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

Ladies and gentlemen, the program is about to begin. At this time, it is my pleasure to turn the program over to your host, Michael Ryskin. You may begin.

Great. Thanks, everyone. Thanks for joining us, and welcome to today's event. My name is Mike Ryskin. I'm the lead analyst for the life science tools and diagnostics team here at Bank of America. And I also have the privilege of covering the animal health sector, which I've now followed for over a decade. It's become an annual tradition for us to host this Animal Health Summit in the first quarter. I think it's a great opportunity to dedicate a full day just the space, take the time to dive deeper into key trends, topics, debates that matter specifically to the animal health community. We've always had really strong participation from companies in the sector. I'm pleased to say that continues again this year in 2026. We also have very strong interest from clients and investors. So really glad to see that. I want to say I appreciate everyone taking the time to tune in today. I know there's a lot of other news flow going on across the space, across health care in the broader market. So as always, our goal is to make the event as useful, productive and beneficial to you as possible. If there are any questions, if there's any comments, anything you like to include any of in the chats, feel free to use either the Veracast portal or reach out to me directly via on Bloomberg chat. You can e-mail me at [email protected], although I imagine most of you have my e-mail. My associate covering animal health, Alexa Chan is also on, and you can feel free to reach out to her and ping her with questions or anything you want us to include. With that, I think we're ready to kick things off. So for our first session of the day, we're excited to be joined by IDEXX Labs. With us, we have Mike Lane, Executive VP and GM of Global Reference Labs, Diagnostic Solutions Information Technology. And joining him is Andrew Emerson, Executive VP and CFO. Andrew, Mike, thanks so much for joining us.

Thanks for having us. Thank you.

So maybe just to kick things off, we'll start with sort of our default opening question. You guys reported 4Q recently. Maybe you could go through sort of the key moving pieces of the result, what stood out to you, sort of what trended a little bit better, what surprised you a little bit? And then we'll follow up on a lot of those topics, I'm sure.

Great. That sounds great, Mike. So yes, in the fourth quarter, we had exceptional financial results that we delivered. That's really benefited from top line double-digit gains that allowed us to also deliver strong operating margin improvement. From an overall organic growth perspective, we delivered about 12% organic revenue growth in the quarter, and that really supported the full year in terms of achieving that double-digit growth on an overall organic basis for 2025 as well. The innovation that we saw really helped us continue to drive the volume growth, which was really a more significant step-up in the second half than the first half in 2025. New platforms like our inVue Dx analyzer helped us exceed over 1,900 incremental placements in the quarter in that category. And then overall, our premium instrument placements were really a record level that we've had in a long time. So our installed base expansion really grew about 12% year-over-year, and that was led with some of those innovation benefits. We saw continued sustained double-digit growth in our international business as well in the fourth quarter and really saw a step-up just in terms of the volume growth in the U.S. business, all in face of the fact that the sector continued to decline. So we saw clinical visit declines of about 1.7%. So really, really nice improvement just from an overall growth rate in face of some sector challenges on clinical visits. And I think that really has a lot to do with some of the innovation that we've delivered, inVue Dx, incremental slides on our Catalyst platform as well as areas like Cancer Dx, which I know Mike can talk to as well. The commercial teams continue to engage our customers, and we're just seeing a lot of strong demand for some of these new innovations, which help grow the overall industry and sector that we participate in. So as I mentioned, for 2025, we saw double-digit top line gains. We delivered about 90 basis points of comparable operating margin improvement year-over-year and really in line with our longer-term financial algorithm for 2025. So excited to see that type of performance. As we head into 2026, just as a reminder, we're not updating or confirming guidance today. But in terms of what we highlighted on our recent earnings call, we are planning for CAG diagnostic recurring revenue growth of 8% to 10% organic overall. And so the midpoint of that of approximately 9% really is about 100 basis point step up year-over-year compared to what we delivered in 2025. So we feel good about that trend and again, continuing to execute on the innovations that we're building off of here from a recurring revenue growth perspective. We also see strong interest in -- continued interest in our platforms like inVue Dx. This year, we're planning for about 5,500 instrument placements, which is a really solid metric that we've been tracking. This time last year, we were planning for about 4,500, and we outperformed that in 2025 and certainly are planning for a higher metric here in 2026 as well. So overall, feel good about the trends of the business, strong interest. We are still faced with clinical visit headwinds. We're planning for about a 2% decline in the U.S. business on clinical visits on a same-store sales basis, but still anticipating to deliver about 5% volume growth overall from a worldwide perspective in light of that. So I think we like the trends that we're seeing just more generally, even though, again, we're not planning for a change in kind of the underlying sector dynamics that we've seen. And from a margin perspective, again, continue to focus on delivering expanded margin on a comparable basis year-over-year. So our target for 2026 is 30 to 80 basis points. the midpoint of which is really kind of in line with the range that we provide for a longer-term opportunity for the business as well. So I think we're really in a good position, and I think we're excited to see how we can continue to drive the innovation growth.

Yes. I maybe add a little color on our innovation-led growth strategy. We exited '25 with really strong momentum, as Andrew mentioned, in particular, let's talk a minute about inVue Dx, over 6,000 placements on the year, beating original estimates and just really well received, building on really common clinical use cases with ear cytology and blood morphology, beginning the control rollout of FNA, starting with lumps and bumps for mast cell. Similarly, 6,000 customers on the year for Cancer DX and a lot of momentum there. Interestingly, about 18% of these customers were new to the IDEXX reference lab, maybe either being introduced for the first time or being reintroduced to our exceptional service. So this innovation-led growth and can talk more about these extensible platforms of inVue Dx and Cancer Dx, just adding a lot of benefit both to record instrument placements, but utilization growth as well.

Okay. I mean that's a great intro. I've got about 7 different things from that. I want to follow up on, guys. So let me handle them one at a time. First, maybe, Andrew, you called out sort of like the overall 2025 performance and how the year played out. If we just take a step back and we look at where you ended the year, 9.6% organic versus where you were guiding originally sort of in that mid- to high single-digit range, 6% to 9%. You guys outperformed pretty meaningfully by about 200 bps, if you could sort of unpack that, like what really worked for you last year, right? Because it's not that vet visits came in much better. It's not that price really deviated from your original plan. So it's the execution, it's the IDEXX portfolio. Is there any way for you to say, hey, the biggest driver was inVue than this, then Cancer Dx? Any way you could break it down and just sort of -- so we could see why you guys did so much better than initially thought last year?

Yes. So I think just in terms of -- we did take up our guidance range kind of over the course of the year a couple of times. And part of that was really driven by the strong execution of some of the innovations that we had. As we highlighted earlier on the more recent call, we had started the year with about an expectation of about 4,500 placements on InVue Dx. And so we do see a nice benefit just in terms of the revenue on the companion animal instrument placement revenue side of the house. Now that's a bit more onetime in nature. We ended up doing over 6,400 or about 6,400 placements in 2024 -- excuse me, 2025. But reality is like that was one of those meaningful drivers of the top line. It delivered about 200 basis points to our overall revenue growth in the year. What's really exciting by that, though, is this momentum that we built on the recurring revenue side. And that's part of why when we look at the CAG diagnostic recurring revenues, we benefited from that as well in 2025, but the step-up at midpoint to 100 basis points, I think, has a lot to do with, to your point, that strong execution more globally as well as some of these innovations that we continue to get benefits from. So inVue Dx is tracking to what we've highlighted in the past of 3,500 to 5,500 per instrument. However, that also includes our F&A launch, which Mike noted we're in a controlled launch phase of that, and we expect that to grow over the course of the year. So we feel really good about the performance that we're seeing and the track record of the instrument. And there's certainly strong demand for it. But that instrument placement played a portion of that. And then again, we continue to see strong execution. And as we are able to, again, reach customers internationally, we had announced midyear that we were expanding our field force in some of these global markets. And so that also allows us to continue the journey of building belief in use of diagnostics more broadly on a global basis. So I think it's a combination of those factors and really being earlier in this ramp cycle on some of the innovation platforms.

And I'd maybe just add the quality of the visits utilization, we saw a step-up in what we call frequency, the percent of clinical visits include blood work to about 100 basis points. So 2x historical levels, and that builds on these innovations that are supporting veterinarians to raise the standard of care, support patients with higher levels of care, particularly as they're aging.

Okay. Okay. That all makes sense. I mean, Andrew, given your emphasis on inVue, maybe we'll just go drive jump right into that and come back to some of the other points later. Yes, you're right. I mean, the placement numbers in '25, exceeding the original guide, you sort of quantify that because we know the ASP is just over 10,000, so you can kind of see the impact there. Now you're seeing that pull-through start to come through for 2026. You're talking about the recurring revenues going from 8% in 2025, total company being a guide of 8% to 10%, so 100 basis points improvement into this year. By our math, about 50 to 75 bps of that is going to come from inVue pull-through, the incremental inVue pull-through given install base. I mean, again, depends on exactly where you are in that 7,500 to 5,500 range, we're about there. Let me know if that's a reasonable starting point. But then the other factors there, you're assuming visits relatively similar year-over-year. Price, you're taking a little bit less. So again, what's another driver to get recurring from 8% to 9% this year?

Yes. So to your point, we aren't expecting any change in the sector landscape. I think we've continued to see pressure on wellness visits as well as some of the more discretionary types of procedures, things like dentals as an example. And Mike highlighted the benefit that we see on the quality. So when folks are coming into the clinic, we're actually seeing them use diagnostics more frequently and certainly, the utilization or the breadth of the diagnostic categories has continued to expand over time. There's a multitude of factors that go into kind of the growth rate. But I think you've characterized some of them well. We are expecting a modest headwind on price -- net price realization for the year. We're anticipating about 4%. In 2025, we did between 4% and 5% -- or 4% and 4.5%. So there's a bit of a headwind there, not really expecting too much change within the underlying sector dynamics. So what it comes down to is really that volume growth that we're going to expect benefit from. Mike highlighted Cancer Dx. That's another innovation category that I think will continue to help us. We noted that we'll be launching mast cell tumor midyear on the Cancer Dx platform. So in addition to lymphoma, which is available today, we're also globalizing that over the course of 2026 here as well. And we're continuing to build on other innovation areas. We had launched pancreatic lipase a little over a year ago at this point into the Catalyst platform base. We also launched cortisol midyear of this year. So we continue to have a robust set of other menu additions that help us continue to drive volumes and expand the use of diagnostics over time and really improve the workflow at the clinic level. So I think it's a combination of these factors. that we're focused on. And as we mentioned, again, an expanded field force internationally should help us have these conversations more in depth with our international teams across the globe and clinics to continue to build the conviction behind how to use diagnostics more broadly.

Yes. I would just add, if you think about Cancer Dx, it really hits on all the growth drivers, right? It engages the practice. It supports raising standards of care utilization. It also expands the value, which supports both price and high 90s customer retention. So just like other innovations that are highly differentiated before SDMA, Cystatin B, fecal antigen, Cancer Dx, these innovations drive multiple growth drivers and enablers.

Okay. Sticking with -- sticking with inVue for a little bit, let's talk about FNA. You're rolling that out, as you had indicated before, you said starting with mast cell tumor detection. Can you talk about that rollout over time? Why start with just mast cell? Why not broader? When should we think that would expand? And just sort of talk about your pull-through assumptions, 3,500, 5,500, just sort of how the incremental rollout of these capabilities will impact that?

Yes, I could start on that. Andrew may want to add. These are highly extensible platforms in the case of inVue, starting with ear cytology and blood morphology. And then FNA is a broad area, but mast cell, in particular, is one of the most commonly diagnosed cancers for general practitioners. And so it's an area where we prioritize -- most pets will form lumps and bumps in their lifetime. We estimate only 10% of those are tested. Many are not found. They may be hidden in the fur or they just may be below the skin. Yet there are also about 12 million that we estimate that are done. So it's a large traditional opportunity done at the point of care. So that's why we prioritize mast cell with inVue FNA to start. Clearly, we'll continue to expand that platform just like we're expanding Cancer Dx.

Yes. And to Mike's point, I think the great news is there's a lot of opportunity just around lumps and bumps in general, a lot of potential continue to ease the workflow in the clinic to make that easier so that we're not testing just 10% of those. We're really expanding how often those are looked at. And a lot of that has to do with the simplicity of the inVue diagnostic instrument platform and the load and go mentality, which is a core principle as we think about bringing new diagnostic capabilities into the clinic. But I think the other kind of exciting part of this is not only is inVue DX really extensible by being able to address these different cytology categories, but to your point, FNA actually becomes an extensible panel or profile within that as well. So we'll be able to continue to add new capabilities on FNA, just like we are with the broader system itself. And so it's a really powerful underlying technology that I think really adds a lot of productivity benefits in the clinic and gives us the opportunity to continue to broaden out the use of diagnostics more comprehensively over time.

And maybe, Mike, I'd just add that we prioritize mast cell, of course, not just for inVue, but for Cancer Dx, and that was very deliberate. These work together. Cancer Dx really looks at the whole body through a simple blood test to indicate if there's mast cell and then inVue comes along to interrogate specific lumps and bumps. And it's really that interrogation of the specific lumps and bumps that the parent can get peace of mind that this is a benign lesion or tumor or this is cancerous. And with Cancer Dx and inVue, we find it earlier and a lot can be done about it to extend the life of these pets.

Great. What I was saying was, how difficult is it to expand from one indication to another, -- sort of like -- I mean, it's sort of a technology biology question, but okay, you've got FNA for mast cell. How different is that from developing FNA for other cancers, for other indications? Is it completely different technology, sort of like how easy is it to make the leap into the next application and the next and the next once you have it for one?

Yes, I can -- it's a platform. So it's designed to extend. So it's not a different application. I think it's just you need to prioritize. Some of that comes down to data sets, clinical evidence. And so rather than hold something back when we have such clinically relevant tests to provide, we've decided to release them as they come, ear cytology, et cetera, blood morphology, FNA, and we'll continue to expand that. But I think it's time and distance in terms of how we continue to extend the platform. Similarly, as you've seen with Cancer Dx. This isn't that different than when you look at fecal antigen. We started with 2 fecal antigens, and we have a third, fourth, fifth, we have another one coming. So this is part of our technology for life. It's part of our innovation approach, which is it's not really the big bang. It's about bringing incremental value to the pet, to the practice as we have it. And so that's, I think, what you're seeing is in the rollouts of both of these breakthrough innovations.

And we continue to build in the investments towards research and development in order to continue that pace over the somewhere at our Investor Day, Martin Smith had provided an overview of just how we think about research and development and our approach to commercializing that with high confidence. And I think we're continuing to invest in that area just to be able to improve that pace over time. To Mike's point, we think about this as platform technology so that it becomes easier to add these things in as we're able to identify them and build conviction and bring confidence that we're capturing the right resulting.

Yes. Okay. So it sounds like it's just a matter of time of generating the clinical evidence and having the runs and training of the algorithm, okay. As you touched on price briefly, I want to make sure we touch on that as well. 4% this year, like you said, just a modest tick down. I think you talked about your LRP of 2.5% to 4%. So you're at the higher end of that. Should we just continue to expect that to just kind of grind down and gradually come back down to that range and still feel like that's a good sustainable point longer term? And I guess other part of the question would be what determines if it's 2.5% or 4%, right? Like that is a relatively broad range in any given year, what are you looking at to determine where you shake out in that? Or what did you look at in '26 to shake out at 4%?

Sure. Yes. So I think over time, certainly, what we'll be paying attention to is the value equation here. And I think that's a key part of how we determine the pricing, whether that's this year or any other year. But it's really about how much value are we able to kind of bring to our customers across a myriad of different avenues. Some of that is new diagnostic capabilities that we don't charge for discretely. So we have a long history of doing this, things like SDMA or cystoisospora, where we're adding additional insights into these panels and profiles that we deliver. And we don't charge explicitly for that, but part of how we recapture that value over time is through list price changes on a yearly basis. An example of that this year is mast cell tumor detection on Cancer Dx, what we have highlighted is we're actually not changing the price of the panel, which already is quite affordable from our lens on when you're including it in a broader diagnostic panel, it's about $15. But even stand-alone, it's only about $60 as we sell it to the clinic. So that's part of our design is how do we think about making sure we're helping build and support the sector. We believe strongly in some of these clinical use cases, we believe there's real clinical value there as to our customers, and we're really trying to bring that more comprehensively. Certainly, the last several years, we've been dealing with significantly higher levels of inflation really across the board. And that's another thing that we have to take into consideration in any given year. But as you've probably seen more broadly, that's been easing. We pay attention to CPI and certainly work with our partners and suppliers on how to manage some of those dynamics. But in those periods of significantly higher inflation, we have to accommodate and take that into consideration as well, which is part of why you saw some higher levels of pricing historically. But our starting point tends to be around the value that we deliver and making sure that our customers understand that and I also believe in that value as well.

Okay. Want to make sure we don't skip over vet visits and sort of the macro dynamic and where it goes from here. I'm actually surprised it's taken me 20 minutes to get there. Normally, it's the first question we start with. But we've had a lot of debates over the last couple of years in terms of what's driving the weakness, why it's been depressed for as long as it has been, why it's not recovering more. 2025, I would say, on the whole was still somewhat of a disappointing year in that regard because I think we had hoped to see some change at some point, and it really doesn't seem like it's turning. With another year under your belt, what would be your latest take on just sort of what's keeping that so suppressed for so long and just sort of what the road map is for here?

Maybe I'll start -- jump in. So yes, I think on clinical visits, Michael, what we're seeing and certainly in 2025, what we saw was a lot of pressure really on the wellness side of the house. And again, these discretionary types of procedures that can happen. So that's -- folks, I think, as they're managing, again, a broad base of inflationary impacts across their own environment, making those decisions about whether they go into the clinic or not. And again, we're seeing that more in those cases where it's less about the acute issues that may be happening with a patient or a pet. I think what we find is when those types of situations are happening that folks are willing to go to the veterinary, seek the health care for their pet. They still believe that they're part of the family. They want to prioritize health care for those individual pets. But they may be a little less inclined as they're trying to work through their own budgetary constraints and especially in some of the lower economic levels to go in and get those wellness visits. And I think that's where we've been seeing the pressure this year more explicitly. We did see a little bit more benefit or kind of less impact on the non-wellness side. And just as a reminder, non-wellness visits account for about 60% of overall clinical visits, and they tend to use higher intensity of diagnostic utilization. And so when you actually look at the diagnostic revenue associated with that, it tends to be more about 70% to 75% of the overall sector. So we are seeing, I think, solid kind of stability on the non-wellness side at this point and certainly the aging cohort, pets that folks got during the pandemic are starting to hit that adults and more senior age category. We talked about some of the green shoots that we're seeing on the aging pet population, but we continue to see pressure on some of those younger age cohorts, a little bit more muted puppy and kitten types of visits as well. I think that has a lot to do with, again, just the broader macro environment that we've been managing through. Consumers tend to be a little slower to add or replace pets when they're feeling under pressure from their own, again, budgetary constraints. So I think those are the types of dynamics that we see play out. And we're not anticipating a major change to that this year. But I think we're optimistic on some of the aging pet populations over time.

Yes, if you step back and you think about the long-term opportunity that we have, only 20% of the visits are receiving blood work today. And so the real opportunity is the visits that are coming in to expand that. And we talked about the quality of the visits earlier. We're seeing 2x over the historical rate last year, the quality, the frequency, the diagnostic intensity that Andrew is describing as pets age, certainly, that's an element. So that -- for those visits that are happening, saying yes to diagnostics, both the veterinarian and the pet parent, that's what we're seeing drive utilization.

Okay. We did this -- I'm sure you guys saw, we did this analysis maybe a week or 2 ago where we looked at visit trends, not just going back to 2020 or '21 or '22 post-COVID, we kind of took a step back and looked over the past decade. And while they were still positive visit growth pre-COVID, it was decelerating a little bit. And what we've gotten increasing feedback on from some of the vets and KOLs we spoke to is the role that vet clinic consolidators and private equity has played in driving excess price and therefore, maybe destroy some demand. I'm just wondering if you have any view on that or any thoughts on that, just sort of like the prevalence of the consolidators, how big they've gotten in the industry, how hard they're pushing price and whether that's having some sort of multiyear, decade-long impact of pricing out some of the consumer.

Yes. So maybe I'll start on that one again. I think from our perspective, certainly, again, we pay attention to things like the vet service CPI, and it's been a little bit more elevated here versus overall CPI. It has kind of come down some in the last year or 2 as well, which I think is good news. But there's been a level of, I think, professionalization within the industry at the clinic level as well that some of these larger consolidators have had to invest in just from a staffing perspective. I think what we saw initially coming out of the peaks of the pandemic was more of a capacity constraint. That had a lot to do with stability of maintaining veterinary capacity, technician capacity within the clinic itself. And I think making sure that they could create some stability on that and not see the types of levels of turnover or burnout that they did, had to do with some of the rebalancing of things like pay over time that I know they're having to accommodate as part of that change. I think the broader kind of point from our perspective on the pricing piece of this is it tends to be a little bit more macroeconomic, right? Again, the cost of housing and food and transportation all went up in this time period. And so maybe a little less acute relative to the veterinary industry specifically changing some of those economic metrics. There's always some interplay on price volume elasticity. But I think our perspective is kind of broader macro environmental change that consumers have been working through here related to that. But over time, we have a lot of conviction in the return of clinical visit growth, just given things like the aging pet population, the fact that the underlying dimensions related to people loving their pets and wanting to treat them well and provide them the health care services that they need. I think that all is really intact and sustained longer term and will be kind of coming back over a longer period of time.

Have you seen -- we've seen a little bit of this in international markets, especially in Europe. There's been a little bit of government involvement in those regions to try to keep pet inflation down, try to keep costs down a little bit. Any sign of that happening in the U.S.? I mean we typically think of the veterinary industry as being incredibly unregulated and just sort of ignored by the government to large degrees. Any concerns that you'll get some regulation and some price controls given how elevated it's been in recent years?

Hard to predict the future on where the governments might go. I think it's certainly something we'd be paying attention to. But again, when you actually take the underlying cost of a pet visit into consideration, it hasn't changed so dramatically just from a pure dollars and cents perspective. I know some of the growth rates seem quite high, but it's still a relatively small portion of the overall consumer budget. But again, I think it's some of these broader kind of challenges that we've seen on the inflation side that consumers are having to deal with and maybe seeing some separation between lower income households and higher income households, although that hasn't been a significant impact that we've seen to date.

Yes. I would just add, of course, we work hard as part of our innovation to make these highly differentiated tests highly affordable. Andrew mentioned $15 for a breakthrough early cancer indicator with -- starting with lymphoma, which, by the way, we just expanded the claims for lymphoma around therapy monitoring and early identification. But we do this because it's part of the innovation process to make it affordable in this case, so there's not a false choice between, hey, do I run a broader blood panel or do I run cancer, at $15 this can be combined. And that's what we're seeing in the -- for example, the cancer diagnostics runs, 50% of them part of wellness panels and the vast majority part of overall panels. So we work hard, Mike, to make these innovations affordable to drive and support the adoption and utilization.

Okay. We've got about 5 minutes left, and I got a couple of more topics I want to run through real quick. One on the demographic shifts, just going back to the vet visit and the macro. And you talked a number of times about a post-COVID puppy pandemic boom and what that might for demographic shift. You've had some good data on that. So just thinking through the next couple of years, we start approaching '27, '28, investors going to be thinking about this more and more. Could you help us size that potential benefit, how to think about it? We've always debated, is it going to be like a 1-year jump and then back to normal? Is it going to be spread out over 5 years or just the shape of the curve. And at peak, could this improve underlying volumes by 100 bps, 200 bps, 300 bps? Just anything you can tell us to help us size that demographic shift and the tailwind it could be.

Maybe I'll start, and Andrew can add some specifics. But just big picture, I think we all know, as we age, as all of us on this call age, we have more diagnostic needs. And we're seeing that. We tend to say senior at 7 in adult in that 5-year range, which were -- for that cohort of pandemic puppies and kittens, we're well within the adult and heading quickly to senior. And I think in the second half of '25, we started to see in the data, some of that increase in frequency and utilization for that cohort. I think, fortunately, pets are living longer. So I don't personally see this as a 1-year thing. This is a secular trend that's going to go on for quite some time as these pets continue to age beyond 7, 8, 9, unfortunately, thanks to all the great work that veterinarians are doing, pets are living longer, which is great.

You captured that one.

Okay. All right. We'll stay tuned to see how that develops. Just a couple of minutes left. Maybe I'll do this as the last one. I mean, Andrew, first of all, we've spoken many, many times before, but I guess this is your first time joining the Summit as CFO. You guys are also sort of in the midst of a CEO transition. So both internal promotes, both with a lot of longevity and IDEXX and sort of a lot of continuity, and that's always very encouraging to see, but still a good amount of management transition at the top of the organization. Anything you want to say in terms of where that might impact strategy, priorities, how both you and Mike are viewing your new roles as you're stepping into them in 2025 and 2026?

Yes, sure. Maybe I'll kick off and Mike might have a point of view on this as well. But the great news about all of that is I think we have a really strong executive leadership team, Mike being a key part of that and has been part of this team for a long period of time. Both he and I have worked with Michael Erickson as the next CEO coming into the role for a decade plus since Mike's arrival or my arrival to IDEXX. And I think we have a lot of key components or key leadership talent at the senior level. There's a ton of opportunity within our space as well, right? We've highlighted over time that we believe there's an opportunity for about a $45 billion of diagnostic sector growth or sector expansion. And so I think when we think about just the size of opportunity in the areas that we've been hyper focused on playing and adding value to our customers, whether that's in-clinic productivity, new diagnostic insights, allowing them to have a workflow that is easier to manage, I think that's all a space for us that creates significant upside growth over time as well as really high returns within this business. So I wouldn't anticipate a lot of change. We have a robust pipeline of innovations that we've been developing over a long period of time, and Mike knows these areas quite well. And I think we're excited to just continue to keep driving the company forward.

Yes. I would just add, we, of course, IDEXX has a really well-defined, consistent long-term strategy, innovation-driven. Mike Erickson is uniquely suited for the CEO role. Mike and I have worked together for 15 years since he joined IDEXX. He's been in the diagnostic business, the software business, our commercial team, our corporate accounts team, highly innovative. So really look forward to working with Mike in his new role.

So are we, so are we. All right. Well, that's all the time we have for today. Thank you for joining us. Mike, Andrew, thanks, everyone, on the line, and we'll stay in touch. Looking forward to...

Thank you.

Thanks, everybody.