10-Q – 2026-08-04 – idxx-20260630.htm

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. Working capital totaled $221.8 million as of June 30, 2026, compared to $265.0 million as of December 31, 2025. The change in working capital is primarily due to higher current borrowings outstanding on our Credit Facility, partially offset by higher accounts receivable and lower accrued expenses. As of June 30, 2026, we had $196.9 million of cash and cash equivalents, compared to $180.1 million as of December 31, 2025. As of June 30, 2026, we had a remaining borrowing availability of $729.2 million under our $1.25 billion Credit Facility, with $519.0 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. As of December 31, 2025, we had $398.0 million in outstanding borrowings under our Credit Facility. 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:

(in thousands)
June 30, 2026 December 31, 2025

U.S. $ 27,532  $ 1,606 
Foreign 169,401  178,464 
Total cash and cash equivalents
$ 196,933  $ 180,070 

Total cash and cash equivalents held in U.S. dollars by our foreign subsidiaries
$ 27,201  $ 24,571 

As of June 30, 2026, of the $196.9 million of cash and cash equivalents held, $187.4 million was held as bank deposits and $9.5 million was held in a U.S. government money market fund. 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 June 30, 2026, included approximately $0.9 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.

45

The following table presents additional key information concerning working capital:

For the Three Months Ended
June 30, 2026 March 31,
2026 December 31, 2025 September 30,
2025 June 30, 2025

Days sales outstanding (1)
46.2  46.2  46.8  46.5  44.7 
Inventory turns (2)
1.4  1.4  1.6  1.5  1.5 

(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 of 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):

For the Six Months Ended June 30,
(in thousands) 2026 2025 Change

Net cash provided by operating activities $ 613,410  $ 423,705  $ 189,705 
Net cash used by investing activities (59,040) (63,238) 4,198 
Net cash used by financing activities (536,619) (495,952) (40,667)
Net effect of changes in exchange rates on cash (888) 11,813  (12,701)
Net change in cash and cash equivalents $ 16,863  $ (123,672) $ 140,535 

Operating Activities . Net cash provided by operating activities during the six months ended June 30, 2026, was $613.4 million, which was a net increase in operating cash flows of $189.7 million, compared to the same period during the prior year. Cash was provided from net income of $616.9 million, adjusted for net non-cash items of $143.2 million, partially offset by a net decrease from changes in operating assets and liabilities of $146.7 million.

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

For the Six Months Ended June 30,
(in thousands) 2026 2025 Change

Accounts receivable $ (82,844) $ (74,889) $ (7,955)
Inventories (1,787) (4,081) 2,294 
Other assets and liabilities (66,538) (133,460) 66,922 
Accounts payable 4,481  (12,113) 16,594 
Total change in cash due to changes in operating assets and liabilities $ (146,688) $ (224,543) $ 77,855 

Cash used by changes in operating assets and liabilities during the six months ended June 30, 2026, decreased $77.9 million, compared to the same period during the prior year. The decrease in cash used for other assets and liabilities was primarily due to a litigation settlement payment in the prior year for approximately $80 million and lower income tax payments in the current period, partially offset by higher annual employee incentive program payments in the current year.

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

Investing Activities . Net cash used by investing activities was $59.0 million during the six months ended June 30, 2026, compared to $63.2 million for the same period during the prior year. The decrease in cash used by investing activities was primarily due to lower capital expenditures.

46

Our total capital expenditure plan for 2026 is 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 . Net cash used by financing activities was $536.6 million during the six months ended June 30, 2026, compared to $496.0 million used for the same period during the prior year. The increase in net cash used was primarily due to comparatively less cash provided by net borrowings under our Credit Facility, which were $121.0 million during the current period, compared to $329.0 million in the prior period. This relative reduction of $208.0 million in cash provided was partially offset by the comparative impacts from other financing activities, including the use of cash in the prior period for the payment of senior notes of $103.4 million, $41.2 million less cash used during the current period for the repurchase of our common stock, and $26.2 million higher proceeds from stock option exercises during the current period.

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. Repurchases of our common stock may vary depending upon the level of other investing and deployment activities, as well as share price and prevailing interest rates, and are subject to market conditions. Refer to “Note 12. Repurchases of Common Stock” to the unaudited condensed consolidated financial statements in “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for additional information about our share repurchases.

As of June 30, 2026, we had $519.0 million in outstanding borrowings under our Credit Facility, of which $250.0 million was on our Term Loan under our Credit Facility. 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 changes, investments, transactions with affiliates, certain restrictive agreements, and violations of sanctions laws and regulations. The sole financial covenant is a Consolidated Leverage Ratio test as described below.

The aggregate principal amount of our 2026 Senior Notes will become due and payable on September 4, 2026. The aggregate principal amount of our 2027 Series B Notes will become due and payable on February 12, 2027. We anticipate funding the full repayment of our 2026 Senior Notes for $75.0 million when due on September 4, 2026, and our 2027 Series B Notes for $75.0 million when due on February 12, 2027, with available cash on hand, borrowings under our Credit Facility, or proceeds from the issuance of new notes, or a combination thereof. The Senior Note Agreements contain affirmative, negative, and financial covenants customary for agreements of this type. The sole financial covenant is a Consolidated Leverage Ratio test as described below.

Refer to “Note 11. Debt” to the unaudited condensed consolidated financial statements in “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for additional information about our Credit Facility and Senior Notes.

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.

47

Financial Covenant . The sole financial covenant of our Credit Facility and Senior Note Agreements is a Consolidated Leverage Ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, non-recurring transaction expenses incurred in connection with acquisitions, share-based compensation expense, and certain other non-cash losses and charges (“Adjusted EBITDA”), as defined in the Senior Note Agreements and Credit Facility, not to exceed 3.5-to-1. As of June 30, 2026, we were in compliance with such covenant.

The following details our Consolidated Leverage Ratio calculation:

(in thousands) Twelve Months Ended
Trailing 12 Months Adjusted EBITDA: June 30, 2026

Consolidated Net Income
$ 1,139,656 
Consolidated Interest Charge
37,788 
Provision for income taxes 284,763 
Depreciation and amortization 154,082 
Non-recurring transaction expense incurred in connection with Acquisitions *
90 
Non-cash charges associated with Share Based Payments
62,972 
Extraordinary and other non-recurring non-cash losses and charges *
6,520 
Adjusted EBITDA $ 1,685,871 

 * Descriptions are contractually defined and may differ from U.S. GAAP definitions.

(dollars in thousands)
Debt to Adjusted EBITDA Ratio: June 30, 2026

Credit Facility
$ 519,000 
Current and long-term portion of long-term debt 449,864 
Total debt 968,864 
Acquisition-related consideration payable — 
Deferred financing costs 136 
Gross debt $ 969,000 
Gross debt to Adjusted EBITDA ratio 0.57 

Cash and cash equivalents $ 196,933 
Net debt $ 772,067 
Net debt to Adjusted EBITDA ratio 0.46

Other Commitments, Contingencies and Guarantees 

Significant commitments, contingencies, and guarantees as of June 30, 2026, are described in Note 16 to the unaudited condensed consolidated financial statements in “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.
48

Item 3. Quantitative and Qualitative Disclosures About Market Risk 
 
For quantitative and qualitative disclosures about market risk affecting us, refer to the section under the heading “Part II. Item 7A. Quantitative and Qualitative Disclosure About Market Risk” of our 2025 Annual Report. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the market risks described in our 2025 Annual Report, except for the impact of foreign exchange rates, as discussed below. 

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

Approximately 23% of our consolidated revenue was derived from products manufactured or sourced in U.S. dollars and sold internationally in local currencies f or both the three and six months ended June 30, 2026, compared to approximately 22% for both the three and six months ended June 30, 2025. 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 impacts of foreign currency denominated costs and expenses and foreign currency denominated supply contracts partially offset this exposure. We also enter into foreign currency exchange contracts, designated as hedges, to manage the exchange risk associated with intercompany inventory purchases and sales that are denominated in certain currencies other than the U.S. dollar.

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

For the Three Months Ended June 30, For the Six Months Ended June 30,
(in thousands, except per share amounts) 2026 2025 2026 2025

Revenue increase (decrease) $ 8,486  $ 12,454  $ 39,657  $ 201 

Operating profit increase (decrease), excluding hedge activity and exchange impacts on settlement of foreign currency denominated transactions $ 4,985  $ 5,490  $ 22,554  $ (1,795)
Hedge gains (losses) - current period (434) (1,180) (284) 2,565 
Foreign currency transactions gains (losses) - current period (246) (568) (690) (1,239)
Operating profit increase (decrease) - current period
4,305  3,742  21,580  (469)

Hedge (gains) losses - comparable period in the prior year 1,180  (1,721) (2,565) (2,531)
Foreign currency transaction (gains) losses - comparable period in the prior year 568  1,001  1,239  1,934 
Operating profit increase (decrease) - compared to prior period
$ 6,053  $ 3,022  $ 20,254  $ (1,066)

Diluted earnings per share increase (decrease) - compared to prior period (1)
$ 0.06  $ 0.03  $ 0.20  $ (0.01)

(1) The impacts on diluted earnings per share presented may not recalculate due to rounding.

49

At our current foreign exchange rate assumptions, we anticipate year-over-year changes for the remainder of the year will decrease our revenues, and increase operating profit and diluted earnings per share by approximately $13 million, $2 million and $0.02 per share, respectively. These favorable currency 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 our total operating profit by approximately $7 million and $0.07 per share for the remainder of the year ending December 31, 2026. These estimates assume that the value of the U.S. dollar will reflect the euro at $1.14, the British pound at $1.32, the Canadian dollar at $0.70, and the Australian dollar at $0.69; and the Japanese yen at ¥162, the Chinese renminbi at RMB 6.80, and the Brazilian real at R$5.20 relative to the U.S. dollar for the remainder of 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.

The foreign currency exchange impacts on our projected revenues and expenses for the remainder of 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, we project a 1% strengthening of the U.S. dollar would reduce revenue by approximately $8 million and operating income by approximately $3 million, net of hedge positions.

Interest Rate Risk . We entered into an interest rate swap to reduce the effect of variable interest obligations of our Term Loan. Beginning in November 2025, the variable interest rate associated with our $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 at June 30, 2026, were $519.0 million. We have designated the interest rate swap as a cash flow hedge. For more information regarding our interest rate swap, refer to “Part I, Item 1. Financial Statements, Note 19. Hedging Instruments.”

Effects of Inflation . We expect to continue to face higher costs for labor, commodities, energy, and transportation, as well as increased prices from suppliers. We may not be 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 4. 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 Securities Exchange Act of 1934 as amended (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 June 30, 2026, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. 
 
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 June 30, 2026, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 
50

PART II — OTHER INFORMATION 
 

Item 1. 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 1A. Risk Factors 
 
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors discussed in “Part I. Item 1A. Risk Factors” in our 2025 Annual Report, which could materially affect our business, financial condition, or future results. There have been no material changes from the risk factors previously disclosed in the 2025 Annual Report. The risks described in our 2025 Annual Report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or future results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 
 
During the three months ended June 30, 2026, we repurchased shares of common stock as described below:

Period Total Number of Shares Purchased
(a)  Average Price Paid per Share
(b) (3)
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)

April 1 to April 30, 2026 357,000  $ 576.70  357,000  2,777,370 
May 1 to May 31, 2026 140,545  $ 562.67  140,500  2,636,870 
June 1 to June 30, 2026 84,784  $ 558.85  84,300  2,552,570 
Total 582,329  (2)
581,800  2,552,570 

(1) Our Board of Directors has 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 June 30, 2026, and no share repurchase programs expired during the period.

(2) During the three months ended June 30, 2026, we received 529 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. 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 share repurchase program.

(3) Includes a 1% excise tax on the value of shares repurchased in the open market, net of a reduction for eligible stock issuances.

Refer to Note 12. “Repurchases of Common Stock” to the unaudited condensed consolidated financial statements in “Part I. Item 1. Financial Statements” of this Quarterly Report on Form 10-Q for additional information about our share repurchases.

Item 5. Other Information

Rule 10b5-1 Trading Plan Elections

During the three months ended June 30, 2026, 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).
51

Item 6. Exhibits  

Incorporated by Reference
Exhibit No. Exhibit Description Form Exhibit Filing Date / Period End Date Filed / Furnished Herewith

Articles of incorporation and by-laws

3.1
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of IDEXX Laboratories, Inc., dated May 13, 2026.
8-K 3.1 5/15/26

3.2
Amended and Restated By-Laws of IDEXX Laboratories, Inc., amended through May 13, 2026.
8-K 3.2 5/15/26

Material Contracts

10.1*
Amendment No. 10 to U.S. Supply Agreement, effective as of May 19, 2026, among IDEXX Operations, Inc., the Company and Ortho-Clinical Diagnostics, Inc. (“Ortho”)
X

10.2*
Amendment No. 8 to European Supply Agreement, effective as of May 19, 2026, among IDEXX B.V., the Company and Ortho
X

Rule 13a-14(a)/15-14(a) certifications

31.1
Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
X

31.2
Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
X

32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
X

32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
X

52

Interactive data file

101 The following financial and related information from IDEXX Laboratories, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline eXtensible Business Reportable Language (iXBRL) includes: (i) the Condensed Consolidated Balance Sheet; (ii) the Condensed Consolidated Statement of Income; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statement of Changes in Stockholders' Equity; (v) the Condensed Consolidated Statement of Cash Flows; and, (vi) Notes to Consolidated Financial Statements.

104 The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL, and contained in Exhibit 101.

* Certain portions have been omitted as confidential information.

53

SIGNATURES  
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

IDEXX LABORATORIES, INC.

/s/ Andrew Emerson
Date: August 4, 2026 Andrew Emerson
Executive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)

54