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IDEXX reported Q3 FY2026 revenue of $1.2 billion, up from $1.1 billion a year earlier and above the consensus. Diluted earnings per share rose to $4.01 from $3.40.
The company’s filing attributed revenue growth primarily to recurring Companion Animal Group diagnostics sales, as existing and new customers ran more tests and realized prices increased. The filing said higher sales of consumables and reference laboratory testing contributed to that growth. It also reported higher revenue in Water and Livestock, Poultry and Dairy, supported by prices and volumes.
IDEXX reported a gross margin of 62.9%, compared with 61.8% a year earlier, while operating margin rose to 33.1% from 32.1%. The filing attributed the gross-margin increase in part to consumables volume, product mix and productivity improvements. IDEXX generated $420.8 million in free cash flow, compared with $357.9 million in the year-earlier quarter.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.2 billion | $1.1 billion | 9.86% |
| Diluted EPS | $4.01 | $3.40 | 18.0% |
| Gross margin | 62.9% | 61.8% | 1.1 percentage points |
| Operating margin | 33.1% | 32.1% | 1.0 percentage point |
| Free cash flow | $420.8 million | $357.9 million | 17.6% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $4.27 | $3.95 | Beat by 8.10% |
| Revenue | $1.2 billion | $1.2 billion | Beat by 1.28% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
| Against its own guidance | For | Guided | Reported | Result |
|---|---|---|---|---|
| Operating margin | Q2 FY2026 | 33.9%–34.3% | 35.0% | Above the guide |
| Revenue growth | Q2 FY2026 | −0.50% | 9.66% | Above the guide |
What management said on the call
CFO Andrew Emerson said demand for diagnostics was supported by new customers, a larger installed base of premium instruments and greater use of IDEXX’s expanded test menu. He said U.S. recurring Companion Animal Group diagnostics revenue grew 9.60% organically in the quarter, while international recurring diagnostics revenue grew 14.0% organically. Emerson said customers were testing more frequently and using more diagnostics per visit, despite a decline in estimated U.S. same-store clinical visits.
Emerson said VetLab consumables revenue grew 15.0% organically, helped by instrument installations and broader use of the test menu. He said global reference laboratory revenue grew 10.0% organically, with volume gains from new customers, including wins from competing laboratories, and increased testing by existing customers. He also said premium instrument placements reached 5,780 in the quarter.
On margins, Emerson said recurring revenue growth, productivity and product mix contributed to gross-margin gains, while pricing benefits offset inflationary costs. He said IDEXX continued to invest in innovation, commercial expansion and information technology.
During questions about clinical visits and the economic environment, Emerson said puppy and kitten adoption remained muted and that the company was paying attention to the macro environment. He said older pets continued to contribute to visits and described the company’s focus as “broadening the use of diagnostics” for animals already coming into clinics.
Asked about the CoVet acquisition’s margin impact, Emerson said the outlook incorporated deal, integration and amortization costs. He said IDEXX saw opportunities for the software business to generate revenue directly and support wider use of diagnostics. For the fourth quarter, Emerson expected a reported operating margin of 28.4% to 29.3%, with gross-margin improvement offset by acquisition expenses and ongoing investment.
Guidance
IDEXX raised its full-year revenue outlook and increased its EPS range to $14.96 to $15.16. The company also raised its organic revenue growth outlook to 9.30% to 10.0%, including 10.3% to 11.0% growth in recurring Companion Animal Group diagnostics revenue.
IDEXX lowered its reported operating-margin outlook to 32.1% to 32.3% from 32.3% to 32.5%.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Operating margin | Q4 FY2026 | 28.4%–29.3% | — | New |
| Tax rate | FY2026 | 20.5% | — | New |
| Operating margin | FY2026 | 32.1%–32.3% | 32.1%–32.5% | Cut |
| Capex | FY2026 | $160.0 million | $180.0 million | Cut |
| Free cash flow growth, Conversion To Net Income | FY2026 | 95.0%–100.0% | — | New |
| EPS | FY2026 | $14.96–$15.16 | $14.69–$14.94 | Raised |
| Revenue, Ezyvet | FY2026 | $5.0 million | — | New |
| Revenue growth, Cag Diagnostics Recurring Organic Growth | FY2026 | 10.3%–11.0% | 9.50%–10.7% | Raised |
| Revenue growth, Organic Growth | FY2026 | 9.30%–10.0% | 8.50%–9.70% | Raised |
| Revenue | FY2026 | $4.7 billion–$4.8 billion | $4.7 billion–$4.7 billion | Raised |
| Revenue growth, Cag Diagnostics Recurring Reported Growth | FY2026 | 11.0%–11.7% | 10.1%–11.3% | Raised |
| EPS growth, Comparable Growth | FY2026 | $0.13–$0.15 | — | New |
| EPS growth, Reported Growth | FY2026 | $0.12–$0.14 | — | New |
| Operating margin, Reported | FY2026 | 32.3%–32.5% | — | New |
| Units, Inviewdx | FY2026 | 5,500 | — | — |
| Free cash flow growth | FY2026 | 85.0%–95.0% | — | New |
| Revenue growth, Cag Diagnostics Recurring | FY2026 | 8.70%–10.7% | — | New |
| Revenue growth | FY2026 | 7.70%–9.70% | — | New |