Kristin Peck : Yes. It’s mostly just timing of investments. I mean it varies quarter-to-quarter.
Operator: Thank you. We’ll take our next question from Michael Ryskin with Bank of America. Please go ahead.
Michael Ryskin : Right. Thanks for taking question. Mostly, I want to focus on Trio. You had a really solid result in the U.S., but it’s sort of in that ramping up phase. Can you talk a little bit about what you’re seeing in the market between yourself and the key competitors, BI, Merck, Elanco and specifically, BI just flashed NexGard PLUS, we saw a relatively surprising decline in Bravecto revenues from Merck? So I’m just curious, any change to competitive dynamics, anything you’re seeing in terms of pricing or stocking or destocking and how that impacts Trio? And then just a follow-up on the very last question. CapEx as well, you slashed the guide this year pretty significantly. I think I heard you say Wetteny, the $725 million to $750 million and previously it was I think, $900 million to $1 billion. So just curious, did that get pushed out into ’24 as well? Or is there — any other change there?
Kristin Peck : Sure. I’ll take the first half of the question, see if Wetteny want to build on it and then Wetteny, if you want to handle the CapEx question. We did see strong growth in Trio in the quarter, 20% in Q3 for Trio. It remains the number 1 fleet tick heartworm in the U.S. by revenue. And really importantly, it’s continuing to grow share. It’s up 3% in the quarter. It’s also growing patient share, which was up 2% in the quarter. So we’re expecting solid growth this year. Obviously, we — there’s a new competitor. But in the Q4, I would also say to watch, we got a challenging comp as you look at us in Q4. If you remember, we got back into stock and ran a number of promotions in Q4 of last year. But we continue to expect strong growth for the year there.
Even with the destocking that we saw in the U.S. in Q1 and the pre-price buying, as we talked about before that you had in Q4 of 2022. So we see this as a franchise that will continue to grow. A lot of our growth is really being driven by our auto ship, by retail, which remains very strong for us, with our corporate accounts. This is also a category where you do see low switching once you get on a product. So we do believe the broadest portfolio, but continue to see strength in Trio. So we’re happy with the growth we’ve seen there. But Wetteny, anything you add that I miss there, and you want to talk about CapEx?
Wetteny Joseph : Yes, sure. Look, on Trio, I think you covered it well, $206 million of revenue in the quarter. That’s up 20% operationally. We’re very pleased with that, including the patient share gains that Kristin already described. On CapEx, yes, we did reduce our CapEx expectations for the year from about $950 million to $1 billion down to $725 million to $750 million. This is really on timing of project spend. We remain committed to the investments that we’re making. And this is still representing about a 25% increase in CapEx year-over-year. So as we said at Investor Day, excise CapEx to remain elevated for the next couple of years, and then we’ll start to bring that down sort of in the range of a growth rate that approximates our revenue growth range as you go beyond ’24, ‘25-time frame. So again, really just don’t matter of timing is what you’re seeing from a CapEx standpoint.
Operator: Thank you. We’ll take our next question from Brandon Vazquez with William Blair. Please go ahead.
Brandon Vazquez : Hi. Good morning, thank for taking my question. On the companion animal side of things, it’s a nice strong quarter. I think you had said, if I heard you correctly, that in 2023, you expect full year organic growth, double digits. The question being, I think you’re at 7% year-to-date. I’m kind of being a little dangerous here and playing with my model live, but I think it implies kind of like a high teens organic growth in companion animal in the fourth quarter. One, am I thinking about that correctly? And then two, what’s kind of giving you the confidence that the business can do that, especially, I think Q4 is a little bit more difficult year-over-year comp.
Wetteny Joseph : Yes, I’ll be happy to take that. Look, we continue to see, as you saw this quarter, 11% operational growth in companion animal. And though we have some tough comps, as Kristin just referenced with the Trio answer on previous question, we are expecting very, very strong growth across companion animal. And keep in mind, we have some comp challenges with respect to livestock, which will decelerate from what it is on a year-to-date basis, about 6% to a low single-digit growth. So as you look at what’s factored into the guidance that we just gave in narrowing the range, but still maintaining our midpoint, if you will, you can factor that into your equation in terms of what the livestock versus companion animal mix is as we exit the year.
Operator: Thank you. We’ll take our next question from Balaji Prasad with Barclays. Please go ahead.
Balaji Prasad : Hi. Good morning. A couple of questions from me. Firstly, to the extent you can without commenting on any ’24 guidance. Can you highlight some of the macro factors and how you expect that to change? Speaking — looking at the diagnostic space of consumer trends, better option volume? And secondly, a bit more specific. Can you speak about your Librela supply plans? You recently opened a facility, a new facility in Lincoln and what impact does that have for supply costs and margins?
Kristin Peck : Sure. I’ll start with the beginning and then Wetteny maybe you can build on it. We continue to see very strong macro drivers in animal health. It’s really led by the humanization of pets, which is a global trend. It’s also led we continue to look at 2024 as to who’s adopting those pets, which is more of millennial and Gen-Z and importantly, more income households, who are really raising the standard of care that they want to spend on their pets. We see this as important drivers as we bring real innovation to the market with Librela, with Solensia certainly continuing with Cytopoint which is growing very strongly. So we look at the drivers of pet care globally, which is really who’s adopting the pest, how they want to spend on their pets and looking at revenue per clinic, which continues to grow very strongly, which is what we’re really correlated against.
It’s something that continues into 2024. These are strong macro drivers for us. As we’ve spoken about on the livestock side, we really believe that market historically, and we believe in the future will continue to grow. 2% to 4%, low single digits. And as we said, we were going to return to that growth rate as we start to fully lap the challenges with DRAXXIN. So as you look at livestock, what’s driving that is a growing middle class and more consumption of protein, with the whole Ozempic thing aside, which really hasn’t really impacted livestock or the consumption of protein globally, really because of who is really driving a lot of that growth, which is middle classes across the globe, and more and more people entering that and seeing and upgrading their protein.
So we look at those macro drivers, and we really don’t see any changes if we look into not just 2024, but 2025 and 2026. And when we bring innovation to those markets, we believe we can continue to grow ahead of that. So Wetteny, I’m not sure if I missed anything there, and if you want to take the second half of the question?
