IDEXX Laboratories, Inc.

Thanks for joining us for our next session with Hydex Labs. They're a leading provider of diagnostic solutions for the animal health industry. Very pleased to have Jay Mazelski, president and CEO, with us today, and John Ravis from IR in the audience. My name is Nathan Rich, and I cover the animal health space here at Goldman Sachs. Maybe to start, Jay, just keeping it high level, you know, could you frame the company's performance in 2023? And then looking forward, kind of what do you see as the state of the industry and kind of strategic priorities for the business in 2024? Sure.

Glad to. Glad to, Nate. And thanks. Thanks for having us. Appreciate it. Yeah, I always like, let me just first start off by providing some context that preceded 2023. You know, we came through the pandemic. with a remarkably, I think, steep step up in number of pet adoptions over that period of two years, 2020 to 2021, 10% additions in number of pets. That's a U.S. number, but we saw similar performance outside of the U.S. And then on top of that, it built with a 2% increase in 2022. So that compares benchmark-wise to about a 1% annual increase. increase pre-pandemic. From a clinical visit standpoint, you know, same type of numbers, 10% step up in clinical visits over those, you know, two years. That compares to approximately 2% to 3% annual. So you saw a very significant step up in the number of pets, the clinical visits, and the whole veterinary, you know, profession, I think, surged to support those increased number of pets as folks stayed at home and they were looking for companions and really members of their household. That was not sustainable, I think, as the pandemic came to an end. We saw some moderation, obviously, in 2022, in 2023, as capacity constraints within the practice forced and, I think, focused veterinary practice owners to really focus on retaining staff and creating more sustainable work-life balance and investing in technology. Against that backdrop, IDEX had a very strong performance, three-quarters in. I'm only going to talk about Q3. Year-to-date, we're in the blackout period for Q4. Very strong performance, and it was really built on execution drivers in the business with double-digit premium instrument placements, Great retention across all of our modalities. Very strong execution. We saw frequency and utilization of diagnostics increase. So very pleased with, you know, how we've performed three-quarters into the year.

And then for 2024, just kind of high-level strategic priorities for the company and kind of where your focus is.