IDEXX (NASDAQ: IDXX) EPS jumps 18% and guidance rises, but the margin outlook slips

Posted by Trevor Kearing on Nov 2nd, 2026

What happened

IDEXX Laboratories, Inc. (NASDAQ: IDXX) reported third-quarter revenue of $1.21 billion, up 10%, and raised its 2026 revenue and EPS guidance.

Diluted EPS was $4.01, up 18% from $3.40 a year earlier and up 22% on a comparable basis. The filing says a higher revenue outlook led the higher full-year EPS outlook.

Management also lowered its reported operating margin outlook. So revenue, not wider margins, drove this raise.

Key numbers

Metric	Latest	Change	Source
Third-quarter revenue	$1.21 billion	from $1.11 billion, +10%	SEC 8-K, Exhibit 99.1
Third-quarter diluted EPS	$4.01	from $3.40, +18%	SEC 8-K, Exhibit 99.1
Third-quarter operating margin	33.1%	from 32.1%, +100 basis points	SEC 8-K, Exhibit 99.1
2026 revenue guidance	$4.74 billion – $4.77 billion	+$32 million at midpoint	SEC 8-K, Exhibit 99.1
2026 EPS guidance	$14.96 – $15.16	+$0.25 at midpoint	SEC 8-K, Exhibit 99.1
2026 reported operating margin outlook	32.1% – 32.3%	-20 basis points	Calculated from SEC 8-K

Where the quarter's growth came from

The filing ties growth to the installed base of premium instruments in veterinary clinics. CAG Diagnostics recurring revenue grew 11% as reported and organic. The filing credits same-store volume growth, innovation, net customer gains and a larger installed base.

IDEXX VetLab consumables revenue rose 14% as reported, helped by an 11% larger global premium instrument installed base. IDEXX placed more than 1,900 inVue Dx analyzers in the quarter, taking the installed base to nearly 11,000 instruments, the filing says.

Reference laboratory diagnostic and consulting services grew 10%. Recurring diagnostics revenue rose 10% in the U.S. and 13% in international regions as reported. Rapid assay products rose 1% and capital instrument revenue was flat.

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Margins and one-time items

Gross margin reached 62.9%, up 110 basis points as reported. The filing credits recurring revenue volume gains, productivity initiatives and net price realization. Operating margin was 33.1%, up 100 basis points as reported and 60 basis points on a comparable basis.

Operating expenses rose 10% as reported and 11% on a comparable basis. The company said the spending supported commercial capabilities and innovation, and covered acquisition impacts, including transaction-related costs.

Not all of the EPS gain was operating. The quarter included $0.03 per share from a non-operating gain on an equity investment, $0.01 per share from share-based compensation tax benefits and $0.04 per share from year-over-year currency changes.

Guidance: more revenue, less margin

Full-year revenue guidance is now $4.74 billion to $4.77 billion, against $4.70 billion to $4.75 billion before. The midpoint rises $32 million, including $5 million from the recent CoVet acquisition.

Organic revenue growth is now expected at 9.3% to 10.0%, up 0.6% at the midpoint. The filing credits operational performance. CAG Diagnostics recurring revenue reported growth is forecast at 11.0% to 11.7%, up from 10.1% to 11.3%.

EPS guidance rises to $14.96 to $15.16 from $14.69 to $14.94, a $0.25 increase at the midpoint. The reported operating margin outlook moved the other way, to 32.1% to 32.3% from 32.3% to 32.5%. By OptimistFi's calculation, that is a cut of 20 basis points at both ends of the range.

The filing says the updated guidance includes acquisition-related impacts.

Why it matters

OptimistFi has argued that IDEXX is a premium compounder if clinic workflow lock-in keeps turning into recurring, high-margin testing revenue. Recurring revenue up 11% and gross margin up 110 basis points support that view. The guidance raise leans on the same stream.

The caveat sits beside it. Part of the quarter's EPS came from a gain, a tax benefit and currency, and the margin outlook was cut. The filing also says currency changes add to full-year 2026 EPS compared with 2025. The risk in OptimistFi's case is that the share price already assumes this durability.

What's next

IDEXX holds an Investor and Analyst Session at VMX in Orlando, Florida, on Monday, Jan. 18, 2027, at 1:00 p.m. ET. It will highlight IDEXX MultiCue Dx, the company's next point-of-care analyzer.

The next quarterly report will show whether recurring revenue growth stays in double digits and whether the lowered margin range holds. A further cut to the margin outlook would weaken the case.