IDEXX Laboratories, Inc. (IDXX) Earnings Call Transcript & Summary

Sorry about that. Good morning, everyone. Welcome to the Raymond James Institutional Investor Conference. Thanks for joining us. I'm Andrew Cooper, and I cover animal health here for Raymond James. And we're excited to have IDEXX joining us this morning for a fireside chat. Just some quick housekeeping. I'd love to include some questions from the audience today. [Operator Instructions] Like I said, excited to have IDEXX, it's the largest player and, really, the leader in pretty much any sense of the word in animal diagnostics, which is one of the fastest-growing spaces in a really terrific end market. With that, we have CEO, Jay Mazelsky here; as well as CFO, Brian McKeon. And Director of IR, John Ravis. And I'm going to jump right into some Q&A here.

Maybe just to start with some high-level views on the pet industry over the last year. I think IDEXX does a great job of sharing probably more data than anyone else out there in terms of visits and trends. And you did more than you did prepandemic as well. For the sake of some generalists and maybe some new investors who may be on the call today, just maybe talk a bit about some of the historical growth trends in the space in terms of visits, how much is from new pets versus more frequent visits historically and sort of through the pandemic? And what's driving the faster pace of growth that we've seen now, even after we've gotten past sort of the lockdowns and the makeup that we might expect? How sustainable should we think about these sort of trends being?

Yes. Good morning, Andrew. Thank you for having us. As folks know, the market in 2020 was quite strong. Clearly, in March and April, when we were at the height of the first wave of the pandemic, there was quite a pullback as veterinary practices were really working through new workflows, curbside patient dropoff and pick up, and concern about how to keep their facilities and employees safe. But after they had worked through that, practices reopened. They were triaging on emergency and sick patient care. And then as we worked through Q3, some of the catch-up related wellness visits, and we saw that in the recovery and wellness testing occurred. So a couple of things driving clinical visit growth. Well, first, new patients, as you referenced, was about 10% of clinical visits. Now historically, you look back in 2019, that was 3%. So that's a pretty decent-sized uplift. And if you take a look at who comprised, which type of patients comprised that new patient growth, it is predominantly puppies and kids, which is the function of adoptions from whether it's breeders or from shelters, those type of things. But there are some higher level macro trends that I would just highlight and point out. We know that working from home and working, sheltering at home, we've all reconnected and reconnected, I think, in a deeper level with our pets. We may have noticed that they're limping or need veterinary care and haven't hesitated to take them to the practice and our veterinarians. The second thing is I think we know veterinarians, for some time, have been pivoting more towards a service orientation, partly as a result of product sales migrating out of the practice, especially in the specialty diet area. Yes, so we think that, that trend has accelerated and veterinarians are really focused on medical and clinical services. And then if you think about our strategy and business model as a company, it's to support the veterinarian. It's to be able to grow medical services and to be able to assess patient health status. And to treat, you first have to diagnose. So through innovations, channel expansion, partnership with our trusted advisers, subject matter experts, we work with our partners, the veterinarian, to really drive relevant testing. So we think all of those are part of it and many of what I just described is sustainable into 2021 and beyond.

Yes. There's the -- to add to that is much of the data that we report across is U.S. space and the trends that Jay have noted, where we don't have the same level of depth of insight in terms of just the structure of the data that we're able to access in international markets, but the trends we saw were global. We -- a key metric, as you know, we focus on is our CAG Diagnostics recurring revenue growth or organic revenue growth. And it was, in the fourth quarter, 20% across all our major markets. And to give you a benchmark, the U.S. same-store diagnostic revenue growth that we saw in the market was in the high teens. So we've -- we're seeing variable market growth, but these trends that Jay's highlighting are -- we've seen globally in our business, strong global recovery across our markets. And that obviously provided a nice tailwind to our results in 2020.

Great, thanks. Maybe one other sort of trend from 2020 and into '21 I want to talk about is the access to clinics or, at times, lack of. Obviously, there was a period, albeit maybe brief, where you couldn't get into clinics because of the pandemic. We keep hearing more and more about clinics being so busy that potentially, it's hard to get in to have your sales force and their selling to actually do an installation. You still added more than 4,000 premium analyzers in the fourth quarter, a lot of which were in new and competitive accounts. But you had some lighter quarters earlier in the year. How do we think about whether there's some backlog on the instrument side? What that sort of end customer demand is looking like in terms of making changes to the vendor they're using and sort of willingness to have IDEXX in there to upgrade and continue to sort of drive that installed base?

Yes. You put your finger on the 2 sort of trends to think about. One is just clinic access, which improved as the year progressed in 2020. And really, as we reported, both in Q3 and Q4, giving you U.S. numbers, but pretty comparable outside the U.S.. We visited clinics in person about 50% of the time but got very good, especially with customers who know us and are IDEXX customers. You can visit virtually. You can demo equipment and even install an onboard new solutions for those folks without being in person. And then as the -- as we recovered through the pandemic, obviously, practices were very, very busy. And so if you're trying to install a completely new clinic -- in-clinic suite, which involves workflow optimization, connectivity, the PIMS and other applications and some training, the clinic needs to be willing to set aside some time to be able to do that. Now as you saw with our numbers, Q3 were hotter and recovered from Q2. Q4, much improved from Q3. They were willing to do that. It's just a trade-off in terms of the productivity they get in adopting new technology and better solutions versus the amount of time they need to set aside to do that. So practices are -- have been willing to do that. We've seen nice recovery in the second half of the year. And we anticipate, as the pandemic recedes, we'll continue to be able to execute to more normal trend levels.

I won't hold you to it necessarily, but can you give us a sense for if you had to think about, as of today, when you expect, hey, we're going to be at more of a normalized ability to get into the clinics, just maybe more so from the, "how busy they are" perspective, any sense or when we should think about being normal? Could we get there in 4Q or early 1Q?

Yes, I mean, we're watching the data just like everybody else in terms of vaccination and how that impacts returning to more normal levels of in-person clinic visits and in-person client pet owner visits. So we have no better data than anybody else with respect to how that proceeds and how quickly the economy goes to whatever the new normal is as a result of that.

Okay. I want to maybe go into something you mentioned in the answer to the first question. But 2020, your CAG Diagnostic recurring growth was about 1,200 bps ahead of clinical visit growth, which is a couple of hundred bps faster than the sort of typical premium we see there. And it's a metric we started talking about a lot more. And as we think about the drivers, obviously, it's partly visits that include diagnostics and part sort of more diagnostics in those visits. But when we think about the sustainability there, you mentioned that being focused on services, maybe some of the conversations, I think we've talked about before, being easier with curbside drop off and all these different moving parts. At some point, just to focus on that, I think pet owners are going to go back to just walking into the clinic and having those conversations face-to-face in the clinic, just like they used to. Is that, to you -- is it a tougher comp? Is it -- or is it a real headwind where you get some potential retracement, where they say, "Hey, I know we did this last time. I don't know." How do you think about that at IDEXX? And then how do you sort of combat the fact that at some point, some of those easier conversations might go back to sort of a little bit more challenging for vets?

Well, keep in mind, Andrew, that curbside dropoff and pickup actually adds time to the visit, between 5 and 10 minutes on average. So that's -- from an efficiency standpoint, that's probably not the most efficient method, though a necessary method. As you pointed out in the set up to the question, the diagnostics growth is a function of -- there are new patients, and we've talked a bit about that. Then diagnostics are being used more often in clinical visits and then the intensity, the amount of diagnostics has also gone up. And that's a function of the many trends that I have mentioned around medical services and that's not something that we think is going to be tackled on and off post pandemic. It's a function of the fact that that's why veterinarians have got into this profession. They want to raise the standard of care, and our business model is about helping our customers raise the standard of care. We do that through innovation and we do that through close partnerships with trusted advisers. We do that through programs like preventive care, sick patient testing protocols, all of those things. So we think that, that is a sustainable approach. And then if you take a look at internationally, which we touched on briefly, that seem to be a more significant opportunity just because they're earlier. So we think approximately 2/3 of the addressable market is outside the U.S. So we're excited by that. And the pandemic and the dynamics that you described, don't, in any way, create headwinds or impede what we think that opportunity is.

Okay. And sort of related to that, I want to talk about preventive care and your program you set up there. You, at a high level, have been sort of the leader in driving diagnostic utilization, creating the wellness baselines for readings and helping sort of advance care within the vet industry. I guess at a high level, though, help me think about -- all right, a customer says, "Okay, I'm in, I want to take on this preventive care challenge." What does that ramp look like? You've got almost 5,000 customers that are participating as of at least the last update we have. It takes time for the vet to work through that customer base in terms of wellness visits, but is there really a clear ramp you can see in terms of driving compliance from their perspective? Do they get better at doing it over time? Just how do we think about, hey, we added x number of preventive care challenged customers. When [ does ] that starts really paying benefits to IDEXX?

Yes. I would answer that in a couple of different ways. We think that wellness and preventive care testing in the U.S. and outside the U.S. are still in fairly early stages. If you take a look at wellness visits, clinical wellness visits, only 9% of those visits including -- include blood work. Just 9%. Now if you take a look at the best practice, sort of guidelines from professional associations, 70%, 80% conservatively should include blood work of some sort. So it's in the very early stages of what that opportunity is. So when we -- you had mentioned almost 5,000 -- I think 4,700, 4,800 new -- total enrollees in the preventive program, but it's not like they go from being able to have 100 patients under some sort of preventive care program to, on average, 3,000 or 3,500 patients that, let's say, an average midsized practice may have. That takes time, and it takes a fair amount of time because you're -- it's an end-to-end change in how the clinic managers these type of programs. So there's new enrollees, which we focus on. And then there's existing enrollees, which we work with to ramp over time, to expand protocols, to make sure that those -- that preventive care program within that practice is successful. So again, early -- I think early stages of what the potential is, and it's a key area of focus for us because we think it ties into what veterinarians want to do from a practice-of-care standpoint. And we think we offer unique solutions to be able to help them do that.

Great. And sort of on that note, you talked about, I think it's 4,800 practices enrolled. You've got an installed base of, call it, 50,000 catalysts out there. So there's still a lot of greenfield opportunity there to get higher utilization in those wellness visits. Maybe first, when a clinic doesn't adopt, what sort of the pushback that they might give? Why might they not be ready? Is there a generational dynamic where younger vets are more willing and older, maybe, are a little bit more resistant? And then I want to jump in on sort of corporate groups and how they react as well because I think, specifically, it would make sense if they're a little bit more receptive given the need to drive growth and potentially the ability to drive sort of wide-scale top-down adoption at their basis. So just some context around those moving parts would be great.

Yes. So maybe just a point of clarification on the preventive care tie-in to catalysts. Most preventive care tests or protocols go out to the reference lab because it's more of a wellness screen. So the way we think about preventive care -- and I think, by the way, it's -- nothing prevents them from doing in clinic and getting it in the moment, but the tie-in is more towards how they practice, which is send-out. And so we think that it continues to be just a great opportunity to grow that program. It's -- and by the way, one of the ways in which we do that, if you take a look at programs, some of the marketing programs like urinalysis anywhere, where you could use SediVue or urinalysis in combination with the reference lab send-out at no additional cost. So it's a way of working with the customer, enabling them to practice in a way that makes most sense for them.

Okay. Great. And I mentioned corporate groups in the last question. It feels like there could be some news in that market as time goes on. We've had the one public player to be taken private, it seems like there could be some that are getting ready to come back in to the public markets. And I think -- like I mentioned, those players become even more acutely aware of the need to drive their own profitability, their own growth. And I think diagnostics is an important way for them to do that. Maybe just give some color and some context on the IDEXX approach to these customers versus an individual that -- you've got a reputation as certainly the premium player in the in-house diagnostics, but that doesn't always go hand-in-hand with being the lowest cost. So how do these dynamics play in a roll-up relative to sort of the individual vet clinic?

Yes. So the corporate customers, they do have a different set of needs in addition to wanting to practice good medicine at the clinic or veterinarian level. So they -- to your point, they're larger, consolidated corporate entities. They're trying to harmonize, it could be against 100 or 500 or more practices. They're focused on productivity and workflow and being able to drive more of a standardized type approach. When you talk to the CEO of corporate groups, they'll tell you that their -- the couple of biggest concerns, one is staff recruiting and retention. And the way we play into that is the veterinarians want best-in-class. They want to practice best-in-class medicine. We give them the tools in which to do that. The second thing the CEOs of the corporate groups will tell you is that they want a software and connectivity and applications, which support workflow, client communications, the productivity of their staff, and we excel at that. Those are areas in which we're differentiated and have made outsized investments. And then they want somebody who can scale with them, to your question around preventive care within corporates. That's a great example. They recognize it's an important driver of value for them in both from services, medical-services-envelope standpoint and then the profitability and economics that flow, we can scale with them. We are where they are. We can offer programs that support multiple hundred practice rollouts with tools, with client communications, with care protocols that are configurable. All those things that they're looking for, we're able to provide. So we have -- as a result of all that, we have excellent relationships and partnerships with corporate accounts.

Okay. And I want to jump in -- oh, sorry, go ahead, Brian.

Yes. And just on the importance -- I was just going to say, just on the importance of diagnostics to these practices over time. I think what you've seen in the trends recently is just this ongoing shift towards expanded services being offered by the veterinarian and our most recent metrics are diagnostics, on average in the U.S., are 16% of revenues and almost 30% of profitability in the clinics. And so as services expand, it's in areas that are relatively underdeveloped like diagnostics as parts of the revenue streams move outside of the practice and things -- in terms of things like product sales, services are more important in diagnostics as a key driver of the financial success of the practice. So that is -- as we partner with corporates, that is at the center of our relationship of developing the market, helping to generate better care, and it's a real win-win with them in terms of their own business models.

Great. And that actually is a good sort of segue into the international markets, as I want to talk about them, I think, partly because that amount of profitability, the amount of revenue generated by diagnostics is a little bit different there. But maybe first at a high level on international. We've had M&A a couple of years ago, a little bit more M&A this year, where I think there was some fear that these markets were going to get a lot more competitive for IDEXX. I think when we look at your numbers, we certainly don't see anything that indicates any sort of headwind there on the whole. But from a competitive perspective, has that landscape changed at all? Have you seen anything different there? And then I'm going to jump into sort of different pieces of that business after this question.

Yes. I mean, just a couple of thoughts there. One is our markets have always been competitive, not just in the U.S., but internationally. So from that standpoint, the M&A landscape you described hasn't changed that dynamic. The second thing is, I'd go back to say the addressable market opportunity were -- globally is really big. I mean, 2/3 of which is coming from outside the U.S.. So in terms of the opportunity before us, it's not like that's an [ equal ] one, and you're only going to have one winner. I think there's space for others to participate and do well. And we know, in those markets, that pet owners love their pets as much as we do here in the U.S., so it's no different from that standpoint. It's a little bit different stage of development. We've invested -- we think that our model and approach in terms of delivering an exceptional customer experience with the right level of commercial footprint and professionalism, the type of innovations we come up with, in some instances, are even better received outside the U.S. and it even put more of a sweet spot there. So we're very excited, and we continue to do well. Brian described some of the numbers in Q4, where Q4, all our regions from a CAG recurring revenue growth standpoint were 20-plus, so really nice opportunity.

Yes, I think there's 2 ways to look at the substantial investment that's going into companion animal health care globally. One is as a threat, if you will, and the other is as a way to accelerate market development. And we think the latter is a much bigger dynamic in terms of our business strategy. A metric we point to frequently is the percentage of times that blood work is taken on pets in a clinical visit. In the U.S., on average, it's 17% and their practice is doing it 34% to 40% of the time. Internationally, that number is 6%. So it's -- there's a very, very long runway to develop higher standards of care and actually think the growth in the industry and the participation of sophisticated investors in this area will only help to raise the tide, if you will, for all the companies. So we think it's a very positive factor.

No, that certainly makes sense that driving that 6% to where it is in the U.S. is a bigger opportunity regardless of whether you've had some players change hands. I guess, to a point one of you made earlier, a lot of the metrics we talk about are really kind of U.S. focused. So I want to talk about international reference lab a little bit. You had a little bit of noise there in 2018 and 2019 on the growth rate. At this point, you've got your new flagship lab up and running. You've got plenty of capacity from that perspective, which should help margins down the road. But again, I don't know if investors have the same sort of grip on the international landscape in terms of reference lab versus the U.S. So maybe just some color on how that market is similar or different, the mix of sort of send-out versus in-house utilization there and sort of what the opportunity is on the reference lab, in particular, internationally?

Yes. So the important thing to keep in mind when we talk about international markets is it's a group of countries. And so you really -- you don't have to look at -- in country-by-country. In the mix between reference labs and in-clinic testing, that does vary by country. In the U.K., it's more sort of evenly balanced. Between the 2, Germany is probably more biased towards reference lab testing. France, for example, if we're just talking about Europe, probably more biased towards in-clinic. So the mix is different, but the customer experience in terms of what the veterinarian is looking for, very similar. They want once or twice a day pickup. They want same-day test results or next morning by 8:00 or 9:00, they want -- so you've got to have network and [ route ] structure. You need to have the type of menu across the 13 or 14 testing categories within reference labs that give them full menu opportunities, whether it's pathology, histology or just more sort of core chemistry and hematology. So all those factors are the same. The thing that I would point out, just getting back to Kornwestheim, which we referenced. Yes, it's been very, very successful for us. We were able to open up that in May, right smack in the middle of the sort of the height of the pandemic, 50% bigger than any reference lab we have in our 80-plus lab network. We've had record -- as we mentioned in our Q4 earnings call, record number of sessions in that lab, so it's operating extremely effectively. It ties into the expansions and investments we've made in our commercial organization in Europe and fits in really nicely with the IDEXX 360 program. This is where you place capital without cash upfront on the part of the customer, but then could finance it through consumables usage of those solutions or reference labs or other monthly annuities. So altogether, we're very pleased with reference lab performance internationally in 2020, and we think we're in a good place.

Yes. And just to reinforce that, Andy, I know you've been following trends, but we accelerated -- we've had extremely high-growth in our in-clinic business internationally as we expanded catalysts, and that's been our strategic focus. But we actually, last year, raised the international lab organic growth rate to double digits, and it was in the mid-teens range in Q4, benefiting from the new investments Jay's highlighting. And one factor I'd note that we mentioned on our recent call is that actually now the majority of our instrument placements now in international markets are under 360 programs. So it is becoming -- some of the strategies we've used in the U.S. to have flexibility for customers to grow their business across modalities, which we can do uniquely well, we believe, that is being increasingly adopted by the market. And that's helping to accelerate reference lab growth in markets that may have emphasized in-clinic as their preferred way of providing care. So very encouraged by those trends and the capability that we continue to build in our lab business.

Okay. And maybe now moving to the practice management side of things, which I don't think we always talk about as much as we should given how important it is, at least for the clinic. I think IDEXX has always been one that I think has highlighted this a little bit more, talked about it a little bit more. And frankly, even willing to invest a little bit more versus competition. Yet you've got a player out there now that got really substantial share in the U.S. and international that is talking specifically about investing more in the software side of things, tying some different capabilities largely on pharmacy ordering into the platform. I guess, one, have you seen any differences in that market? And then two, how do you think about sort of these tie-ins, your willingness to look at them for yourself and to partner with players to enable kind of easier ordering, easier use of the software itself, just to make sure you continue to have, really, a competitive stack in that arena?

Sure. I mean, software and applications has been and will remain a key focus for us as a company. If you think about practices, they're both -- they're clinics or hospitals, if you will, but they're also businesses, whether they're small businesses or large corporate enterprises. So the type of tools that they need around medicine are things like clinical decision support, being able to trend results, access patient records. But also, they need to be able to run these practices like businesses. Understand charges that are captured, be able to invoice customers, all of those things. So we did extremely well in our PIMS business in 2020, 20-plus percent growth in the U.S. We -- for our Cornerstone system, for example, it's now offered on a cloud-based offering, which is a technology trend that customers, we think, are increasingly embracing for a lot of reasons. But getting to the sort of the crux of your question, we've always taken an open approach to information management. In other words, we don't think we have to be a leader in every single application within the practice. What we want to be able to do is make sure that we offer connectivity, both in the diagnostics, but the practice [ at ] large, so we do that. So we're open. And if an application provider comes to us, or customers come to us and they reached a certain critical mass, and they want to connect into our solutions, more than glad to do that. In fact, we -- our diagnostics connects into 80-plus percent of the PIMS systems out there. More than -- far more in excess of 80%. And we'll continue to do that. We think that, over time, the whole software and information management piece of the -- of our solution will become even more important for the reasons I described.

Great. [Operator Instructions] But back to it, I guess, taking a step back, clearly, IDEXX has been sort of the leader, I would say that's the dominant leader in terms of innovation in this market. We've had SediVue, the first urine sediment analyzer that was automated, SDMA, that I think really changed a lot in terms of looking at kidney disease. More recently, I think the product that's front of mind for folks has been digital cytology in terms of a new offering. To me, more of sort of a service than it is a product. But can you maybe just talk about that launch and, relative to expectations, how you view it as helping pull those customers deeper into IDEXX and differentiating yourself from some of the other players out there?

Yes. So I agree with you, Andrew. I think we think about it more as a service, too. It does have a capital component to it, obviously. I think it's just a great example of where we're able to bring unique value as a company. So if you think about the service offering, under 2 hours, you can get a readout 24 hours a day, 7 days a week, 365 days a year. So that's hard to do. How are we able to do it? One is we have over 100 clinical pathologists, that's setting aside anatomical, which are another 100 plus. So we're able to essentially provide coverage around the globe. We have a sales organization, a field service organization, lab information management systems, which are harmonized, which enable all of our labs to be connected in these things to be installed. So being able to provide this type of service is something that you need to have a global footprint, and you need to be able to have full range of capabilities, more than just the pathologists themselves but all the enabling technology capabilities, which we do. It's been -- to get to your question around how it's been received, very enthusiastically. Customers appreciate being able to get those results in real time. And we've targeted relatively -- just speaking in the U.S. right now, higher usage. So these are practices that do 5 or more send-outs given -- in a given month. We have been successful in terms of selling into existing IDEXX customers, bundling it as part of our -- completing our IDEXX 360 program, but also selling into a competitive installed base. We know that once customers start using proprietary services like that, they tend to use more of our reference lab services and other product offerings. And certainly, in some instances, we have seen that dynamic.

Okay. And maybe just one more kind of on the innovation front, both for you and for some competitors out there, I think intestinal parasites and fecal has been really a focus. You're going after this with, really, a fecal antigen approach in the lab, saying that lab is the best option here because you can get improved performance. How -- when you talk to a vet, do you think they're balancing this need for expediency? I guess, particularly in a sick pet versus well pet of doing it in-house versus the willingness to wait for, like I mentioned, that higher accuracy that you're able to get from the lab test of fecal antigen? And we see other players, like I said, going about this differently, going about it at the point-of-care to try to ease that workflow component for the vet. But maybe just balance sort of why lab is the right modality for IDEXX today?

Yes, for a couple of reasons. One is the vast majority of fecal screens are for wellness. So if you just start sort of foundationally in terms of why the test is being used, so there's not a time criticality element to it. Then the second piece is really around performance. The fecal antigen test is up to 2x -- uncovers up to 2x more intestinal parasites. And the reason it does that, it's not reliant on visually detecting the eggs. So there's a prepatent period in patient infection that could be anywhere from 2 weeks, 4 weeks, 6 weeks or more where the eggs aren't present. And what the fecal antigen test is doing is detecting the presence of the parasite through protein. And so being able to uncover more, that substantially is very significant from a clinical treatment standpoint. So we think that if you take a look at CAPC, sort of gold standard recommendations, they talk about fecal antigen plus O&P as the gold standard. It's been growing very strongly for us. I think veterinarians recognize that you uncover more and when you uncover more, you can treat more and nip these nasty conditions, nasty diseases in the bud. So that's been our approach and also removes a time-consuming and messy and unpleasant sample handling process from the in-clinic, enables the lab to do that. So we think that what customers tell us is they like that, too. They like not having their veterinarian techs have to mess around, no pun intended.

Certainly understand that aspect of it. And maybe just in the last 2 minutes, I want to talk about numbers a little bit. For 2021, you guided the CAG Diagnostics recurring growth of 12% to 14.5%, which sort of has that premium over the clinical visits back to more of a normal and more of a typical range. If we're talking this time next year, which of those numbers, when we think about utilization, utilization per visit, visit themselves, where do you feel like there's the most opportunity for potential outperformance or underperformance versus sort of what's in your guidance and what the expectations are through 2021?

We -- to start, we think it's a reasonable range. We're trying to capture the part of the dynamic and the range is capturing that. We will be lapping a big step-up in growth, right? There was an acceleration in growth. So we're trying to reflect that. We believe that the growth that we've seen will sustain, meaning the revenue will sustain. The question is, does that acceleration of this kind of market conversion to higher levels of testing continue at a higher pace? And I think that's probably the area that we would -- if there was additional upside to what we have, that would likely be where it is. That there's more revenue being generated per test and expansion of the envelope of care. I think we're trying to capture, in those numbers, the growth that we've seen in new patients and believe that, that will sustain and an expectation that there will be continued focus on the number of clinical visits per patient will continue to be strong. So again, I think it's a reasonable range. There's some unknowns here, where we don't quite know how the post COVID world -- I think we're a little less worried about a risk, if you will, that something is going to pull back. It's more about will that accelerated growth pace continue moving forward? And there are a lot of new pet owners, a lot of younger new pet owners and people who are -- and I think veterinarians who have seen that pet owners are willing to pay for higher standards of care. So we'll see how those trends play out going forward. But it's a backdrop for what we think is what we're planning for, which is continued strong growth in our business and looking to build off of the rate year we had in 2020.

Well, great. With that, I think we are out of time. I really appreciate both of you joining us this morning, and we'll be in touch from here. But thanks for joining.

Thank you, Andrew.

Thank you. Take care.