activities was $136.2 million during 2025, compared to $207.1 million used during 2024. The decrease in cash used by investing activities during 2025, compared to 2024, was primarily due to the acquisition of a software business during the prior year.
Summary of Significant Accounting Policies (v) and (w)” to the consolidated financial statements for the year ended December 31, 2024, included in this Annual Report on Form 10-K for a complete discussion of recent accounting pronouncements adopted and not adopted. 44 RESULTS OF OPERATIONS AND TRENDS Effects of Certain Factors on Results of Operations CAG Trends .
Summary of Significant Accounting Policies (v) and (w)” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K for a complete discussion of recent accounting pronouncements adopted and not adopted. 43 RESULTS OF OPERATIONS AND TRENDS Effects of Certain Factors on Results of Operations Our financial results have been, and will continue to be, impacted by certain significant trends, including those which are described below.
Management's Discussion and Analysis of Financial Condition and Results of Operations, and is incorporated by reference herein. We have included certain terms and abbreviations used throughout this Annual Report on Form 10-K in the “Glossary of Terms and Selected Abbreviations.” Description of Business Segments .
We have included certain terms and abbreviations used throughout this Annual Report on Form 10-K in the “Glossary of Terms and Selected Abbreviations.” Description of Business Segments .
Cash used for accounts receivable decreased $25.6 million compared to the prior year primarily due to the timing of customer payments received, partially offset by higher revenue.
Cash used for accounts receivable increased $40.4 million, compared to the prior year, primarily due to the timing of customer payments received and higher revenue.
For those jurisdictions where tax carryforwards are likely to expire unused or the projected operating results indicate that realization is not more-likely-than-not, a valuation allowance is recorded to offset the deferred tax asset within that jurisdiction. In assessing the need for a valuation allowance, we consider future taxable income and ongoing prudent and feasible tax planning strategies.
For those jurisdictions where tax carryforwards are 42 likely to expire unused or the projected operating results indicate that realization is not more-likely-than-not, a valuation allowance is recorded to offset some or all of the deferred tax asset within that jurisdiction.
We anticipate paying off our 2025 Series C Notes for €88.9 million when due in June 2025, and our 2025 Series B Notes for $75.0 million when due in December 2025, with available cash on hand, borrowings under our Credit Facility, or proceeds from the issuance of new notes, or a combination thereof.
We anticipate funding the full repayment of our 2026 Senior Notes for $75.0 million when due in September 2026 with available cash on hand, borrowings under our Credit Facility, or proceeds from the issuance of new notes, or a combination thereof.
The applicable interest rate for the Term Loan is consistent with our line of credit, and is calculated at a per annum rate equal to either (at our option) (1) a prime rate plus a margin ranging from 0.0% to 0.375% based on our consolidated leverage ratio, (2) an adjusted term SOFR rate, plus 0.10%, plus a margin ranging from 0.875% to 1.375% based on our consolidated leverage ratio, or (3) an adjusted daily simple SOFR rate, plus 0.10%, plus a margin ranging from 0.875% to 1.375% based on our consolidated leverage ratio.
Dollars under our Credit Facility is calculated at a per annum rate equal to either (at our option) (1) a base rate (determined as the greatest of the prime rate, the NYFRB Rate plus 0.50%, and the Adjusted Term SOFR Rate for a one-month Interest Period plus 1.0% (but no less than 1.0%)), plus a margin rate ranging from 0.0% to 0.375% based on our consolidated leverage ratio, (2) the Adjusted Term SOFR Rate, plus a margin rate ranging from 0.875% to 1.375% based on our consolidated leverage ratio, or (3) the Adjusted Daily Simple SOFR Rate, plus a margin rate ranging from 0.875% to 1.375% based on our consolidated leverage ratio.
The change in foreign currency exchange rates was not significant to operating expense growth. 52 Livestock, Poultry and Dairy The following table presents the LPD segment results of operations: For the Years Ended December 31, Change Results of Operations (dollars in thousands) 2024 Percent of Revenue 2023 Percent of Revenue Amount Percentage Revenues $ 122,060 $ 121,659 $ 401 0.3 % Cost of revenue 59,500 56,219 3,281 5.8 % Gross profit 62,560 51.3 % 65,440 53.8 % (2,880) (4.4 %) Operating Expenses: Sales and marketing 28,027 23.0 % 25,798 21.2 % 2,229 8.6 % General and administrative 16,716 13.7 % 17,174 14.1 % (458) (2.7 %) Research and development 11,184 9.2 % 12,493 10.3 % (1,309) (10.5 %) Total operating expenses 55,927 45.8 % 55,465 45.6 % 462 0.8 % Income from operations $ 6,633 5.4 % $ 9,975 8.2 % $ (3,342) (33.5 %) Revenue .
The impact from changes in foreign currency exchange rates was not significant to operating expense growth. 51 Livestock, Poultry and Dairy The following table presents the LPD segment results of operations: For the Years Ended December 31, Change Results of Operations (dollars in thousands) 2025 Percent of Revenue 2024 Percent of Revenue Amount Percentage Revenues $ 131,787 $ 122,060 $ 9,727 8.0 % Cost of revenue 67,579 59,500 8,079 13.6 % Gross profit 64,208 48.7 % 62,560 51.3 % 1,648 2.6 % Segment operating expenses: Sales and marketing 30,685 23.3 % 28,027 23.0 % 2,658 9.5 % General and administrative 18,174 13.8 % 16,716 13.7 % 1,458 8.7 % Research and development 12,120 9.2 % 11,184 9.2 % 936 8.4 % Total segment operating expenses 60,979 46.3 % 55,927 45.8 % 5,052 9.0 % Segment income from operations $ 3,229 2.5 % $ 6,633 5.4 % $ (3,404) (51.3 %) Revenue .
The change in foreign currency exchange rates decreased revenue growth by 0.5%. Gross Profit . Gross profit for Water increased due to higher revenue, and a 120 basis point increase in the gross profit margin. The increase in the gross profit margin was primarily due to higher realized prices and lower freight costs, partially offset by higher product costs.
The impact from changes in foreign currency exchange rates increased revenue growth by 0.6%. Gross Profit . The increase in gross profit for Water was primarily due to higher revenue, partially offset by a 100 basis point decrease in the gross profit margin.
The decrease in LPD gross profit was primarily due to a 250 basis point d ecrease in the gross profit margin. The decrease in the gross profit margin was primarily due to higher product and distribution costs and unfavorable business mix, partially offs et by higher realized prices.
The increase in LPD gross profit was primarily due to higher revenues, partially offset by a 260 basis point de crease in the gross profit margin. The net decrease in the gross profit margin was primarily due to higher product costs, partially offs et by higher realized prices and manufacturing efficiencies.
The following table presents cash, cash equivalents, and marketable securities held domestically and by our foreign subsidiaries: For the Years Ended December 31, Cash and cash equivalents (in thousands) 2024 2023 U.S. $ 145,118 $ 324,434 Foreign 143,148 129,498 Total $ 288,266 $ 453,932 Total cash, cash equivalents and marketable securities held in U.S. dollars by our foreign subsidiaries $ 10,623 $ 13,170 Of the $288.3 million of cash and cash equivalents held as of December 31, 2024, $148.7 million was held as bank deposits at a diversified group of institutions, primarily systemically important banks, and $139.6 million was held in a U.S. government money market fund.
The following table presents cash, cash equivalents, and marketable securities held domestically and by our foreign subsidiaries: For the Years Ended December 31, Cash and cash equivalents (in thousands) 2025 2024 U.S. $ 1,606 $ 145,118 Foreign 178,464 143,148 Total cash and cash equivalents $ 180,070 $ 288,266 Total cash, cash equivalents, and marketable securities held in U.S. dollars by our foreign subsidiaries $ 24,571 $ 10,623 As of December 31, 2025, more than 99% of the cash and cash equivalents held were held as bank deposits at a diversified group of institutions, primarily systemically important banks.
The increase in recurring revenue was primarily due to higher subscription and support services volume from our expanded SaaS installed base and higher realized prices. The impact of a business acquisition increased recurring revenue growth by 6.0%.
The increase in recurring revenue was primarily due to higher subscription and support services volume from our expanded SaaS installed base and higher realized prices . The increase in our systems and hardware revenue was primarily due to higher diagnostic imaging system sales.
Research and development expense increased primarily due to higher project and outside services costs.
Research and development expense increased due to development project costs for new products and services, including higher personnel-related costs.
Working capital totaled $332.0 million as of December 31, 2024, compared to $543.7 million as of December 31, 2023. The change in working capital is primarily due to lower cash and higher current amount payable of our Senior Notes.
Working capital totaled $265.0 million as of December 31, 2025, compared to $332.0 million as of December 31, 2024. The change in working capital is primarily due to lower cash and higher borrowings on our Credit Facility, partially offset by higher receivables and lower outstanding borrowing on the current portion of our Senior Notes, as compared to the prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe entered into an interest rate swap to manage the effect of variable interest obligations on amounts borrowed under the terms of the Credit Facility. Beginning on March 31, 2023, the variable interest rate associated with $250.0 million of borrowings outstanding under the Credit Facility became effectively fixed at 3.9%, plus the applicable credit spread, through October 20, 2025.
Biggest changeAs of December 31, 2025, the variable interest rate associated with $250.0 million Term Loan became effectively fixed at 3.4%, plus the applicable credit spread, through November 12, 2028. Borrowings outstanding under our Credit Facility as of December 31, 2025, were $398.0 million. During 2025, we experienced inflationary pressure on our operating costs.
From time to time, we may also enter into other foreign currency exchange contracts, cross currency swaps, or foreign-denominated debt issuances to minimize the impact of foreign currency fluctuations associated with specific balance sheet exposures, including net investments in certain foreign subsidiaries. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 19.
From time to time, we may also enter into other foreign currency exchange contracts, cross currency swaps, or foreign-denominated debt issuances to reduce the impact of foreign currency fluctuations associated with specific balance sheet exposures, including net investments in certain foreign subsidiaries. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 19.
As a result, no significant ineffectiveness has resulted or been recognized in the statements of income for the years ended December 31, 2024, 2023, and 2022. Our hedging strategy related to intercompany inventory purchases and sales is to employ the full amount of our hedges for the succeeding year at the conclusion of our budgeting process for that year.
As a result, no significant ineffectiveness has resulted or been recognized in the statements of income for the years ended December 31, 2025, 2024, and 2023. Our hedging strategy related to intercompany inventory purchases and sales is to employ the full amount of our hedges for the succeeding year at the conclusion of our budgeting process for that year.
We enter into foreign currency exchange contracts with large, well-capitalized multinational financial institutions and we do not hold or engage in transactions involving derivative 61 instruments for purposes other than risk management. Our accounting policies for these contracts are based on our designation of such instruments as hedging transactions.
We enter into foreign currency exchange contracts with large, well-capitalized multinational financial institutions, and we do not hold or engage in transactions involving derivative 58 instruments for purposes other than risk management. Our accounting policies for these contracts are based on our designation of such instruments as hedging transactions.
We target to hedge approximately 75% to 85% of the estimated exposure from intercompany product purchases and sales denominated in the euro, British pound, Canadian dollar, Japanese yen, and Australian dollar. We have additional unhedged foreign currency exposures related to foreign services and in emerging markets where it is not practical to hedge.
We target to hedge approximately 75% to 85% of the estimated exposure from intercompany product purchases and sales denominated in the euro, British pound, Canadian dollar, Japanese yen, and Australian dollar. We have additional unhedged foreign currency exposures related to intercompany foreign transactions and in emerging markets where it is not practical to hedge.
Excluding the impact of intercompany and trade balances denominated in currencies other than the functional subsidiary currencies, a 1% strengthening of the U.S. dollar would reduce revenue by approximately $13 million and operating income by approximately $5 million, net of hedge positions.
Excluding the impact of intercompany and trade balances denominated in currencies other than the functional subsidiary currencies, a 1% strengthening of the U.S. dollar would reduce revenue by approximately $16 million and operating income by approximately $5 million, net of hedge positions.
Our foreign currency hedging strategy is consistent with prior periods and there were no material changes in our market risk exposure during the year ended December 31, 2024.
Our foreign currency hedging strategy is consistent with prior periods, and there were no material changes in our market risk exposure during the year ended December 31, 2025.
Quarterly, we enter into contracts to hedge incremental portions of anticipated foreign currency transactions for the current and following year. Accordingly, our risk with respect to foreign currency exchange rate fluctuations may vary throughout each annual cycle.
Quarterly, we enter into contracts to hedge incremental portions of anticipated foreign currency transactions for the current and following year. As a result, our risk with respect to foreign currency exchange rate fluctuations may vary throughout each annual cycle.
These unfavorable impacts to our operating profit and diluted earnings per share include net year-over-year impacts of foreign currency hedging activity, which is expected to increase total company operating profit by approximately $19 million and diluted earnings per share by $0.18 during the year ending December 31, 2025.
These favorable impacts to our operating profit and diluted earnings per share include net year-over-year impacts of foreign currency hedging activity, which is expected to increase total company operating profit by approximately $4 million and diluted earnings per share by $0.04 during the year ending December 31, 2026.
For the year ended December 31, 2024, approximatel y 22% o f our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 21% for both the years ended December 31, 2023, and 2022. The functional currency of most of our subsidiaries is their local currency.
For the year ended December 31, 2025, approximately 23% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 22% and 21% for the years ended December 31, 2024 and 2023, respectively. The functional currency of most of our subsidiaries is their local currency.
The following table presents the estimated foreign currency exchange impact on our revenues, operating profit, and diluted earnings per share for the current period and compared to the respective prior-year period: For the Years Ended December 31, (in thousands, except per share amounts) 2024 2023 2022 Revenue (decrease) increase $ (9,471) $ (4,603) $ (108,812) Operating profit (decrease) increase, excluding hedge activity and exchange impacts on settlement of foreign currency denominated transactions $ (4,253) $ (5,489) $ (56,420) Hedge gains (losses) - current period 5,932 3,512 25,733 Foreign currency transaction (losses) - current period (4,527) (1,078) (3,408) Operating profit (decrease) increase - current period $ (2,848) $ (3,055) $ (34,095) Hedge (gains) losses - prior period (3,512) (25,733) 7,121 Foreign currency transaction losses - prior period 1,078 3,408 2,111 Operating profit (decrease) increase - compared to prior period $ (5,282) $ (25,380) $ (24,863) Diluted earnings per share (decrease) increase - compared to prior period $ (0.05) $ (0.24) $ (0.22) At our current foreign exchange rate assumptions, we anticipate year-over-year changes will reduce our revenues, decrease our operating profit, and diluted earnings per share in the year ending December 31, 2025, by approximately $80 million, $22 million, and $0.21 per share, respectively.
The following table presents the estimated foreign currency exchange impact on our revenues, operating profit, and diluted earnings per share for the current period and compared to the respective prior-year period: For the Years Ended December 31, (in thousands, except per share amounts) 2025 2024 2023 Revenue increase (decrease) $ 33,139 $ (9,471) $ (4,603) Operating profit increase (decrease), excluding hedge activity and exchange impacts on settlement of foreign currency denominated transactions $ 16,579 $ (4,253) $ (5,489) Hedge gain (losses) - current period (801) 5,932 3,512 Foreign currency transaction (losses) - current period (4,160) (4,527) (1,078) Operating profit increase (decrease) - current period $ 11,618 $ (2,848) $ (3,055) Hedge (gains) losses - prior period (5,932) (3,512) (25,733) Foreign currency transaction losses - prior period 4,527 1,078 3,408 Operating profit increase (decrease) - compared to prior period $ 10,213 $ (5,282) $ (25,380) Diluted earnings per share increase (decrease) - compared to prior period $ 0.10 $ (0.05) $ (0.24) At our current foreign exchange rate assumptions, we anticipate year-over-year changes will increase our revenues, operating profit, and diluted earnings per share in the year ending December 31, 2026, by approximately $28 million, $22 million, and $0.22 per share, respectively.
Summary of Significant Accounting Policies.” Interest Rate Risk and Effects of Inflation We incur interest expense on our borrowings outstanding on our Senior Notes at a fixed rate. We have a Credit Facility with a syndicate of multinational banks, which matures on December 9, 2026, and requires no scheduled prepayments before that date.
Summary of Significant Accounting Policies.” Interest Rate Risk and Effects of Inflation We incur interest expense on the aggregate principal amount of our outstanding Senior Notes at a fixed rate. We have a revolving credit facility with a syndicate of multinational banks, which matures on November 12, 2030, and requires no scheduled prepayments before that date.
The foreign currency exchange impacts on our revenue and operating income will be different from our 2025 estimates if actual foreign exchange rates are different from our assumptions.
The foreign currency exchange impacts on our revenue and operating income for the year ending December 31, 2026, will be different from our estimates if actual foreign exchange rates are different from our assumptions.
The notional amount of foreign currency exchange contracts to hedge forecasted intercompany purchases and sales totaled $325.7 million as of December 31, 2024, and $294.0 million as of December 31, 2023. As of December 31, 2024, we had $12.8 million of net unrealized gains on foreign currency exchange contracts reflected within accumulated other comprehensive income, net of related tax.
The notional amount of foreign currency exchange contracts to hedge forecasted intercompany purchases and sales totaled $397.6 million and $325.7 million, as of December 31, 2025 and 2024, respectively. As of December 31, 2025, we had $2.5 million of net unrealized losses on foreign currency exchange contracts reflected within accumulated other comprehensive income, net of related tax.
Furthermore, additional tariffs on imported goods may increase our costs to purchase products, components, and materials. We may not be 62 able to offset these higher costs through productivity initiatives and price increases, which may materially and adversely affect our business, results of operations, and financial condition.
We may not be 59 able to offset these higher costs through productivity initiatives and price increases, which may materially and adversely affect our business, results of operations, and financial condition.
The above estimate assumes that the value of the U.S. dollar relative to other currencies will reflect the euro at $1.02, the British pound at $1.23, the Canadian dollar at $0.68, the Australian dollar at $0.61; the Japanese yen at ¥160, the Chinese renminbi at RMB 7.43, and the Brazilian real at R$6.21 to the U.S. dollar for the full year of 2025.
The above estimates assume that the value of the U.S. dollar relative to other currencies will reflect the euro at $1.16, the British pound at $1.33, the Canadian dollar at $0.72, the Australian dollar at $0.66; the Japanese yen at ¥157, the Chinese renminbi at RMB 7.05, and the Brazilian real at R$5.45 to the U.S. dollar for the full year of 2026.
Borrowings outstanding under the Credit Facility as of December 31, 2024, were $250.0 million. During 2024, we experienced inflationary pressure on our operating costs. During 2025, we expect to continue to face higher costs for labor, commodities, energy, and transportation, as well as increased prices from suppliers.
During 2026, we expect to continue to face higher costs for labor, commodities, energy, and transportation, as well as increased prices from suppliers. Furthermore, additional tariffs on imported goods may increase our costs to purchase products, components, and materials.
Although the Credit Facility does not mature until December 9, 2026, all individual borrowings under the terms of the Credit Facility have a stated term between 1 and 180 days, including the $250.0 million Term Loan that matures on October 20, 2025. The variable rates are based on SOFR, with rolling maturities of one and three month increments.
Although the revolving credit facility does not mature until November 2030, all individual borrowings under our Credit Facility have a stated term of less than 1 year, including the $250.0 million Term Loan, which matures on November 12, 2028. We entered into interest rate swaps to reduce the effect of variable interest obligations of our Term Loan.

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