10-K – 2026-02-20 – idxx-20251231.htm

A weak economy may also cause deterioration in the financial condition of our distributors and customers, which could inhibit their ability to meet their performance obligations or pay us amounts owed for products delivered or services provided in a timely fashion or at all.

We are subject to risks associated with public health issues, including pandemics, which could have a material adverse effect on our financial condition and results of operations

We are subject to risks associated with public health issues, including pandemics and other events beyond our control. Public health issues and crises may adversely impact our operations, supply chain and logistics network if the locations where we operate, manufacture or distribute our products; where our raw materials or product components are sourced, manufactured or distributed; or where our third-party distributors, suppliers and other service providers operate, are disrupted, temporarily closed or experience worker shortages for a sustained period of time. In addition, public health issues and crises may adversely impact our customers’ businesses due to business lockdowns, decreased companion animal clinical visits, labor shortages, the delay of elective procedures and wellness visits, and disruption of veterinary clinic and other customer operations, all of which could cause a decline in demand for our products and services. These disruptions could also cause economic slowdowns or increased economic uncertainty.

A future public health issue, pandemic, or outbreak could lead to delays in the manufacturing and supply of products, or adversely affect the ability of the USDA, FDA, EPA, or other government agencies to timely review and process our regulatory submissions, which could have a material adverse effect on our business and results of operations. Moreover, any future public health issue, pandemic, or outbreak could result in the imposition of new governmental restrictions, quarantine requirements or other public health measures, which could result in closures or other restrictions that significantly disrupt our operations or those of our third-party distributors, suppliers or other service providers, or otherwise adversely affect our customers’ businesses or operations, or result in actual or perceived economic weakness or slowdowns in one or more of our key geographies, any of which could adversely affect our financial condition.

Our operations and reputation may be impaired if we, our products, or our services do not comply with our global privacy policy or evolving laws, regulations, and industry standards regarding data privacy and protection

Our business operations involve the receipt, storage, transmission, and use of information, including personal data, about our customers, pet owners, suppliers, and employees. We collect and use personal data in a variety of ways. We offer products and services that collect and use personal data, including veterinary practice management systems, online customer communication tools and services, VetConnect PLUS, and two-way integration technology. Some of these products and services rely on third-party providers for cloud computing and storage. We also engage in e-commerce through various websites and collect contact and other personal data from our customers and website visitors, and some of our software products and services enable access to point-of-sale credit card processing functionality for our veterinary customers. In addition, we transfer information, including personal data, among IDEXX, our subsidiaries and third parties with which we have commercial relations for business purposes. Our collection, transfer, protection, security, retention, storage, disclosure, sharing and use of personal data are subject to expanding and increasingly complex laws and regulations in the U.S. and abroad. In addition, these laws and regulations continue to develop and are subject to frequent revisions (and generally have become more stringent over time), are subject to differing interpretations, may be applied inconsistently from jurisdiction to jurisdiction and could be deemed to be inconsistent with our current global privacy policy and data protection practices. Further, some of our customer contracts require us to comply with industry standards adopted by industry groups related to the storage, processing, and transmission of individual cardholder data.
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While we maintain a program to monitor, assess, and comply with applicable global data privacy laws and relevant industry standards, compliance with these evolving requirements is costly, may require us to change our business practices in a manner adverse to our business, and may delay or impede the development and offering of innovative products and services. Additionally, public perception and standards related to the privacy of personal data can shift rapidly, in ways that may affect our reputation or influence regulators and industry groups in the U.S. and abroad to expand or adopt more stringent regulations, laws, and standards. As a global company, we are tasked with navigating a patchwork of privacy laws, both in the U.S. and abroad, which may have conflicting requirements that can make compliance challenging. Some examples include (but are not limited to) the California Consumer Privacy Act, as amended by the California Privacy Rights Act; various U.S. state consumer privacy laws that apply to our business operations within a respective state and/or a U.S. federal privacy law that may be passed in the future; the European Union’s General Data Protection Regulation (“GDPR”), Switzerland’s Federal Act on Data Protection, and the United Kingdom’s General Data Protection Regulation (“UK GDPR”), which impose stringent operational requirements for controllers and processors of personal data of individuals in the European Economic Area (“EEA”), Switzerland, and the United Kingdom (“UK”); the Brazilian General Data Protection Law; the Chinese Personal Information Protection Law; the Japanese Act on the Protection of Personal Information; and the Australian Privacy Act.

An additional area of complexity concerns the restrictions on transfers of personal data from certain countries to others. We currently rely on a mixture of mechanisms to transfer certain personal data from the EEA, Switzerland, and the UK to the U.S. and other third countries including the EU-U.S. Data Privacy Framework (the “EU-U.S. DPF”), the Swiss-U.S. Data Privacy Framework, and the UK Extension to the EU-U.S. DPF. A challenge to the EU-U.S. DPF adequacy decision, adopted in July of 2023, will be reviewed by the European Court of Justice, and international transfers to the U.S. and other jurisdictions generally continue to be subject to enhanced scrutiny by regulators. Any transfers by us or our vendors of personal data are subject to potential regulatory scrutiny and may increase our exposure under the GDPR, UK GDPR, and similar laws which contain cross-border personal data transfer heightened requirements and restrictions (such as the Chinese government standard contract for cross-border personal data transfers).

Any failure or perceived failure by us, the third parties with whom we work, or our products and services to comply with all applicable privacy-related laws, regulations, and standards, as well as our contractual obligations, could result in damage to our reputation, legal proceedings or actions against us by governmental entities or others, fines and other penalties, damage to our ability to enable access to credit card processing functionality for our veterinary customers, and revenue losses, any of which could have an adverse effect on our business. In addition, concerns about our practices with regard to the collection, use, retention, transmission, disclosure, or security of personal data or other privacy-related matters, even if unfounded and even if we are in compliance with applicable laws, regulations, standards, and contractual obligations, could damage our reputation and harm our business.

Failure to meet current or evolving environmental, social, and governance regulations, standards, or expectations or to achieve our environmental, social, or governance goals could adversely affect our business, results of operations, financial condition, reputation, or stock price

Regulators, investors, customers, employees, and other stakeholders are focused on environmental, social, and governance matters, including climate-related issues; human capital matters; and responsible sourcing, human rights, and supply chain. Regulators in the U.S., Europe, and elsewhere are considering or have proposed or adopted various laws, directives or regulations regarding these matters, which include specific, target-driven disclosure requirements or obligations, including the European Union’s Corporate Sustainability Reporting Directive and California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act. Furthermore, our investors, customers, and other stakeholders have additional (and sometimes different or contradictory) expectations.

We strive to align our environmental, social and governance goals with our long-term business-strategy and Purpose. Some stakeholders, however, including government regulators, may disagree with some or all of our goals and initiatives. The focus of our various stakeholders remains inconsistent and may also change and evolve over time, and they continue to have very different (and sometimes contradictory) views on which matters should be prioritized or even undertaken at all. Meeting these emerging and evolving regulations, standards and expectations exposes us to unpredictable reporting obligations or business requirements and will require us to make strategic choices and investments, incur compliance costs, and create new practices, processes, and procedures. We also may be unable to satisfy all stakeholders in light of their varied and sometimes contradictory views and expectations regarding environmental, social, and governance matters. In addition, if we fail (or are perceived to fail) to comply with applicable regulations, or our practices do not meet evolving and sometimes contradictory investor, customer or other stakeholder expectations and standards, then our reputation, ability to attract and retain employees, relationships with some customers, and attractiveness as an investment, business partner, acquiror, or product or service
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provider could be negatively impacted, and we may be exposed to government enforcement actions, private litigation, and increased scrutiny from investors, special interest groups, government regulators, and other stakeholders, any of which could adversely affect our business, results of operations, financial condition, reputation, or stock price.

Our ability to achieve any of these goals is subject to numerous risks, many of which are outside of our control and depend in part on third-party performance or data, and there can be no assurance that we will achieve or maintain them. Our failure (actual or perceived) to adequately update, accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation and expose us to increased scrutiny from investors, special interest groups, and enforcement authorities.

Climate change, or legal, regulatory or market measures to address climate change, could adversely affect our business, financial condition, and results of operation

We operate in many regions around the world where our businesses and the activities of our customers and suppliers could be disrupted by climate change. We are exposed to physical risks (such as extreme weather conditions or rising sea levels), risks in transitioning to a low-carbon economy (such as additional legal or regulatory requirements, changes in technology, market risk, and reputational risk) and social and human effects (such as harm to health and well-being) associated with climate change. These risks can be either acute (short-term) or chronic (long-term).

Potential physical risks from climate change may include altered distribution and intensity of rainfall, prolonged droughts or flooding, increased frequency of wildfires and other natural disasters, rising sea levels, and a rising heat index, any of which could cause negative impacts to our and our customers’ and suppliers’ businesses. Increased frequency and severity of extreme weather events could adversely impact our suppliers, manufacturing locations, logistics, and/or customers. Such impacts may include losses incurred as a result of physical damage to facilities, loss or spoilage of inventory, and business interruption and disruption (e.g., decrease in companion animal clinical visits and diagnostic utilization). Other potential physical impacts due to climate change include reduced access to high-quality water in certain regions and the loss of biodiversity, which could impact future product development. These risks could disrupt our operations and supply chain, which may result in increased costs, or adversely affect our revenues.

New legal or regulatory requirements may be enacted to prevent, mitigate, or adapt to the implications of a changing climate and its effects on the environment. These regulations, which may differ across jurisdictions, could result in our being subject to new or expanded carbon pricing or taxes, increased compliance costs, restrictions on greenhouse gas emissions, investment in new technologies, increased carbon disclosure and transparency, investments in developing data gathering and reporting systems, upgrade of facilities to meet new building codes, increased energy costs, and the redesign of utility systems, which could increase our operating costs. Our supply chain would likely be subject to these same transitional risks and would likely pass along any increased costs to us, which may impact our ability to procure goods or services required for the operation of our business at the quantities and levels we require.

Future operating results could be negatively affected by changes in tax rates, the adoption of new tax legislation or exposure to additional tax liabilities

The nature of our global operations subjects us to local, state, regional, and federal tax laws in jurisdictions around the world. Our future tax expense could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.

While we have taken, and may take further, actions intended to align our corporate structure and intercompany relationships with supporting our growth in international geographies and maintaining operational and tax efficiency and continue to consider all of these developments within our overall tax strategy, changes in tax law in the U.S. and other countries in which we operate or have a presence may materially and adversely impact our income tax liability, provision for income taxes, effective tax rate and results of operation, and there can be no assurance that any actions we take to maintain operational and tax efficiency will effectively mitigate these impacts. Moreover, these actions may increase our operating costs, and if ineffectual, could increase our income tax liabilities and our global effective tax rate.

Our income tax filings are subject to examination by various tax authorities, and the final determination of tax audits could be materially different from that which is reflected in historical income tax provisions and accruals. Significant judgment is required in determining our worldwide provision for income taxes. We regularly assess our exposures related to our worldwide provision for income taxes to determine the adequacy of our provision for taxes. Any reduction in these contingent liabilities or additional assessments would increase or decrease income, respectively, in the period such determination is made.
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If the ultimate determination of taxes owed is for an amount in excess of amounts previously accrued, our business, results of operations and financial condition could be materially adversely affected.

Strengthening of the rate of exchange for the U.S. dollar has a negative effect on our business

We are a global business, with 36% of our revenue during the year ended December 31, 2025, attributable to sales of products and services to customers outside of the U.S. Any strengthening of the rate of exchange for the U.S. dollar against foreign currencies, and in particular the euro, British pound, Canadian dollar, Chinese renminbi, Japanese yen, Australian dollar and Brazilian real, adversely affects our results, as it reduces the dollar value of sales and profits that are made in those currencies. The strengthening of the U.S. dollar has a greater adverse effect on the profits from products manufactured or sourced in U.S. dollars that are exported to international geographies and a lesser effect on profits from foreign sourced products and services due to a natural hedge from international expenses denominated in the corresponding foreign currencies.

For the year ended December 31, 2025, approximately 23% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 22% and 21% for the years ended December 31, 2024, and December 31, 2023, respectively. A strengthening U.S. dollar could also negatively impact the ability of customers outside the U.S. to pay for purchases denominated in U.S. dollars as well as affect our overall competitiveness in international geographies. The accumulated impacts from any continued, longer-term growth in the value of the U.S. dollar against foreign currencies may have a material adverse effect on our operating results. Refer to “Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk” included in this Annual Report on Form 10-K for additional information regarding currency impact.

Our foreign currency hedging activities (refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 19. Hedging Instruments” in the accompanying Notes to consolidated financial statements), which are designed to minimize and delay, but not to eliminate, the effects of foreign currency fluctuations, may not sufficiently offset the adverse financial effect of unfavorable movements in foreign exchange rates on our financial results over the limited time the hedges are in place. In addition, our hedging activities involve costs and risks, such as transactions costs and the risk that our hedging counterparties will default on their obligations.

We primarily hedge intercompany product purchases and sales denominated in the euro, British pound, Canadian dollar, Japanese yen, and Australian dollar. Other foreign currency exposures related to foreign sourced services and emerging markets may not be practical to hedge. In certain cases, these exposures are not offset by foreign currency denominated costs. As we primarily use foreign currency exchange contracts with durations of less than 24 months and enter into contracts to hedge incremental portions of anticipated foreign currency transactions on a quarterly basis for the current and following year, the effectiveness of our foreign currency hedging activities to offset longer-term appreciation in the value of the U.S. dollar against non-U.S. currencies may be limited. Factors that could affect the effectiveness of our hedging activities include accuracy of sales and other forecasts, volatility of currency markets, and the cost and availability of hedging instruments. Since our hedging activities are designed to minimize volatility, they not only temporarily reduce the negative impact of a stronger U.S. dollar, but they also temporarily reduce the positive impact of a weaker U.S. dollar. Our future financial results could be significantly affected by a strengthening value of the U.S. dollar in relation to the foreign currencies in which we conduct business. The degree of this effect for any given time period will depend in part upon our hedging activities.

Restrictions in our debt agreements or our inability to obtain financing on favorable terms may increase our cost of borrowing and limit our activities

Our ability to make scheduled payments and satisfy our other obligations under our Credit Facility and senior notes depends on our future operating performance and on economic, financial, competitive, and other factors beyond our control. Our business may not generate sufficient cash flows to meet these obligations or generate sufficient levels of earnings to satisfy the applicable affirmative, negative, and financial covenants. Our failure to comply with these covenants and the other terms of the Credit Facility and senior notes could result in an event of default and acceleration of our obligations under these agreements, which may require us to seek additional financing or restructure existing debt on unfavorable terms. In addition, adverse changes in credit markets could increase our cost of borrowing and make it more difficult for us to obtain financing, which could limit our ability to execute certain strategies and have an adverse effect on our revenue growth and profitability.

Our senior notes require payment of a prepayment penalty in the event that we elect to repay the notes prior to their stated maturity dates. Should we elect to repay some or all of the outstanding principal balance on our senior notes prior to their stated maturity dates, the prepayment penalty we incur could adversely affect our results of operations and cash flows.

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We fund our operations, capital purchase requirements, and strategic growth needs through cash on hand, funds generated from operations, amounts available under our Credit Facility and senior note financings. If we are unable to obtain financing on favorable terms, we could face restrictions that would limit our ability to execute certain strategies, which could have an adverse effect on our revenue growth and profitability.

Borrowings under our Credit Facility bear interest at variable rates, including rates based on the Secured Overnight Financing Rate (“SOFR”), exposing us to interest rate risk. If interest rates were to increase, our debt service obligations under our variable-rate Credit Facility would increase even if the principal amount borrowed remained the same.

RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES

Fluctuations in our quarterly or annual results may cause our stock price to decline

Our prior operating results have fluctuated due to a number of factors, many of which are beyond our control, including seasonality of certain product lines; changes in our accounting estimates; the impact of acquisitions; timing of distributor purchases, product launches, operating expenditures, and customer marketing and incentive programs; changes in the number and type of competitors and their product and service offerings; changes in our sales and distribution model; changes in the economy affecting consumer spending; and other matters. Similarly, our future operating results may vary significantly from quarter to quarter or year to year due to these and other factors. If our operating results or projected operating results do not meet the expectations of securities analysts or investors in future periods, our stock price may decline.

The market price of our common stock may be volatile, and you may not be able to resell your shares at or above the price you paid

The trading price of our common stock may be volatile. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as other general economic, market, or political conditions, could reduce the market price of our common stock rapidly and unexpectedly, in spite of our operating performance as demonstrated during 2025 where the range of our stock price was from a low of $361.04 to a high of $766.68. Factors that may impact the market price of our common stock include the factors described in this “Risk Factors” section and elsewhere in this Form 10-K, as well as:
• Our stock repurchase program and changes in our capital structure or cost of capital, including the issuance of additional debt or equity;
• Public announcements (including the timing of these announcements) regarding our business, financial performance and prospects or new products or services, product enhancements or technological advances by our competitors or us;
• Trading activity in our stock, including portfolio transactions in our stock by the company, our executive officers and directors, and significant stockholders; trading activity that results from the ordinary course rebalancing of stock indices in which we may be included, such as the S&P 500 Index; trading activity related to our inclusion in, or removal from, any stock indices; and short interest in our common stock, which could be significant from time to time;
• Investor perception of the company and the industry and sectors in which we operate, including changes in earnings estimates or buy/sell recommendations by securities analysts; and whether or not we meet earnings estimates of securities analysts; and
• General financial, domestic, international, economic, and market conditions, including overall fluctuations in the U.S. equity and credit markets, which may experience extreme volatility that, in some cases, is unrelated or disproportionate to the operating performance of particular companies.
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ITEM 1B.    UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C.    CYBERSECURITY

Our Cybersecurity Risk Management Program

Like other companies, we currently inhabit an environment of increasing global cybersecurity vulnerabilities and threats. We aim to effectively assess, identify, and manage material risks from these cybersecurity threats through our cybersecurity risk management program.

Our cybersecurity risk management program includes processes that incorporate and utilize certain principles from the National Institute of Standards and Technology Cybersecurity Framework and the Center for Internet Security – Top 18 Critical Security Controls – Control Level Framework. The program aims to protect and preserve the security, availability, integrity, confidentiality, and privacy of our information systems and information residing on those systems and includes controls and procedures for the prevention, identification, containment, and remediation of cybersecurity threats through the use of various technologies, tools, policies, standards, and practices. Features of our cybersecurity risk management program include:

• An expectation, set forth in our Code of Ethics, that all employees are responsible for protecting our data, operations and environment from unauthorized access and use;
• Regular cybersecurity risk assessments and benchmarking;
• Policies and processes related to the detection and reporting of and response to cybersecurity events;
• Cybersecurity training for all newly hired employees upon onboarding;
• Individualized, biannual employee information security assessments, coupled with tailored follow-on employee trainings;
• Phishing tests conducted at least quarterly on a global basis, with additional periodic phishing tests conducted with high-risk employee groups;
• Channels for employees to report suspicious emails or other activity and the actual or suspected loss, theft, improper use of or access to IDEXX systems or information;
• Deployment and ongoing assessment of the effectiveness of technological tools aimed at preventing, detecting, and mitigating cybersecurity threats;
• Policies and procedures to assess third-party service provider cybersecurity risks and security controls and measures (as part of our procurement process and periodically thereafter);
• Periodic performance of cybersecurity tabletop exercises;
• Regular review of and, as applicable, updates to our cyber incident response plan and protocols, system backup measures, redundancy planning, and disaster recovery plans; and
• Maintenance of a cyber risk insurance policy to help address risk of loss due to certain types of cybersecurity events.
A review of cybersecurity risks is integrated into our annual enterprise risk assessment that occurs as part of our annual strategic planning process and is included in our quarterly disclosure controls and procedures. Our annual enterprise risk assessment process involves the identification and assessment by senior line-of-business and functional leaders, including our Chief Information Security Officer (“CISO”) and Chief Digital and Information Officer (“CDIO”), of the risks relevant to their lines of business and functional areas, the materiality of those risks, our risk tolerances and our plans to manage and mitigate the risks to the extent prudent and feasible.

From time to time, we engage third parties, including assessors, consultants, legal counsel, and others to conduct penetration testing, assess our program, provide recommendations for improvement, and advise us on best practices.

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Material Effects from Risks of Cybersecurity Threats

We do not believe any risks from cybersecurity threats (including from any prior cybersecurity incidents) have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition. There can be no assurances, however, that we or our business partners or suppliers will not experience a future system disruption, attack or security breach that materially impacts our business, operations, results of operations, or financial condition. For more information refer to “Item 1A. Risk Factors, General Risks, We depend on the continuous and reliable operation and security of our information technology systems and our products and services that incorporate or rely on information technology, and any disruption or significant cybersecurity breach or other incident could adversely affect our business.”

Governance of our Cybersecurity Risk Management Program

Role of Management

Our cybersecurity risk management program and activities are led by a dedicated CISO who is also a Vice President of Information Technology. Our CISO reports to our Executive Vice President and General Manager, Global Reference Laboratories, Diagnostic Solutions and Information Technology, and oversees a team of information security professionals within the Information Security Group. Our CISO joined IDEXX in 2024 and has more than twenty years of business and technical experience leading information technology teams, including cybersecurity teams, at high tech, marketing, and healthcare companies. Our CISO is responsible for our cybersecurity-related governance programs, overseeing testing of our compliance with standards and remediation of known risks, and leads our employee training program.

Our CISO is responsible for providing information regarding our cybersecurity risk management program, as well as cybersecurity risks and incidents, to a senior management-level cybersecurity steering committee. Within our cybersecurity risk governance model, the steering committee, which includes our CDIO, CISO, General Counsel, Chief Compliance Officer, Chief Audit Executive, Chief Human Resources Officer, and other senior functional and business leaders, meets quarterly, and more frequently as warranted, to review and discuss, among other things, our cybersecurity risk assessments, prioritization of initiatives, training plans and incident response plan, protocols and testing. This committee regularly provides updates on its discussions and decisions to our Chief Executive Officer.

Role of the Board of Directors

T he Audit Committee has responsibility for overseeing our cybersecurity risk management. In accordance with the Audit Committee’s charter, the Audit Committee at least annually reviews and discusses with management, including the CISO, our processes, policies, procedures, and protocols related to cybersecurity and information security. In addition, the Audit Committee regularly reviews and discusses with management, including the CISO, cybersecurity program assessments and audits, planned improvements, and the status of any information security initiatives, as well as risks from cybersecurity threats pertinent to us and any previous cybersecurity incidents experienced by us, including any material impact or reasonably likely material impact on the Company, our business strategy, results of operations, or financial condition. The Audit Committee provides reports to the Board at each regularly scheduled Board meeting of the matters it has recently addressed, including relating to the oversight of our cybersecurity risk management, and the full Board may participate, as warranted, in the Audit Committee’s sessions on cybersecurity risk management. Outside advisors also may meet from time to time with the Audit Committee or Board, as warranted, to review and discuss cybersecurity matters.
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ITEM 2.    PROPERTIES

Our worldwide headquarters and principal executive offices are located in Westbrook, Maine where we engage in manufacturing, research and development, marketing, sales, and general and administrative support functions.

Primary Facility Locations

Location Functions Own/Lease
Westbrook, Maine Worldwide Headquarters, principal executive offices, and CAG manufacturing Own
Hoofddorp, Netherlands Distribution center, warehousing, International administrative offices Lease
Baar, Switzerland
EMEA administrative offices
Lease

Scarborough, Maine
Water, LPD and Supply Chain
Own

Memphis, Tennessee Distribution center, warehousing, and Reference Lab Lease
North Grafton, Massachusetts
Reference Lab
Own

West Sacramento, California
Reference Lab
Own

Kornwestheim, Germany Reference Lab Own
Wetherby, United Kingdom Reference Lab Own

Markham, Ontario, Canada
Reference Lab
Lease

Elmhurst, Illinois
Reference Lab
Lease

Newmarket, United Kingdom Water manufacturing Lease
Bern, Switzerland LPD manufacturing Lease
Montpellier, France LPD manufacturing Lease
Roswell, Georgia CAG and other manufacturing
Lease

    
Including the locations above, we have over 50 reference laboratories throughout the United States and over 25 reference laboratories internationally, including locations in Europe, Canada, Australia, New Zealand, Asia, and South Africa. The majority of our reference laboratories are leased, with the remainder being owned. We also lease space in various locations worldwide for administrative support, manufacturing, sales, distribution, and storage. We believe that our leased and owned properties are generally in good condition, are well-maintained, and are generally suitable and adequate to carry on our business.

ITEM 3.    LEGAL PROCEEDINGS

Due to the nature of our activities, we are at times subject to pending and threatened legal actions that arise out of the ordinary course of business. In the opinion of management, based in part upon advice of legal counsel, the disposition of any such currently pending or threatened matters is not expected to have a material effect on our results of operations, financial condition, or cash flows. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that our results of operations, financial condition or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.
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PART II

ITEM 5.    MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the NASDAQ Global Select Market under the symbol IDXX.

Holders of Common Stock

As of February 18, 2026, there were 280 holders of record of our common stock. Because the majority of our common stock is held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Purchases of Equity Securities by the Issuer

During the three months ended December 31, 2025, we repurchased shares of common stock as described below:

Period Total Number of Shares Purchased
(a) Average Price Paid per Share
(b) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
(c)
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
(d)

October 1, 2025 to October 31, 2025 162,760  $ 639.30  162,760  3,915,170 
November 1, 2025 to November 30, 2025
89,600  $ 721.16  89,600  3,825,570 
December 1, 2025 to December 31, 2025
103,481  $ 709.39  103,400  3,722,170 
Total 355,841  (2) 355,760  3,722,170 

(1) As of December 31, 2025, our Board of Directors had approved the repurchase of up to 78 million shares of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program. The initial program was approved and announced on August 13, 1999, and the maximum number of shares that may be purchased under the program has been increased by the Board of Directors on numerous occasions. There is no specified expiration date for this repurchase program, and it may be suspended or discontinued at any time. There were no other repurchase programs outstanding during the three months ended December 31, 2025, and no repurchase programs expired during the period.

(2) During the three months ended December 31, 2025, we received 81 shares of our common stock that were surrendered by employees in payment for the required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units. In the above table, these shares are included in columns (a) and (b) but excluded from columns (c) and (d). These shares do not reduce the number of shares that may yet be purchased under the repurchase program.

During the year ended December 31, 2025, we repurchased approximately 2.4 million shares of our common stock in transactions made pursuant to our repurchase program and received approximately 0.02 million shares of our common stock that were surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 20. Repurchases of Common Stock” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K for further information.

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Dividends

We have never declared or paid any cash dividends on our common stock. From time to time, our Board of Directors may consider the declaration of a dividend. However, we have no intention to declare or pay a dividend at this time.

Stock Performance

This graph compares our total stockholder returns, the Total Return for the Standard & Poor’s (“S&P”) 500 Index, the Total Return for the S&P 500 Health Care Index, and the Total Return for the NASDAQ Stock Market Index (U.S. Companies) (the “NASDAQ Index”) prepared by the Center for Research in Security Prices. This graph assumes the investment of $100 on December 31, 2020, in IDEXX’s common stock, the S&P 500 Index, the S&P 500 Health Care Index, and the NASDAQ Index and assumes dividends, if any, are reinvested. Measurement points are the last trading days of the years ended December 2020 to 2025. Historic stock price performance should not be relied on as being indicative of future stock price performance.

2020 2021 2022 2023 2024 2025
 
IDEXX Laboratories, Inc. $100.00 $131.73 $81.61 $111.04 $82.71 $135.34
NASDAQ Index $100.00 $122.18 $82.43 $119.22 $154.48 $187.14
S&P 500 Index $100.00 $128.71 $105.40 $133.10 $166.40 $196.16
S&P 500 Health Care Index $100.00 $126.13 $123.67 $126.21 $129.46 $148.36

ITEM 6.    [RESERVED]
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ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10‑K . The discussion of our financial condition and results of operations and liquidity and capital resources for the year ended December 31, 2023, and year-over-year comparisons between 2024 and 2023, is included in our Annual Report on Form 10-K for the year ended December 31, 2024, within Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

We have included certain terms and abbreviations used throughout this Annual Report on Form 10-K in the “Glossary of Terms and Selected Abbreviations.”

Description of Business Segments . We operate primarily through three business segments: diagnostic and information management-based products and services for the companion animal veterinary industry, which we refer to as the Companion Animal Group (“CAG”); water quality products (“Water”); and diagnostic products and services for livestock and poultry health and to measure the quality and safety of milk and improve producer efficiency, which we refer to as Livestock, Poultry and Dairy (“LPD”). Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 3. Revenue and Note 17. Segment Reporting” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K, for financial information about our segments, including our product and service categories, and our geographic areas.

The following is a discussion of the strategic and operating factors that we believe have the most significant effect on the performance of our business.

Companion Animal Group

Our strategy is to provide veterinarians with the highest quality diagnostic information, software products and services, and medical evidence to support more advanced medical care and information management solutions that help demonstrate the value of diagnostics to pet owners and enable efficient and effective practice management. By doing so, we are able to build a mutually successful relationship with our veterinary customers based on healthy pets, loyal customers, staff efficiency, and expanding practice revenues. We also provide products and services that support veterinarians in engaging and communicating directly with pet owners.

CAG Diagnostics . We provide diagnostic capabilities that meet veterinarians’ diverse needs through a variety of modalities, including point-of-care diagnostic solutions and outside reference laboratory services. Veterinarians that utilize our full line of diagnostic modalities obtain a single view of a patient’s diagnostic results, which allows them to track and evaluate trends and achieve greater medical insight.

Our diagnostic capabilities generate both recurring and non-recurring revenues. Revenues related to capital placements of our point-of-care IDEXX VetLab suite of instruments and our SNAP Pro Analyzer are non-recurring in nature because they are sold to a particular customer only once. Revenues from the associated IDEXX VetLab consumables, SNAP rapid assay test kits, reference laboratory and consulting services, and extended maintenance agreements and accessories related to our IDEXX VetLab instruments and our SNAP Pro Analyzer are recurring in nature, because they are regularly purchased by our customers, typically as they perform diagnostic testing as part of ongoing veterinary care services. Our recurring revenues, most prominently IDEXX VetLab consumables and rapid assay test kits, have significantly higher gross margins than those provided by our instrument sales. Therefore, the sales mix of recurring and non-recurring revenues in a particular period will impact our gross margins.

Diagnostic Capital Revenue . Revenues related to the placement of the IDEXX VetLab suite of instruments are non-recurring in nature, because the customer will buy an instrument once over its respective product life cycle, but will purchase consumables for that instrument on a recurring basis as they use that instrument for diagnostic testing purposes. Many instruments are placed through our customer commitment arrangements in exchange for multi-year customer commitments to purchase recurring products and services.

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Below is a table showing the installed base units of our premium diagnostic instruments as of the years ended December 31, 2025, 2024, and 2023:

(units in thousands) Installed Base

Instrument December 31, 2025 December 31, 2024 December 31, 2023
Catalyst 78 74 69
Premium Hematology 56 52 48
SediVue Dx
24 21 18
IDEXX inVue Dx
6 —  — 

Our long-term success in the continuing growth of our CAG recurring diagnostic products and services is dependent upon: growing volumes at existing customers by increasing their utilization of existing and new test offerings, acquiring new customers, maintaining high customer loyalty and retention, and realizing price increases based on our differentiated products and the growing value of our diagnostic offering. We continually seek opportunities to enhance the care that veterinary professionals give to their patients and clients through supporting the implementation of real-time care testing workflows, which are performing tests and sharing test results with the client at the time of the patient visit. Our latest generation of chemistry, hematolo gy, cytology/morphology, an d urinalysis instruments demonstrates this commitment by offering enhanced ease-of-use, faster time to results, broader test menu, and connectivity to various information technology platforms that enhance the value of the diagnostic information generated by the instruments. In addition, we provide marketing tools and customer support that help drive efficiencies in veterinary practice processes and allow practices to increase the number of clients they see on a daily basis.

With all of our instrument product lines, we seek to differentiate our products from our competitors’ products based on time-to-result, ease-of-use, throughput, breadth of diagnostic menu, flexibility of menu selection, accuracy, reliability, ability to handle compromised samples, analytical capability of diagnostics software, integration with the IVLS and VetConnect PLUS, client communications capabilities, education and training, and superior sales and customer service. Our success depends, in part, on our ability to differentiate our products in a way that justifies a premium price.

Recurring Diagnostic Revenue . Revenues from our IDEXX VetLab consumable products, our SNAP rapid assay test kits, outside reference laboratory and consulting services, and extended maintenance agreements and accessories related to our CAG Diagnostics instruments are considered recurring in nature. For the year ended December 31, 2025, recurri ng diagnostic revenue, which is both highly durable and profitable, accounted for approximately 79% of our consolidated revenue.

Our point-of-care diagnostic solutions, consisting of our IDEXX VetLab consumable products and SNAP rapid assay test kits, provide real-time reference laboratory quality diagnostic results for a variety of companion animal diseases and health conditions. Our outside reference laboratories provide veterinarians with the benefits of a more comprehensive list of diagnostic tests and access to consultations with board-certified veterinary specialists and pathologists, combined with the benefit of same-day or next-day turnaround times for most tests.

We derive substantial revenues and margins from the sale of consumables that are used in IDEXX VetLab instruments, and the multi-year consumable revenue stream is significantly more valuable than the placement of the instrument. Our strategy is to increase diagnostic testing within veterinary practices by placing IDEXX VetLab instruments and increasing instrument utilization of consumables. Utilization can increase due to a greater number of patient samples being run or to an increase in the number of tests being run per patient sample. Our strategy is to increase both drivers. To increase utilization, we seek to educate veterinarians about best medical practices that emphasize the importance of chemistry, hematology, cytology/morphology, and urinalysis testing for a variety of diagnostic purposes, as well as by introducing new testing capabilities that were previously not available to veterinarians.

Our point-of-care diagnostic solutions also include SNAP rapid assay tests that address important medical needs for particular diseases prevalent in the companion animal population. We seek to differentiate these tests from those of other point-of-care test providers and reference laboratory diagnostic service providers based on critically important sensitivity and specificity, as demonstrated by peer-reviewed third-party research, as well as overall superior performance and ease-of-use by providing our customers with combination tests that test a single sample for up to six diseases at once, including the ability to utilize our SNAP Pro Analyzer. We further augment our product development and customer service efforts with sales and marketing programs that enhance medical awareness and understanding regarding certain diseases and the importance of diagnosti c testing.
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The prevalence of point-of-care testing, as opposed to outside reference laboratories such as IDEXX Reference Laboratories, may vary by region. We attempt to differentiate our reference laboratory testing services from those of competitive reference laboratories and competitive point-of-care offerings primarily on the basis of a differentiated test menu, technology employed, quality, turnaround time, customer service, and tools such as VetConnect PLUS that demonstrate the complementary manner in which our laboratory services work with our point-of-care offerings.

Profitability in our laboratory business is supported, in part, by our expanding business scale globally. Profit improvements also reflect benefits from price increases and our ability to achieve operational efficiencies. When possible, we utilize core reference laboratories to service samples from other states or countries, expanding our customer reach without an associated expansion in our reference laboratory footprint. New laboratories may operate at a loss until testing volumes achieve sufficient scale. Acquired laboratories frequently operate less profitably than our existing laboratories, and acquired laboratories may not achieve the profitability of our existing laboratory network for several years until we complete the implementation of operating improvements and efficiencies. Therefore, in the short term, new and acquired reference laboratories generally may have a negative effect on our operating margin.

Recurring reference laboratory revenue growth is achieved both through increased testing volumes, including new test menu additions, with existing customers and through the acquisition of new customers, net of customer losses. We believe the increased number of customer visits by our sales professionals as a result of the growth in our field sales organization has led to increased reference laboratory opportunities with customers who already use one of our point-of-care diagnostic modalities. Recurring reference laboratory diagnostic and consulting revenues have also increased as a result of our customer commitment arrangements, and customer gains from reference laboratory acquisitions, customer list acquisitions, and the opening of new reference laboratories, including laboratories that are co-located with large practice customers.

Veterinary Software, Services, and Diagnostic Imaging Systems . Our portfolio of practice management offerings is designed to serve the full range of customers primarily within the North American, Australian, New Zealand, and European regions. Cornerstone, ezyVet, IDEXX Neo, and Animana practice management systems provide integrated information solutions, backed by customer support and education. These practice management systems support the veterinarian’s ability to practice better medicine and achieve the practice’s business objectives, including a quality client experience, staff efficiency, and practice effectiveness and profitability. We market Cornerstone, ezyVet, and IDEXX Neo practice management systems to customers primarily in North America, Australia, and New Zealand. We market our Animana offering to customers primarily throughout Europe.

Our diagnostic imaging systems offer a convenient radiographic solution that provides superior image quality and the ability to share images with clients virtually anywhere. IDEXX imaging software enables enhanced diagnostic features, including AI-powered tools, reduced manual steps, and time savings on diagnosis, as well as streamlined integration with our other products and services. Our digital radiography systems enable low-dose radiation image capture without sacrificing clear, high-quality diagnostic images, reducing the risk posed by excess radiation exposure for veterinary professionals.

Recurring Revenue . Animana, ezyVet, and IDEXX Neo practice management systems are subscription-based SaaS offerings designed to provide flexible pricing and a durable, recurring revenue stream, while utilizing cloud technology instead of a client server platform. We also offer add-on subscription services, such as Pet Health Network Pro, Vello, Petly Plans, and credit card processing. Our Cornerstone customer base continues to be an important driver of growth through diagnostic integrations and add-on subscription services. We continue to make investments to enhance the customer experience of all of our license-based software offerings. Our large practice management systems installed base provides access to veterinary channel transaction activity, enabling a syndicated data offering.

Our SmartFlow and Vet Radar cloud technology help to improve overall patient management through coordination and tracking of every step in a patient workflow. Our Pet Health Network Pro and Vello software provide online client communication and engagement functionality integrated into our practice management system workflows.

Placements of imaging systems are important to the growth of revenue streams that are recurring in nature, including extended maintenance agreements and IDEXX Web PACS, which is our cloud-based SaaS offering using proprietary AI capabilities to enable optimal sharing, analysis, and storage of diagnostic images. We derive relatively higher margins from our subscription-based products. IDEXX Web PACS is integrated with Cornerstone, ezyVet, IDEXX Neo, and IDEXX VetConnect PLUS to provide centralized access to diagnostic imaging results alongside patient diagnostic results from any internet connected device.

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Systems and Hardware . We differentiate our practice management systems through enhanced functionality, ease-of-use, and embedded integration with point-of-care IDEXX VetLab instruments and outside reference laboratory test results. We offer software, hardware, and integrated services that run key functions of veterinary clinics, including managing patient electronic health records, scheduling, client communication, billing, and inventory management. We also provide installation and advisory services associated with our systems and hardware placements.

Our diagnostic imaging systems capture radiographic images in digital form, replacing traditional x-ray film and the film development processes, which generally require the use of hazardous chemicals and darkrooms. We currently market and sell two diagnostic imaging systems primarily used in small animal veterinary applications: the IDEXX ImageVue DR50 and the IDEXX ImageVue DR30. The IDEXX ImageVue DR50 Plus, which launched in North America in January 2026, combines high definition, AI-powered imaging with a lower dose of radiation compared to our current IDEXX ImageVue DR50 system.

Water

Our strategy in the water testing business is to develop, manufacture, market, and sell products that test primarily for the presence of microbial contamination in water matrices, including drinking water supplies, with superior performance, supported by exceptional customer service. Our customers primarily consist of water utilities, government laboratories, and private certified laboratories that highly value strong relationships and customer support. We expect that future growth in this business will be partially dependent on our ability to increase international sales. Growth also will be dependent on our ability to enhance and broaden our product line. Most water microbiological testing is driven by regulation, and, in many countries, a test may not be used for compliance testing unless it has been approved by the applicable regulatory body and integrated into customers’ testing protocols. As a result, we maintain an active regulatory program that involves applying for a growing number of regulatory approvals in a number of countries, primarily in Europe. Further, we seek to receive regulatory approvals from governing agencies as a means to differentiate our products from the competition.

Livestock, Poultry and Dairy

We develop, manufacture, market, and sell a broad range of tests and perform services for various livestock diseases and conditions, and have active research and development and in-licensing programs in this area. Our strategy is to offer differentiated tests with superior performance characteristics for use in government programs to control or eradicate disease and disease outbreaks and in livestock and poultry producers’ disease, reproductive, and herd health and production management programs. Our Alertys Ruminant Pregnancy Test, Rapid Visual Pregnancy Test, and Alertys On-Farm Pregnancy Test for cattle can detect pregnancy 28 days after breeding. These tests provide a quick and accurate identifier using whole blood samples.

Disease outbreaks are episodic and unpredictable, and certain diseases that are prevalent at one time may be substantially contained or eradicated at a later time. In response to outbreaks, testing initiatives may lead to exceptional demand for certain products in certain periods. Conversely, successful eradication programs may result in significantly decreased demand for certain products. In addition, increases in government funding may lead to increased demand for certain products, and budgetary constraints may lead to decreased demand for certain products. As a result, the performance in certain sectors of this business can fluctuate.

Our strategy in the dairy testing business is to develop, manufacture, and sell antibiotic residue and contaminant testing products that satisfy applicable regulatory requirements or dairy processor standards for testing of milk and provide reliable field performance. The manufacture of these testing products leverages the SNAP platform and production assets that also support our rapid assay business, which also leverages the SNAP platform. The dairy SNAP products incorporate customized reagents for antibiotic and contaminant detection.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The discussion and analysis of our financial condition and results of operations is based upon the consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 2. Summary of Significant Accounting Policies” to the consolidated financial statements included in this Annual Report
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on Form 10-K for a description of the significant accounting policies used in preparation of these consolidated financial statements.

We believe the following critical accounting estimates and assumptions may have a material impact on reported financial condition and operating performance and involve significant levels of judgment to account for highly uncertain matters or are susceptible to significant change.

Revenue Recognition

Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 3. Revenue” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K for additional information about our revenue recognition policy and criteria for recognizing revenue.

We enter into arrangements with multiple performance obligations where customers purchase a combination of IDEXX products and services. The total transaction price of the contractual arrangement is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We recognize revenue as each performance obligation is satisfied, which is when control of the related goods or services is transferred, either at a point in time or over time.

We determine the transaction price for customer contractual arrangements based on the total consideration we expect to receive in exchange for the transferred goods or services. We apply judgment to estimate the transaction price that we expect to earn from multi-year customer contracts, including variable consideration such as certain customer rebates and other incentive payments, and price adjustments. Our estimates are based on historical and projected experience with similar customer contracts, predicted future customer purchases, expected price adjustments and incentive utilization over the term of these arrangements, changing trends and market conditions, and other relevant factors. Variable consideration is included in the estimated transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Differences between estimated and actual customer purchases may impact the timing and amount of revenue recognition during the term of the customer arrangement, and would affect revenue recognized in the period that such differences are incurred, but would not affect the total revenue recognized over a contract term. Although the timing of revenue recognition for these customer arrangements is dependent on estimates and assumptions, historically our adjustments to actual results have not been material. Changes to assumptions used to estimate transaction prices and differences between estimated and actual customer purchases are not reasonably likely to have a material effect on revenue recognized in any annual period or on revenue growth trends.

We determine standalone selling prices in order to allocate the expected consideration from a customer contract to the individual performance obligations. We utilize the observable standalone selling price when available, which represents the price charged for the promised product or service when sold separately. When standalone selling prices for our products or services are not directly observable, we determine the standalone selling prices for products and services using relevant information available and apply suitable estimation methods including, but not limited to, the cost plus a margin approach. We estimate the standalone selling prices for customers’ rights to earn rebates on optional future purchases that are determined to be material rights, which represent the expected value to the customers, based on our historical rebate experience, the contractual rebate structure and terms, and other relevant information. Changes in standalone selling prices would affect the allocation of customer consideration amongst performance obligations, but would not affect the total revenue recognized over a contract term. Changes to assumptions used to determine standalone selling prices are not reasonably likely to have a material effect on revenue recognized in any annual period or on revenue growth trends.

Income Taxes

We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant estimates and judgments are required to determine our worldwide income tax provision, deferred tax assets and liabilities, and any valuation allowances recorded against net deferred tax assets. Substantial changes to our estimates could result in increases or decreases in our income tax provision in the period in which we make the changes, which could have a material impact on our effective tax rate and net income.

Deferred tax assets and liabilities represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. Significant judgment is required to evaluate the need for a valuation allowance against deferred tax assets. For those jurisdictions where tax carryforwards are
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likely to expire unused or the projected operating results indicate that realization is not more-likely-than-not, a valuation allowance is recorded to offset some or all of the deferred tax asset within that jurisdiction. We apply judgment to assess the recoverability of future tax deductions and credits by estimating future expected taxable income and considering prudent and feasible tax planning strategies available in the relevant jurisdiction. Our realizability assessments are made at a given balance sheet date and are subject to change in the future, particularly if earnings of a subsidiary are significantly higher or lower than expected, or if we take operational or tax planning actions that could impact the future taxable earnings of a subsidiary. If our judgment as to realizability changes, the effects of the change would be recognized in the period in which the change occurs.

Our net taxable temporary differences and tax carryforwards are recorded using the enacted tax rates expected to apply to taxable income in the periods in which the deferred tax liability or asset is expected to be settled or realized. Should the applicable tax rates change in the future, an adjustment to our deferred taxes would be credited or charged, as appropriate, to income in the period in which the tax rate change is enacted.

The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations and the potential for future adjustment of our uncertain tax positions by government tax authorities in various jurisdictions. We periodically assess our exposures related to our worldwide provision for income taxes and believe that we have appropriately accrued taxes for contingencies.

We record a liability for uncertain tax positions that do not meet the more-likely-than-not standard as prescribed by U.S. GAAP for income tax accounting. We record tax benefits for only those positions that we believe will more-likely-than-not be sustained. If our judgment as to the likely resolution of an uncertainty changes, if an uncertainty is ultimately settled, or if the statute of limitations related to an uncertainty expires, the effects of the change would be recognized in the period in which the change, resolution, or expiration occurs. Our net liability for uncertain tax positions was $12.7 million as of December 31, 2025, and $18.1 million as of December 31, 2024. We also accrue for estimated interest expense and penalties on our uncertain tax positions to the extent possible.

Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 14. Income Taxes” in the accompanying Notes to consolidated financial statements for more information.

RECENT ACCOUNTING PRONOUNCEMENTS

Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 2. Summary of Significant Accounting Policies (v) and (w)” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K for a complete discussion of recent accounting pronouncements adopted and not adopted.
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RESULTS OF OPERATIONS AND TRENDS

Effects of Certain Factors on Results of Operations

Our financial results have been, and will continue to be, impacted by certain significant trends, including those which are described below. While these trends are important to understanding and evaluating our financial results, this discussion should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K, and the other transactions, events, and trends discussed in “Part I, Item 1A. Risk Factors” included in this Annual Report on Form 10-K.

CAG Trends . Global trends in companion animal healthcare, including growth in demand for clinical services, continue to support growth for companion animal diagnostic products and services across regions. In the U.S., average diagnostics revenue per practice grew approximately 6% on a same-store basis during 2025, faster than approximately 2% growth in overall practice revenues. U.S. same-store clinical visits at veterinary practices declined approximately 2% in 2025, impacted by ongoing veterinary practice capacity challenges, as well as macroeconomic headwinds. Our initial 2026 financial outlook anticipates a similar decline in U.S. same-store clinical growth levels as in 2025, reflecting these near-term sector and macroeconomic dynamics. Our products and services include solutions that help improve staff productivity, create additional capacity at veterinary clinics, and engage and communicate with pet owners.

Supply Chain and Logistics Challenges . We believe that building and maintaining a well-managed and disciplined infrastructure has helped minimize impacts of supply chain constraints, including product and component availability issues; logistics challenges, including extended shipping periods and delays; and inflationary cost pressures. Our proactive approach to managing our operational processes, including forward planning with a focus on working closely with our suppliers and logistics partners, enables us to maintain continued high levels of product and service availability and customer service. We believe we are well-positioned to enable sustained high growth in our businesses and to effectively manage the impacts of potentially higher costs in certain areas to support these growth plans. However, there can be no assurance as to the duration or severity of the supply chain and logistics challenges or the effectiveness of our mitigation activities.

Effects of Economic Conditions . Demand for our products and services is vulnerable to changes in the economic environment, including slow economic growth, inflationary pressure, geopolitical events, tariffs, high unemployment, and credit availability. Negative or cautious consumer sentiment can lead to reduced or delayed consumer spending, resulting in a decreased number of patient visits to veterinary clinics or lower use of diagnostics. Unfavorable economic conditions can impact sales of instruments, diagnostic imaging, and practice management systems, which are larger capital purchases for veterinarians. In the U.S., we monitor patient visits and clinic revenue data provided by a subset of our CAG customers. Although this data is a limited sample, and may be susceptible to short-term impacts, we believe that this data provides a fair and meaningful long-term representation of the trend in patient visit activity in the U.S., providing us insight regarding demand for our products and services.

Economic conditions may also affect the purchasing decisions of our Water and LPD customers. Water testing volumes may be susceptible to declines in discretionary testing for existing home and commercial sales and in mandated testing as a result of decreases in home and commercial construction. In addition, fiscal difficulties can also reduce government funding for water and herd health screening services.

We believe that the diversity of our products and services and the geographic diversity of our customers partially mitigate the potential effects of the economic environment and negative consumer sentiment on our revenue growth rates.

Currency Impact . For the year ended December 31, 2025, approximately 23% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 22% and 21% for the years ended December 31, 2024, and December 31, 2023, respectively. Strengthening of the rate of exchange for the U.S. dollar relative to other currencies has a negative impact on our revenues derived in currencies other than the U.S. dollar and on profits of products manufactured or purchased in U.S. dollars and sold internationally, and a weakening of the U.S. dollar has the opposite effects. Similarly, to the extent that the U.S. dollar is stronger in current or future periods relative to the exchange rates in effect in the corresponding prior periods, our growth rate will be negatively affected. The impact of foreign currency denominated operating expenses and foreign currency denominated supply contracts partly offsets this exposure. Additionally, our designated hedges of intercompany inventory purchases and sales help delay the impact of certain exchange rate fluctuations on non-U.S. denominated revenues. Refer to “Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk” included in this Annual Report on Form 10-K for additional information regarding currency impact. Our future
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income tax expense could also be affected by changes in the mix of earnings, including as a result of changes in the rate of exchange for the U.S. dollar relative to currencies in countries with differing statutory tax rates. Refer to “Part I, Item 1A. Risk Factors” included in this Annual Report on Form 10-K for additional information regarding tax impacts. 

Changes in Tariff and Trade Policies . We manufacture many of our companion animal and water quality products, as well as certain of our LPD testing products, in the United States. We rely on third-party suppliers located in the United States and other regions (such as Europe and Asia Pacific) for certain components, raw materials, and consumables used in or with our products. In addition, as a global business, our products and services are sold in more than 175 countries. For the year ended December 31, 2025, approximately 36% of our overall revenues were attributable to sales of products and services to customers outside the United States. Accordingly, changes in tariff and trade policies may adversely affect our business, financial condition, and operating results.

We aim to optimize operations and inventory management to help reduce the potential impact from changes in tariff and trade policies. However, imposed tariffs (including retaliatory tariffs) and our optimization activities may cause our cost of goods to increase, our profit margins to decrease, or our products to become less competitive or less available in the applicable region. We continue to monitor the dynamic trade environment and evaluate the potential impacts of changes in tariffs and trade policies, but there can be no assurance that any of our optimization activities will be successful in offsetting some portion of these costs or otherwise reducing the impact on our business, financial condition, and operating results.

Distributor Purchasing and Inventories . When selling our products through distributors, changes in distributors’ inventory levels can impact our reported sales, and these changes may be affected by many factors which may not be directly related to underlying demand for our products by veterinary practices. If during a quarter or year, distributors’ inventories grow by less than those inventories grew in the comparable period of the prior year, then changes in distributors’ inventories would have an unfavorable impact on our reported sales growth in the current period. Conversely, if during a quarter or year, distributors’ inventories grow by more than those inventories grew in the comparable period of the prior year, then changes in distributors’ inventories would have a favorable impact on our reported sales growth in the current period. 

In certain countries, we sell our products through third-party distributors and may be unable to obtain data about sales to veterinary practices. We do not believe the impact of changes in these distributors’ inventories have had or would have a material impact on our growth rates. Refer to “Part I, Item 1. Business, Marketing and Distribution” included in this Annual Report on Form 10-K for additional information regarding distribution channels.

Effects of Patent Expiration . Although certain patents and licenses of patents and technologies from third parties periodically expire, the expiration of these patents or licenses, individually or in the aggregate, is not expected to have a material effect on our financial position or future operations due to a range of factors as described in “Part I, Item 1. Intellectual Property, Including Patents and License.”

Non-GAAP Financial Measures . The following revenue analysis and discussion includes organic revenue growth, and references in this analysis and discussion to “revenue,” “revenues,” or “revenue growth” apply equally to revenue growth reported in accordance with U.S. GAAP and to “organic revenue growth.” Organic revenue growth is a non-GAAP financial measure and represents the percentage change in revenue during the current year, compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates, certain business acquisitions, and divestitures. Organic revenue growth should be considered in addition to, and not as a replacement for, or as a superior measure to, revenue growth reported in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers.

We exclude from organic revenue growth the effect of changes in foreign currency exchange rates because changes in foreign currency exchange rates are not under management’s control, are subject to volatility, and can obscure underlying business trends. We calculate the impact on revenue resulting from changes in foreign currency exchange rates by applying the difference between the weighted average exchange rates during the current period and the comparable prior year period to foreign currency denominated revenues for the prior year period. 

We also exclude from organic revenue growth the effect of certain business acquisitions and divestitures because the nature, size, and number of these transactions can vary dramatically from period to period, and because they either require or generate cash as an inherent consequence of the transaction, and therefore can also obscure underlying business and operating trends. We consider acquisitions to be a business when all three elements of inputs, processes, and outputs are present, consistent with ASU 2017-01, “ Business Combinations: (Topic 805) Clarifying the Definition of a Business. ” We do not consider acquired assets to be a business if substantially all the fair value of the assets acquired is concentrated in a single
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identifiable asset or group of similar identifiable assets. A typical acquisition that we do not consider a business is a customer list asset acquisition, which does not have all elements necessary to operate a business, such as employees or infrastructure. Revenue from these customers acquired is included in organic revenue growth because we believe the efforts required to convert and retain these acquired customers are similar in nature to our efforts to obtain and retain our existing customer base.

We also use Adjusted EBITDA, gross debt, net debt, gross debt to Adjusted EBITDA ratio, and net debt to Adjusted EBITDA ratio, all of which are non-GAAP financial measures that should be considered in addition to, and not as a replacement for, financial measures presented according to U.S. GAAP. Management believes that reporting these non-GAAP financial measures provides supplemental analysis to help investors further evaluate our business performance and available borrowing capacity under our Credit Facility.

Segment Income from Operations . We report segment income from operations in our discussion of the results of the operations of our segments below. Segment income from operations is a non-GAAP financial measure that adjusts for the impact of foreign currency transaction gains and losses and should be considered in addition to, and not as a replacement for, or superior measure to, income from operations. We exclude foreign currency transaction gains and losses for each reportable segment (CAG, Water, and LPD) from segment income from operations and report the full amount of foreign currency transaction gains and losses in Other. We believe that reporting segment income from operations provides supplemental analysis to help investors further evaluate each reportable segment’s business performance by excluding foreign currency transaction gains and losses, which are centrally managed by our corporate treasury function and which we do not consider relevant for assessing the results of each reportable segment’s operations.

The reconciliation of these non-GAAP financial measures is as follows:

(dollars in thousands)
For the Years Ended December 31,

2025 2024
Income from Operations Impact from Foreign Currency Segment and Other Income from Operations Income from Operations Impact from Foreign Currency Segment and Other Income from Operations
CAG $ 1,260,969  $ 3,604  $ 1,264,573  $ 1,034,539  $ 3,877  $ 1,038,416 
Water 92,999  269  93,268  84,244  289  84,533 
LPD 2,942  287  3,229  6,272  361  6,633 
Other 3,121  (4,160) (1,039) 3,282  (4,527) (1,245)
Total $ 1,360,031  $ —  $ 1,360,031  $ 1,128,337  $ —  $ 1,128,337 

Comparisons to Prior Periods . Our fiscal years end on December 31. Unless otherwise stated, the analysis and discussion of our financial condition, results of operations and liquidity, including references to growth and organic growth and increases and decreases, are being compared to the equivalent prior year period. 
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Twelve Months Ended December 31, 2025, Compared to Twelve Months Ended December 31, 2024

Total Company

The following table presents revenue by operating segment by U.S. and non-U.S., or international, geographies: 

For the Years Ended December 31,
Net Revenue
(dollars in thousands)
2025 2024 Dollar Change Reported Revenue Growth (1)
Percentage Change from Currency Percentage Change from Acquisitions Organic Revenue Growth (1)

             
CAG $ 3,953,285   $ 3,574,044   $ 379,241   10.6 % 0.8 % —   9.8 %
United States 2,619,461  2,409,152  210,309  8.7 % —  0.1  % 8.7 %
International 1,333,824  1,164,892  168,932  14.5 % 2.5 % —  12.0 %

Water $ 201,149   $ 185,112   $ 16,037   8.7 % 0.6 % —   8.0 %
United States 101,314  95,347  5,967  6.3 % —  —  6.3 %
International 99,835  89,765  10,070  11.2 % 1.3 % —  9.9 %

LPD $ 131,787   $ 122,060   $ 9,727   8.0 % 1.8 % —   6.1 %
United States 25,453  22,250  3,203  14.4 % —  —  14.4 %
International 106,334  99,810  6,524  6.5 % 2.2 % —  4.3 %

Other $ 17,481   $ 16,288   $ 1,193   7.3 % — —   7.3 %

Total Company $ 4,303,702   $ 3,897,504   $ 406,198   10.4 % 0.8 % —   9.6 %
United States 2,752,785  2,533,174  219,611  8.7 % —  0.1  % 8.6 %
International 1,550,917  1,364,330  186,587  13.7 % 2.3 % —  11.3 %

(1) Reported revenue growth and organic revenue growth may not recalculate due to rounding.

Total Company Revenue . The increase in revenue primarily reflected growth in CAG Diagnostics recurring revenue, including benefits from higher volumes and higher realized prices. Volume growth was supported by new business gains, our expanded menu of available tests, and higher utilization in our loyal customer base, partially constrained by macroeconomic and sector headwinds. Instrument revenue gains were primarily due to the placements of our new IDEXX inVue Dx Analyzer. Higher volume and price gains in recurring veterinary software, services, and diagnostic imaging also contributed to revenue growth. Higher revenue in our Water business was primarily due to the benefits from higher realized prices and higher volumes. The increase in LPD revenue was primarily due to higher volumes and higher realized prices. The impact from changes in foreign currency exchange rates increased total revenue growth by 0.8%.
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The following table presents our consolidated Company results of operations:

For the Years Ended December 31, Change
Total Company - Results of Operations
(dollars in thousands)
2025 Percent of Revenue 2024 Percent of Revenue Amount Percentage
           
Revenues $ 4,303,702    $ 3,897,504  $ 406,198  10.4 %
Cost of revenue 1,644,123    1,518,577  125,546  8.3 %
Gross profit 2,659,579  61.8  % 2,378,927  61.0  % 280,652  11.8 %

Operating Expenses:
Sales and marketing 643,547  15.0  % 588,507  15.1  % 55,040  9.4 %
General and administrative 404,794  9.4  % 442,291  11.3  % (37,497) (8.5 %)
Research and development 251,207  5.8  % 219,792  5.6  % 31,415  14.3 %
Total operating expenses 1,299,548  30.2  % 1,250,590  32.1  % 48,958  3.9 %
Income from operations
$ 1,360,031  31.6  % $ 1,128,337  29.0  % $ 231,694  20.5 %

Gross Profit . Gross profit increased due to higher revenue and an 80 basis point increase in the gross profit margin. The net increase in the gross profit margin reflected benefits from recurring revenue growth in IDEXX VetLab consumable and reference laboratory testing volumes, along with operational productivity and pricing benefits, which offset the impacts from higher product and labor costs due to, in part, inflationary cost effects. These increases in the gross profit margin were reduced by the business mix impact from higher instrument revenue. The impact from changes in foreign currency exchange rates on the gross profit margin was not significant, including the impact of hedge losses in the current year compared to hedge gains in the prior year.

Operating Expenses . Sales and marketing expense increased primarily due to higher personnel-related costs and higher expenses to support marketing outreach activities. General and administrative expense decreased primarily due to a $61.5 million expense in the prior year and a reduction in accrued expense of approximately $9 million in the first quarter of the current year, related to a now-concluded litigation matter, partially offset by higher personnel-related and information technology and security costs. Research and development expense increased due to development project costs for new products and services, including higher personnel-related costs. The impact from changes in foreign currency exchange rates increased operating expense growth by less than 1%.
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Companion Animal Group  

The following table presents revenue by product and service category for CAG: 

For the Years Ended December 31,
Net Revenue
(dollars in thousands)
2025 2024 Dollar Change Reported Revenue Growth (1)
Percentage Change from Currency Percentage Change from Acquisitions Organic Revenue Growth (1)

             
CAG Diagnostics recurring revenue: $ 3,407,199   $ 3,129,492   $ 277,707   8.9 % 0.8 % —   8.1 %
IDEXX VetLab consumables 1,496,752  1,303,250  193,502  14.8 % 1.1 % —  13.7 %
Rapid assay products 348,950  359,754  (10,804) (3.0 %) 0.3 % —  (3.3 %)
Reference laboratory diagnostic and consulting services 1,424,073  1,336,121  87,952  6.6 % 0.7 % —  5.9 %
CAG Diagnostics services and accessories 137,424  130,367  7,057  5.4 % 1.0 % —  4.5 %
CAG Diagnostics capital - instruments $ 200,206   $ 131,928   $ 68,278   51.8 % 2.5 % —   49.3 %
Veterinary software, services, and diagnostic imaging systems:
$ 345,880   $ 312,624   $ 33,256   10.6 % —   0.4   % 10.2 %
Recurring revenue 276,338  250,359  25,979  10.4 % —  0.4  % 9.9 %
Systems and hardware
69,542  62,265  7,277  11.7 % (0.1 %) 0.4  % 11.4 %
Net CAG revenue $ 3,953,285   $ 3,574,044   $ 379,241   10.6 % 0.8 % —  9.8 %

(1) Reported revenue growth and organic revenue growth may not recalculate due to rounding.

CAG Diagnostics Recurring Revenue . The increase in CAG Diagnostics recurring revenue was primarily due to higher volumes of IDEXX VetLab consumables and reference laboratory testing, partially constrained by macroeconomic and sector headwinds, as well as benefits from higher realized prices. Volume growth was supported by new business gains, our expanded menu of available tests, and higher utilization in our loyal customer base . The impact from changes in foreign currency exchange rates increased CAG Diagnostics recurring revenue growth by 0.8% .

The increase in IDEXX VetLab consumables revenue was primarily due to higher volumes and higher realized prices. Volume gains were supported by increases in testing, including the benefits from 12% growth in our installed base of premium instruments, which reflected new customers and continued high customer retention rates, as well as our expanded menu of available tests. The impact from changes in foreign currency exchange rates increased revenue growth by 1.1%.

The decrease in rapid assay revenue resulted primarily from a shift of customers’ pancreatic lipase testing to our Catalyst instrument platform and macroeco nomic and sector headwinds, partially offset by higher realized prices.

The increase in reference laboratory diagnostic and consulting services revenue was due to higher testing volumes in North America, Europe, and Asia Pacific and higher realized prices. The impact from changes in foreign currency exchange rates increased revenue growth by 0.7%.

The increase in CAG Diagnostics services and accessories revenue was primarily a result of the expansion of our installed base of premium instruments. The impact from changes in foreign currency exchange rates increased revenue growth by 1.0%.

CAG Diagnostics Capital – Instrument Revenue . T he increase in instrument revenue was primarily due to placements of our new IDEXX inVue Dx Analyzer, partially offset by lower placements of other premium instruments. The impact from changes in foreign currency exchange rates increased revenue growth by 2.5%.

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Veterinary Software, Services, and Diagnostic Imaging Systems Revenue . The increase in recurring revenue was primarily due to higher subscription and support services volume from our expanded SaaS installed base and higher realized prices . The increase in our systems and hardware revenue was primarily due to higher diagnostic imaging system sales. The impact of a business acquisition increased overall Veterinary Software, Services, and Diagnostic Imaging Systems revenue growth by 0.4%.

The following table presents the CAG segment results of operations:

For the Years Ended December 31, Change
Results of Operations
(dollars in thousands)
2025 Percent of Revenue 2024 Percent of Revenue Amount Percentage
           
Revenues $ 3,953,285  $ 3,574,044  $ 379,241  10.6 %
Cost of revenue 1,504,611  1,394,864  109,747  7.9 %
Gross profit 2,448,674  61.9  % 2,179,180  61.0  % 269,494  12.4 %

Segment operating expenses:

Sales and marketing 586,376  14.8  % 536,171  15.0  % 50,205  9.4 %
General and administrative 364,864  9.2  % 402,198  11.3  % (37,334) (9.3 %)
Research and development 232,861  5.9  % 202,395  5.7  % 30,466  15.1 %
Total segment operating expenses 1,184,101  30.0  % 1,140,764  31.9  % 43,337  3.8 %
Segment income from operations $ 1,264,573  32.0  % $ 1,038,416  29.1  % $ 226,157  21.8 %

Gross Profit . Gross profit increased primarily due to higher revenue and a 90 basis point increase in the gross profit margin. The net increase in the gross profit margin reflected benefits from recurring revenue growth in IDEXX VetLab consumable and reference laboratory testing volumes, along with operational productivity and pricing benefits, which offset the impacts from higher product and labor costs due to, in part, inflationary cost effects. These increases in the gross profit margin were reduced by the business mix impact from higher instrument revenue. The impact from changes in foreign currency exchange rates on the gross profit margin was not significant, including the impact of lower hedge gains in the current year, compared to the prior year.

Segment Operating Expenses . Sales and marketing expense increased primarily due to higher personnel-related costs and higher expenses to support marketing outreach activities. General and administrative expense decreased primarily due to a $61.5 million expense in the prior year and a reduction in accrued expense of approximately $9 million in the first quarter of the current year, related to a now-concluded litigation matter, partially offset by higher personnel-related and information technology and security costs. Research and development expense increased due to development project costs for new products and services, including higher personnel-related costs. The impact from changes in foreign currency exchange rates increased operating expense growth by less than 1%.
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Water

The following table presents the Water segment results of operations:

For the Years Ended December 31, Change
Results of Operations
(dollars in thousands)
2025 Percent of Revenue 2024 Percent of Revenue Amount Percentage
           
Revenues $ 201,149  $ 185,112  $ 16,037  8.7 %
Cost of revenue 61,860  55,101  6,759  12.3 %
Gross profit 139,289  69.2  % 130,011  70.2  % 9,278  7.1 %

Segment operating expenses:

Sales and marketing 25,469  12.7  % 23,149  12.5  % 2,320  10.0 %
General and administrative 14,827  7.4  % 16,873  9.1  % (2,046) (12.1 %)
Research and development 5,725  2.8  % 5,456  2.9  % 269  4.9 %
Total segment operating expenses
46,021  22.9  % 45,478  24.6  % 543  1.2 %
Segment income from operations
$ 93,268  46.4  % $ 84,533  45.7  % $ 8,735  10.3 %

Revenue . The increase in revenue was primarily due to higher realized prices and higher volumes. The increase in volumes was due to higher testing volumes in Europe, North America, and Asia Pacific, as well as higher sales volumes of our Tecta systems, our new UV Viewer Plus, and accessories. The impact from changes in foreign currency exchange rates increased revenue growth by 0.6%.

Gross Profit . The increase in gross profit for Water was primarily due to higher revenue, partially offset by a 100 basis point decrease in the gross profit margin. The net decrease in the gross profit margin was due to higher product and distribution costs, partially offset by higher realized prices. The impact from changes in foreign currency exchange rates decreased the gross profit margin by approximately 20 basis points, including the impact of lower hedge gains in the current year, compared to the prior year.

Segment Operating Expenses . Sales and marketing expense increased primarily due to higher personnel-related and higher trade show and sales meeting costs. General and administrative expense decreased primarily due to lower personnel-related costs and lower bad debt expense. Research and development expense increased primarily due to higher personnel-related costs, partially offset by lower project costs. The impact from changes in foreign currency exchange rates was not significant to operating expense growth.

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Livestock, Poultry and Dairy

The following table presents the LPD segment results of operations:

For the Years Ended December 31, Change
Results of Operations
(dollars in thousands)
2025 Percent of Revenue 2024 Percent of Revenue Amount Percentage
           
Revenues $ 131,787  $ 122,060  $ 9,727  8.0 %
Cost of revenue 67,579  59,500  8,079  13.6 %
Gross profit 64,208  48.7  % 62,560  51.3  % 1,648  2.6 %

Segment operating expenses:

Sales and marketing 30,685  23.3  % 28,027  23.0  % 2,658  9.5 %
General and administrative 18,174  13.8  % 16,716  13.7  % 1,458  8.7 %
Research and development 12,120  9.2  % 11,184  9.2  % 936  8.4 %
Total segment operating expenses
60,979  46.3  % 55,927  45.8  % 5,052  9.0 %
Segment income from operations
$ 3,229  2.5  % $ 6,633  5.4  % $ (3,404) (51.3 %)

Revenue . The increase in revenue was primarily due to volume growth in the Americas and Asia Pacific, and higher realized prices. The impact from changes in foreign currency exchange rates increased revenue growth by 1.8% .

Gross Profit . The increase in LPD gross profit was primarily due to higher revenues, partially offset by a 260 basis point de crease in the gross profit margin. The net decrease in the gross profit margin was primarily due to higher product costs, partially offs et by higher realized prices and manufacturing efficiencies. The impact from changes in foreign currency exchange rates decreased the gross profit margin by approximately 90 basis points, including the impact of hedge losses in the current year, compared to hedge gains in the prior year.

Segment Operating Expenses . Sales and marketing expense increased primarily due to higher personnel-related and higher trade show and sales meeting costs. General and administrative expense increased primarily due to higher bad debt expense and personnel-related costs. Research and development expense increased primarily due to higher personnel-related costs in the current year. The impact from changes in foreign currency exchange rates increased operating expense growth by approximately 1%.

Non-Operating Items

Interest Expense and Income . Interest expense was $38.9 million for the year ended December 31, 2025, compared to $31.2 million for the prior year. The increase in interest expense was primarily due to higher average debt levels and higher interest rates. Interest income was $3.0 million for the year ended December 31, 2025, compared to $12.7 million for the prior year. This decrease in interest income is primarily due to a decrease in money market investments.

Provision for Income Taxes . Our effective income tax rates were 20.0% for the years ended December 31, 2025, and December 31, 2024. Our effective tax rate for the year ended December 31, 2025, was consistent with the prior year; the impact from an increase in tax benefits related to share-based compensation was largely offset by a reduction in our U.S. tax benefit associated with Foreign-Derived Intangible Income resulting from the acceleration of research and development deductions as allowed by recent U.S. tax law changes. Our projected effective tax rate for 2026 is approximately 21.3%. This increase in the projected 2026 effective tax rate is primarily due to estimated reductions in share-based compensation tax benefits, as compared to 2025.

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LIQUIDITY AND CAPITAL RESOURCES

We fund the capital needs of our business through cash on hand, funds generated from operations, proceeds from long-term senior note financings, and amounts available under our Credit Facility. We generate cash primarily through the payments made by customers for our companion animal, livestock, poultry, dairy, and water products and services, consulting services, and other various systems and services. Our cash disbursements are primarily related to compensation and benefits for our employees, inventory and supplies, repurchase of our common stock, taxes, research and development, capital expenditures, rents, occupancy-related charges, interest expense, and business acquisitions. As of December 31, 2025, we had $180.1 million of cash and cash equivalents, compared to $288.3 million as of December 31, 2024. Working capital totaled $265.0 million as of December 31, 2025, compared to $332.0 million as of December 31, 2024. The change in working capital is primarily due to lower cash and higher borrowings on our Credit Facility, partially offset by higher receivables and lower outstanding borrowing on the current portion of our Senior Notes, as compared to the prior year. As of December 31, 2025, we had a remaining borrowing availability of $850.2 million under our $1.25 billion Credit Facility, with $398.0 million in outstanding borrowings under our Credit Facility, and an option for the Company to incur incremental revolving credit commitments and/or term loans in the aggregate principal amount of up to $250.0 million. The general availability of funds under our Credit Facility is reduced by $1.8 million for outstanding letters of credit. We believe that, if necessary, we could obtain additional borrowings to fund our growth objectives. We further believe that current cash and cash equivalents, funds generated from operations, and committed borrowing availability will be sufficient to fund our operations, capital purchase requirements, and anticipated growth needs for the next twelve months. We believe that these resources, coupled with our ability, as needed, to incur incremental revolving credit commitments and/or term loans under our Credit Facility and otherwise obtain additional financing, will also be sufficient to fund our business as currently conducted for the foreseeable future. We may enter into new financing arrangements or refinance or retire existing debt in the future depending on market conditions. Should we require more capital in the U.S. than is generated by our operations, for example to fund significant discretionary activities, we could elect to raise capital in the U.S. through the incurrence of debt or equity issuances, which we may not be able to complete on favorable terms or at all. In addition, these alternatives could result in increased interest expense or other dilution of our earnings.

We manage our worldwide cash requirements considering available funds among all of our subsidiaries. Our foreign cash and cash equivalents are generally available without restrictions to fund ordinary business operations outside the U.S.

The following table presents cash, cash equivalents, and marketable securities held domestically and by our foreign subsidiaries:

For the Years Ended December 31,
Cash and cash equivalents
(in thousands)
2025 2024
   
U.S. $ 1,606  $ 145,118 
Foreign 178,464  143,148 
Total cash and cash equivalents
$ 180,070  $ 288,266 
   
Total cash, cash equivalents, and marketable securities held in U.S. dollars by our foreign subsidiaries
$ 24,571  $ 10,623 

As of December 31, 2025, more than 99% of the cash and cash equivalents held were held as bank deposits at a diversified group of institutions, primarily systemically important banks. Cash and cash equivalents as of December 31, 2025, included approximately USD $1.0 million in cash denominated in non-U.S. currencies held in a country with currency control restrictions, which limit our ability to transfer funds outside of the country in which they are held without incurring costs. The currency control restricted cash is generally available for use within the country where it is held.

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The following table presents additional key information concerning working capital:

For the Three Months Ended
December 31, 2025 September 30, 2025 June 30,
2025 March 31, 2025 December 31, 2024
       
Days sales outstanding (1)
46.8  46.5  44.7  45.7  47.1 
Inventory turns (2)
1.6  1.5  1.5  1.3  1.3 

(1)     Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that quarter, the result of which is then multiplied by 91.25 days.
(2)     Inventory turns are calculated as the ratio our inventory-related cost of revenue for the quarter multiplied by four, divided by the average inventory balances at the beginning and end of each quarter.

Sources and Uses of Cash

The following table presents cash provided (used): 

(in thousands) For the Years Ended December 31,
2025 2024 Dollar Change
   
Net cash provided by operating activities $ 1,181,805  $ 929,001  $ 252,804 
Net cash used by investing activities (136,239) (207,062) 70,823 
Net cash used by financing activities (1,164,964) (878,073) (286,891)
Net effect of changes in exchange rates on cash 11,202  (9,532) 20,734 
Net change in cash and cash equivalents $ (108,196) $ (165,666) $ 57,470 

Operating Activities . Cash provided by operating activities during the year ended December 31, 2025, was $1.2 billion, which was a net increase in operating cash flows of $252.8 million, compared to the prior year. Cash was provided from net income of $1.1 billion, adjusted for net non-cash items of $349.9 million, partially offset by a net decrease from changes in operating assets and liabilities of $227.5 million.

The following table presents cash flow impacts from changes in operating assets and liabilities, excluding the effects of foreign exchange rate fluctuations: 

(in thousands) For the Years Ended December 31,
2025 2024 Dollar Change
   
Accounts receivable $ (68,722) $ (28,280) $ (40,442)
Inventories (789) (28,001) 27,212 
Accounts payable (8,573) 8,086  (16,659)
Deferred revenue 6,929  (4,378) 11,307 
Other assets and liabilities (156,359) (80,665) (75,694)
Total change in cash due to changes in operating assets and liabilities $ (227,514) $ (133,238) $ (94,276)

Cash used due to changes in operating assets and liabilities during the year ended December 31, 2025, compared to the prior year, increased $94.3 million. Cash used for other assets and liabilities increased $75.7 million, compared to the prior year. During 2025, we paid approximately $80 million, which was accrued in prior years, to conclude a litigation matter, and the payment is included within the cash flow impacts from changes in other assets and liabilities. Cash used to fund contract assets and consideration paid to customers arising from customer commitment arrangements also increased in 2025, compared to the prior year. Increases in cash used for other assets and liabilities were partially offset by lower tax payments and lower annual employee incentive program payments in 2025. Cash used for accounts receivable increased $40.4 million, compared to the prior year, primarily due to the timing of customer payments received and higher revenue.

We have historically experienced proportionally lower net cash flows from operating activities during the first quarter and proportionally higher cash flows from operating activities for the remainder of the year and for the annual period, driven primarily by payments related to annual employee incentive programs in the first quarter following the year for which the bonuses were earned.

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Investing Activities .   Cash used by investing activities was $136.2 million during 2025, compared to $207.1 million used during 2024. The decrease in cash used by investing activities during 2025, compared to 2024, was primarily due to the acquisition of a software business during the prior year.

Our projected capital expenditures for 2026 are estimated to be approximately $180.0 million, which includes capital investments in manufacturing and operations facilities to support growth, as well as investments in customer-facing software development.

Financing Activities . Cash used by financing activities was $1.2 billion during 2025, compared to $878.1 million used during 2024. The increase in cash used was primarily due to an increase of $379.9 million in cash used to repurchase shares of our common s tock during 2025 , compared to 2024, as well as the repayment in full upon the maturity of our 2025 Series C Notes for $103.4 million, and the repayment in full upon maturity of our 2025 Series B Notes for $75.0 million. These increases in cash used by financing were partially offset by borrowings of $148.0 million under our Credit Facility during 2025, compared to no borrowings or repayments under our Credit Facility during the prior year, and the repayment in full upon the maturity of our 2024 Series B Notes during the prior year for $75.0 million.

Repurchases of our common stock vary depending upon the level of other investing and deployment activities, as well as share price and prevailing interest rates. We believe that the repurchase of our common stock is a favorable means of returning value to our stockholders, and we also repurchase our stock to offset the dilutive effect of our share-based compensation programs. We primarily fund our share repurchases with cash generated from operations, as well as from various capital market activities, including the committed available financing through our Credit Facility. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 20. Repurchases of Common Stock” for additional information about our share repurchases. We currently anticipate a 1% to 2% reduction in diluted shares through share repurchases in 2026, subject to market conditions.

The aggregate principal amount of our 2026 Senior Notes will become due and payable on September 4, 2026. We anticipate funding the full repayment of our 2026 Senior Notes for $75.0 million when due in September 2026 with available cash on hand, borrowings under our Credit Facility, or proceeds from the issuance of new notes, or a combination thereof.

The obligations under our senior notes may be accelerated upon the occurrence of an event of default under the applicable Senior Note Agreements, each of which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency-related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the failure to pay specified indebtedness, and a change of control default.

Under the $1.25 billion Credit Facility, the $1.0 billion unsecured credit line matures on November 12, 2030, the $250.0 million Term Loan matures on November 12, 2028, and no scheduled principal prepayments are required before these respective dates. Our Credit Facility also includes an option for the Company to incur incremental revolving credit commitments and/or term loans in the aggregate principal amount of up to $250.0 million. Our Credit Facility contains affirmative, negative, and financial covenants customary for financings of this type. The applicable interest rate for borrowings in U.S. Dollars under our Credit Facility is calculated at a per annum rate equal to either (at our option) (1) a base rate (determined as the greatest of the prime rate, the NYFRB Rate plus 0.50%, and the Adjusted Term SOFR Rate for a one-month Interest Period plus 1.0% (but no less than 1.0%)), plus a margin rate ranging from 0.0% to 0.375% based on our consolidated leverage ratio, (2) the Adjusted Term SOFR Rate, plus a margin rate ranging from 0.875% to 1.375% based on our consolidated leverage ratio, or (3) the Adjusted Daily Simple SOFR Rate, plus a margin rate ranging from 0.875% to 1.375% based on our consolidated leverage ratio. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 13, Debt” for additional information about our applicable interest rates on our Credit Facility. Under our Credit Facility, we also pay on a quarterly basis commitment fees ranging from 0.075% to 0.25% per annum, based on our consolidated leverage ratio, on any unused commitment.

As of December 31, 2025, we had $398.0 million in borrowings outstanding under our Credit Facility, of which $250.0 million was on our Term Loan under our Credit Facility. As of December 31, 2024, we had $250.0 million in borrowings outstanding under our Credit Facility, all of which was on our $250.0 million Term Loan under our Credit Facility. The general availability of funds under our Credit Facility was further reduced by $1.8 million and $1.9 million for letters of credit that were issued primarily in connection with our workers' compensation policy as of December 31, 2025, and December 31, 2024, respectively. Our Credit Facility contains affirmative, negative, and financial covenants customary for financings of this type. The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental
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changes, investments, transactions with affiliates, certain restrictive agreements, and violations of sanctions laws and regulations. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, and share-based compensation not to exceed 3.5-to-1. As of December 31, 2025, we were in compliance with the covenants of our Credit Facility. The obligations under our Credit Facility may be accelerated upon the occurrence of an event of default under our Credit Facility, which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under ERISA, the failure to pay specified indebtedness, and a change of control default.

Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 13, Debt” for additional information about our Senior Notes, Senior Note Agreements, and Credit Facility.

Effect of Currency Translation on Cash . The net effects of changes in foreign currency exchange rates are related to changes in exchange rates between the U.S. dollar and the functional currencies of our foreign subsidiaries with non-U.S. dollar functional currencies. These changes will fluctuate each year as the value of the U.S. dollar relative to the value of foreign currencies changes. The value of a currency depends on many factors, including interest rates, and the issuing governments' debt levels and strength of economy.

Off-Balance Sheet Arrangements . We have no off-balance sheet arrangements or variable interest entities except for letters of credit and third-party guarantees, as reflected in “Part II, Item 8. Financial Statements and Supplementary Data, Note 13 Debt” and “Part II, Item 8. Financial Statements and Supplementary Data. Note 16. Commitments, Contingencies and Guarantees” to the consolidated financial statements for the year ended December 31, 2025, included in this Annual Report on Form 10-K, respectively.

Financial Covenant . The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, and share-based compensation, as defined in the Senior Note Agreements and Credit Facility, not to exceed 3.5-to-1. As of December 31, 2025, we were in compliance with the covenants of the Senior Note Agreements and Credit Facility. The following details our consolidated leverage ratio calculation:

(in thousands) Twelve Months Ended
Trailing 12 Months Adjusted EBITDA: December 31, 2025
 
Consolidated Net Income
$ 1,059,464 
Consolidated Interest Charges
38,852 
Provision for income taxes 264,725 
Depreciation and amortization expense
145,183 
Non-recurring transaction expense incurred in connection with Acquisitions *
90 
Non-cash charges associated with Share Based Payments
60,013 
Extraordinary and other non-recurring non-cash losses and charges *
820 
Adjusted EBITDA $ 1,569,147 

 * Descriptions are contractually defined and may differ from U.S. GAAP definitions.
 
 
(dollars in thousands) Twelve Months Ended
Debt to Adjusted EBITDA Ratio: December 31, 2025
 
Credit Facility
$ 398,000 
Current and long-term portion of long-term debt 449,837 
Total debt 847,837 
Acquisition-related consideration payable 1,800 
Deferred financing costs 163 
Gross debt $ 849,800 
Gross debt to Adjusted EBITDA ratio 0.54 

Cash and cash equivalents $ (180,070)
Net debt $ 669,730 
Net debt to Adjusted EBITDA ratio 0.43 

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Commitments, Contingencies and Guarantees

For more information regarding our commitments, contingencies, and guarantees, refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 16. Commitments, Contingencies and Guarantees.”

For more information on our future lease payments, refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 8. Lease Commitments” for our minimum lease payment schedule. The expected timing of payments of our leases may be different in future years, depending on decisions to extend lease terms and/or enter into additional leases in the preceding years.

For more information on our future Swiss defined benefit pension plans payments, refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 23. IDEXX Retirement and Incentive Savings Plan” for our future benefits expected to be paid.

As of December 31, 2025, current liabilities include $398.0 million in outstanding borrowings under our Credit Facility and the current portion of long-term debt of $75.0 million recorded as current liabilities. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 13. Debt” for more information about our Credit Facility and Senior Notes.

We also have purchase obligations that include agreements and purchase orders to purchase goods or services that are contractually enforceable and that specify all significant terms, including fixed or minimum quantities, pricing, and approximate timing of purchases. As of December 31, 2025, we had approximately $207.3 million in purchase obligations due in 2026. Our purchase obligations beyond 2026 are approximately $136.7 million. These purchase obligation amounts do not include amounts recorded in accounts payable as of December 31, 2025. The expected timing of payments of our purchase obligations is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for some obligations.

Additionally, we have agreements with third parties that we have entered into in the ordinary course of business under which we are obligated to indemnify such third parties for and against various risks and losses. The precise terms of such indemnities vary with the nature of the agreement. In many cases, we limit the maximum amount of our indemnification obligations, but in some cases those obligations may be theoretically unlimited. We have not incurred material expenses in discharging any of these indemnification obligations, and, based on our analysis of the nature of the risks involved, we believe that the fair value of these agreements is minimal. Accordingly, we did not record any liabilities for these obligations as of December 31, 2025, and 2024, and do not anticipate any future payments for these guarantees.
57

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risk consists primarily of foreign currency exchange risk, interest rate risk, and effects of inflation. Our functional currency is the U.S. dollar and our primary manufacturing operations and inventory supply contracts are in the U.S. or in U.S. dollars, but we distribute our products worldwide both through direct export and through our foreign subsidiaries. Our primary foreign currency transaction risk consists of intercompany purchases and sales of products, and we attempt to mitigate this risk through our hedging program described below. For the year ended December 31, 2025, approximately 23% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies, compared to 22% and 21% for the years ended December 31, 2024 and 2023, respectively. The functional currency of most of our subsidiaries is their local currency.

Our foreign currency exchange impacts are comprised of three components: 1) local currency revenues and expenses; 2) the impact of hedge contracts; and 3) intercompany and monetary balances for our subsidiaries that are denominated in a currency that is different from the functional currency used by each subsidiary. 

The following table presents the estimated foreign currency exchange impact on our revenues, operating profit, and diluted earnings per share for the current period and compared to the respective prior-year period:

For the Years Ended December 31,
(in thousands, except per share amounts) 2025 2024 2023

Revenue increase (decrease)
$ 33,139  $ (9,471) $ (4,603)

Operating profit increase (decrease), excluding hedge activity and exchange impacts on settlement of foreign currency denominated transactions
$ 16,579  $ (4,253) $ (5,489)
Hedge gain (losses) - current period
(801) 5,932  3,512 
Foreign currency transaction (losses) - current period
(4,160) (4,527) (1,078)
Operating profit increase (decrease) - current period
$ 11,618  $ (2,848) $ (3,055)

Hedge (gains) losses - prior period
(5,932) (3,512) (25,733)
Foreign currency transaction losses - prior period
4,527  1,078  3,408 
Operating profit increase (decrease) - compared to prior period
$ 10,213  $ (5,282) $ (25,380)

Diluted earnings per share increase (decrease) - compared to prior period
$ 0.10  $ (0.05) $ (0.24)

At our current foreign exchange rate assumptions, we anticipate year-over-year changes will increase our revenues, operating profit, and diluted earnings per share in the year ending December 31, 2026, by approximately $28 million, $22 million, and $0.22 per share, respectively. These favorable impacts to our operating profit and diluted earnings per share include net year-over-year impacts of foreign currency hedging activity, which is expected to increase total company operating profit by approximately $4 million and diluted earnings per share by $0.04 during the year ending December 31, 2026. The actual impact of changes in the value of the U.S. dollar against foreign currencies in which we transact may materially differ from our expectations described above. The above estimates assume that the value of the U.S. dollar relative to other currencies will reflect the euro at $1.16, the British pound at $1.33, the Canadian dollar at $0.72, the Australian dollar at $0.66; the Japanese yen at ¥157, the Chinese renminbi at RMB 7.05, and the Brazilian real at R$5.45 to the U.S. dollar for the full year of 2026.

The foreign currency exchange impacts on our revenue and operating income for the year ending December 31, 2026, will be different from our estimates if actual foreign exchange rates are different from our assumptions. Excluding the impact of intercompany and trade balances denominated in currencies other than the functional subsidiary currencies, a 1% strengthening of the U.S. dollar would reduce revenue by approximately $16 million and operating income by approximately $5 million, net of hedge positions.

The primary purpose of our foreign currency hedging activities is to protect against the volatility associated with foreign currency transactions. We also utilize natural hedges to mitigate our transaction and commitment exposures. Our corporate policy prescribes the range of allowable hedging activity. We enter into foreign currency exchange contracts with large, well-capitalized multinational financial institutions, and we do not hold or engage in transactions involving derivative
58

instruments for purposes other than risk management. Our accounting policies for these contracts are based on our designation of such instruments as hedging transactions. If a hedging instrument qualifies for hedge accounting, changes in the fair value of the hedging instrument from the effective portion of the hedge are deferred in accumulated other comprehensive income, net of tax, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. We immediately record in earnings the extent to which a hedge instrument is not effective in achieving offsetting changes in fair value. We primarily utilize foreign currency exchange contracts with durations of less than 24 months.

Our subsidiaries enter into foreign currency exchange contracts to manage the exchange risk associated with their forecasted intercompany inventory purchases and sales for the next year. From time to time, we may also enter into other foreign currency exchange contracts, cross currency swaps, or foreign-denominated debt issuances to reduce the impact of foreign currency fluctuations associated with specific balance sheet exposures, including net investments in certain foreign subsidiaries. Refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 19. Hedging Instruments” to the consolidated financial statements of this Annual Report on Form 10-K for details regarding euro-denominated notes that we designated as a hedge of our euro net investment in certain foreign subsidiaries.

Our foreign currency hedging strategy is consistent with prior periods, and there were no material changes in our market risk exposure during the year ended December 31, 2025. We enter into foreign currency exchange contracts designated as cash flow hedges for amounts that are less than the full value of forecasted intercompany purchases and sales and for amounts that are equivalent to, or less than, other significant transactions. As a result, no significant ineffectiveness has resulted or been recognized in the statements of income for the years ended December 31, 2025, 2024, and 2023. Our hedging strategy related to intercompany inventory purchases and sales is to employ the full amount of our hedges for the succeeding year at the conclusion of our budgeting process for that year. Quarterly, we enter into contracts to hedge incremental portions of anticipated foreign currency transactions for the current and following year. As a result, our risk with respect to foreign currency exchange rate fluctuations may vary throughout each annual cycle.

We enter into hedge agreements where we believe we have meaningful exposure to foreign currency exchange risk, with the exception of certain emerging markets where it is not practical to hedge our exposure. We target to hedge approximately 75% to 85% of the estimated exposure from intercompany product purchases and sales denominated in the euro, British pound, Canadian dollar, Japanese yen, and Australian dollar. We have additional unhedged foreign currency exposures related to intercompany foreign transactions and in emerging markets where it is not practical to hedge. The notional amount of foreign currency exchange contracts to hedge forecasted intercompany purchases and sales totaled $397.6 million and $325.7 million, as of December 31, 2025 and 2024, respectively. As of December 31, 2025, we had $2.5 million of net unrealized losses on foreign currency exchange contracts reflected within accumulated other comprehensive income, net of related tax. For more information on our hedge agreements, refer to “Part II, Item 8. Financial Statements and Supplementary Data, Note 19. Hedging Instruments.”

For additional information, refer to “Part I, Item 1A. Risk Factors:” “Since our business is global in nature, geopolitical risks and other risks associated with doing business internationally could negatively affect our business, financial condition, and operating results” and “Strengthening of the rate of exchange for the U.S. dollar has a negative effect on our business,” and “Part II, Item 8. Financial Statements and Supplementary Data, Note 2. Summary of Significant Accounting Policies.”

Interest Rate Risk and Effects of Inflation

We incur interest expense on the aggregate principal amount of our outstanding Senior Notes at a fixed rate. We have a revolving credit facility with a syndicate of multinational banks, which matures on November 12, 2030, and requires no scheduled prepayments before that date. Although the revolving credit facility does not mature until November 2030, all individual borrowings under our Credit Facility have a stated term of less than 1 year, including the $250.0 million Term Loan, which matures on November 12, 2028.

We entered into interest rate swaps to reduce the effect of variable interest obligations of our Term Loan. As of December 31, 2025, the variable interest rate associated with $250.0 million Term Loan became effectively fixed at 3.4%, plus the applicable credit spread, through November 12, 2028. Borrowings outstanding under our Credit Facility as of December 31, 2025, were $398.0 million.

During 2025, we experienced inflationary pressure on our operating costs. During 2026, we expect to continue to face higher costs for labor, commodities, energy, and transportation, as well as increased prices from suppliers. Furthermore, additional tariffs on imported goods may increase our costs to purchase products, components, and materials. We may not be
59

able to offset these higher costs through productivity initiatives and price increases, which may materially and adversely affect our business, results of operations, and financial condition. Any price increases we may impose may lead to declines in sales volume or loss of business, if competitors do not similarly adjust their prices, or customers refuse to purchase at the higher prices.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The response to this item is submitted as a separate section of this report commencing on page F-1.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining disclosure controls and procedures, as defined by the SEC in its Rules 13a-15(e) and 15d-15(e) under the Exchange Act. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2025, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Report of Management on Internal Control Over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material adverse effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies and procedures may deteriorate.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that, as of December 31, 2025, our internal control over financial reporting was effective.
60

The effectiveness of the Company's internal control over financial reporting as of December 31, 2025, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2025, that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Certifications

The certifications with respect to disclosure controls and procedures and internal control over financial reporting of the Company’s Chief Executive Officer and Chief Financial Officer are attached as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K.

ITEM 9B.    OTHER INFORMATION

Rule 10b5-1 Trading Plan Elections

During the three months ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted , modified, or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as such terms are defined in Item 408(a) of Regulation S-K of the Securities Act of 1933).

ITEM 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item with respect to Directors, executive officers, compliance with Section 16(a) of the Exchange Act, our code of ethics and corporate governance is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Proposal One – Election of Directors,” “Executive Compensation – Executive Officers,” “Stock Ownership Information – Delinquent Section 16(a) Reports,” “Corporate Governance – Corporate Governance Guidelines and Code of Ethics,” and “Corporate Governance – Board Committees” in the Company’s definitive Proxy Statement with respect to its 2026 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Insider Trading Arrangements and Policies

We have adopted an insider trading policy (the “Insider Trading Policy”) and related procedures, which govern the purchase, sale, and other dispositions of our securities by our directors, officers, employees, and other covered persons, as well as by IDEXX itself. We believe that our Insider Trading Policy and related procedures are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and the Nasdaq Stock Market listing standards applicable to us. The Insider Trading Policy prohibits our directors, officers, employees, and other covered persons from trading in our securities while in possession of material non-public information about us. This Policy also generally prohibits disclosure of material non-public information about us to others, with some limited exceptions.

The foregoing summary of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by reference to the full text of the Insider Trading Policy filed with this Annual Report on Form 10-K as Exhibit 19.1.

ITEM 11.    EXECUTIVE COMPENSATION

The information required by this Item with respect to Item 402 of Regulation S-K and paragraphs (e)(4) and (e)(5) of Item 407 of Regulation S-K is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Executive Compensation – Compensation Discussion and Analysis,” “Executive Compensation – Executive Compensation Tables,” “Executive Compensation – Potential Payments Upon Termination or Change in Control,” “Corporate Governance – Non-Employee Director Compensation,” “Corporate Governance – 2025 Non-Employee Director Compensation Table,” “Executive Compensation – CEO Pay Ratio,” “Executive Compensation – Executive Compensation Recovery Policy (Clawback Policy),” “Executive Compensation – Pay Versus Performance,” “Corporate Governance – Compensation and Talent Committee Interlocks and Insider Participation,” and “Compensation and Talent Committee Report” in the Company’s definitive Proxy Statement with respect to its 2026 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item with respect to Item 201(d) of Regulation S-K is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the section entitled “Executive Compensation – Equity Compensation Plan Information” in the Company’s definitive Proxy Statement with respect to its 2026 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. The information required by this Item with respect to Item 403 of Regulation S-K is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the section entitled “Stock Ownership Information” in the Company’s definitive Proxy Statement with respect to its 2026 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.
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ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item with respect to Items 404 and 407(a) of Regulation S-K is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Corporate Governance – Related Person Transactions” and “Corporate Governance – Director Independence” in the Company’s definitive Proxy Statement with respect to its 2026 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is omitted from this Annual Report on Form 10-K and, pursuant to Regulation 14A of the Exchange Act, is incorporated herein by reference from the sections entitled “Audit Committee Matters – Independent Auditor Fees” and “Audit Committee Matters – Independent Auditor Fee Approval Policy” in the Company’s definitive Proxy Statement with respect to its 2026 Annual Meeting, which Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

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PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Form 10-K:
   
(a)(1) and (a)(2) The financial statements set forth in the Index to Consolidated Financial Statements are filed as a part of this Annual Report on Form 10-K commencing on page F-1.
   
(a)(3) and (b) The exhibits listed in the accompanying Exhibit Index are filed as part of this Annual Report on Form 10-K and either filed herewith or incorporated by reference herein, as applicable.

ITEM 16. FORM 10-K SUMMARY

None.
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FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 
Page No.
 
Report of Independent Registered Public Accounting Firm - PCAOB ID No. 238
F- 2

 
Consolidated Balance Sheets as of December 31, 202 5 and 202 4
F- 4

 
Consolidated Statements of Income for the Years Ended December 31, 2025, 2024, and 2023
F- 5

 
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024, and 2023
F- 6

 
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024 ,and 2023
F- 7

 
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023
F- 8

 
Notes to Consolidated Financial Statements
F- 9

 

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of IDEXX Laboratories, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of IDEXX Laboratories, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Report of Management on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

F-2

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition from Certain Product and Service Revenue

As described in Note 3 to the consolidated financial statements, the Company recognized product and service revenue of $4.3 billion for the year ended December 31, 2025, of which a majority relates to certain product and service revenue. Management recognizes revenue when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to a customer, and it is probable that the Company will collect substantially all of the consideration to which they will be entitled, based on the customer’s intent and ability to pay the promised consideration. Management excludes sales, use, value-added, and other taxes they collect on behalf of third parties from revenue. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products or services to a customer. To accurately present the consideration received in exchange for promised products or services, the Company applies the five-step revenue recognition model.

The principal consideration for our determination that performing procedures relating to revenue recognition from certain product and service revenue is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition from certain product and service revenue.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the recording of certain product and service revenue at the amount of consideration management expects to receive in exchange for transferring products or services to the customer. These procedures also included, among others, (i) testing the completeness, accuracy, and occurrence of revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as purchase orders, invoices, contracts, proof of delivery and acceptance for instruments, proof of shipment, proof of lab report or proof of lab test, and subsequent payment receipts; (ii) testing certain service revenue transactions by developing an independent expectation of revenue and comparing the independent expectation to the amount recorded; and (iii) confirming a sample of outstanding customer invoice balances as of December 31, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as invoices, proof of delivery and acceptance for instruments, proof of shipment, proof of lab report or proof of lab test, and subsequent payment receipts.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
February 20, 2026

We have served as the Company’s auditor since 2002.

F-3

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
( in thousands, except per share amounts )

December 31, 2025 December 31, 2024

ASSETS    
Current Assets:    
Cash and cash equivalents $ 180,070   $ 288,266  
Accounts receivable, net of allowance of $ 11,304 in 2025 and $ 12,585 in 2024
552,378   473,575  
Inventories 377,756   381,877  
Other current assets 303,623   256,179  
Total current assets 1,413,827   1,399,897  
Long-Term Assets:
Property and equipment, net 747,380   713,123  
Operating lease right-of-use assets 123,228   116,129  
Goodwill 414,004   405,100  
Intangible assets, net 109,843   111,676  
Other long-term assets 542,477   547,518  
Total long-term assets 1,936,932   1,893,546  
TOTAL ASSETS $ 3,350,759   $ 3,293,443  

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable $ 110,408   $ 114,211  
Accrued liabilities 530,147   502,119  
Credit Facility
398,000   250,000  
Current portion of long-term debt 74,995   167,787  
Current portion of deferred revenue 35,264   33,799  
Total current liabilities 1,148,814   1,067,916  
Long-Term Liabilities:
Deferred income tax liabilities 31,865   11,312  
Long-term debt, net of current portion 374,842   449,786  
Long-term deferred revenue, net of current portion 32,177   26,939  
Long-term operating lease liabilities, net of current portion
101,151   97,836  
Other long-term liabilities 56,527   44,341  
Total long-term liabilities 596,562   630,214  
Total liabilities 1,745,376   1,698,130  

Commitments and Contingencies (Note 16)

Stockholders’ Equity:
Common stock, $ 0.10 par value: Authorized: 120,000 shares; Issued: 108,369 shares in 2025 and 107,836 shares in 2024; Outstanding: 79,712 shares in 2025 and 81,604 shares in 2024
10,837   10,784  
Additional paid-in capital 1,826,750   1,673,863  
Deferred stock units: Outstanding: 59 units in 2025 and 60 units in 2024
6,094   5,885  
Retained earnings 6,391,902   5,332,438  
Accumulated other comprehensive loss ( 68,844 ) ( 93,645 )
Treasury stock, at cost: 28,657 shares in 2025 and 26,232 shares in 2024
( 6,561,356 ) ( 5,334,012 )
Total IDEXX Laboratories, Inc. stockholders’ equity 1,605,383   1,595,313  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,350,759   $ 3,293,443  

The accompanying notes are an integral part of these consolidated financial statements.

F-4

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
( in thousands, except per share amounts )

For the Years Ended December 31,
2025 2024 2023
Revenue:      
Product revenue $ 2,539,210   $ 2,248,178   $ 2,089,936  
Service revenue 1,764,492   1,649,326   1,571,017  
Total revenue 4,303,702   3,897,504   3,660,953  
Cost of Revenue:
Cost of product revenue 804,616   716,078   717,951  
Cost of service revenue 839,507   802,499   753,032  
Total cost of revenue 1,644,123   1,518,577   1,470,983  
Gross profit 2,659,579   2,378,927   2,189,970  
Expenses:
Sales and marketing 643,547   588,507   566,066  
General and administrative 404,794   442,291   335,825  
Research and development 251,207   219,792   190,951  
Total operating expenses
1,299,548   1,250,590   1,092,842  
Income from operations 1,360,031   1,128,337   1,097,128  
Interest expense ( 38,852 ) ( 31,205 ) ( 41,581 )
Interest income 3,010   12,699   5,629  
Income before provision for income taxes 1,324,189   1,109,831   1,061,176  
Provision for income taxes 264,725   221,964   216,134  
Net income
$ 1,059,464   $ 887,867   $ 845,042  

Earnings per Share:
Basic $ 13.17   $ 10.77   $ 10.17  
Diluted $ 13.08   $ 10.67   $ 10.06  
Weighted Average Shares Outstanding:
Basic 80,427   82,467   83,066  
Diluted 81,025   83,246   83,978  
     
The accompanying notes are an integral part of these consolidated financial statements.

F-5

IDEXX LABORATORIES, INC. AND SUBSIDIARIES  

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  
(in thousands)

For the Years Ended December 31,
2025 2024 2023
     
Net income $ 1,059,464   $ 887,867   $ 845,042  
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments 59,949   ( 46,958 ) 17,725  
Defined benefit plans gain (loss), net of tax of expense (benefit) $ 146 in 2025, $( 130 ) in 2024, and $( 267 ) in 2023
865   ( 701 ) ( 1,302 )
Reclassification adjustment for defined benefit plans included in net income, net of tax of $ 96 in 2025, $ 154 in 2024, and $ 111 in 2023
514   352   519  
Unrealized gain (loss) from Euro-denominated notes, net of tax expense (benefit) of $( 2,511 ) in 2025, $ 1,280 in 2024, and $( 811 ) in 2023
( 8,958 ) 4,105   ( 2,601 )
Unrealized gain (loss) from investments, net of tax expense (benefit) of $ — in 2025, $ — in 2024, and $ 3 in 2023
—   1   8  
Reclassification adjustment from investments included in net income, net of tax of $ — in 2025, $ 51 in 2024, and $ — in 2023
—   163   —  
Unrealized gain (loss) on derivative instruments:
Unrealized gain (loss) from foreign currency exchange contracts, net of tax expense (benefit) of $( 5,624 ) in 2025, $ 7,660 in 2024, and $( 143 ) in 2023
( 16,033 ) 19,418   ( 792 )
Unrealized gain (loss) from cross currency swaps, net of tax expense (benefit) of $( 3,586 ) in 2025, $ 1,864 in 2024, and $( 1,754 ) in 2023
( 11,390 ) 5,981   ( 5,629 )
Unrealized gain (loss) from interest rate swap, net of tax expense (benefit) of $( 3 ) in 2025, $ 600 in 2024, and $ 976 in 2023
( 8 ) 1,927   3,131  
Reclassification adjustment from derivative instruments for (gains) losses included in net income, net of tax (expense) benefit of $( 206 ) in 2025, $( 2,473 ) in 2024, and $( 1,699 ) in 2023
( 138 ) ( 6,727 ) ( 4,469 )
Unrealized gain (loss) on derivative instruments ( 27,569 ) 20,599   ( 7,759 )
Other comprehensive gain (loss), net of tax 24,801   ( 22,439 ) 6,590  
Comprehensive income $ 1,084,265   $ 865,428   $ 851,632  
     
The accompanying notes are an integral part of these consolidated financial statements.

F-6

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except per share amounts)

Common Stock    
Number of Shares $ 0.10 Par Value
Additional Paid-in Capital Deferred Stock Units Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity
Balance as of December 31, 2022 107,193   $ 10,719   $ 1,463,215   $ 5,182   $ 3,599,529   $ ( 77,796 ) $ ( 4,392,112 ) $ 608,737  
Net income —  —  —  —  845,042   —  —  845,042  
Other comprehensive gain, net of tax —  —  —  —  —  6,590   —  6,590  
Repurchases of common stock, net of issuances —  —  —  —  —  —  ( 82,569 ) ( 82,569 )
Common stock issued under stock plans, net 313   32   46,639   320   —  —  —  46,991  
Share-based compensation cost —  —  59,711   28   —  —  —  59,739  
Balance as of December 31, 2023 107,506   10,751   1,569,565   5,530   4,444,571   ( 71,206 ) ( 4,474,681 ) 1,484,530  
Net income —  —  —  —  887,867   —  —  887,867  
Other comprehensive loss, net of tax —  —  —  —  —  ( 22,439 ) —  ( 22,439 )
Repurchases of common stock, net of issuances —  —  —  —  —  —  ( 859,331 ) ( 859,331 )
Common stock issued under stock plans, net 330   33   44,010   348   —  —  —  44,391  
Share-based compensation cost —  —  60,288   7   —  —  —  60,295  
Balance as of December 31, 2024 107,836   10,784   1,673,863   5,885   5,332,438   ( 93,645 ) ( 5,334,012 ) 1,595,313  
Net income —  —  —  —  1,059,464   —  —  1,059,464  
Other comprehensive gain, net of tax —  —  —  —  —  24,801   —  24,801  
Repurchases of common stock, net of issuances —  —  —  —  —  —  ( 1,227,344 ) ( 1,227,344 )
Common stock issued under stock plans, net 533   53   92,899   184   —  —  —  93,136  
Share-based compensation cost —  —  59,988   25   —  —  —  60,013  
Balance as of December 31, 2025 108,369   $ 10,837   $ 1,826,750   $ 6,094   $ 6,391,902   $ ( 68,844 ) $ ( 6,561,356 ) $ 1,605,383  
               
The accompanying notes are an integral part of these consolidated financial statements.

F-7

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

For the Years Ended December 31,
2025 2024 2023
     
Cash Flows from Operating Activities:      
Net income $ 1,059,464   $ 887,867   $ 845,042  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 145,183   129,936   114,908  
Provision for uncollectible accounts 8,429   6,867   5,552  
Deferred income taxes 131,204   ( 24,194 ) ( 48,306 )
Share-based compensation expense 60,013   60,295   59,739  
Other 5,026   1,468   2,004  
Changes in assets and liabilities:
Accounts receivable ( 68,722 ) ( 28,280 ) ( 53,871 )
Inventories ( 789 ) ( 28,001 ) ( 28,651 )
Accounts payable ( 8,573 ) 8,086   ( 557 )
Deferred revenue 6,929   ( 4,378 ) ( 3,032 )
Other assets and liabilities ( 156,359 ) ( 80,665 ) 13,682  
Net cash provided by operating activities 1,181,805   929,001   906,510  
Cash Flows from Investing Activities:
Purchases of property and equipment ( 124,676 ) ( 120,922 ) ( 133,631 )
Acquisitions of intangible assets ( 13,550 ) ( 10,000 ) —  
Equity investments ( 756 ) ( 1,004 ) —  
Acquisitions of businesses, net of cash acquired —   ( 76,694 ) —  
Proceeds from net investment hedges
2,743   1,558   8,377  
Net cash used by investing activities ( 136,239 ) ( 207,062 ) ( 125,254 )
Cash Flows from Financing Activities:
Borrowings (payments) on revolving credit facility, net
148,000   —   ( 329,000 )
Payments of senior notes
( 178,385 ) ( 75,000 ) ( 75,000 )
Borrowings on term loan
250,000   —   —  
Payments of term loan
( 250,000 ) —   —  
Debt issuance costs ( 3,738 ) —   —  
Repurchases of common stock
( 1,216,964 ) ( 837,034 ) ( 71,920 )
Proceeds from exercises of stock options and employee stock purchase plans 93,362   44,492   47,034  
Payments of acquisition-related contingent consideration and holdbacks
—   —   ( 3,135 )
Shares withheld for statutory tax withholding payments on restricted stock ( 7,239 ) ( 10,531 ) ( 9,975 )
Net cash used by financing activities ( 1,164,964 ) ( 878,073 ) ( 441,996 )
Net effect of changes in exchange rates on cash 11,202   ( 9,532 ) 2,126  
Net increase (decrease) in cash and cash equivalents
( 108,196 ) ( 165,666 ) 341,386  
Cash and cash equivalents at beginning of period 288,266   453,932   112,546  
Cash and cash equivalents at end of period $ 180,070   $ 288,266   $ 453,932  
     
The accompanying notes are an integral part of these consolidated financial statements.  

F-8

IDEXX LABORATORIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.       NATURE OF BUSINESS, BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements of IDEXX Laboratories, Inc. and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the requirements of Regulation S-X.

These statements include the accounts of IDEXX Laboratories, Inc., and our wholly-owned subsidiaries (“IDEXX,” the “Company,” “we,” or “our”). We do not have any variable interest entities for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

Impairment charges incurred in the years ended December 31, 2024 and 2023, were recast to other adjustments to reconcile net income to net cash provided by operating activities on the Consolidated Statements of Cash Flows to conform to the current‑period presentation. The recast had no impact on net cash provided by operating activities for any period presented.

We develop, manufacture, and distribute products and provide services primarily for the companion animal veterinary, livestock, poultry and dairy, and water testing industries. Our principal line of business, which we refer to as our Companion Animal Group (“CAG”) operating segment, provides diagnostic and information management products and services for the companion animal veterinary industry, including point-of-care diagnostic solutions, outside reference laboratory services, and veterinary software and services. Our principal regions for these products and services are North America, Europe, Australia, and Japan, and we also sell to customers and distributors in many other countries. Our Water operating segment provides innovative testing solutions and related instrumentation for easy, rapid, and accurate detection and quantification of various microbiological parameters in water principally in the U.S. and Europe, and Brazil, and we also sell to customers in many other countries. Our Livestock, Poultry and Dairy (“LPD”) operating segment provides diagnostic tests, services, and related instrumentation and performs services that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to measure the quality and safety of milk. Our principal regions for these products and services are Europe, the United States, Brazil, China, and Japan, and we also sell to customers in many other countries. We also manufacture and sell human medical diagnostic products and services. Refer to “Note 3. Revenue” for additional information regarding disaggregated revenue by segment, major product and service categories, and geographical areas. Refer to “Note 17. Segment Reporting” for additional information regarding our reportable operating segments.

NOTE 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)    Estimates

The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, we evaluate these estimates, including those related to allowances for credit losses for potentially uncollectable accounts receivable, customer contract assets and lease receivables; goodwill and other intangible assets; income taxes; inventory valuation; revenue recognition, including product returns and customer contracts with multiple performance obligations; share-based compensation; warranty reserves; self-insurance reserves; fair value measurements; and loss contingencies. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates.

( b )     Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of ninety days or less to be cash equivalents. Cash and cash equivalents consist primarily of demand deposits and money market funds, which management believes are subject to minimal credit and market risk.

There is no restricted cash on our consolidated balance sheets for the years ended December 31, 2025, and 2024.

(c)    Inventories – Refer to Note 7
F-9

(d)    Property and Equipment – Refer to Note 9

(e)    Goodwill and Other Intangible Assets – Refer to Note 11

(f)    Warranty Reserves

We provide a standard twelve-month warranty on all diagnostic instruments sold. We recognize the cost of instrument warranties in cost of product revenue at the time revenue is recognized based on the estimated cost to repair the instrument over its warranty period. Cost of product revenue reflects estimated warranty expense for instruments sold in the current period and changes in estimated warranty expense for the portion of the aggregate installed base that is under warranty. Estimated warranty expense is based on a variety of inputs, including historical instrument performance in the customers’ environments, historical and estimated costs incurred in servicing instruments, and projected instrument reliability. Should actual service rates or costs differ from our estimates, revisions to the estimated warranty liability would be required. The liability for warranties, included in accrued liabilities in the accompanying consolidated balance sheets, was approximately $ 2.2  million and $ 1.8  million for the years ended December 31, 2025, and 2024, respectively.

(g)    Income Taxes – Refer to Note 14

(h)    Taxes Remitted to Governmental Authorities by IDEXX on Behalf of Customers

We calculate, collect from our customers, and remit to governmental authorities sales, value-added, and excise taxes assessed by governmental authorities in connection with revenue-producing transactions with our customers. We report these taxes on a net basis and do not include these tax amounts in revenue or cost of product or service revenue.

(i)    Revenue – Refer to Note 3
    
(j)    Research and Development Costs

Research and development costs, which consist of employee compensation and benefits, certain licensing costs, materials, external consulting, and product development costs, are expensed as incurred. Software developed to deliver hosted services to our customers has been designated as internal-use, and we capitalize certain costs incurred in connection with developing or obtaining internal-use software. Software development costs required to be capitalized under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, were not material during the years ended December 31, 2025, 2024, and 2023. Refer to “Note 9. Property and Equipment, Net” for further information on capitalized internal-use software.

(k)    Advertising Costs

Advertising costs, which are recognized as sales and marketing expense in the period in which they are incurred , were $ 4.0 million, $ 3.4 million, and $ 4.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

(l)     Legal Costs

Legal costs are considered period costs and, accordingly, are expensed in the year services are incurred.

(m)    Share-Based Compensation – Refer to Note 5

(n)    Lease Commitments – Refer to Note 8

(o)    Earnings per Share – Refer to Note 15

F-10

(p)    Foreign Currency

The functional currency of most of our foreign subsidiaries is their local currency. A small number of our foreign subsidiaries that conduct business primarily in U.S. dollars have the U.S. dollar as their functional currency. Assets and liabilities of our other foreign subsidiaries, whose functional currency is their local currency, are translated to the U.S. dollar using the exchange rate in effect at the balance sheet date. Revenue and expense accounts are translated to the U.S. dollar using the exchange rate at the date at which those elements are recognized, and where it is impractical to do so, an average exchange rate in effect during the period is used to translate those elements. Cumulative translation gains and losses are shown in the accompanying consolidated balance sheets as a separate component of accumulated other comprehensive income (“AOCI”).

Revenues and expenses denominated in a currency other than the respective subsidiary’s functional currency are recorded at the current exchange rate when the transaction is recognized. Monetary assets and liabilities denominated in a currency other than the respective subsidiary’s functional currency are remeasured at each balance sheet date using the exchange rate in effect at each balance sheet date. These foreign currency gains and losses are included in general and administrative expense. We recognized aggregate foreign currency losses of $ 4.2 million, $ 4.5 million, and $ 1.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.

(q)    Hedging Instruments – Refer to Note 19

(r)    Fair Value Measurements – Refer to Note 18

(s)    Comprehensive Income

We report all changes in equity, including net income and transactions or other events and circumstances from non-owner sources during the period in which they are recognized. We have chosen to present comprehensive income, which encompasses net income, foreign currency translation adjustments, gains and losses on our net investment hedges, defined benefit plan adjustments, and the difference between the cost and the fair market value of investments in debt and equity securities, foreign currency exchange contracts, and interest rate swap contracts in the consolidated statements of comprehensive income. Refer to “Note 21. Accumulated Other Comprehensive Income” for information about the effects on net income of significant amounts reclassified out of each component of AOCI for the years ended December 31, 2025, 2024, and 2023.

(t)     Accounting for Investments

Investments where we have the ability to exercise significant influence, but do not control the entity, are accounted for under the equity method of accounting. Significant influence generally exists if we have a 20% to 50% ownership interest in the investee, or in the case of a limited partnership or similar entity, at least 3% to 5%. Equity investments in entities for which we do not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are accounted for at cost and adjusted for observable price changes and impairments when necessary.

We evaluate our investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

Our equity investments of $ 31.8  million and $ 31.0  million for the years ended December 31, 2025, and 2024, respectively, are recorded at cost in other long-term assets. Refer to “Note 4. Acquisitions, Asset Purchases and Investments” for additional information regarding our acquisition of certain equity investments.

(u)    Concentrations of Risk

Financial Instruments . Financial instruments that potentially subject us to concentrations of credit risk are principally cash, cash equivalents, accounts receivable, contract assets, lease receivables, and derivatives. To mitigate such risk with respect to cash and cash equivalents, we place our cash with highly rated financial institutions, generally in accounts that are insured by the U.S. government and money market funds invested in government securities. To reduce credit risk with respect to accounts receivable, contract assets, and lease receivables, we routinely assess the financial strength of our significant customers and monitor the amounts owed to us. Concentrations of credit risk are limited due to the large number of customers that purchase our products and services, and we have no significant customers that accounted for greater than 10% of our consolidated revenues during the year ended December 31, 2025. As a result, we believe that accounts receivable, contract
F-11

assets, and lease receivables credit risk exposure is limited. We maintain allowances for expected credit losses, but historically have not experienced material losses related to an individual customer or group of customers in any particular industry or geographic area.

To mitigate concentration of credit risk with respect to derivatives, we enter into transactions with highly rated financial institutions, enter into master netting arrangements with counterparties to our derivative transactions, and monitor the creditworthiness of our counterparties. Our master netting arrangements reduce our exposure in that they permit outstanding receivables and payables with the counterparties to our derivative transactions to be offset in the event of default. We have not incurred such losses and consider the risk of counterparty default to be minimal.

Sole and Single-Source Suppliers . Many of the third parties that provide us with certain instruments we sell, as well as certain components, raw materials, and consumables used in or with our products and services, are sole or single-source suppliers. Some of the products that we purchase from these suppliers are proprietary or complex in nature, and, therefore, cannot be readily or easily replaced by alternative sources. We have a process to qualify alternative third-party suppliers for select components and materials, which in certain cases require approvals from various regulatory agencies before we are able to use and sell products using these alternative sources. If we are unable to obtain adequate quantities of inventory, we could face cost increases or delays or discontinuations in product shipments, which could have a material adverse effect on our results of operations. Under certain long-term supply arrangements, we paid the supplier for costs related to molds, dies, and other tools used for the production of products we purchase. These payments are capitalized in other assets, as we do not have title or control of the underlying production assets, and are amortized to cost of sales.

(v)    New Accounting Pronouncements Adopted

We adopted ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which includes amendments that enhance income tax disclosures, primarily through standardization and disaggregation of income tax rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, and we elected to adopt the disclosure requirement on a prospective basis.

(w)    New Accounting Pronouncements Not Yet Adopted

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (ASU) 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” which amends the existing standard related to accounting for internal-use software development costs. The amendments modernize the recognition and capitalization framework to better align with current software development practices by removing references to project stages and clarify the criteria for capitalization, which begins when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the timing of adoption and the impact of this amendment on the consolidated financial statements and related disclosures.