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

Good morning, and welcome to IDEXX's 2025 Investor Day. Welcome -- warm welcome to those of you here in the room at our global headquarters in Westbrook, Maine, and welcome to those joining us virtually through our webcast. I'm Jay Mazelsky, President and CEO of IDEXX. We'll be joined by our management team this morning, who'll go through a number of growth drivers in the business. And I believe we have a very informative program planned for you. Let me quickly set up the day and go through the agenda and some of the topics that I'll set up for the presenters who will follow. First, I'll speak about the company, our strategy and some of the initiatives -- key initiatives that the leadership team will highlight. I'll be followed by Dr. Hunt, who heads up our Strategy, Corporate Development and Global Commercial team. Dr. Hunt will spend some time on the sector, sector development and some of the underlying growth drivers. She'll be followed by Dr. Martin Smith, who heads up R&D Manufacturing and Supply Chain. Dr. Smith will talk about some of the depth and I think technical depth of our innovation engine and its sustainability. And we'll have a short break and come back and be followed by Mike Lane, who heads up our reference lab business, our technology-enabled service platform. Will talk about the depth and breadth of our menu as well as spotlight oncology, which sits or resides on the reference lab. Dr. Erickson will follow. He leads our point-of-care business, and will really talk about the transformation in point of care, highlight some of the innovations and the direction in that business. And then Michael Schreck who leads our customer-facing software, corporate accounts and customer experience group, will talk about veterinary software, the role it's playing with practices, both independent and corporately owned and the way they use it to support and really optimize workflow. We'll come back from the break, George Fennell, who leads our commercial team, will facilitate a conversation with Dr. Brian Greenfield of Animal Clinic Northview. Dr. Greenfield has generously spent -- agreed to spend time talking about the state of the state, in the industry and the veterinary profession and his partnership with IDEXX. And then Andrew Emerson will complete the formal part of the program as our Chief Financial Officer and talk about the finances and financial review, and we'll have time at the end for question and answers. And so with that, let me just briefly pause here and mention the safe harbor disclaimer, a copy of which is also on our website that you can refer to. And with that, let's begin. A key point to understand about IDEXX and the IDEXX business model is that there's a very significant opportunity still in front of us. We measure this in decades and at $45 billion-plus TAM. The realization requires a set of strategies. Those strategies support the sector development. Key amongst them is innovation, and we're proceeding at incredible pace and acceleration for innovation across all dimensions of the business: point of care, reference lab, and customer-facing software. Also, our model is supported by a large integrated commercial ecosystem, very much aligned with our customers' priorities with a focus on international expansion. The net result of that is a long-term durable growth opportunity with high returns, which reflect the value that we, as a company, bring from a differentiated solution standpoint. Our business strategy is very much aligned with our company's purpose. As a growth company being purpose-driven, has some significant advantages in terms of employee engagement and professional motivation amongst our team. And as we advance our growth strategy, we're committed to creating a positive and lasting impact on the health and well-being of pets, people and livestock. This morning's discussion is going to primarily focus on the Companion Animal Group because that's the largest part, by far, of our portfolio. For those of you who may be more interested in delving deeper into topics of corporate responsibility, I would refer to you the -- our 2024 corporate responsibility report. It's on our website, and you can go deeper into that. We've deployed a consistent strategy over time. And as you can see from the chart, the result of that has been a highly durable recurring revenue stream. In fact, this durable recurring revenue stream now represents over 80% of the company's total revenue. And this growth has been supported by key drivers. And this morning, we're going to speak at length about these drivers: diagnostics innovation, industry-leading multi-modality solutions, product development supported by pace and depth, fast-growing customer-facing software. Customers increasingly tell us and appreciate that we're targeting the first vertical health SaaS for animal health, and as opposed to the type of fragmented application solutions they live with today. And a direct commercial model with a focus on global expansion. We'll speak about the importance of this global commercial model in terms of creating customer partnership and intimacy and really awareness in education. But before we go into the strategies, I'd like to talk about the sector and the sector landscape as a whole. On that, we see it as very, very attractive with long-term tailwinds that reinforce the potential growth of the business. It starts with an expanded pet population and pets living longer and we'll share with you just how much longer they are living. It really is a fairly dramatic improvement, just over a generation. Younger generations of pet ownership. They now form the majority of pet forming households. And we know there's a propensity to spend for the care and well-being of their pets. Rapid innovation, which is supporting an increased standard of care. And in some cases, very dramatic. This just isn't in diagnostics. It's also in therapeutics, specialty diets, new financing models like health care insurance. And while staffing and inflation challenges persist, and not trying to, in any way, minimize those, we've seen in large measure stabilization in these trends in which to be able to build off going forward. And again, Dr. Hunt will spend some time and really go into these trends with some details and share with you some information that's new and I think pretty revealing. But for us, the key to developing the sector and realizing the long-term potential is increased utilization of diagnostics. And we're presenting this at a little bit of a different way in terms of quartiles. And in the U.S., this has grown about 50 basis points a year across wellness and nonwellness. During the pandemic, it was a little bit faster than at 50 basis points. And the key thing to keep in mind is it doesn't just happen. We have to work as well as others have to work, hard at creating awareness and education and a change in belief system to drive diagnostics utilization. And this is where our focus on innovation and commercial engagement come into play as enablers to really support best practice standards within the veterinary community. And our strategy to take a step back is multifaceted. We try to lift all boats, independent of where the customer may be today in terms of diagnostic usage left and right, we believe that based on education and partnership, all of our customers would benefit from a patient care standpoint in using more relevant diagnostics testing. The other thing that we have learned over time is by focusing on those customers on the 2 -- in the 2 right quartiles. They tend to have a very strong belief system as a foundation in the importance of diagnostics, the role it plays in achieving their missions, and can be inspired through education and new innovation to perhaps become the top 2% or 5%. So very -- I think that's an important insight. But independent of where the practice is today in terms of overall use of diagnostics, the foundational role of diagnostics to their mission, I think, is very well understood amongst practice owners and veterinarians and their staff. And this chart really speaks to the evolution of the mix of -- in favor of services over time and diagnostics being a direct or a indirect driver of about 80% of the activity within the practice, therapeutics and vaccines and specialty diet prescriptions and all of those pieces. And these increases have helped the clinics grow appreciably over that time period. About 15 years, you can see, they've more than doubled. So diagnostics is a multiplier to growth. You've seen it's grown faster and has accelerated from period 1 to period 2. And it's not surprising. You can't treat unless you diagnose. When you treat, you often need to provide follow-up monitoring. You can't assess the health status and establish a baseline of a healthy pet unless you first diagnose. So all this foundational role is a key part of the practice themselves. But the other piece to keep in mind about diagnostics as a category within the practice is it's a profit center. In fact, it's the largest profit center in the practice as a percentage of EBITDA basis. And it represents almost 1/3 of the total profits. And it's not surprising if you think about it. Not only the -- most veterinarians capture the cost of the test, but also their activity and the activity of the staff and the procedure itself. So the key takeaway, the key thing to keep in mind is about the alignment of diagnostics to practice economics. Not only is it good medicine, but it's also good practice economics. And so there's this alignment between what the practice is trying to do and the benefit we're trying to achieve in terms of growing diagnostics utilization. So now let's get into the strategies. How do we drive this diagnostics utilization. How do we really drive, over time, this increase in relevant testing use. And it starts with R&D. This is a view that of spend, we keep $1.2 billion fixed. You can see the 20 years and then the last 7 years, and if we project on a go-forward basis 4 plus years. So we are recognizing that there's some inflation in here. We are accelerating our spend as a company. And we believe that the role of innovation to address our customers' most challenging clinical or medical problems as well as business problems justified. And we invested -- and Dr. Smith will speak to this, this morning. We invested in instrument platforms, biomarker assay, discovery and development, customer-facing software, getting all these pieces to work together in a seamless way. It's my experience having been in product development for decades, both in human health and now animal health is that the competencies, the deep competencies we developed across all these disciplines is very rare, if not unique. Companies tend to be good at instrument development or software, but not all 3. And we've had to develop these deep competencies and capabilities in all 3. It very often is impossible to take a solution that's been developed for human health. It has the wrong economics, form factor, easy use, reliability. Everything about it doesn't necessarily translate in the right way for our environment. And so this is something that we have focused on and have really built up, we think, what are sustainable capabilities. But the other piece about this, even though quantity of spend has a quality all its own, is we look to be efficient and disciplined. And one way we're able to do that is we get leverage across reference hubs and point to care. We develop a biomarker, for example, SDMA, for our reference lab business, and over time was able to successfully port it to our catalyst in point of care. But that's not it. We also focus on making sure the investment support disease states because after all, patients are more than a test, they come in sick, we need to be able to provide a portfolio of testing solutions that support that. And these disease states tend to be billions in addressable size, which is important. And we look to be able to create sustainable differentiation in each. So in the case of vector-borne disease, for example, we -- it's a performance category. And through peer-reviewed research, it supports that our tests are performed at the highest levels in the marketplace. We also, through SNAP Pro, was able to bring our rapid assay testing into the IDEXX Diagnostics ecosystem. In the case of Parasitology with fecal antigen and detecting the proteins, we detect these earlier and more of them. Far in advance of being able to see in ova under the microscope. In the case of renal, we started about a decade ago and said, there's got to be a better test than creatinine. And SDMA demonstrated that we could detect kidney impairment, functional impairment much, much earlier than SDMA, and save lives in the process of doing that. But we didn't stop there. We also -- FGF-23, which is for therapeutic delivery and Cystatin B, which is acute kidney injury and being able to distinguish between progressive and stable kidney disease. More recently, we have focused on oncology. We've been in oncology testing and interpretation and support for decades. But it's mostly been on the later stages of disease. The patient comes into the practice, they're already clinically symptomatic. The outcomes are more challenging, in that case. So being able to detect earlier is super important. So I'm excited to share with you some updates on that. We're not standing still. But before we do that, I do want to set the table and talk a bit about the overall TAM or opportunity. But the thing to keep in mind is you're going to see a number of different charts this morning that describes the size of the opportunity. This is the broadest possible one. It's global. It's cats and dogs. It's in aid and diagnosis as well as diagnostic screening. So $2.5 billion is what we peg this opportunity today. Just to quickly go through the definitions of how we think about aid and diagnosis versus screening. Pretty intuitive based on the name. In aid and diagnosis, pet comes into the practice, have symptoms, clinically symptomatic, consistent -- consistent with cancer, but it could be other things. The veterinarian wants to run a test or they have validated through our test or others that the patient has cancer. They begin a therapeutic path and then want to be able to monitor it through remission. That's an aid and diagnosis. Screening, just like the way it sounds. A healthy dog may come into the practice, needs to be screened because of age or they may be an at-risk breed, and we offer a test and plan to offer more tests to be able to screen. The thing to keep in mind about cancer, as we talk about it this morning, it is very complex in and of itself and relative to some of the other disease states that I shared with you. The heterogeneity of cancer types and subtypes, the biomarker discovery piece that you need to be able to identify cancer with the type of performance that our veterinary customers are looking for makes it complex. And by the way, this is the type of challenge that we at IDEXX, our scientists and medical folks, just love. They rally to it. That's why they're here. It's the spring in their step. And so we're excited to be able to support that. So an important question, obviously, is we've had canine lymphoma in the market, less than 5 months now. How is it doing? And what's the reception been? And it's been -- I can tell you, it's been outstanding. Customers tell us that we've hit the sweet spot. It's an important part of the tool set that they feel that they need and that pet owners want. Today, we're about 3,400 practices who have submitted a test to us. What's very gratifying, from my perspective, from our collective perspective, is that 15% of these test submissions are coming from competitive customers. And it's gratifying in the following sense. Veterinarians are saying, it's not about who my primary reference lab provider is. It's about the patient and providing the best possible care for that patient. And if it comes from the other guy across the street, then we're going to send it to them, even if it requires breaking workflow. Maybe having a vial of blood sent to them and the second vial of blood sent to IDEXX. So we think that, that strong validation in addressing an unmet need and one we're excited to be able to support. Performance has been outstanding with some more data. We've been able to say it's 99% plus specificity. So very rare false positives. Very often when we get a call from a veterinarian and she may say, I suspect this is a false positive. We'll recommend waiting, testing 4 weeks, 8 weeks down the road. And in a handful of cases, they have come back as positive. The patient really developing lymphoma. So it's an important, I think, validation of the quality of the test. We've been able to achieve our published turnaround times of 2 to 3 days. We've priced it for inclusion, and we'll talk more about what that strategy entails this morning. And as a result of spending time with key opinion leaders, and European and international customers, our field organization, we've made the decision to launch this internationally in the coming year. So more to come on that. It's very exciting. But that's not all. I'm excited to announce the expansion of the IDEXX cancer diagnostics panel to also include mast cell tumor detection for canines, and one other test yet to be announced. All coming in the -- in 2026. Mast cell is a very common type of skin cancer in dog, just to give you some background. It's part of the immune system. And when the mast cell becomes cancerous, it tends to manifest itself as a lump or nodule on the skin of the canine. Now between canine lymphoma and canine mast cell tumor, those represent over 1/3 of the most common type of test. So now we have a panel, which from a critical mass standpoint starts to get there. And there'll be one other test that will continue to be able to grow. And because of the technical achievements in biomarker discovery and development and testing platforms, we're very excited to say, we think the performance is going to be excellent. We're still working through that. It will be the same type of turnaround time of 2 to 3 days. And our intention is to be able to price it around where we are today. So keep it accessible, keep it as part of this broader commercial sector development strategy. And we're still on track to be able to achieve the majority of common cancer types of dogs as part of a broader panel, and that will be achieved in 2028. So again, very exciting. This is something we know that our customers -- so you'll see some data in terms of how veterinarians think about mast cell cancer types and its prevalence and the key part of the practice. Now it fits very much in with a broader tool set, integrated tool set we're developing, where you can screen and then through inVue FNA testing for lumps and bumps, really interrogate that suspicious lump or bump or nodule and determine whether or not it has mast cell cancer. And we'll spend more time this morning. We'll talk about exactly what that looks like from a clinical workflow standpoint. Keep in mind, mast cell cancer, it's a little bit different than lymphoma cancer in terms of the ability to treat it among -- out of the general practice in the following sense. If you have a test that you can detect it and validate that, in fact, that pet has cancer. In vast majority of cases, the veterinarian can treat it. Now they'll treat it through surgically remove the cancer itself. They'll then perhaps send biopsy, send it in for histopathology. Pathology interpretation, if it comes back positive or you get some additional grading information, they may decide at that point to administer chemotherapy. But there's a lot of oral, oral type of chemotherapy solutions on the market. So you can do that out of the general practice. You don't have to send that pet to a specialist. And that's important that you'll see some data in terms of why that's important because there just aren't enough specialists, oncologists out there to support the 1 in 4 dogs, 1 in 5 cats who develop cancer over their lifespan. Customers will also tell us, it's not just about the test, they want access to our specialists, internal medicine. Pathologists, when they get a difficult case, they want to be able to get -- run some ideas, offer somebody who's been a practicing, oncologist is board certified. We offer that. It's free of charge when you use our diagnostics, it's something that they value in great measure. And as we develop this cancer testing and care management sector or opportunity, we believe that that's a key differentiator for the company. So let me now take this inVue solution, maybe frame it as part of our broader point of care portfolio. And we're in vision quest to really transform point-of-care testing. And Dr. Erickson is going to speak to that at length this morning. And we're going to do that through innovation. And sometimes, innovation takes the form a menu extension or expansibility for Catalyst, for example, over the last year, we introduced SmartQC, pancreatic lipase, cortisol, we call that technology for life. Sometimes we do it through completely new platforms like inVue Dx, which takes very well, high volume, characterized use cases and really automate it. We eliminated the slide perhaps saved 10 to 20 minutes on that front, establishing highly consistent, reliable results. And we're able to bring these, I think, transformational point-of-care analyzers to the -- to our customers because we follow important first principles that we've come to appreciate and realize and through experience know how important they are. First principle is performance. It should be as good or better than what you find at the reference lab. And better often it comes down to you have a fresh sample like in the case of urine and in SediVue. Secondly, we design for technology for life, menu extensibility, so that when a customer buys a solution a week ago, it has no more feature or capability than the customer who bought a cat 1 as an example or inVue as time passes, 10 years ago, an important first principle. Number three, we recognize that veterinary technicians are not laboratory technicians, that they have a set of responsibilities this wide. And they can't take 20 minutes to prepare a slide and do it consistently as well as do all the other responsibilities that they're tasked with doing. So we design our system from a sample preparation and management standpoint for load go. And then fourth, the fourth first principle is it needs to fit within the workflow, be integrated, capture, be able to run the test, capture the test results, invoice the customer through PIMS and really support it. And when we do that and do that well, we see really remarkable uptake and receptivity in the overall amongst our customer base. Now there may be some of you in the audience who are highly perceptive -- visually perceptive, and see our fifth premium analyzer on the slide. That's the IDEXX MultiCue Dx. It fits all those first principles. All those first principles, it's been designed to fit all those first principles. There's a strong connection in a clinical and workflow sense to what I've just described, what's important to our customers. And we're making really good product development progress on it. Now today, I'm not going to go through the testing category or the launch plan, except to say we're making solid progress. And as we get closer to launch, we'll provide some additional details. But what I will talk about is inVue Dx because it's on the market today and doing extremely well. As you know, and as part of our Q2 earnings call, we upped the forecast of 5,500 units as a result of customer enthusiasm. Consumables are tracking very well to expected usage. We're getting very good feedback on it. Menu expansion is increasing really on a bimonthly, every 2-week basis in terms of continuing to put out menu extensions in ear cytology and blood morphology. And then by the end of the year, we'll have 5 needle aspirate testing for lumps and bumps. So really a very robust menu that supports cytology across the spectrum. And Dr. Erickson will speak to how we're thinking about future menu extensions and just sort of sizing what that opportunity looks like. I will say, just from an economic standpoint, as Andrew talks about our growth algorithm and how we think about the benefits of a new instrument launch, they're very substantial. There are direct economic benefits in terms of revenue from the instrument and the consumables. And then there are indirect benefits in terms of multiplier from them. It gives us access to competitive accounts. George will tell you that it helps the productivity of the field selling a suite this big versus this big. We know that there's also as part of our IDEXX 360 and other programs, it allows us to extend the relationship we have with customers. So lots and lots of benefits. It's a big deal when we launch an instrument at IDEXX, and it really drives productivity just beyond the clinical and medical contributions we make. And so as we size out what this looks like from an opportunity going forward. We finished 2024 at 147,000 placements. We think the opportunity on a global basis is many factors larger than that. In the U.S., for existing platforms, even though it's our most advanced market in terms of diagnostics usage, still tons of opportunity. Internationally, you can see the darker colors on the slide, even more so because in some country markets, it's more embryonic. And then, of course, for the new platforms, inVue and MultiCue Dx, we broke that out. Those are more greenfield opportunities and very, very sizable. So we're excited. We feel like there's tremendous runway to transform point of care from a technology and bringing labs to the clinic. Let me now quickly segue into talking about the reference lab business. This is a technology-enabled service business. It's a key modality for us. It's a surprisingly complex business to get right and to run. It involves deep science in terms of developing biomarkers for them. It's a lot of work behind that. But if you think about just being an extension of the customer's practice, which is what they want from us and keeping the complexity behind them, it's very complex from a full value chain standpoint. Picking up the sample, at the right time, bringing it to the right lab, running the right test, tracking it through the reference lab, providing the result. So from a transportation and logistics standpoint, you need to have very deep capabilities to be able to do this well. And again, what -- the way the customer wants to think about testing capability is we're just an extension of their practice. We need to keep the complexity back office and front office to just deliver a pleasing experience. And so this is a business that requires, in addition to being logistics and transportation experts, a heavy investment of IT and information management system that involves automation and digitization and really being able to deliver millions of results in a timely way without the errors. And when you do that well, it's reflected in the type of statistics you see in front of you, where from a sample pickup and processing accuracy standpoint, four 9s plus, four 9s plus, which is outstanding. And then from an NPS, world class is 50. We're deep into world class level. So there's deep advocacy and support for that. Now our customers tell us, it's not just about the reference lab, and Mike Lane will speak at depth to that this morning. It's also about the software that ties it all together, that integrates it, that helps support workflow, that optimizes workflow, that supports team collaboration and productivity, that enables digital communication with their clients, that really has a technology stack in an application portfolio that is designed and developed for animal health as opposed to sort of the fragmented islands of applications today. We're very proud that we are increasingly seen as the first company to develop a vertical SaaS technology stack for animal health from the ground up. We continue to drive it. It's a key area of investment focus for the company, with increased emphasis on the pet owner engagement application, a digital connection with the younger generations who want to interface with the practice and their veterinarian in that way. And again, Michael Schreck will spend some time this morning talking about that and what that looks like. So just maybe to wrap up the innovation piece. This is a picture we've shown this in the past. I think it's a good depiction of how we think about innovation. It starts with the customer, in our case, the veterinarian, his or her customer, the patient and the pet owner at the center of everything we do. They expect from us as table stakes, best-in-breed modality solutions, point-of-care and reference labs. And so we endeavor to deliver that. But they wanted all to work together. They want it to be seamless, supportive of their workflow, supportive -- giving them the flexibility to practice in a way they want to. We layer on additional complementary layers of innovation, big business model, for example, pay-per-run and auto replenishment is a great example of that. The net result of that is what you see on the right-hand side of the slide. Customers stay with us, which is a part of our growth algorithm. Our Brand Promoter Score at the IDEXX level, so that's all-in is deeply into world-class levels. And that product availability number, the way to think about that through the customer lens is, it allows them to focus on their patient. They don't have to worry about is the IDEXX test -- can I get the IDEXX test? When is it going to come to me? Is it going to be accurate? This allows them to really focus on why they're in business and what they do best. So as important as innovation is, we believe that the commercial investments that we make and our commercial ecosystem is equally important. It's really about the partnership with the customer establishing customer intimacy, being aligned with their priorities, supporting what they want to get done. And we know there's no better way to do that than to be able to understand their practice needs, calling them frequently, have a relationship, be trusted, be subject matter experts when there's a question, to create awareness and education and support. And the only way to do that is through commercial density. It's by assigning a few enough accounts per account manager, per our professional service vets and field service representatives so that they can visit these practices frequently. It's -- they're not only there when they want to try to sell something. So that's what we endeavor to do. We've had 9 commercial expansions in the last 4 years. As you know, as part of the Q2 earnings call, I announced 4 more, 3 of which are international, 1 that includes really expanding what we're doing in the U.S. due to the size of our portfolio. And some of the opportunities that we see, these will be in seat, ready and really moving up the productivity curve strongly by January 1 of this year. I'm often asked, so you do this and how do you know when to do it? Or what are some of the unanticipated perhaps benefits of that? And what we find is when we call on customers, they use more diagnostics. So they have a propensity to use more of our entire portfolio. And these are some numbers -- updated numbers that we've shared in the past, but not just for the U.S. but also for Germany and Australia, New Zealand. And what you see is they're growing strongly, the ability to really use all of our portfolio. And Michael Schreck, as part of the software piece, will give you a different cut at it through the software lens. But I think the message is through the customer perspective, it all works better together. It gives them the flexibility to practice, how they want to practice, and it's a key element of our growth strategy. Now in response to this, we often get the question, well, aren't you cannibalizing reference labs or point -- will you bring out a new point-of-care analyzer? Does that result any decrease in reference labs? And it doesn't. I think our data and experience shows that testing begets testing. As you use more point of care, you use more reference labs and vice versa. And part of this comes down to those customers on the right-hand side of the chart, had a strong belief in diagnostics. It really comes down to -- they have this belief system. They realize this is a foundational role. It helps them achieve their practice and patient objectives. And they use more diagnostics. And when you test in clinic and you want to get a quantitative viral load, you want to biopsy a tissue and send it in for histopathology and pathology interpretation, you use more reference labs. The other thing that I would point out is that wellness testing is done in reference labs. And wellness testing is a big thrust for the business, for their profession for a lot of reasons. It engages and anchors this client experience, it's good medicine. You find things that are seemingly not there. These are healthy pets that, in fact, aren't healthy, so by doing wellness testing, you really drive the reference lab business also. Now this is new data. This is an interesting cut. What this shows is that our corporate customers, and corporate customers more generally are doing more wellness testing than the sector as a whole. This is U.S. data. This is where we have excellent PIMS. So the mean, blood work inclusion and wellness visits, it's 12% in the U.S. You've seen that number repeatedly, and you'll see it this morning. For the corporate account customers, 3 out of the 4 quartiles are above that 12% U.S. sector average. And in fact, some appreciably above. The top 5 corporate groups, these are very big practices. They're doing wellness testing and blood work inclusion in the high teens, low 20s. And they do it -- there's a couple of reasons that they're doing it. One is they see this as a growth strategy. It's just much harder to grow through acquisitions for a lot of reasons, including the cost of money, the availability of clinics. So they're looking to really grow organically. The second thing is they can operate at scale. Once they decide to do something, it's not like just pushing a button and it can go from 0 to 1,000 clinics overnight, but they can move much faster at scale once they decide that it makes -- it's good business and good medicine. And we believe IDEXX is extremely well positioned to support these customers through our programs, through our field organization. Wherever they are, we are, and we can bring expertise and campaigns and program educational support to help drive this change and help the customers achieve these objectives. Now let me take this up a level and tie together the cancer strategy and wellness testing, which is such a key priority for the industry as a whole. The way blood work inclusion -- remember, about 50 basis points a year historically has grown. It's really from left to right. The clinical -- those patients that come into the practice are medicalized. About half those patients, 47% of those patients undergo some diagnostics test. Sometimes it's just heartworm or a fecal test and a much smaller subset of that 12%, that's the number I showed you previously, have blood work inclusions, so chemistry and/or hematology. So it's been hard work. We've done it. Others have done it. We've lifted the boats. It's 50 basis points a year, blood work enclosure. There's an opportunity to change this paradigm, to go from right to left. And you're going to see some very interesting data from Dr. Hunt and Mike Lane this morning that just shows how veterinarians and pet owners are thinking about cancer testing. It's very motive. It resonates with them. They recognize based on age of the dog, breed of the dog, there's much higher risk. It's something that they're willing to pay for. We priced it for access, the turnaround time, means that they don't have to wait weeks to get a result back. So we think that this is a potential game changer. And as we go from canine lymphoma, a single test as part of the panel, to canine lymphoma and mast cell tumor detection, one other one next year, the value proposition gets more and more compelling. We develop a critical mass and have a chance to grow faster than that 50 basis points. So this is -- when we talk to customers, I spoke with a number of corporate groups personally, this very much resonates with them. They get it, their medical staff. It's very supportive. They -- obviously, they have to get the pieces in place, but it's a key part of our strategy. So let me now begin to tie some of these pieces together. As a result of the sector tailwinds that I shared with you, the innovation strategy of solving our customers' most challenging medical as well as business problems, a commercial model that's a partnership model of subject matter experts, trusted by our customers, aligned with their priorities. We believe that there's an enduring opportunity for long-term attractive growth. And we pegged this out 20, 25 years. That's how we -- compelling, we believe the opportunity is. From a sector opportunity, we peg the growth possibilities or opportunity in a high single digit. It's a little bit faster internationally than the U.S. as you might suspect based on some discussions, but that IDEXX -- and Andrew will go through the growth algorithm, 10-plus percent opportunity, again, faster internationally in the U.S. and Andrew will sort of build this up through the different building blocks of the growth algorithm, and that we can grow faster as a result of our leadership position, as a result of our differentiation and the contributions that we deliver on behalf of the customer. So now let me tie it all together before handing this off to Dr. Hunt, which is I'm going to end where I started, which is a key point to understand about our business at IDEXX and our business model is that there's a significant opportunity still in front of us. We measure this opportunity in decades at $45 billion plus. We realize that it's just not going to fall out of the sky, that we have to develop it, our strategy to develop it the next 3 hours, you're going to hear about innovation and innovating faster than ever before. Across a very broad spectrum of the business: point of care, reference lab, customer-facing software modalities, a commercial model, which is second to none, which is trusted by our customers, which has the time and capacity to visit our customers, to understand the opportunities that are aligned with their priorities to support their practice objectives. With an eye towards -- a clear eye towards expansion in our international geographies, which is much earlier in development than here in the U.S. The net result of that is a long-term durable growth opportunity with high returns, reflecting the value and differentiation that we as a company bring. So with that, I'm going to turn the podium over to Dr. Hunt, who's going to talk about the sector and some of the growth drivers in the sectors and the opportunities as we see it. So Dr. Hunt?

Thank you, Jay. Good morning. It's great to be here with all of you again. If your family is anything like mine, pets are probably will win in your lives also. Some of you may remember my germane at Ishka, who has been part of the family for years along with our 2 cats. This year, our family had a new addition. My 23-year-old son, who lives in a tiny apartment in New York City adopted a cat named Nola. He's been wanting a pet of his own since he left the house because as he told us, my life doesn't feel complete without pets. That deep connection between people and their pets is what makes what we do at IDEXX so special. The pet health care industry is at a defining moment. As Jay shared, innovation is expanding what is possible in care and pet parent expectations are rising faster than ever. And IDEXX is playing an important role in this transformation. What sets us apart is our proven ability to develop the sector end-to-end from breakthrough innovations to belief-building education to driving global adoption, all grounded in deep customer centricity. Cancer is a clear example of that. It's globally resonant. It's globally relevant, emotionally resonant and it makes wellness a shared priority between clinics and their pet families. To understand where this industry is headed, let's first look at the strong underlying sector trends that are shaping future demand, starting with one of the most relevant, the evolving pet population. The surge in pet ownership over the past few years has reshaped the veterinary landscape. Historically, pet -- the net pet population in U.S. has grown at about 1%, a trend that we expect will continue into the future. But between 2020 and 2022, millions of households added pets, driving a 12% increase in the total U.S. pet population. We saw similar adoptions pretty much everywhere around the world. These pandemic era pets are now aging, and they are entering life stages where their health care needs rise and diagnostics move from occasional, nice to have to essential. And at the same time, pets are living longer. We now get more time with our pets, more years, more memories, every pet parent wants more birthdays. We track this through a longitudinal data set of about 2 million pets who have access to medical care in the U.S. The average life spans have increased by nearly 2 years since 2020. Those extra 2 years translate into a 22% increase in the diagnostic spend over the life of a pet. And while cats may not have 9 lives, it is wonderful to see that 18% increase in their average lifespan. That said, cats are masters at hiding pain and disease, and they will of suffer in silence. Without regular checkups and diagnostics, the conditions can often go unnoticed. So when cats do come in, they are often very sick. Feline visits, as you can see, have been increasing. Still last year, only 30% of the cats came in for a health visit compared to 70% of dogs, leaving a tremendous opportunity to provide the care that cats deserve. Practices are adapting from cat-only clinics to low-stress environments, the industry is shifting to meet the needs of the feline patients. This is signaling a broader mindset change that will result in better care and stronger health outcomes for cats. Given the unique needs of feline care, IDEXX has a purpose-built portfolio that is designed just for cats. It is focused on areas that matter most for the feline biology, such as diabetes, hyperthyroidism, feline-specific infectious diseases. Some of you may be surprised to learn that 1 in 3 cats, 1 in 3 will develop some sort of kidney disease over their lifetime. Anyone who's had a cat with kidney issues knows how hard it is, both for the cat and for the pet family. And that's why innovations from IDEXX like SDMA, Cystatin B, FGF-23 are so important. They help a veterinarian assess the full kidney health status of the pet. That commitment to cats also carries through in our future innovation pipeline. We're developing new ways to help veterinarians detect and manage feline conditions earlier and more effectively. Our goal is to help veterinarians practice the caliber of medicine and experience that they aspire to provide. Over the past 6 years, we have seen modest but meaningful growth in the total number of clinical visits, primarily driven by the growing pet population. What lies ahead because of the population growth could shape the sector in new and important ways. We're entering a phase where aging pets and rising expectations will be shaping the next wave of demand, and clinics will need to be ready with the right tools and capacity to meet that demand. There are 2 important things for us to take away from this data. As you can see, as pets get older, diagnostic intensity increases. It's just like us humans. Aging brings greater complexity. The light blue bars are the average diagnostic spend for U.S. practices. What's most compelling is the dark blue. That represents the top 1/3 of clinics. These clinics are doing 50% more diagnostics than their peers across all age groups. That tells us 2 things. Firstly, there is real and replicable headroom to elevate care across the industry. And second, consistent use of diagnostics not only get -- ensures better health outcomes, as Jay highlighted, it facilitates better business performance. And this opportunity is only accelerating as the pandemic era pets, that large cohort of pets enter into higher care stages of life. Most of these pets are now entering or in adulthood when diagnostic usage starts rising sharply. Let me first explain this chart. The bars show the clinical visits by age group, and the green line is the number of -- the percent of visits that include diagnostics. This is a snapshot in time, but it's an ongoing phenomenon. By 2030, we expect to see 30% more senior visits and 20% more geriatric visits. As the clinic visits increase, so will the need for diagnostics. The next wave of demand is coming. Clinics who plan and build capacity now will avoid the stress and burnout that they experienced during the pandemic. Let's go a level deeper and look at one of the most common diagnostics. It's a foundational diagnostics that is run in clinics every day, blood work. Why is blood work important? Since pets can't tell us what's wrong with them, blood work is a critical tool to understand what could be going on inside the body and to uncover any hidden health issues. We're seeing a steady increase in how often blood work is run, 50 basis points every year. But even with that momentum, only 1 in 5 pets coming in for a health checkup get the benefit of this powerful diagnostic tool. The right side shows a much sharper story. Blood work use climbs steeply with age. As blood work moves from occasional to more routine, it unlocks a substantial medical value. IDEXX-led research based on samples from 220,000 patients demonstrates that clinically relevant abnormalities are found in seemingly healthy pets at all ages. The rise of the -- the rate of findings increases dramatically as pets get older, as they become mature and senior, and it reinforces the medical importance of regular preventive screening. And this was before we introduced Cancer Dx, which will only add to the value of wellness screening. The good news is the younger generations already place high importance on proactive wellness. Millennials and Gen Z like my son are reshaping what it means to be a pet parent. These younger generations now make up the largest segment of pet owners. For them, pets are unquestionably family, inseparable from their daily rhythm of life. They expect care that is more personalized for their pet. They're more engaged in health care decisions than any of the generations before. With greater access to data than ever before, they seek advice, share stories and build beliefs online. That shared belief is powerful. And when that belief meets the medical recommendations of the veterinarian, they're ready to say yes. The data shows that the main barrier to diagnostics isn't acceptance. It's whether the conversation happened at all. There is a huge variation in how often veterinarians will recommend diagnostics based on their assumptions on the pet parents' ability to afford, but acceptance varies little by financial status. Most pet parents, even those on tighter budgets, are willing to make trade-offs, skip vacations, delay purchases in order to take care of their pet. They prioritize their pet's care. This is a fundamental mismatch. It's not a demand problem. It's a supply problem. The opportunity is clear, equip veterinary practices to offer diagnostics more confidently and consistently because diagnostics are the engine behind the system of care. They not only enable early detection, they set care in motion. Up to 80% of a practice's activity can be tied to diagnostics, including medical services, therapeutics and nutrition. For example, a routine blood test can help uncover the onset of early disease, leading to follow-on testing, prescription diet and better health outcomes. Or SediVue might reveal a urinary tract infection, resulting in targeted treatment and faster relief for a suffering pet. This is where IDEXX is highly differentiated, combining diagnostics, software and communication tools to help clinics operate as one cohesive system. As health care needs rise, operating as a cohesive connected system is going to give clinics the one thing that they need most, time. That was the idea behind our landmark Finding the Time study. We extensively mapped workflows in real practices and found that by using better tools and smarter processes, clinics can free up to 2,000 hours annually. That is equivalent of a full-time veterinarian without making a single hire. That time can be reinvested in patient care, client conversations or just simply easing the load on busy veterinary teams. So the question becomes, how do we unlock that time? With innovation, innovation plays a critical role, especially in busy practices where every minute matters. That's why our latest innovations are designed to make that time count. inVue Dx with its load and -- slide-free load and go workflow, IDEXX VetLab Station at twice the speed, ezyVet, giving time back to clinicians to focus on care. Vello, modernizing pet parent engagement and reducing no shows. Individually, each of these solutions save time. But together, they create a productivity flywheel that enables clinics to do more with the teams that they have. And it's not just about efficiency. Our innovations elevate the level of care that veterinarians can provide. Cancer is a great example for -- to look at on how that comes to life. Cancer is by far the leading cause of death in adult dogs. Many of us, myself included, have felt the impact of this unforgiving disease firsthand. By the time cancer is diagnosed, it is too late, which is why early detection matters so much. Our global research shows that veterinarians around the world are open to adding cancer screening as part of their preventive care protocols. And when they recommend it, majority of pet parents will say yes. Now we know this won't be an overnight shift, but building beliefs and growing categories is what IDEXX does best. We've done multiple times before with vector-borne disease, parasitology and renal health with SDMA. Now it's time to make cancer screening the global standard through belief, education and access. The case for screening becomes even more compelling when we look at breed-specific risk. 13 of the most common dog breeds, that is 13 million pets in U.S. alone, are at an elevated risk of lymphoma and mast cell tumor starting at the age of 4. All breeds have an elevated cancer risk around age 7. Detecting cancer earlier opens doors to more options and better health outcomes. But to bring this benefit to more pets, we also need to rethink how scale is -- how care is delivered at scale. As Mike Lane will share, there simply aren't enough specialists to meet demand. That means that general practitioners will have to lead more through -- more of that cancer journey. This shift is necessary, and IDEXX is helping make it happen. This is how. It starts with a strong clinical foundation, and we're not doing that alone. We are working with specialists and key opinion leaders to define new standards of care. We're also equipping general practitioners with the tools and confidence to diagnose and manage cancer care effectively. That includes AI-enabled diagnostic support, clear step-by-step case pathways and communication tools to help guide families through difficult conversations. We're not just launching a test panel. We're helping transform a care model. Cancer is a defining example of how diagnostics can shape care and the broader opportunity to elevate diagnostic utilization across all categories is significant, especially across the global stage. While there's still ample opportunity for growth in the U.S., international regions represent the largest untapped opportunity. What has fueled growth in U.S., rising care standards, stronger economics, growing clinical confidence with tools and technology can be replicated internationally. We have excellent product market fit and our reference lab infrastructure meets the needs of these regions. And we are tailoring our commercial strategies to address local needs and dynamics. We see this as an IDEXX playbook of sector development and the engine behind the long-term TAM expansion that Jay referenced earlier. And in addition to innovation and education, it is powered by consistent presence. It doesn't matter where in the world you are, relationships fuel growth. And the best way to grow relationships is through presence. Today, many of our international sales territories are too large to fully support customer success. As Jay highlighted, we are making focused investments in 4 regions, 3 international and a modest expansion in U.S. These are investments in our people, processes and productivity, all designed to deepen relationship through presence. When we show up, we help clinics grow and their commitment to IDEXX strengthens. That link between presence and performance is very clear. These examples from 3 international countries make the case. When we engage consistently and directly with customers, clinics grow faster. Why? Because we're not just selling products. We're building trust. We're uncovering needs. We're helping teams get more from the diagnostics in their care protocols. This kind of partnership leads to better care for more pets around the world and helps us deliver on our shared mission with our customers. Veterinary care is entering a new era, and IDEXX is helping shape what comes next by enabling health care teams to scale care, meet that rising demand without compromising quality, equip, enable clinicians to do more, especially in cancer care, extending our reach to more clinics, more regions, more pets and helping clinics deliver the modern personalized experience that is more aligned with the expectations of today's and tomorrow's pet parents. This is how we deliver strong sustainable growth by advancing care for pets and expanding access globally. Now I'll invite Dr. Martin Smith to share how we are accelerating the innovation that powers this growth for both our clinics and the sector.

Thank you, Tina. Hello, everyone. I'm Smith. I head up R&D and operations here at IDEXX. And it's my immense pleasure today to stand here and represent the many amazing teams that contribute to our innovation agenda. Over the past 3 years, we have more than doubled the rate of new product launches. We've taken out 10 months on average from our development project time lines. And at the same time, we've built capacity so that we can work on multiple breakthrough technologies simultaneously inVue, cancer, MultiCue. Now my job today is to take you through some of the ways in which we delivered that performance, tell you about some of our capabilities and the insights that we've built that are setting us up for now and as we go into the future. Now you've seen slides like this before. This is a snapshot of some of our recent launches, and there's several examples of accelerated innovation on this page. I draw your attention to the bottom left, Catalyst Pancreatic Lipase, cortisol, SmartQC, 3 launches in less than a year, not 1 launch a year, 3. This is the kind of innovation pace we are striving for. Jay showed you this slide earlier. I've modified it slightly. I got MultiCue on there. It's no surprise that an increase in investment accelerates innovation. And as Jay pointed out, we focus our innovation investments into key core competencies that he describes. We're also building capabilities. We're installing new and breakthrough and state-of-the-art infrastructure, and we're building more and more insights as we build ever greater returns on investments for our projects as we go faster and faster. Now we've always had great products at IDEXX, breakthrough technologies throughout the years, as Tina described. But we want more. We create problems for ourselves on purpose. We ask specific questions. How can we go faster? How can we do more at the same time? How can we extract more from that invested dollar? This is continuous improvement. And like all good continuous improvement programs, you need a framework. I describe some of those framework pillars excellence and culture, the right leadership, the right teams, the right organizations, all established to deliver our mission. We've installed from scratch in some cases, areas like data science and AI, molecular diagnostics and also manufacturing technology capabilities, all propped up by a world-class engagement campaign. We strive for the best place, the best people with a culture of and, metrics and meaning, performance and people, results and recognition. Metrics drive behaviors, behaviors drive our culture. This is a go-get team that come to work every day to win. Additionally, we invest, as Jay described, in tools, those breakthrough and capable state-of-the-art technologies that help us solve our problems everyday. Now I'll talk about a couple of those in a few slides, biomarkers, pilot infrastructure. And then, of course, no surprise, everything is propped up and underpinned with process. The active product development or new product development called NPD is really, really complicated. Multitudes of teams coming together for a singular mission launch. You need a disciplined program management capability, really, really robust processes that are continually revamped and the introduction of risk assessments so that we're able to identify when risks may occur and actually mitigate them before they cause delay to our projects. Process underpins everything that we do, absolutely a key. And one of the themes we are spending a lot of time on and Tina about this is bringing that exquisite customer intimacy into our new product development, NPD processes. Now we operate with a process what's known as quality function deployment. And within that is a process called customer critical to quality, CTQ. This is identifying and translating those parameters that customers expect from our products, performance, turnaround time, quality, consistency, precision. And the active CTQ mapping allows us to take those parameters of interest and importance for our customer directly into our NPD programs and even to the level of the factory floor. What do I mean? Those parameters that the customer expects from us, we can actually translate directly to the levers and knobs that we turn on our manufacturing equipment, even the raw material tolerances that we need to produce our products. Really, really powerful early engagement of the customer, driving our requirements down to the factory floor. Now I mentioned quality. A key dynamic in the delivery of quality is another area that we've invested quite heavily in known as design for manufacturing and assembly, DFMA. DFMA is a way in which you can organize workflow ease, manufacturing simplicity, reduction of error, reduction of rework, you design for manufacturability, you design for serviceability, you design for inventory plan, you design for spare part management. It actually drives the quality that we're expecting. Now let me give you an example here. If you look into the middle of the page, you can see the gray box there, that is our Catalyst One instrument, an absolutely outstanding instrument. It operates with somewhere in the region of 71 months mean time between failures. That means for almost 6 years, I think over 6 years, it doesn't break down. Used every day multiple times, world-class exquisite at performance that you would expect with the types of instruments coming from IDEXX. Now there's 650 components in that instrument, motors, circuit boards, wires, engines, chassis, you name it, screws. They're all in there, you get the picture. Now let's roll on to inVue. Through DFMA, that instrument is built with 150 components. That's DFMA at its zenith. With just 150 components, we control quality. We really reduce rework. We increase our yields and we deliver the quality that is expected through that CTQ program that I described. And not only that, DFMA and the reliability and consistency that we drive in production allows us to deliver those unprecedented availability time lines that Jay talked about. We operate with 99% on time to delivery for customer requests. Customers never, ever have to think about where their product from IDEXX is coming from. Now another way to accelerate is with the identification and the installation of what I'll call technology platforms or technology flywheels, really straightforward concept, identify and invest into a technology base, you do it and invest once. And then you use it as a flywheel going forward for the downstream product developments from that, reusing those technology bases. And we've got a variety of these technology platforms here at IDEXX that we use over and over again for our product development. I list a few here on the left-hand side, hardware, components, consumables, chemistry, algorithm designs. We can reuse these technologies over and over again for our product developments. Again, another straightforward example. ProCyte One into inVue. We've reused a variety of technologies that were once developed for ProCyte One that we now redeploy within inVue. About 40% of the embedded software is taken from ProCyte One and into inVue. We have the same central processing unit and control centers from one instrument to the next. The same design convention, chassis, layout, again, from one instrument to the next. We do it once, and we don't have to spend time doing it again. This type of reuse of technology platforms is one of the ways we were able to bring as a product development project, IDEXX 2 years faster than the project that was ProCyte One. inVue is really leveraging the technology reuse, as I've described, really, really key enabler for our pace. Perhaps the biggest breakthrough that we've had over the last 3 years is what I'll call a biomarker engine or a biomarker factory. The installation of this capability has slashed unbelievable amounts of times from our delivery. And remember, biomarkers feed the pipeline for the assay content that we deliver. Really, really breakthrough capabilities. And like all good engines or factories, I can depict it in terms of unit operations. I can show within that process where I'm using tools like AI, driving greater insights, faster decision-making, more accurate analysis. I can also identify in this factory where I use automation, speed up the process, higher throughput, really, really important. Now we're showing here a Cancer Dx biomarker engine as an example. But before I go into some of the step descriptions here, let me just describe for you what a biomarker is. A biomarker is a molecule, could be a protein, an antibody, a metabolite, a chemical, piece of RNA, piece of DNA, all these types of biological molecule content. And what we do in discovery, we take a healthy sample and an unhealthy sample, a diseased sample. And we're actually looking at the profile differences between those biomarkers. A biomarker in disease may be upregulated, get more of it or down regulated or it may change. And we're looking for those differences between healthy and disease. Now I mentioned samples. You don't get any process without samples. Samples are the lifeblood of a biomarker campaign. And we're really fortunate here at IDEXX, and I think this is a key differentiator. We have hundreds of thousands of samples going through our reference labs every day. I can wake up in the morning, check my e-mail. Hey, there was a positive lymphoma in Australia yesterday. I have the opportunity to get that sample right there. In effect, our 80-plus reference lab network across the globe is our biobank. It's unbelievable the power that, that drives for us. This is a cancer example, as I've described. So this second step is unique to cancer diagnostic biomarker discovery. It's what I'll call primary cell culture. We've worked out how to take the progenitor cells that are the last moment a normal cell before it turns into a cancer cell through a process called transformation. We can literally raw watch that once normal cell transform to cancer. And we can take that cell and we have single cell capability and sensitivities with our analytics. I can take that normal progenitor. I can compare it to the now transformed cell, and I'm looking for biomarker differences between the 2. This is not a dog limping into a clinic with Stage IV cancer. If I take those samples from that patient, what am I going to get? I'm going to get biomarker discovery for late-stage disease. As Tina described, we think that's too late. We want literally the earliest stages of disease onset, and that's what we're doing with this primary cell capability that we've created. It's our true belief, and you'll hear this again from Mike Lane, that early detection, and we're delivering that plus early treatment equals better life outcomes. Now once a biomarker is identified, we have to create the reagents that can see that biomarker in a relevant test and also in relevant test formats. Stage 6 here, you can see reagent marker formatting. I show a 96-well plate here, a higher throughput format, the types of content that we will put into reference labs. We validate through clinical study. That's how we generate our claims. You saw some of the data that Jay described, came out of clinical study and then into manufacturing. Absolutely breakthrough capabilities that we've invested into here and are now delivering slashing years out of our original campaigns now down to months. Now we're really fortunate here at IDEXX and that we have direct co-location of R&D and manufacturing. It certainly makes my job easier in what I do. I can actually spend time with my teams under the same roof, sharing the same rooms, the same laboratories in some cases. We have that deep organic synergy and connection propped up with the types of process that I described. Now new product development, NPD, yes, it's about the cool science. I described some of that with biomarkers. But at its heart, the definition of new product development is the creation, validation and turnover of a capable manufacturing process. That's it. That's my definition of new product development. And why do I say that? Sometimes we have to make millions of these tests a year. I got to know that Lot 1 and Lot 147 3 years later are working identically the same quality, the same consistency, the same yields, the same cycle times, the same cost. Really, really important that we have that capability. So that organic and process drive that we have and we can enjoy here with our co-location, that's great. But we take it further. In our R&D labs here at IDEXX, we've invested into what I will call pilot line infrastructure. We have recreated and have direct and exact simulants of manufacturing processes in our R&D labs. What does that mean? It means that I can develop directly for performance with the product development and at the same time and in parallel, design for manufacturability. In parallel, I don't have to do that in a sequential way. I'm saving that time. It's a pace and scale accelerator for us. And it doesn't stop there. We can supercharge our pace if we choose under the right conditions. We can actually launch from those pilot lines and not go through the steps of formal manufacturing, which we could actually do later on. All of the pilot lines we have here at IDEXX are on our quality management system and subordinate to our ISO standards. Now Jay showed a version of this slide, it's talking about our test modalities and franchises, the areas that we concentrate on. Knowing our areas of concentration is also an accelerator to innovation. Why so? You can build deep, deep bench specifically for the franchise, the right scientific skill, the right medical skill, the right product management capabilities, the deep external networks that drive our credibility into the marketplace, taking at pace unmet needs, translating them for our product development, taking those unmet needs and through a CTQ process that I described, turning those unmet needs into requirements that we drive in our product development programs. That's pace. But as you'll notice, there's differences between these areas, and we have to be very careful to make sure we devise skill and capability along those lines. So you see parasitology here, very, very interesting and complicated. often really, really difficult sample types. Very common that we're handling fecal samples here. And as you can imagine, the range and shape and size of different samples from a stool standpoint is very, very variable. And not only that, we've actually got to drive those tests into a very high throughput format. So you've got to build a test that can work in 96-, 384-well plates. And there's also pet behaviors like Coprophagy that can actually confound results, and we have to mitigate against those as well. And by the way, an extra doughnut for anyone who can tell me in the break what Coprophagy means. When you look at oncology, deep overlay between oncology and hematology, expertise sitting together, working together, driving outcomes. Jay showed, I also showed that biomarker discovery for this type of complex disease is complicated. We don't have one biomarker that says everything about a single type of cancer. We have panels. Those panels come together. They work in tandem and drive a singular output of result, absolutely essential. And then, of course, the biobank. You can't do anything in cancer without well and qualified samples that are diseased and understood what disease level and aggression and then certified healthy samples. You need that absolute certainty as you drive an oncology campaign. And I've already described our network of reference labs that act as our biobank. Now this is a slide that gets me to work every day. We've always had great technologies at IDEXX, as I've described. What we're talking about here is impact. I'm really, really fortunate in what I do. I get to work on the coolest technologies every day. I get to see those turn into manufacturing products, and I get them to see them being used very quickly by our customer base. But seeing the impact that, that drives from an organic revenue standpoint is really, really meaningful. You can see we do always and will have revenue contribution from existing and historic technologies. Again, breakthrough items, always providing revenue for us. But we're on the cusp now. We're translating these new innovations, these transformational innovations into oversized growth opportunity. Transformational products, cancer, inVue, MultiCue, transformational in that they are new to industry, new to clinic, new to IDEXX and in sometimes creating new medicine. Absolutely the reasons we, as innovators come to work every day. We want to know and see the impact. Now it would be remiss of me to give a science and technology talk at a forum like this without giving a little bit of a nod towards data and AI. It's our strong belief here at IDEXX that winners in the data space need to have a variety of attributes available to them. First, large and very clear access to diverse and historic databases. I already mentioned the hundreds of thousands of samples that go through our reference labs, and we've been collecting that for decades, giant data lakes of relevance. You need to be able to collect and deliver new data every day. And again, what I just described happens every day, not in the reference lab alone, but also in the clinic. We're collecting all of that data. And in collaboration with our customers, we're also accruing PIMS customer and pet parent data as well. And then lastly, the place in which data and AI-derived insights are consumed. It's no good having all this data if you then can't use it, see it and engage in it. And we have that, too. Michael Schreck will talk about VetConnect PLUS and Vello. These are the chosen forums that our customers enjoy and how they consume their data inquiries and AI-induced portals. Now the purpose of this slide is not to go through it, but just to describe to you a little bit of how we're thinking about our execution here. Like all good NPD, you asked the question right at the beginning, where does the technology come from? We're going to make it? We're going to buy it? We're going to co-collaborate. You can do the same in data science and AI as well. In the blue bars here, I describe the tech, the types of tech that we're going to use and map it across the application use cases that we have, cancer, inVue Dx, there's plenty of others as well. and the types of outcomes that we want to drive for ourselves internally and also for our customer experience and enhancement. A total mapping of tech to use case, sequenced and on a road map, knowing that is again another enabler for pace. Now I do have to show one example. Tina described this. Mike Lane is going to describe it as well. What we're talking about here is Cancer Dx, the test completely enveloped in a data and AI ecosystem, driving further, as Tina described, the episode of care for cancer management with the GP. Think about all this data that we have and being able to, in real time, ask questions of it through AI tools. Set me up with a patient summary before the visit. What sort of things do I need to be looking out for? The patients arrived, I test, I get a result. What do I do now? Is this what I expected? What sort of therapy should I have? How do I think about dosing? When shall I see the animal again? You send the animal on its way, and now we're into monitoring. What are the clinical signs I should be looking out for? What should I advise the pet parent on to look out for? Is fluffy drinking, eating, et cetera, et cetera. These are the data -- derived data questions, we can have DVMs in the moment during their episode of care ask of our data sets. And then lastly, and Tina described this, too, there are going to be occasions you have to refer to an oncology specialist. So let's ask the data in the moment and in real time to prepare a referral package of meaning, of consistency and thereby driving efficiency. And at the same time, get that same package, but written in the way that a customer or a pet parent will be able to understand. This is a test enveloped with a data ecosystem changing and transforming cancer care management. So hopefully, you've got a little bit of an insight on how we do things, how we've been able to deliver new-to-world transformational content at record pace. We're innovating across a variety of areas from biomarkers to instruments to AI and data science. We really do drive the customer intimacy into our process as I hope you've seen, even to the level of the factory floor. This key integration between R&D and manufacturing is absolutely essential. And of course, we utilize customer relevant data pools. All this driving insights so that we're able to deliver today and go faster and faster into the future. So with that, we'll have Mike Lane next. He'll describe to you some of our reference lab details and also take you through our oncology strategies. But before then, we'll have a 10-minute break. Thank you very much. [Break]

Good morning, and welcome back from break. It's a pleasure to be here with you this morning to share an update on our global reference laboratory strategy and as we pursue the tremendous opportunity that both Jay and Tina shared and to update you on our enterprise oncology strategy and the significant progress that we're making. Today, I'll share an update on our global reference lab capabilities that we've been developing for over 30 years. I'll share how we take a customer-first approach to innovation and service delivery, focused on a 5-star customer experience. As Dr. Smith described, I'll share what this acceleration in innovation means to the reference laboratory and to our reference laboratory customers. And I'm really excited to share an update on Cancer Dx and our broader oncology offering, just a handful of months since the introduction of Cancer Dx with lymphoma. And then I'll translate this into the results that it's delivering. IDEXX Reference Labs has 3 reinforcing layers of competitive advantage that we've been building for 30 years. At the foundation is a focus on operational excellence with the customer experience at the core and performance excellence across a global network. We have a track record of delivering highly differentiated, innovative new menu. And these build on each other. In partnership with our customers, we have a tremendous opportunity to advance the standard of care, elevating patient care. We take a technology and talent approach to innovation. For example, with 800 medical specialists that are around the world and support our customers in a follow the sun network. This is all supported by highly talented teams, leveraging differentiated lab technology platforms, all part of a fully integrated IDEXX diagnostic and software solution. It begins with a global network. Delivery service requires dozens of day labs that operate throughout the day as an extension of the veterinary practice. Regional labs that operate throughout the night to deliver results by next morning by 8:00 a.m., especially for sick patient testing. Core labs, like I've shared before, Kornwestheim and other core labs throughout our major markets that deliver the full breadth and depth of our differentiated diagnostic menu. Global network and logistics, automation and technology. Each of our laboratory departments utilizes a combination of automation, digitization and AI to deliver the most comprehensive, timely diagnostic results and customer experience. And this is what I mean by exceptional customer experience. Here, you see the Net Promoter Score for reference laboratory that Jay mentioned, 64, well above a world-class level. We work every day to deliver a 5-star experience from courier pickup through chain of custody through our logistics network and laboratory network through to diagnostic results and interpretation and support for our customers. This supports, in addition, 97% customer retention rate. You may be wondering why is the VetConnect PLUS Net Promoter Score here even higher at 71. VetConnect PLUS is foundational to how we deliver the customer experience in the reference lab. Just take a look at this picture with the veterinarian and the pet parent, how easy it is for the veterinarian to share the diagnostic results to share high-resolution images, to share interpretation support so the pet parent can lean in and make the best decision for their loved pet. VetConnect PLUS is one of a kind, combining and unifying diagnostic results across modalities, point of care, reference lab. And from a reference lab perspective, VetConnect PLUS plays an added role. If you think about reference lab services, different than point of care, with point of care, we're delivering results in the patient window in that 15-minute window. With reference labs, results may be due later the same day or next morning or during the next day or even in the next couple of days. And so we keep our customers updated every step of the way to ensure their confidence, to ensure they can keep the pet parent updated, to ensure they can care for that pet in their hands. They can add on through our ecosystem, additional testing, while that sample is in flight, already left through our logistics network, add on additional testing. This is a seamless end-to-end digital workflow that we're building in VetConnect PLUS for reference labs from ordering to results to support and communications with the pet parent, embedded in the practice management software, but also in the palm of the staff and the veterinarian to know where those results are. The ability to trend and compare these results in patient context, access support for interpretation. This is how our customers consume our differentiated diagnostic experience across a very broad set of diagnostic categories in the laboratory that you see here from chemistry to urinalysis and microbiology to cardiology. We have about 65,000 practices, customers around the world, about 27,000 you see represented here, this is a U.S. view in the gray bar. Almost all the U.S. veterinary practices access something, some testing from the IDEXX reference lab. But you can see that they've adopted the breadth and depth of this deep menu at different levels, highlighting the tremendous growth opportunity that we have in front of us. And these diagnostic categories, combined with some of the differentiated assays that we've already talked about today and that we'll continue to add, form integrated disease franchises. As you heard, renal health, parasitology, vector-borne disease. And of course, we're doing it again with oncology. We're just beginning to serve the $11 billion TAM that you see represented by just these 4 disease franchises. So let's take a closer look at renal health. We've been at this for over a decade, adding SDMA to every chemistry panel at no additional charge. That was intentional. Monitoring kidney health is so important that by design, we set a requirement to be able to add it to every panel. Adding Cystatin B to sick patient panels. Additionally, by design, being able to do that at no additional charge. FGF-23, forming an integrated disease franchise, well recognized by veterinarians given the importance that they know of renal health as well as highly respected key opinion leaders. Here's a quote I'll read from Dr. Larry Cowgill. IDEXX has been at the forefront of kidney health through diagnostic innovation for the past decade. Parasitology, redefining as well what's possible. This is a huge diagnostic category. the largest therapeutic category, essential for dog and cat, well, non-well diagnostic testing. And we fundamentally redefined fecal testing. For over a century, the method had been to look through a microscope for eggs. And whether or not you're looking through a traditional microscope or a more automated instrument microscope today, if you're looking for eggs, you're going to miss infections. And thanks to what Martin shared, we just changed the game by looking for the protein. Didn't need to find the eggs. Sometimes the eggs aren't present or visible based on the infection cycle. And you can see here discovering as much as twice as many infections as a result of this breakthrough technology. And you can also see the acceleration in innovation with flea tapeworm in '22, Cystoisospora in '24, and we'll be introducing our next biomarker to this already highly differentiated panel next year. So let's turn now to oncology and Cancer Dx. Sadly, cancer impacts so many pets, the pet parents that love them and the caregivers, general practitioners and specialists that are caring for them. I've had 4 dogs, 2 have died from cancer. We estimate 1 in 4 dogs, 1 in 5 cats will develop cancer in their lifetime. And you can see on the right side, by far, cancer as the leading cause of death in adult dogs. As Jay noted, this tremendous disease burden represents a $2.5 billion TAM. Jay also highlighted how excited we are about the progress with the start with canine lymphoma, the performance, the price, you may be asking yourself, how is it that IDEXX is able to deliver such an accurate, affordable actionable, available diagnostic screen in aid and diagnosis. I think Dr. Martin Smith just highlighted some of the elements. I'll amplify on that from a reference lab perspective. When we innovate, we don't just innovate on the biomarker, as you just heard. We innovate on the platform. And we do this in the reference laboratory as well. At the point of care, you see our highly differentiated platforms in the form of Catalyst or inVue or MultiCue, SediVue. Similarly, we have highly differentiated platforms in the reference laboratory, leveraging our expertise in instrumentation, automation, information technology, multiplexing, reagent manufacturing. And by design, just like we did it with SDMA, just like we did it with Fecal Dx, Cystoisospora, by design, we have developed a platform for cancer that allows us to have a cost profile in the lab to have an affordable price to the vet and in turn to the pet parent that allows us to deliver the turnaround time. by design and allows us to expand, as Jay noted, and extend and scale globally with the addition of Mast Cell, as you heard, in 2026 and one more and simultaneously leveraging our global network, beginning the expansion internationally in 2026. Now importantly, Cancer Dx and inVue Dx FNA, starting with Mast Cell are highly complementary. They're not only highly complementary together, and I'll show in a moment the integrated disease protocols, diagnostic protocols between themselves. But inVue Dx is also highly complementary with our global pathology network. We have hundreds of pathologists globally, 6 continents. They form a follow the sun network. In the inVue installed base of customers, when they want additional information, personalized support, perhaps a deeper set of information from a board-certified pathologist, at the touch of a button, they'll be able to send those images 24/7, 365 to an IDEXX pathologist to support them. This combination of an elegant load and go point-of-care instrument with a personalized pathology service is going to be a multiplier for reference lab growth. So here's the integrated diagnostic protocol that I referenced. And importantly, this empowers the general practitioner to diagnose, to screen, to rule in, rule out, to access the broader services from the reference laboratory of anatomic pathology and histopathology and clinical pathology, to characterize to then further monitor. This is tailor-made for the general practitioner by design. Why is it so important? Jay referenced this, so important that we empower the general practitioner. And why is this particularly important for mast cell? Well, mast cell is top of mind right up there with lymphoma. These are the top 2. When you ask a veterinarian, what are the most commonly diagnosed cancers that we're dealing with in the practice, general practitioners say mast cell, lymphoma. mast cell often forms, not always, sometimes it's not visible with a lump or bump, but often can form with a lump or bump, which results in a very concerned pet parent, I've been one of them, that's in the practice and the general practitioner has a lot of questions coming at them about is this lump or bump okay? Is it cancerous? Is it benign? So they get a tremendous amount of questions. And with this integrated diagnostic protocol that I shared, with IDEXX Cancer Dx with Mast Cell, inVue Dx FNA. They can bring peace of mind to that pet parent very quickly. They've got the tools at the general practitioner level. And if they identify something of concern, they'll identify it early when something can be done about it. There's another reason to empower the general practitioner. There just simply are not enough oncology specialists. If you take a look at the U.S. line here, hundreds of oncology specialists, and we estimate millions of dogs in this case, living with cancer. Of course, there are cats as well. The disease burden just cannot be fully served by the oncologist. And we're empowering the general practitioner with the tools, the technology, the support to help address this disease burden. And they're eager to do it. And our goal is to support them every step of the way. Now here is the good news, actually, the great news. Earlier detection improves patient outcomes. Mast cell is a great example. If you look at these studies, if found early, a single tumor, 6 -- these are median survival times, prognosis, 6 years or more. But you can see as the disease progresses to 5 years to 2 years to just a matter of months, early detection will improve outcomes. And pet parents know this. In fact, we surveyed them. 94% agree with this. And why is that? Well, they've seen it. They've seen it in human health. They've seen it with breast cancer and colon cancer and melanoma and lymphoma. And they're ready to have this conversation with a general practitioner to include cancer screening as part of the wellness testing in the care for their pets. There's even more good news. When caught early, especially, it's highly actionable. Here, you see existing therapeutic approaches in blue for lymphoma, green for mast cell. In addition for mast cell surgical removal is certainly one of the steps, highly actionable. And in purple, you see relatively recent innovations in therapeutics. And we fully expect based on the advancements in diagnostics that we're bringing that we'll see an acceleration in therapeutic innovation. The outlook for this tremendous disease burden is very positive to be able to improve it and improve the outcomes for patients. Now when you take these first-in-world innovations, you combine it with affordably priced by design, menu that's cost effective. And you add in the motivation and the emotional connection that pet parents have with cancer, we believe there's an opportunity to unlock the preventive care opportunity. And you can see that on the slide on the left, we've been making steady progress. But if you look at the demonstrated best practice of the top 30% of practices, they're including blood work and wellness visits at 2x the level, highlighting the tremendous opportunity in front of us. And when we partner with practices to advance wellness care as well as non-well with these new-to-world innovations, we support their growth. And when our customers grow, we grow. And when we grow, we have high profit drop-through based on this capability that we've developed in reference labs, and we have steady margin expansion. And importantly, it allows us to reinvest in the strategies that I've shared with you today, customer experience, innovation, technology and talent. In summary, we are inspired by the unmet needs of pets around the world, the pet parents that love them, the GPs and the specialists that care for them to continue to advance this highly already advanced capability that we have in global reference laboratories. As a technology-enabled global services platform, this -- what we do is not easy. But every day, we are focused on a 5-star customer experience from courier pickup through logistics and laboratory network to results and interpretation and personalized support. And we see Cancer Dx and our broader oncology offering as ready to unlock this preventive care and utilization opportunity. In closing, I'd like to thank the thousands of reference lab employees and more broadly across IDEXX that are supporting our customers every day, working alongside them and in turn, supporting the delivery of the innovation, the customer experience and the results that I've shared today. Thank you. And I'd like to now introduce Dr. Mike Erickson. Dr. Erickson leads our point of care business, and will share the tremendous innovations that we have happening at the point of care and the value that they bring our customers.

Okay. Thank you very much, Mike, and good morning, everybody. It's great to be back with you to share an update on our point-of-care diagnostic strategy. So today, I'll build on what you've heard already this morning, focused on how we're harnessing transformative innovation to shape the future of point-of-care diagnostics and drive growth together with our customers. I'll talk about our new-to-world point-of-care platforms and how they drive step function boost to diagnostic quality and to practice productivity. I'll talk more about how we've significantly accelerated Catalyst Technology for Life menu expansion. I'll also take some time to spotlight innovations in our diagnostic imaging and our rapid assay businesses, which stand alongside VetLab as key parts of our overall point-of-care solution suite. And finally, I'll describe how all of this innovation fuels significant growth and value creation for our customers and also for IDEXX across multiple lines of business. So I always like to anchor the conversation in the importance of point-of-care diagnostics as viewed through the practice lens. So I want you to picture that beloved family pet being rushed into the practice. The pet and its human pet parents, they're in deep distress. And of course, the pet can't explain what's wrong. The pet can't tell the doctor where it hurts. And in this moment, the veterinarian is facing a cascade of high stakes questions. What's making this pet sick? Should I start aggressive therapy now or should I wait? Is it safe to go into surgery? The doctor needs trusted diagnostic answers, and there is not time or capacity for complicated messy sample workflows. The wrong call in this moment could lead to delayed treatment or bad outcomes. Our IDEXX point-of-care diagnostic solutions bring our world-class reference laboratory performance standards right into this N equal 1 practice environment that I'm talking about, providing the veterinarian with trusted answers in real time and the confidence to take the right medical action while the pet is still in the practice. And we're arming practice teams with in-clinic diagnostic capabilities that they've never had before, packaged into small footprint, high-technology platforms with high accuracy, elegant load-and-go workflow, complete end-to-end integration across the suite and into the practice ecosystem and technology for life platform expansion. And we deliver to these very high standards that we've set all around the world, more than 500,000 times every day and on behalf of more than 0.5 million practice team members. And we continue to drive this kind of execution across the business. Last year was an exceptional year for premium analyzer placements and record placements continued again into this year, setting a new high watermark in the second quarter with strength across VetLab, including competitive Catalyst and led by inVue Dx with 2,400 placements in the quarter and elevated expectations for 5,500 placements this year. Our global installed base of premium analyzers now exceeds 155,000. And this combination of high-quality placements, expanding menu and utilization and very high levels of loyalty together drive our consistent double-digit growth in our VetLab consumable annuity stream. And we see a lot of runway to continue propelling this kind of growth. We have line of sight to over 400,000 premium placement opportunities around the world. Collectively, this represents a more than 3.5-fold expansion over where we stand today. And we know how to go after this kind of opportunity with our commercial team members working in the field side-by-side with our customers in their practices, helping them to adopt these innovations into their practice protocols. And we just keep setting the bar higher, shaping the future of point-of-care diagnostics together with our customers. This includes new-to-world platforms, purpose-built by IDEXX to transform the intended category of veterinary diagnostics. So talk a little bit more about inVue Dx here shortly. With respect to MultiCue Dx, I'll simply say that you can be sure it will address diagnostic categories of high relevance to our customers in a manner that sets new performance standards and it will be completely additive to our existing VetLab suite. Now across these platforms, we continuously bring forth new clinically relevant test menu and big leaps forward in the software and workflow. And all of this that I'm describing, all of this innovation is only possible because of our deeply integrated IDEXX innovation and manufacturing platform capabilities that you heard Martin talk about a little bit earlier this morning. And we aren't slowing down. We're accelerating. Take, for example, technology for Life on Catalyst. We have a multi-decade track record of bringing new IDEXX developed test menu to Catalyst. And we've significantly accelerated this strategy, as you heard Jay describe, delivering 3 new valuable additions to Catalyst in the last 12 months, and we have a full road map looking into next year and years beyond that. Now you may be asking how does that create value? Well, you have to start with the fact that the Catalyst is the most versatile and high-performing analyzer platform in the sector, providing 42 parameters and 6 preloaded clips across chemistry, electrolyte and immunoassay testing. If you don't have Catalyst, this array of testing modalities requires 2 or 3 disparate instruments. And then we keep expanding this menu of high-value specialty slides like pancreatic lipase. And all of this drives more reasons to test on Catalyst, more utilization, more recurring revenue across the entire installed base and with every new placement. It also drives more competitive Catalyst placements, more second Catalyst placements and deep customer loyalty. And when we roll out a new test across our large Catalyst installed base, we consistently see rapid uptake. The latest example of this is Catalyst Pancreatic Lipase. We're not even 12 months into this launch and already more than half the customers are running this test. Our next major new test for Catalyst launched just last month, and that's Catalyst Cortisol. This has been our #1 most requested test for Catalyst. It addresses a critical customer need for accurate in-clinic measurement of cortisol in dogs, particularly low cortisol, what's called Addison's disease, also known as the great pretender because it presents with these nondescript symptoms like vomiting and lethargy. Addison's is life-threatening. Doctors do not want to miss this diagnosis. And if it is diagnosed, it requires urgent treatment. So now with Catalyst Cortisol, veterinarians can confidently rule out or diagnose Addison's at the point of care, and they can also manage high cortisol cases, what's known as Cushing's syndrome. Now like pancreatic lipase, when we add cortisol to Catalyst, it makes Catalyst an even more valuable platform. And in fact, new menu on Catalyst has contributed to a more than doubling of platform economic value since we launched Catalyst One around a decade ago. This is the power of technology for life, realized through the incredible extensibility of Catalyst. Our newest platform, inVue Dx, brings this same type of extensibility to the massive category of in-clinic cytology. And as I've said before, multiple times, when it comes to our new platforms, we have zero interest in being incremental. Our aim is to transform the category, and that's what inVue Dx is doing in cytology. Cytology has been done the same way for well over 100 years, requiring manual preparation of a glass slide. We made the giant leap to eliminate the slide, and we built a platform that sees cells like never before. And it's hard to overstate just how game-changing this is when compared to conventional cytology. inVue Dx's advanced optics and AI unlock deep cellular insights and drive actionable diagnostic interpretations. Unlike microscopes, inVue Dx is constantly learning with AI updates coming every 2 weeks. And because it sees more, one run on inVue Dx provides the diagnostic content equivalent of fully preparing, staining and reading 10 to 20 glass slides. And there are literally hundreds of variations on how to make slides in the practice. There are no standards for this, and that can drive a lot of variability. And finally, when slides are made, they're stained with repeated dips into a jar of stain that's used oftentimes for days or sometimes weeks. And we've looked at this. We know these jars can be rife with contamination like bacteria. With inVue Dx, there's zero contamination, sample preparation and the workflow is 100% consistent every time. This drives diagnostic quality, and it drives repeatability, which is really important for things like rechecks when you want to be able to compare the results between visits to see if there's an improvement in the patient condition. And of course, going slide-free also eliminates all the time-consuming work of actually making the slide. It transforms the workflow into an intuitive load-and-go experience with accurate results in around 10 minutes and no specialized training required, 10 to 20 minutes saved per patient. Well over 90% of the hands-on time freed up for more valuable tasks. This is like giving a practice 1 to 2 hours of technician time back every single week. For a corporate group with 1,000 practices, this is like handing them 50 veterinary technicians that they can deploy into revenue-generating activities. Now inVue Dx, as I mentioned, addresses a large array of applications, blood morphology, ear cytology, fine needle aspirates or FNA coming later this year and wide potential for future expansion. All of this ensures that there are multiple complementary reasons for using inVue Dx. The vast majority of our customers are running both ear cytology and blood morphology. Our overall utilization and revenue per instrument are tracking right to our assumptions with FNA still to come. And looking through a longer-term technology for life lens at everything that you see up here on the screen, there are over 150 million cytologies being done today all around the world that could benefit from this breakthrough technology. I mean you think about that, the sheer amount of trapped capacity from all of that manual slide making is -- it's pretty staggering as is the opportunity to really elevate the quality of the diagnostics being done. Now I mentioned blood morphology because inVue Dx is an integral part of the VetLab suite, it was purpose-built to pair hand in glove with ProCyte to provide the industry's first comprehensive hematology assessment at the point of care. This combines blood morphology with the complete blood count or CBC. Now this is an area where, again, the challenge of doing blood morphology with a glass slide, it's just been a barrier to the standard of care, quite frankly. But with inVue Dx and ProCyte, there's no glass slide, and this is completely automated. And in fact, over 95% of the morphologies being run on inVue Dx are run together with CBC on ProCyte. And I should also add that demand for ProCyte Dx and ProCyte One is very strong all around the world with high attach to Catalyst as part of the VetLab suite. And specifically for ProCyte One, as you can see on this chart here, we beat our stated 5-year placement goal by a full year, and we've just kept growing since then. Now the coming addition of FNA will add another reason for using inVue Dx. Today, there are well over 12 million FNAs being done annually. We know though that, that dramatically underrepresents the true opportunity. Most pets when they come in, have multiple skin masses. We know that only around 10% get aspirated. Again, it's the challenge of doing FNAs on a glass slide. It's a limit to timely insights that could potentially leave cancerous masses undetected and delay access to life-extending therapy. inVue Dx FNA provides actionable insights on every FNA sample with an initial focus on the identification of mast cell tumors. This is the top concern when it comes to skin masses and where early detection is just super critical. And for complex cases, as Mike Lane referenced, FNA on inVue Dx will also offer an optional one-click digital review by an IDEXX board-certified pathologist with additional insights being integrated back into the patient record in as little as 2 hours, no glass slide required, and this also drives incremental revenue in the IDEXX reference lab. So let's just -- let's take another quick look at that mast cell cancer workflow that Mike shared. Whether mast cell cancer is detected by Cancer Dx as part of wellness screening or prompted by a concerned pet parent who discovers bumps while snuggling with their pet at home. In either of these cases, the GP faces this critical question of which of these masses is cancerous. And that's where inVue Dx automates the identification of mast cell tumors. It eliminates the guesswork and with that one-click pathology review option that I mentioned. And usually, as Jay spoke to, treatment entails surgical removal of the mass. They may opt for histopathology or additional treatment and then Cancer Dx provides ongoing monitoring for recurrence. Across all of this, this combination of FNA on inVue Dx and Cancer Dx in the IDEXX Reference Laboratory provides integrated multi-modality tools for GPs to be able to manage these high-stakes mast cell cancer cases. This is a giant leap forward in cancer care for pets. Okay. I now want to turn to another part of our point-of-care solution offering, IDEXX SNAP. And this is another area where we're advancing diagnostic standards through innovations to assays and multi-modality workflow. Now there's no question that SNAP is the trusted standard for rapid testing in the over $1 billion vector-borne disease screening category. It's backed by over 350 peer-reviewed studies. It's loved by customers all around the world. And there are more than 750 million SNAPs that have been run since the platform's inception nearly 3 decades ago. On average, a SNAP is run every second of every day. Now you may know that SNAP has played an outsized role in helping to establish regular preventive care blood work here as part of a wellness screen, started with screening for heartworm and Lyme with SNAP. And then over time, we expanded that protocol to include full blood work. And last year, I shared how we're bringing that same strategy to Europe, only focused on canine leishmania in replace of Lyme. Now as a reminder, leishmania is -- it's a devastating zoonotic disease. It's endemic to Southern Europe, particularly the south of France, Spain and Italy. And any dog that's living in or traveling to these really popular regions needs to be tested at least every year. And the protocol, by the way, is any positives found with screening, they need to be sent to a reference lab for confirmation testing prior to starting treatment. And last year, we launched SNAP Leish 4Dx, and this is providing the first ever end-to-end solution in the category, accurate point-of-care screening for leishmania and 3 other vector-borne diseases with a single sample. Full compatibility with the IDEXX SNAP Pro analyzer, hands-free SNAP workflow, full charge capture, results on VetConnect PLUS and all of those benefits. And then finally, a streamlined process for confirmation testing in the IDEXX reference labs that's built into the price of the SNAP. This is what we call IDEXX Anywhere Leishmania. And we've been very pleased to see early success with this that's been helping to drive double-digit growth in our European vector-borne disease business. So I've talked about rapid assay. I talked about VetLab. I also promised you an update on diagnostic imaging. This is another example of our ecosystem approach to shaping the future of point-of-care diagnostics. Our IDEXX digital radiography or DR imaging systems, they're a valuable part of our overall point-of-care solution suite. And it turns out for veterinary imaging, a top issue is radiation safety in the practice. And that's particularly true when you consider that over 75% of veterinary technicians are women of child-bearing age. Our IDEXX DR systems are benchmarked to have unmatched image quality and lowest radiation dose. And our customers really appreciate our leadership on radiation safety, and they value our integrated approach that combines DR systems together with valuable software and service extensions. We've seen strong growth here, as Jay shared on the Q2 call, and we have over a 95% attach of our cloud imaging workflow software called Web PACS, and that drives solid SaaS revenue growth in our software and diagnostic imaging line. And we also have very high attach of our teleradiology consulting services, which, by the way, embed AI in the loop with our incredibly talented IDEXX radiologists and cardiologists all around the world, driving next level quality and accuracy and workflow efficiency. And that drives recurring revenue growth in the reference labs. So this is another example of innovative point-of-care platforms, elevating the standard of care for diagnostics in the practice, but also driving recurring revenue growth across multiple IDEXX lines of business. And so in closing, I want to thank all the IDEXX teams that support our point-of-care businesses around the world. I'm inspired by what they do every day to expand access to these higher standards of point-of-care diagnostics. Our strategy of innovation fueled growth across new platforms, new assays, new software, AI, it's driving substantial value for customers and for IDEXX. And we see enormous long-term runway to continue driving this kind of innovation and growth and delivering the future of point-of-care diagnostics. So with that, I want to thank you, and I'd like to invite my colleague, Michael Schreck, to the stage. Michael Schreck is the Executive Vice President and General Manager for Veterinary Software, Corporate Accounts and Customer Experience. Michael?

Thank you. Thank you. Is my mic on? Well, it's great to be with you. For the third year in a row, I'm the caboose to the Mike train, and I hope to bring it home. Every minute across the IDEXX network, there are over 500 diagnostic tests being processed. And as you've heard from my colleagues, they're increasingly being contextualized via VetConnect PLUS, enriched via AI and ultimately actioned in our software workflow. And that's the transformation that I'm excited to share with you today, which is this powerful intersection between world-class software and world-class diagnostics. It's a combination that historically has delivered an enriched diagnostic experience. But what I'm going to share with you today is how it's reshaping the dynamics in the visit, both frequency of and quality of, and that drives accelerated growth for our customers. So let's dive in. I don't normally quote Bob Dylan in things like this, but times they are changing. And they get it, how do they do? The importance of software in this industry has elevated. And practices and corporates are turning to us with huge demand for modern software. And consequently, what we're seeing is an acceleration of cloud growth, moving from on-prem to a cloud-based software system. And that makes sense, because there's just benefits that I'll talk about in a minute that are important to making that migration. Now as you know, IDEXX has prepared for this moment. We declared that we would be a cloud-first software company in 2021. And we knew that there would be literally tens of thousands of practices that would be making this migration, and we needed to be ready to support that type of industry transition, and it's happening. And of course, I'll talk a little bit about artificial intelligence, like my colleagues have as well. We have deep digital assets at IDEXX that are proprietary and powerful. And we obviously have digital workflow in an integrated ecosystem. And so as a consequence, our software ecosystem brings more diagnostics, more insight, more impact with every visit. Here's a bit of a road map for my presentation today. I'm going to hit these 5 themes. And ultimately, I'm going to talk about what Jay referenced, which is the first vertical SaaS platform purpose-built for animal health and how that platform unlocks practice growth, elevated practice productivity and that, that's especially true when it's combined with our world-class diagnostics. This triple arch highlights how we've approached the platform differently than anyone else in the industry. It addresses all 3 user types in one integrated stack. And as you can see, the inner arch, which is the practice, is where everyone else's PIMS begin and end. We've added an enterprise layer to support our corporates who I'll touch on in a minute, need support for organic growth. And we've now added a pet parent layer, all integrated in the customer experience. And you'll note, and as you've heard from my colleagues, this is deeply embedded in our global diagnostic ecosystem so that no matter who you are as a persona in our software, it feels connected and integrated. Now this has resulted in a platform that we've built that is the first of its kind that supports enterprise and pet parents and means that the digital workflow can support an entire visit cycle that if the clinician and the pet parents want to stay in a digital experience, they can. And we know increasingly that rising generations, as I've shared in the past, don't know how to answer the phone. So we know this is critical. And more importantly, it adds incredible productivity. We've also built this platform so that it's expandable, modern and capable of new partners through a plug-and-play API and that our unique data assets will give -- and models will allow us to deliver personalized insight directly to the clinician, directly to the pet parent at the most relevant moment. And this whole program of creating this platform allows us to add more and more value in support of our customers. And obviously, when we do that, that creates opportunities for IDEXX as well. This is an illustration of our vertical SaaS suite and the integrated key elements in it. You can get a sense for each new cloud customer we add and each step up this stair step creates incredible value for our customers because they get a fully integrated experience as opposed to stitching together a bunch of applications on their own and storing that in the lunch room on a server. This is different. And it starts with payments. Jay touched on that. This is critical because practices miss charges, real charges. They deliver services and don't get paid if they don't have integrated payments at a surprisingly high rate. Similarly, pet parents need affordability. So we've added financing capabilities to the platform so that the pet parent doesn't feel like they can't show up for the visit because they can't pay the bill. And as you heard, we believe in digital workflow. We think that's how you deliver AI, enriched experiences, and that shouldn't stop at the exam room. It should go all the way into the surgical domain. And our workflow allows that to happen and orchestrates an entire practice staff to deliver care in life -- sometimes life and death situations. And this also automates diagnostic triggers. And so these are the kinds of things that we're integrating more deeply into our platform. And I'll touch on Vello, which is our pet parent application that I mentioned last year. And I'll give you an example of artificial intelligence being embedded in our workflow. So where are we in this industry migration from on-prem to cloud? Practices and corporates are moving faster than ever, and that's because these benefits matter. They now have anywhere access, right? They can now make sure they're on the latest versions without having to do anything. And for our corporates, we've now delivered a level of deep security that's consistent with their enterprise nature. And we have multi-location capability so that corporates can push out important things to their practices. Now the results speak for themselves. We're seeing a 2x acceleration in practices who want to switch. And they want to move from an on-prem to a cloud-based in a higher degree. And this is no longer an early adoption story. We're now in the early majority. And that's why we prepared for this moment to support cloud migration at scale. So where are these migrations coming from? And where are they going? Our research suggests there's real pressure building with legacy on-prem providers. And this example, it's one representative player, gives you a sense for the percentage of the base that's considering switching. That's enormous to have 42% of your base considering switching in the next 2 years. And you contrast that with ezyVet, where it's almost a nominal percentage of people that would be thinking about switching from ezyVet. And that's really a powerful thing that gets to where are they going? Well, ezyVet has been the #1 choice since we've been measuring this, and they continue to be the #1 choice for those intending to switch. And that lead has actually expanded as we grew 8 points on this metric in the last year. When you put these 2 data sets together, it gives you a sense for why IDEXX is experiencing such rapid cloud growth. And as we talk about as a team, we're gratified by that, but we're never satisfied. It's kind of an IDEXX thing. And we're more committed than ever to strengthening this platform to support our customers in this time and this level and this scale of migration. So where are we seeing that happening the most? It's with our corporate customers. Their landscape has totally changed where they were driving their growth inorganically. That's not an option today. The cost of capital is high, multiples have remained high. And as a consequence, M&A is not an engine for expansion anymore. And so there's a real operational pivot that these leadership teams are making, and they need to drive organic growth. And they recognize that a disparate set of legacy PIMS across hundreds, if not thousands of practices will not allow them to deliver an organic growth platform. And also, the corporate buyers are more discerning than ever about the level of software that they're buying. And we like that because they're raising the bar. And they're looking for proven partners who will deliver on what Mike Erickson talked about, which is technology for life. Software is all about technology for life. It can change tomorrow, and it will change 10 years from now. And that's how corporates are looking at it and not only today, but tomorrow. And this is all good news for IDEXX because we built an enterprise layer on our platform and ezyVet is the most advanced enterprise platform available. Also, IDEXX made an extraordinary and unrivaled commitment to be a world-class software provider. And so we also know that corporates are looking and saying, that's a team I want to bet on long term. And so consequently, you can see that our new sales to corporates has gone up 6x in just 3 years. And it's doubled in terms of acceleration in the last 12 months. When you combine independent migration with that kind of corporate acceleration, you see growth like this. You can get a sense for how committed we are to cloud in that this year, we're approaching 100% of everything that we placed is cloud. And when you do that for 4 years in a row, it radically changes your installed base, both in size and in mix. And so you get a sense here where 5 years ago, we were a little over 1/4 of our base was cloud and exiting 2025, we'll be closer to 2/3. And this is the flywheel we anticipated and prepared for, where cloud adoption at scale, combined with suite expansion, buying more of that integrated platform from us would create more customer value, whether you're an independent or a corporate. What I'm really excited about is I'm going to share data that we've never shared before about what happens when you add diagnostics to this equation. This is a really interesting example. Jay shared this version -- a version of this concept, which is ezyVet was acquired in the middle of 2021. And as you can see, only a little more than 1/3 of those users were using both of our diagnostics. And in just a short period of time, 4 years, we're approaching half of that same cohort, we're approaching half are using both of our diagnostics. And to give you context, that lift represents $17 million of incremental recurring revenue for the company. We think this is driven by 2 key factors. One is, as has been shared and Mike shared -- Mike Lane shared earlier, the VetConnect PLUS experience is world-class inside of the ezyVet platform. And it also does something that no other platform can do, which is it programs in the standard of care and then automates that workflow and then automatically triggers diagnostics through that workflow. That's an extraordinary thing, and it's naturally something that's very valuable to our customers. And our field teams and our corporate sales teams are increasingly seeing software as a way to reinforce an elevated standard of care and amplify the IDEXX innovations that we've been talking about. And there's more runway to go. To give you context, Cornerstone on this metric is at 59% -- this is the more traditional view we share with you, which is what happens when you have our software and our modalities. You grow faster. And in this case, almost twice as fast. And obviously, in turn, that supports IDEXX's growth. And when customers pair best-in-class software with best-in-class diagnostics, we all grow faster. I promised to share an example, a real-life example of AI. This is a heat map and you get a sense, this is when clinicians are completing their post-visit notes. And they're doing it outside of work time, whether it's on the weekend or after hours. So we rolled out last quarter an AI-capable note-taking automation tool. It will listen to the visit and in real time, populate that health record. And the staff feedback has been phenomenal with quotes like, "This is a game changer or thank you for not having any more pajama time." And so this is regifting time back to the practice and they're saving on average 6 hours per week per clinician. That's like 15% more capacity without adding staff. And as you've heard from my colleagues, we're very committed to artificial intelligence across the enterprise. And our goal is to create intelligent workflows and customer experiences across all of our touch points. Let me turn to Vello for a moment. You may remember, this is our differentiated pet owner engagement application that we introduced last year to you. You may recall, it's built uniquely to support an entire visit cycle that can be digitally supported between the pet parent and the practice, both before, during and after the visit. And it reduces time wasted chasing pet parents and playing telephone tag. And Vello, in particular, changes the wellness visit dynamics. And let me show you how. Before the visit, every one of the pet parents will receive an invitation to add a higher level of diagnostics to their screening package, whether it's blood work and in the future cancer. So we know, as Tina talked about the supply problem, we're changing that entire dynamic because once the pet parent interacts with that invitation, a signal goes to the practice management system to tell the clinician the state of mind of that pet parent, creating more confidence and clarity in that clinician to have a discussion about the importance of preventive care. And practices are seeing positive visit growth even with the industry backdrop that we have. And they're seeing better quality of visits where the pet comes fasting. They didn't forget the fecal sample. And so we're getting both frequency uplift and quality. And this all translates to better practice revenue growth and in turn, IDEXX's growth. I'm really excited. This is what's coming next. We're going to launch our next-generation version of Vello early next year. And that will accelerate wellness adoption through personalization, deep personalization. And as my colleagues have talked about, Cancer Dx messaging directly to the pet parent. We believe cancer, as Tina shared, is an emotional gateway to the preventive care adoption. Pet parents want it, we know. And we know with Cancer Dx, they want it even more if they were just asked. And clinicians, I think there was near 90-plus percent said they would add this to a wellness panel. So this is an example where Abby gets a very personalized message to her breed, her age and her medical history. And with one touch, the pet parent can add that to a visit or say I'm interested in learning more about that or even I'm not interested, which again gives the clinician clarity about the visit. And during the visit, we can deliver value with our partners that support therapies or nutrition to make care more affordable. Maybe most importantly, we're going to celebrate the negative test. And those pet parents will be able to post that on social media, which our research says is the #1 thing that the pet parent wants to do after a visit that they're good, solid pet parents. And in this case, they'll be celebrating that Abby is cancer-free. And we then add a personalized care plan that the vet has configured. And with one touch of a button, that plan gets activated. And in this case, forward book, which is a huge opportunity in this industry. And as Tina said, our ultimate mission is to create more birthdays for Abby and all the pets that we serve. So we're honored that so many customers have responded positively to our vertical SaaS efforts. It's powered a high-growth, high margin, high gross profit software and imaging business. And this happened, thanks to our 1,000-plus now software professionals around the world. And together, we've built something that's a powerful stand-alone business, but more importantly, can power diagnostics and better standard of care. I want to close with this. Our cloud platform helps practices be more productive and grow faster. And this is the headline. When IDEXX diagnostics and software come together, customers see more visits, better visits and faster growth. And we're just getting started. We think we're still in the early innings of the power of a vertical SaaS platform in transforming the future of animal health. Thank you. Next, George Fennell will be having a conversation with Dr. Greenfield. But before we do that, we're going to take a 10-minute break. Thank you. [Break]

Good morning, everybody, and welcome back. We are going to continue our Investor Day program here and break up the presentations with a bit of a fireside chat. So if you can imagine a clicker or a wood pile in front of us. My name is George Fennell. I work with our commercial organization around the world. These are the teams that interact directly with our customers. What I'm about to do for the next 25 minutes is just that interact with one of our customers. I am joined here on the stage and virtually by Dr. Brian Greenfield of Animal Clinic Northview. And he and I are going to have a proper conversation about a number of the topics that my colleagues spoke about this morning, but really an understanding of the state of the state and what he's seeing in his practice in Cleveland, Ohio. But I'm going to first have Brian introduce himself and a little bit about the team at Animal Clinic Northview and maybe an interesting educational background about Michigan and the Ohio State, a very interesting combination.

So yes, thank you, George. I appreciate it. Thanks for having me. I did go to the University of Michigan undergrad and then from there to Ohio State University for veterinary school. So any of you out there know that combination is like oil and water. So anyway, it's an interesting tidbit. I live with it, I deal with it. I'm pretty normal other than that. So I joined Animal Clinic Northview in 1998 when I graduated, I think I was a fifth or sixth vet there. We had about 25 people. Now we are 34 vets, about 175 strong. The building that you see behind you -- behind me is about 36,000 square feet. We're a hybrid practice, which is a little bit unusual in the space. We do general practice. We're a 24-hour ER, and we do a good amount of advanced care. So I think this really fits well with a lot of what IDEXX is trying to do, especially with the shortage of specialists out there, which we definitely see. And so it really creates opportunity for practices like mine to continue to grow and perform advanced care as well as be people's everyday vet. So I've been there for 27 years, and my partner, Dr. Randy and I run this place. It's Crazy Town. Everything that you guys are saying about time and pressure and stress and what's happening in the veterinary world, it's true. The slide that was shown with the lab tech earlier on...

Mike Erickson's slide.

Mike Erickson, yes. The lab was way cleaner than any lab ever is, by the way. But the lab tech's hair was blurred in the slide. And I said -- I leaned over to George, I said that's exactly how it is in practice. I mean people are flying in 1 million directions. We've got hundreds of people in the building at any given time, a full ICU, 6 surgeries going on and 34 exam rooms, and it's crazy pants. So any of these things that can help with efficiencies are super important to us.

Brian, thanks for sharing that. There's not many practices that expand 8 exam rooms at a time, but Animal Clinic Northview does that because of those ambitions. I'd like to maybe start by just having you share with the gathering here this morning, what are some of the trends that you are noticing as it relates to care intensity, clinic visits is often a backdrop of discussion. What are you seeing with your clientele at the hospital and maybe even in the last 6 to 12 months, if you're detecting anything differently?

Yes. I mean there certainly has been a lot written about decreasing numbers of client visits in the last year or so. We haven't really appreciated that too much at our practice, maybe but we've maybe flattened a little bit. So in our world, that's probably -- we did experience it. A lot of people ask, well, how do you respond to that? Some of it, you can respond to it through some surgical price changes, right? But really, the best way to respond to that and what we really have done is just to continue to focus on best medicine for clients. And so what we've found is that we've continued to have practice growth because maybe if you did have 1 or 2 less clients that day, you're still spending the same amount of time with your existing clients. And so this happened in 2007. I don't know, there's not a lot of people in here that were doing what they do today in 2007, but I remember it. And I remember it flattened a little bit for about a year, and then it came right back. And my general sense is, especially, I would say, even over the last 3 to 4 weeks, we're seeing visits really start to ramp, especially in urgent care and emergency. The past month at our office has been pretty crazy. And so I think some of these trends that we've read about, we've heard about, you guys have run metrics on, my general sense is that's changing.

Yes. The -- in Tina's setup, she talked about this dynamic with pandemic puppies and kittens that are sort of moving through this health care continuum, Brian, sort of facing middle age and getting into senior status. I'd like your perspective on sort of 2 dynamics, sort of the clinical trends, what happens clinically as patients age? And then what implications does that have for you as you look forward over the next several years and think about the health care that might be arriving at Animal Clinic Northview.

Right. Well, I first look back to the pandemic period, right, which nobody wants to live through again. And business was nuts during that period and you're getting people in and out through drop-offs and a window. But remember the volume of new puppies that we saw during that period. And so certainly, as these patients are starting to age, they're certainly going to be needing more diagnostics. There's going to be more problems. There's definitely going to be a blip. I've actually -- a lot of the Gen Zers that adopted these pets, it's my opinion that they are incredibly dedicated to these pets. I think a lot of them -- these were puppies that they bonded with during the pandemic. It's part of their families. And I think we're going to find that this generation is absolutely ready to run the test, do the diagnostic what does it take, doc? I think it's coming. I think it's around the corner. I think we've put some thoughts into it in our practice as far as what do we need to do to prepare for that. But I think it's going to be a reality.

You share with me just sort of an interesting lens on this. We bring charts and graphs and tables and economics to these kinds of trends as a business, but your staff members made an interesting observation about the profile of that pet owner and the bond that they formed during that pandemic period. Can you share their impression, a different lens than maybe we would look at.

Yes. some discussions I was having at the practice prior to flying out here, I was speaking with some of my lab technicians. And I just said, "Hey, what do you guys think about this dynamic, these people, these pet owners are they committed to -- were these puppies adopted and they're just not going to be cared for very well? Or are these people committed"? And by overall impression, far majority of people said, no, we actually think these people are more prepared than the existing pet owner. And the bonds that they've formed with these puppies and now with adult dogs is that strong that they are going to request the care, demand the care. Several of my lab techs said that to me.

Yes. It's interesting. I think we -- some of us remember the pandemic and some of us don't want to remember the pandemic. But that was a tough time for society to navigate through. And so we're talking really now about the profile of the new pet owner who formed a very, very special and close bond during a very turbulent time, and they're now facing those health care decisions in the years ahead. So as you've begun to think about it without disclosing anything proprietary at the hospital, how are you beginning to think about how we would prepare ourselves and the teams to be able to really meet the needs of those clients?

Yes. Well, I mean, capacity is going to be the first one completely. You need to have enough DBMs and enough techs, enough support staff ready to go. I mean, no question, that's number one. How do we decide when to hire? We hire when nobody can get an appointment when all our urgent care and our ER slots are full because people can't get in for routine stuff. So it's time to hire. But I think this is a good opportunity to look ahead on that, make sure you have exam room space, make sure you have ORs, makes you have enough catalysts sitting around plural, which we do, and they're churning all day long, and it's a valuable tool for us.

Can we talk a little bit about sort of what are the expectations of those clients? I mean, look, I'm not trying to date you or me, candidly. But over 27 years, you've seen the expectations of clients evolve. As you look ahead, where are those clients' expectations for you and the health care team at Animal Clinic Northview? What do they want? What do they expect?

Yes. People walk in wanting best medicine, number one. you're not doing them a service if you're not offering that. If you're making assumptions about what they can -- what you think they can afford, you're absolutely doing a miss service to them. And this has been a chronic problem in the profession, in my opinion. But these clients are expecting best medicine. They're expecting accurate estimates. They're expecting very clear communication, and they like to be communicated with regularly, e-mail, text, when we refill meds for people, we will send text right out of ezyVet and say, hey, your meds are ready. if you have a patient in the hospital, they want regular updates, and it doesn't have to be a phone call. It's fine to communicate electronically, whether it's tax electronic and app. So they're expecting transparency. They're expecting accurate diagnosis. They're expecting the ability to send records to them, show them pictures. They want all of that, and they want to be communicated with regularly. That's what they require. It's what they do now in every other aspect of their life.

Right. And what they expect in veterinary medicine isn't any different than they would expect outside of veterinary.

Like when you go to the car dealership. They send you a picture of your car and then they send you an accurate estimate and video. That's what they want from the vet.

Yes. So an interesting notion because you touched on this, but let's get into it now. You had ezyVet before we had ezyVet. Okay. So ezyVet's enablement to meet those service requirements. Take us through that exam. And what does the software do to empower you guys clinically? But then what's the client expecting while you're in the exam room?

Yes. It's fabulous software. We went live on it in 2018. So we were one of the earlier adopters of it, and our practice was growing. We still were -- even though we were digital and electronic, we were still using some paper. And as you expand and get bigger, it becomes completely inefficient to not have software like ezyVet. So we can manage a case from anywhere in the hospital, especially linked with the digital whiteboard technology, like which was SmartFlow and is now Radar. So everybody in the hospital can look into a case. They know where it is, what it's doing, how long they've been somewhere. From a client experience, we're walking into a room, the room tech has already triaged the case, put information right in the room. We have a screen in every room and you can -- iPads, you can use whatever you want. One of the beautiful things of it is all the integrations. The integrations are unbelievable. We can draw blood work, get urine, grab a fecal, whatever we're doing. I can literally be in the exam room talking to a client about their kids, about what's happening in their life. And behind me on the screen, the results are starting to pop up. And it's fabulous. People want to come to the clinic and get the results. Gone are the days of, I'll call you in 2 days with the results. I mean nobody wants that anymore. And so we get them in, we keep them there as we get -- we can often get diagnosis and treatment started while they're there. And they love that. We don't book 15-minute appointments. We book half hour appointments because we know we want to have -- give the client that full experience there.

And how do they respond when you can -- let's say, you advance medical information to them. Is that in alignment with their expectations these days? Is that a special surprise? I mean how would you gauge the ability to transmit what happens in exam room to clients?

It's -- people go to their own doctor and don't have blood results back for a week, right? And this is the same blood work that we're running, and we have it in 20 minutes, if not less, in some cases. So they love it. They're surprised. The interaction is there. They're there. They don't have to bring their dog to the vet a second time. Maybe they need treatment, maybe you're diagnosing something and you'll get surgery scheduled right there while on that experience, and move on. It's a one-stop shop. The integration from a veterinary standpoint is fantastic. We get a memo that pops up, "Hey, you got a test result back." And it streamlines everything. I mean it's an unbelievable time-saver for the vet and for the client.

And when you think about the time savings in the moment, that can obviously be repurposed, but some of that time savings may be needed for this future wave of pet health care that's coming. And so the fact that you guys have that automated now is probably a bit of a tailwind, anticipating this demand.

Yes. It's fantastic, yes. I mean radiographs show up, we can show -- clients love pictures, right? We can show them cells. Their dog has a UTI. We can show them the bacteria and the white cells. Just these are things that clients like to see. And they understand what you're telling them when you give them a visual aspect of it. And then you can e-mail it to them as well right from the room.

In a way, it sort of empowers them, right, because they are going to then go see the front-desk staff. They're going to check out, they're going to get a bill, but they've been empowered in that 30-minute appointment, and that's what all this technology working together really does for them, right?

We like to get them answers. And that's the thing. Like, let's get to the answer, and then they can make a valuable decision for their pet. But let's not guess at it.

Right. Let me touch on this notion, I know how unwavering your medical expectations are, this notion of always wanting to recommend what you believe is in the patient's interest first without thought for the economic profile or, as Tina noted, the perceived economic profile of the client. How do you culturally instill that notion with such a big team, Brian, at this point? How do you guys do that?

Yes. It's the way everybody practices at the practice. So when we get new students in, in many cases, they've already rotated through our system. They know how we practice. All I can say is you should never make assumptions about people. And at the end of the day, we recommend to all of our staff that you treat that pet the same way you would treat it if it were your own. And that is really the end of the day. If you're not doing that, you're doing them a disservice. And that's your job. That's your job, and that's why they're here. They're not here for guesswork. They're here for answers. And so that's what we do with everybody. And not everybody says do this, that or the other thing, but everybody has been offered it. And if we miss something because a test wasn't run, at least we offered it, right? But I would say the vast majority of our clients take our recommendations.

Yes. And I think there's -- Jay talked about his own notion of first principles. This sounds like an Animal Clinic Northview first principle, is that we recommend what we believe is best for the pet, without screening that might happen.

Yes. And I think the new vets that are graduating from vet school these days, I believe that they're coming out with that mentality more than it used to be that way. I think it's a little bit of an old-school mentality, "Well, we don't need to run this. Your dog is unlikely to have this, that or the other thing." I think the new students that are coming out, we started 2 from Ohio State and 1 from Purdue this year, and they're incredibly sharp and they come out and they ready to run diagnostics. They take to the ezyVet platform very, very quickly. It's like learning a new language, but once you learn it, you know it forever. And we communicate through it. And I think that -- I don't think it's that difficult really as long as you're in a room, you're honest with people, you tell them what you would do, you're nice about it, and you have a conversation.

Yes. That's great. I want to maybe just turn the page just slightly. I know that a lot of the information that you're receiving, back there sitting next to me, was also new to you this morning. It's very clear, you and I have talked a little bit about IDEXX' unwavering commitment to oncology and cancer in dogs. You heard that from all of us today. Can you just talk a little bit about cancer diagnostics in primary care and what you see and maybe even some reflections from what you've heard just in the last several hours here?

I mean it is 100% true that oncologists are in short supply, right? I mean everybody knows that. And while they are very valuable in certain cases, general practice needs to absorb the majority of those cases. And we see tons of lumps and bumps. I don't remember the numbers that you quoted, but it's true all the time. And when you guys introduced the digital cytology machine, that was very helpful. We could get a nice response within a couple of hours, in most cases. But it's a big part of dogs' lives. And it's true, we see a lot of lymphoma, we see a lot of mast cell tumors, we see a lot of sarcomas. And it's very, very common. I can tell you, I mean, in the last 10 years of my career, how many clients come to me and say, "Doc, don't you just have a cancer test?" And the answer is no. We don't have a cancer test. We didn't have a cancer test. We're looking at kidneys and livers and calciums and white counts, and maybe our suspicion of cancer goes up, and then we do additional diagnostics. But actually, the availability of a true cancer marker is new for us. And I think that's exciting. I think clients are going to be very appreciative that they can screen and feel good about it or if we find something, then go from there. I'm especially excited about the needle aspirates coming. That's something that I think will take off.

Yes. The client interest and curiosity about cancer, can you say more about that? They're aware of this, aren't they? The pet owner who has a boxer, the pet owner who has a golden retriever.

They know their risk. Their breed is high risk for this, that or the other thing. I mean most clients are very knowledgeable. And they come in and they have some preconceived notions and they say, boy, wouldn't it be nice to know if my dog has something I need to -- and everybody is unfortunately known somebody, a person or a pet in their life who's had cancer, right? So it's something that everybody can relate to. And early detection is key 100% of the time. So it is a very relatable conversation. And if you can offer a screening test that's cost effective, I think a lot of people will be very happy about that.

Yes. That's good. And I think this is something that IDEXX is committed to working with the profession on developing this. I mean, as this comes out of the factory or the bench, as Martin would describe, out through the commercial teams to you, it's something we want to help educate everybody about and going forward. So thank you for sharing that. I just want to touch just very briefly in the remaining couple of minutes about your IDEXX relationship. We've had a long and growing relationship. I know that it's an important one to you. Would you mind just sort of sharing a few words about why that relationship is important to you?

Yes. It's important to us because I think IDEXX, from the beginning, did focus on best medicine, which is a tenet of ours. 6, 7 years ago when you were developing your progesterone slide, we did a lot of reproductive work at our office. And so that test was of interest to us. And we had a lot of collaboration with IDEXX, sending samples back and forth and validating. And that was actually the last time I was here, to meet that team that was -- and now since then, we've had a lot more collaboration. The techs at our lab have sent you I don't know how many thousands of samples to help with development of lots of things. And I will tell you the best part of that is that they feel like they're part of something bigger. This isn't like send you the samples so we get a price on something. It's not that at all. My staff -- you pay people well, you give them good benefits, but the intangible is if you can -- if they can come into a day and feel like they're making a difference in the animal health world, that's way beyond anything you can pay them or that they even care about.

Yes. It's a strong sense of purpose, right?

Yes. They love it. And there's a lot of give and take with your client service reps and the people developing these tests. It's just creates excitement and buzz. And we also appreciate hearing about things that are coming soon, right? We like that.

That's why you were here?

Yes. That's right. It's pretty cool. It's a good way to go. We're not just punching the clock. We're having a good time.

I think one of the most underappreciated aspects of veterinary medicine is that very strong thread of purpose that's bigger than all of us. We're recognizing patients and pets are part of families, and it's part of the bond that they form, it's how they experience life.

Yes. People want to go home at the end of the day, even though some days in this profession are very difficult, but you want to go home at the end of the day and feel like you made a difference in some way. And that relationship has been part of that for us.

Yes, well, that's excellent. Maybe, Brian, just in the remaining minute, any pearls of wisdom or advice or thoughts that you're thinking about relative to your profession more broadly. Stepping out of Animal Clinic Northview for a moment, what's ahead for the veterinary profession? As you think about this business, 27 years of experience, you're not a rookie anymore, how are you thinking about the business going forward?

I think in a very positive way, for sure, there's certainly incredible demand for our services. People are still getting pets. They're going to continue to get pets. The business itself, I think that if you take the time to educate your people, to train your people, to find the best people when you're hiring and then you employ technology and cutting edge and continuing education and communication, and never forget that the pet in front of you is somebody's pet, it's part of their family, they're there for that reason. And so I think the profession is incredibly healthy. I think that bond between the pet owner and the vet is very strong. And I think there's going to be -- we've seen massive demand. I think it's going to continue to expand.

Okay. Maybe we'll leave it there then. And we'll thank Dr. Greenfield for his perspective this morning and enriching our Investor Day experience for all of you. And at this point in the program, I'll introduce IDEXX' Chief Financial Officer, Andrew Emerson, to move the program forward. Andrew?

Thank you, guys, and thank you, George and Dr. Greenfield. Good morning, everyone. I am Andrew Emerson, IDEXX' CFO. And as you can see, my family has a number of pets that are really important to our household. And as it turns out, when you have 6 pets, not only I, but my wife, are very well steeped in animal health finances. But as we transition to IDEXX, I think, hopefully, what you took away from today is we operate a great business in a really attractive sector with significant long-term opportunity. And I'm pleased to take you through the financial review, where we'll focus really on the growth strategy and the financial approach that we have associated with that. Overall, our mission is really to improve pet health care through the use of expanding diagnostics and cloud-based software, and we have a focus on innovation, integration and commercialization. This strategy really contributes and delivers durable long-term recurring revenue streams that benefit from scale to drive high ROIC and strong earnings potential over time. And this focused, consistent strategy that we have has delivered outstanding financial results over a long period. In the last 5 years alone, we've outperformed all of our key financial metrics on a multiyear basis, and we continue to grow off of this base into the future. This really is focused on our Companion Animal Group, which is our largest segment of the business, and is a set of attractive core businesses that really have a long-term opportunity to continue to grow and contribute high profitability. And a key driver of that success over time has been the global expansion of our CAG Diagnostics revenue annuity. This represents approximately 80% of the overall company and grew to about $3 billion in 2024. We've had a long track record of double-digit growth in both the U.S. and our international regions over this time period. And again, we believe we can continue to grow off of this base. Now this really stems from those strong customer relationships that we have and the ability for IDEXX to provide high-quality diagnostic insight about the patient health. That remains our focus, and you'll hear more about that as part of our transition and focus on transformational innovation today. But we've been able to grow off of this base in the U.S. and sustain double-digit growth in our international business even through a period of macro and sector headwinds. And our customers value the IDEXX integration that we have, which is really enabled through our cloud-based software approach. As Michael described, we have a vertical SaaS model that's specifically designed for the animal health industry. So that has supported high growth overall, but also expanded recurring revenue streams. And when we think about the opportunity in front of us, adding additional services will help increase ARR, things like integrated payment solutions; Vello, which will help us reach our end consumer; as well as Web PACs in managing diagnostic imaging workflow. And we'll continue to add technology and AI to support productivity in the clinic, which adds incremental value to our customers. But as we think about looking forward, certainly, one of the impacts that we've had more recently that's constrained our overall revenue growth has been around clinical visits. And many of you are familiar with this story. We saw an exceptional step-up during the pandemic period of clinical visits. And since 2022, we've had declines on this metric, impacting the industry. That really stemmed from staffing challenges within the clinic itself as well as broad inflation on the consumer that's put pressure on this metric. But as you could see, we've also sustained at a clinic level visits that are above the pre-pandemic period. And this gives us a base to grow off into the future. We have strong longer-term dimensions that you just heard about from Dr. Greenfield as well around an expanded and aging pet population, pet owner demographics that support that long-term humanization of pets, and IDEXX continues to focus on strategies like personalization with Vello, and all of this points to increased patient traffic over time. And for those seeking veterinary services, as Tina described earlier, we continue to see an increasingly important role of diagnostics in the clinic. So this steady expansion that we've seen over time of 50 basis points of blood work inclusion per clinical visits has led us to 20% in 2024. But U.S. benchmarks would highlight there's opportunity to double this over time. And what we know is, internationally, we're even in earlier stages of this progress. For every 50 basis points on an annual basis that we get this expansion, that's the opportunity for us to deliver 1% to 1.5% global CAG Diagnostics recurring revenue growth. And senior pets, those age 7-plus, often have higher inclusion levels within the clinical visit that they have. This provides an opportunity in coming years to outpace that historical norm over time. And strategies with IDEXX like our Cancer Dx pricing further inspire more comprehensive diagnostic testing over a longer period. So that brings me to more the innovation side. And what you heard earlier today was our focus on transformational innovation, and we're really excited by the momentum that we're building with recent launches. We've created new platforms with inVue Dx and Cancer Dx and, in the future, MultiCue Dx. And these are truly incremental greenfield opportunities, which will be additive to our overall CAG Diagnostics recurring revenues over time. There are also extensible platforms, meaning we see opportunity for continued menu expansion that drives new diagnostic insight over time to the clinician and continues to build a deeper understanding of patient health, similar for our Technology for Life strategy, which Mike talked about earlier, where we've continued to deliver new menu on our core catalyst as well. So this helps reinforce the belief in diagnostics. Being able to discover more and detect disease earlier allows clinicians to use these tools for better outcomes in the patient. And overall, we expect innovation to be able to drive 2-plus percent incremental revenue growth to CAG Diagnostics recurring revenues over time. But innovation also supports our ability to expand our customer relationships. So while we have over 100% headroom on our core analyzers with Catalyst, ProCyte and SediVue, and we have commercial plans well aligned with the significant opportunity that you see internationally, inVue DX and MultiCue Dx provide the opportunity to leverage our relationships with customers for broader diagnostic testing. And what we see is when they take advantage of this broader ecosystem of IDEXX, we do find testing begets testing. They use more diagnostics. They understand what's happening at a deeper level with the patient. This is also a really important base for us. This creates a large loyal base of customers that, as we talked about earlier, has rapid adoption on new menu and specialty testing like cortisol that we launched recently. So bringing this all together, IDEXX execution, coupled with our innovation agenda, supports the long-term potential for CAG Diagnostics recurring revenue growth. Now this chart represents the building blocks for the business overall. But what I'd highlight is, even in this period where we've had macro and sector headwinds, with broad inflation and challenges with staffing, IDEXX execution has continued to deliver solid volume and pricing gains through that period. Now as inflation eases, we expect price realization to moderate to 2.5% to 4% of revenue growth contribution, more aligned with our historical standard as well as really building on the value that we're delivering to customers. And we see a steady pathway for us to continue to build new customer relationships over time and place core instruments as well. This benefits from high retention and loyalty within our customer base. The more dramatic step-up that you see on this chart is really related to the utilization and innovation. And that comes back to our transformational approach focused on these platform technologies. And as we build momentum with things like inVue Dx and Cancer Dx, we see the opportunity to continue to expand in this area, and we have a robust pipeline for the future, as Martin highlighted. And while we have many positive factors that lead us to believe it's a matter of when, not if, clinic visits return to growth, even if they were flat, we see the opportunity to grow this portion of the business by 8.5% to 11% over time. So the strong growth in CAG Diagnostics recurring revenues really forms the foundation of our overall business growth expectation of 10-plus percent. And software, as you can see on this page, that's focused on solving clinic needs like productivity, workflow enhancements, client engagement, provides the opportunity to grow even faster. And we continue to place analyzers, which benefit our CAG instrument revenues. And Water and LPD also operate in attractive sectors within their areas where we think we can grow mid- to high single digits over time in these categories, additive to Companion Animal, but also synergistic. And as we grow, we benefit from high incremental gross margins in the CAG business itself. Gross margin expansion is a really important element for our overall profitability improvement over time. So we benefit from a business model and a business being at scale where we get natural tailwinds that, as we grow these recurring revenues, we see high flow-through on the drop-through associated with that. But we're also not focused only on that growth. We continue to have lab and operational improvement agendas, things like automation and DFMA in order to continue to enhance this potential over time. And combined with net price realization, we see the opportunity to offset inflationary cost pressures through this approach. And our focus on gross margin expansion and operational efficiency really allows us to continue to invest in the long-term nature of the business. R&D, as an example, where we expect to remain 5-plus percent of revenues overall, is focused on the pace and breadth of our innovation agenda. We're advancing capabilities that we built over decades, and we're establishing new ones as technology evolves. And this is in support of having a robust pipeline of innovation supporting customer solutions. And sales and marketing is about commercial enablement and customer intimacy, where we're translating the value of diagnostics and software to our customers and building strong, trusted long-term relationships. And as we advance commercial expansions, we often see these as fast and high returns because they're focused on growing that CAG Diagnostics recurring revenue annuity. In G&A, we expect to continue to advance some leverage in our back-office functions while we invest in areas like IT and data in order to maintain this broader integrated network effect. And we have a disciplined capital allocation and resource allocation approach. This starts with our strategic growth priorities, our focus on clinically relevant diagnostic insights, delivering a modern customer experience through software and AI, and ensuring we have customer reach to the global customers that we operate with. And whether it's organic investment or M&A, we use the same principles. It starts with our core businesses and solving veterinary clinic challenges. We have often find opportunities that plug directly into our extensive ecosystem. This allows for high profitability and accretive revenue growth potential. And while many of the opportunities that we invest in have significantly longer lives than 5 years, we do look for a return above our cost of capital within that time period. And under this philosophy, since 2017, we've invested $1.7 billion in R&D and M&A alone. And this is really focused on enhancing the capabilities we have in diagnostics and software over time. We often see more inorganic opportunities on the software side, and that's where we'll continue to pay attention closely as opportunities arise that we make the appropriate investments to advance our capability set. And through the same time period, we've been able to deliver meaningful growth and ROIC at the same time. So as we continue to invest in the business, we will target incremental operating margin improvement. We've had a steady track record of outperforming our goal of 50 to 100 basis points average comparable operating margin gains, and that maintains our goal going forward. We're focused on continuing to drive profitability over time and believe we can do that, which will be gross margin led, as we invest back into the longer-term nature of our growth agenda. And in 2025, we're on track with that. We're expecting, as we highlighted in our recent guidance, to deliver 50 to 80 basis points of comparable operating margin improvement this year. And because we're able to continue to expand our operating margin profile and grow the business meaningfully, that provides the potential for strong free cash flow generation. We also have a long history in this area, where we've continued high levels of conversion from net income to free cash flow. Again, we benefit from a scale business where our capital intensity is relatively low. We typically provide 4% to 5% of revenues towards capital spending, and that's largely on our growth agenda. So we see over time, the potential to continue at this pace and maintain net income to free cash flow conversion of 80% to 90% over the longer term. Now our capital allocation principles are really remaining consistent. Our priorities are focused on driving our organic growth business. And as we identify M&A opportunities, we continue to do -- we continue to invest in that path. However, because of our significant free cash flow generation, we typically have excess capital in regards to the business requirements that we have. And we've been able to redeploy that through share repurchases over time very effectively. Since 2015, we're expecting to actually over-deliver our share repurchase level of capital deployment versus our free cash flow and at levels that are significantly discounted to today's price. So while we'll be thoughtful as we continue down this path about our capital allocation methodology, we've seen this as a really good opportunity to continue to leverage how we deploy capital and expect to do that into the future. So we're optimistic about the long-term nature of the business. We see the opportunity and potential to continue to grow 10-plus percent. We're going to continue to maintain our focus on operational efficiency and capital allocation methodologies consistent with our past, and that can all deliver 15-plus percent earnings per share on a comparable basis over time. That's really the foundation building off of our strategies with strong secular tailwinds, the expanded and aging pet population, pet owner demographics and our robust innovation pipeline that we see a clear pathway to deliver this. So that concludes our financial review. I'd like to thank everybody, and welcome Jay back on stage for Q&A.

Thank you, everyone. We have some time for a few questions. [Operator Instructions]

Erin Wright, Morgan Stanley. Can you talk a little bit about inVue and some of the near-term and longer-term opportunities there? Does the 20,000 placement 5-year target still holds and that consumables [ will grow by $100 million ] from a dollar perspective? And can we extrapolate that incremental $100 million test volume opportunity by basically adding [ something like $400 million ] kind of annual flow-through from a consumables perspective? Is that the right way to think about it in terms of that incremental opportunity for inVue? And then the second question is also kind of numbers, too, but just the 15% to 20% EPS growth that you had previously, in terms of the long-term guidance, it went to 15%-plus, just comment on that.

Do you want to take the first one?

No. Why don't you take the financial?

Sure. I'll take the financial one. So just in terms of our earnings per share, 15-plus percent is still largely in line with the 15% to 20%, as you highlighted. Our focus is on making sure that we advance investments for the longer-term potential, right? At the margin profiles that we're at, we can continue to create significant value by ensuring we have this long-term ability to grow the business into the potential that we see for the $45 billion opportunity in front of us. So we're highly focused on that and finding that right balance over time. And I wouldn't look at this as a major change. As you could see, all the other benchmarks that we have and financial characteristics are right in line with what we would have expected. We're just making sure that we have the capacity and investment cycle to support the long-term potential of the company.

In terms of a placement goal of 20,000 units in 5 years, we're not updating that at this point. We're just early in the cycle right now. And as we have begun more recently to expand outside the U.S., I think we'll get a better picture of what the end market goal is. The modeling we've done suggests that there's 90,000 or so units of opportunity. We think that's a good model over time as we expand the menu, that could potentially go up, but I think that remains to be seen. From a menu standpoint, the focus is really on the 3 right now of the ear cytology, blood morphology and then FNA for lumps and bumps, as Dr. Erickson indicated. There's a lot of runway in terms of cytology that you can do. That's a multiple of the number of tests today being run. And I think we'll look at that over time. And we always, from a Technology for Life standpoint and menu extensibility standpoint, see a lot of very interesting opportunity.

Chris Schott at JPMorgan. You've got several new platforms ramping. You've got an aging pet population. Can you just talk about the potential for this kind of acceleration in the percent of visits that have a diagnostic tied to them? I think you laid out it's been about 50 basis points per year. How much of a step-up could we think about as this plays out? Is it 1% a year or something like that? Is that within the realm of possibilities? And then maybe a second question kind of tied to this, as we think about visits stepping up, percent of visits with diagnostics stepping up, are vet practices equipped to deal with this acceleration if it plays out? So can this actually flow through to numbers, to volumes, et cetera?

To the earlier discussion, the 50 basis points has been a good benchmark. And during the pandemic, as we shared, it did step up for a while to 100 basis points, and we didn't necessarily see that give back. Some of this comes down to, if you take a look at the top quartiles, they're definitely using blood work inclusion at a much higher level. So the bleed system is there. It's not like there's just a couple of practices. There's very broad adoption. So a lot of our sector development strategies are really based on continuing to drive that. As I mentioned in the earlier part of my talk, we want to lift all boats because we think that diagnostics is underused. And then the top half already have this foundational belief and can use more. Part of our strategy, both innovation and on the commercial engagement side is to drive that faster. I'd hesitate right now to speculate how much faster we can drive that. But as Andrew showed in his slide, just within the U.S., every 50 basis points translates to a global CAG Diagnostics recurring revenue uplift of between 1 point and 1.5 points. So that's pretty significant. We're highly motivated to figure out how to do that. I think we shared with the group, some potential strategies that we think are very promising. I do think that the tailwinds of an aging pet population, to the earlier part of your question, is going to help a lot because we know just the level of medicalization as a pet ages is substantial. It really steps up.

And I would just add that international is, again, significantly earlier in that, right? So Jay shared some of that information on his slide, which is, on the international front, we're about 8% of blood work inclusion per clinical visit versus the 20% in the U.S. And so again, an opportunity for us to continue to partner with our customers and expand the use of diagnostics over time.

Mike Ryskin, Bank of America. On the Cancer Dx, the 3,400 clinics purchasing it, anything you can say in terms of utilization per clinic, if that's still growing or you're starting to get a sense for how many tests they run a day, a week, a month? How often are they reordering? Just any metrics you can give us on Cancer Dx adoption there? And then second one is going to be on the commercial expansion. You talked about a couple of regions internationally, some expansion in the U.S. I think a point you guys have harped on in the past is that our customers do more testing when we call on them more. So as you've got such a big innovation cycle now in terms of inVue, in terms of Cancer Dx, in terms of MultiCue, do you feel like maybe you need to do a little bit more commercial expansion than you would have in the past just because every salesperson is going to have that much more menu to talk about? You're going to need to shrink their customer base to give them more time to handle that.

Yes. Let me take the second part of the question first. We're definitely not done from a commercial expansion standpoint. To your point, a broader portfolio of innovation, the need to really, I think, call on more customers really, I think, indicates that we would benefit from international expansions. There's a pace that we're very disciplined. We want to make sure we have all the pieces in place. There's a tendency to think about this as just adding heads. In fact, you need to make sure your reference lab network is built out. You need to make sure your software systems are appropriately localized. You have the right model that's matured in these geographies. And so there's a practical limit in terms of how fast you could do that. Otherwise, we'd be expanding at 8, 10 a year, and we're certainly not doing that. But I would say there's a lot of opportunity to continue to drive footprint. Dr. Hunt shared some numbers, and we're about half of where we want to be outside the U.S. Now that's also a function of utilization and how fast that utilization increases. To the first part of your question in terms of cancer diagnostics usage, we do track that. We haven't shared that yet just because it's earlier. As you might guess, the aid-in-diagnosis is where the first focus is, but we're starting to see a shift into inclusion and preventive care. We think a broader menu will accelerate that shift. And it's pretty much developing as we thought we would. And customers, they order once, then they order again, and it builds. It builds steadily over time. And that's just the adoption cycle, the long tail you see in this industry. So all signs positive, and we'll share more as time goes on.

David Westenberg from Piper Sandler. So I want to talk about the European opportunity. I think you had a graph out there that said you're targeting 26% of clinics. I didn't realize how under-penetrated it was, which now makes a lot more sense with that 13% to 16% international CAG growth. I also thought that Mike Lane's slides on the margin expansion in reference lab were very interesting as well as the contribution margin slide that Andrew had. So can you talk about your under-penetration in Europe and how that correlate, how that is going to impact margin expansion opportunity if that is growing indeed faster? I would have to imagine maybe the fixed costs are lower there -- I mean, are higher there. But I just want to think about margin potential between, like, international and U.S. And then just can you clarify that 26% touch in Europe? Is that actually correlated with market share? Because I would assume your market share is actually higher than 26%.

So maybe just a clarification on that metric. There's a reach-to-revenue metric and there's a reach-to-customer metric. The reach to revenue is these are IDEXX customers. And Dr. Hunt showed much higher numbers, in the 70s, with that metric. The reach to customer is the overall geography or country market. So these may be smaller clinics. They don't use diagnostics as much. Certainly, they're not IDEXX customers. And that's the 26%. And I think that what that indicates is just a much larger opportunity as we expand to really reach the entire market, whether or not they use IDEXX or not. And again, that comes back down to the commercial footprint. It comes back down to really being able to, over time, do what we did in the U.S. and drive diagnostics utilization, which is about a little bit over 1/3 of what we see in the U.S., at a much faster level. Did you want to talk about margin?

Yes, I'll just hit on the margin piece of this. So in terms of what I shared is we really do benefit by having a business at scale already, right? We have an extensive ecosystem, both in the U.S. and places like Europe, where we can really leverage that infrastructure and continue to grow our gross margins at incremental levels as we grow over time. But again, we're not solely focused on just that growth. We want to make sure we keep an operational discipline in place where we're looking for efficiencies, we're leveraging automation, digitization, AI and creating new capabilities within that infrastructure. So we see long-term potential to grow margin overall through gross margins.

Jon Block at Stifel. I was told to limit it to one. So the Cancer Dx TAMs, maybe if you can just share what are the ASP assumptions behind those? I would just think screening would be better. So is it that $15 for screening and higher $45 to $60 for the aid-in-diagnosis. Maybe if you can clarify that, and I'll keep it to one.

Yes, it is, and that's going to evolve over time, obviously. It assumes -- it's based on a certain amount of mix shift between aid-in-diagnosis and screening. And then as the panel expands, there's some built-in inflation in there. We haven't broken out all the different elements of the model. But I think the $1.1 billion also includes all our cancer diagnostic tests, including pathology, including telemedicine, those pieces. So it's the broadest possible look.

Yes. The $2.5 billion is a broad kind of number for oncology and in general. And then to Jay's point, we've broken that down for Cancer Dx specifically. And we haven't, again, shared all of the details behind that. But I think in terms of the pricing, you would see some differential between the screening and the aid-in-diagnostics based on what we're trying to do from a pricing perspective.

Okay. And so with that, we're out of time, and we're going to conclude the program. Thank you again for joining us and look forward to following up with you in a number of different forms over time. So thank you again, and have a safe time.