IDEXX Laboratories, Inc. (NASDAQ:IDXX) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 08:30 am ET

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IDEXX Laboratories, Inc. (NASDAQ:IDXX) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] And our first question on the line comes from Mr. Michael Ryskin from Bank of America. Please go ahead.

Analyst
Michael Leonidovich Ryskin

Thanks for taking the questions. Brian, Jay, I want to start with your comments clearly indicate that conditions improved throughout June and July. And your SNAPshot data and a lot of other third-party data indicates that right now, we're at a run rate that's in line with, if not above, prior year trends. I'm just curious, given the improved trends we've seen in recent months, what factors went into the decision to not reissue a guide? Is there any additional uncertainty you're anticipating? Is it tied to some potentially economic sensitivity later in the year? Could you just give us an insight into the thinking there? And I have a follow-up.

Executive
Brian P. McKeon

Well, as you know, I think we're very encouraged by the trends in the business and our execution. The decision to continue to suspend guidance is not reflective of a lack of optimism for the business. I think it's more just reflective of its continues to be dynamic. You can see 30% growth in the business in June. We have some dynamics that continue to evolve, and we're gaining more experience and insight as we work through this. We're planning for solid revenue and profit growth in the near term. We've got the same long-term outlook for our business. We see the same potential. And I think the strength of the business during the pandemic is reinforcing that potential. So we're feeling good about the business, but we'd like to gain more experience with some of the dynamics before we start updating the specific projections.

Analyst
Michael Leonidovich Ryskin

Appreciate the color. A quick follow-up exactly on that. The strength in June and July, I think you had some comments of you expect that some of this could have been pent-up demand from April from late March, April downturn. Any color you could give us any way to parse that apart? Because obviously, the 30% recurring CAG in June is clearly above any prior level of performance. So anything you can do to sort of give us a sense of what the underlying demand levels are right now?

Executive
Jay Mazelsky

Sure. I mean, we do think, as we indicated that some of this is due to pent-up demand both on the wellness and nonwellness side. I mean, we also think that there's a potential change in the delivery of care, which is both driving visits at a practice and higher diagnostics. And let me just expand on that through the lens of both the pet owner and the veterinarians. So if you think about the pet owner, we're all spending significantly more time with our pets as we work from home. We're observing more issues. It could be very simple things like lumping, scratching, lesions, so I think being more attuned to our pet and their activities. Certainly, pet owners are bringing their pets to the practices, both catch-up as well as observing new things.