The addition of this new lab to our global network ensures customers will receive faster turnaround times for test results, enabling them to make timely and informed decisions for their patients’ well-being. IDEXX provides the only veterinary-dedicated and accredited reference laboratory network in Australia and New Zealand, so bringing this location online is an important achievement as we strive to deliver sustainable long-term value. Expansion of our global reference lab footprint is just one way we are addressing the approximately two-thirds of our estimated TAM opportunity outside of the U.S., an area of focus. With that, I’ll now conclude the prepared remarks portion of the call. Before we move to Q&A, I want to take a moment to express our heartfelt sympathy for everyone affected by the events in Lewiston, Maine last week.
We are deeply saddened by the senseless act of violence impacting our communities. Keeping our colleagues safe, supporting each other, and providing health and well-being support is a top priority during this difficult time. I also want to thank law enforcement and public safety personnel who are working tirelessly to keep our communities safe and medical teams who continue to aid all who have been impacted. Now, let’s open the line for Q&A.
Operator: [Operator Instructions] Moving first to Michael Ryskin of Bank of America. Your line is open. Please go ahead.
Michael Ryskin : Hey guys. Thanks for taking the question. First, I want to talk about the broader market, I mean, as you said visit trends, as you’ve said, the pressures remain soft from the numbers in the snapshot relatively consistent with what we expected from third-party data. So not a huge surprise there. But I think it’s safe to say that it’s the last thing a lot of longer than anyone is expected going into the year. If this continues without anything that’s improvement, how does this impact your long-term model and longer term expectations to the business? Already put another way, you’re targeting 8.5% organic growth this year well below your 10%, long-term target and that’s despite taking 7% to 8% price. So if pricing power is not there, we’re not there to the same extent and volumes don’t recover, I mean, what other levers do you have to offset that?
Jay Mazelsky: Yeah, good morning Mike. This is Jay. Just a couple things, maybe at a higher level and I’ll turn it over to Brian talk about some of the specifics related to the model. Keep in mind the backdrop of the sector is very positive. It’s just been an expanded pet population. I think the human health and pet pop has very, very strong. Our execution drivers as a company the things that you know, we can directly influence have been very strong. We’ve seen that in instrument placements and in PIMS placements, net retention, pricing realization. So all those things I think are very good. We think there’s been very good end-customer demand as we cited. There are some constraints related to practice capacity and some challenges there.
I think the good news on that front is the practices have hired their baby some yeah, some additional charts that they’re working through, but they’re investing heavily and in technology, we see that with the use of our lab equipment, both in-clinic, as well as reference labs. And obviously, the appetite for software and applications that help them with optimized workflow have continued to grow. And then overall, our competitive position is very strong and we think as a result of our innovation pipeline, we will continue to be strong enough for some differentiated advantages. So, I think from an industry standpoint, it’s a very positive story. I think we’re well positioned to capitalize on those trends and the practices just continued to work through some of the constraints we cited.
Brian McKeon: Yeah, Mike, just to reinforce Jay’s points, I think our long-term 10% growth potential, the key drivers that that we look towards we see a lot of positive factors sustaining in terms of our competitive positioning, expansion of diagnostics frequency and utilization. The adoption of IDEXX technology is the long-term demand dynamics that we see associated with expanded population, and favorable demographics in terms of pet ownership. So, all those factors are positive. I think the thing that we’re working through is a combination of near-term capacity management challenges at the clinics. And I think that’s something we’re assisting with and, and believe we’ll have solutions to help with that over time. But that is something that is has continued and I think is a factor impacting near term growth, as well as some of the near term macro impacts.
So I think, as we stated many times in the past, we’re a business that’s very resilient, but not immune to those types of impacts. And that’s something that that I think is also impacting our near-term growth at the margin. But we don’t see that either of those factors as being long-term constraints to the growth potential for the company. And I think from a competitive positioning point of view, we’re in a strong position as we’ve ever been in terms of our ability to support the continued expansion of the sector globally.
Michael Ryskin : Okay. All right. And maybe I’ll use my follow-up to just be a little bit more direct on ‘24. I know you’re not guiding for ‘24. I’m not asking for ‘24 guide. But just looking at where consensus is right now, it is still at that roughly 10% number. Just given what we see about market conditions, as we sit today, I mean, in November, we’ve already got a pretty good sense of where they are. Do you think that there’s a risk that ‘24 – 2024 is also below that long-term trend line – that long term model?
Jay Mazelsky : We’re not going to be guiding obviously today, but I think we’ve got a number of positive factors that we see heading into next year in terms of our execution. The competitive position that I noted the innovation pipeline that we’re looking forward to sharing more on as we move forward. And I think those are all things that we will be leaning on to continue to delivering solid growth and continue delivering strong financial performance, which I think we’re demonstrating our ability to do this year. So we’ll share more in that front as we get into next year. We’re focusing on the drivers that we have direct impact on and we feel very good about our execution on that front.
Michael Ryskin : Thanks.
Operator: The next question comes from Nathan Rich with Goldman Sachs. Your line is open. Please go ahead.
Nathan Rich: Hi, good morning. Can you hear me?
Jay Mazelsky : Yeah.
Brian McKeon: We do.
Jay Mazelsky : Good morning, Nate.
Nathan Rich: Great. Hey, good morning. Thanks for the questions. Just wanted to ask about the, the US CAG Diagnostic recurring performance in the third quarter and maybe just if you could go into a little bit more detail on how that played out relative to expectations? Obviously, traffic decelerated during the quarter, but from a diagnostic volume standpoint, I’d wonder if you can maybe, was there anything from a category standpoint that was more challenging than you had expected? And I’ll stop there and then maybe ask my follow up next.
