IDEXX Laboratories, Inc. (NASDAQ:IDXX) Q2 2023 Earnings Call Transcript

Jonathan Block: Thanks guys and good morning. I’ll break up my questions. Brian, it seems like the visits are expected to get a bit better in the second half of ’23. I think if I had it right, you mentioned flattish, give or take year over year, but 2Q, ’23 was down from the 1Q, ’23 level. So maybe if you can elaborate a little bit on what helps the 2H, ’23 visits from those first half levels, we did some work around labor constraints that might be easing a bit, but we love your thoughts on the improvement in 2H, ‘23. And then do we think about that trend line arguably continuing into 2024? And then I’ll ask my follow up.

Brian McKeon: Yes, thanks John for your question. I think the A part of it is working through this effect we saw in 2022 where there was a pullback in capacity. And so I think the pullback was largely happening in the first half of 2022. And so we knew we’d still be working through some of that. And I think that there’ll be some relative improvement which I think you were pointing out. And I think overall we anticipate that we continue to look at the growth in demand that we see in terms of the expansion of the pet population and increased interest in pet health care that being affirmed on a lot of the qualitative work that we do believe that there’s underserved demand and believe that that will be a positive tailwind over the long-term continue to feel that’s very much part of the growth build that we have for the long-term.

And we’re working through some dynamics here to help clinics adapted to that and improved their productivity. And I think we can be helpful. So I think our long-term optimism is intact. That should be a positive drive over time. And we’ve made some positive transitions here in their first part of this year. I’d also highlight sometimes we spend a lot of time on the U.S. trends that internationally we’ve seen relatively more kind of same-store headwind effect that we’ve been able to offset with our benefits from our business expansion and engagement and invasions that we’re bringing. And I think internationally we see the same kind of a story that over time that there’s very strong demand for pet healthcare and it’s probably relatively greater macro impacts in the near term.

But we think that over time that will improve as well.

Jonathan Block: Got it, that was a very helpful thing for that. And maybe just a pivot to innovation. When I look back to set of you I believe there was a staggered launch with the U.S. leading and then international following. Any color on how we think of those pending new systems will we see sort of the same approach play out you know, the staggered call it. And then I don’t know if you’ve talked about this before but will the manufacturing be handled by yourself or your partners on those new systems? And just sorry, a quick clarifying question. Brian, I think price in the quarter if I got you right was closer to 9% for Q2 but is full year 2023 price still expected to be between 7 to 8. Thanks guys.

Brian McKeon: I’ll let Jay dive into the platforms on your latter question. Yes, that’s correct. That’s what we said.

Jay Mazelsky: Yes, so from a platform standpoint I’m obviously not going to talk about it until we talk about it and get closer to the launch. What I will say, John, from a premium instrument placement and how we think about the opportunity. We typically do start with the U.S. market but there’s nothing that says we have to do that. The key is really to build an installed base and get that consumable revenue stream moving. That takes time. I think set of U.S. was one example and we launched it seven plus years ago and we built the installed base and we have a nice profile. So we really focus on being able to really drive sector development and adoption and solve those critical problems and everything else takes care of itself from there.