XML 30 R13.htm IDEA: XBRL DOCUMENT
v3.24.0.1

REVENUE | 12 Months Ended
--- | ---
Dec. 31, 2023
Revenue from Contract with Customer [Abstract] |
REVENUE | REVENUE Revenue Recognition We recognize 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 we will collect substantially all of the consideration to which we will be entitled, based on the customer’s intent and ability to pay the promised consideration. We exclude sales, use, value-added, and other taxes we collect on behalf of third parties from revenue. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services to a customer. To accurately present the consideration received in exchange for promised products or services, we apply the five-step model outlined below: 1.Identification of a contract or agreement with a customer 2.Identification of our performance obligations in the contract or agreement 3.Determination of the transaction price 4.Allocation of the transaction price to the performance obligations 5.Recognition of revenue when, or as, we satisfy a performance obligation We enter into contracts where customers purchase combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The timing of revenue recognition, billings, and cash collections results in accounts receivable, lease receivables, and contract assets arising when revenue is recognized in advance of billings, and contract liabilities or deferred revenue as a result of receiving consideration in advance of revenue recognition within our consolidated balance sheet. Customer payment terms are typically 30 to 60 days, and these terms vary by location based on local business practices and by customer. Customer contracts are modified primarily to create new, or change existing, enforceable rights and obligations. Customer contract modifications typically create new performance obligations to deliver additional goods and/or services that are distinct from the goods and/or services transferred before the modification, and the related increase in consideration does not reflect the standalone selling price for the additional goods and/or services. We account for these modifications prospectively as if it were a termination of the existing contract and the creation of a new contract, and we allocate the sum of the remaining consideration of the original contract that has not been recognized as revenue and the incremental consideration promised as part of the modification to the remaining performance obligations. From time to time we have other types of contract modifications. Contract modifications that create new performance obligations to deliver additional goods and/or services that are distinct from the goods and/or services transferred before the modification, and the related increase in consideration approximates the standalone selling price for the additional goods and/or services, are accounted for as separate contracts. Contract modifications that do not create new performance obligations, but the goods and/or services to be delivered after the contract modification date are distinct from the goods and/or services transferred before the modification, are accounted for as a termination of the existing contract and the creation of a new contract. Revenues by Product and Service Categories and by Principal Geographic Areas We present disaggregated revenue for our CAG segment based on major product and service categories. Our Water and LPD segments are comprised of a single major product category. The following table presents revenue by major product and service categories:
(in thousands) |  | For the Years Ended December 31,
|  | 2023 |  | 2022 |  | 2021
CAG segment revenue: |  |  |  |  |  |
CAG Diagnostics recurring revenue: |  | $ | 2,935,425 |  |  | $ | 2,660,280 |  |  | $ | 2,534,562 |
IDEXX VetLab consumables |  | 1,188,261 |  |  | 1,057,236 |  |  | 1,006,781 |
Rapid assay products |  | 344,494 |  |  | 313,667 |  |  | 296,852 |
Reference laboratory diagnostic and consulting services |  | 1,278,617 |  |  | 1,178,113 |  |  | 1,123,656 |
CAG Diagnostics services and accessories |  | 124,053 |  |  | 111,264 |  |  | 107,273 |
CAG Diagnostics capital - instruments |  | 137,603 |  |  | 147,326 |  |  | 149,140 |
Veterinary software, services and diagnostic imaging systems: |  | 279,328 |  |  | 251,187 |  |  | 206,258 |
Recurring revenue |  | 214,597 |  |  | 180,973 |  |  | 147,498 |
Systems and hardware |  | 64,731 |  |  | 70,214 |  |  | 58,760 |
CAG segment revenue |  | 3,352,356 |  |  | 3,058,793 |  |  | 2,889,960 |
Water segment revenue |  | 168,149 |  |  | 155,720 |  |  | 146,505 |
LPD segment revenue |  | 121,659 |  |  | 122,607 |  |  | 135,887 |
Other segment revenue |  | 18,789 |  |  | 30,204 |  |  | 43,008 |
Total revenue |  | $ | 3,660,953 |  |  | $ | 3,367,324 |  |  | $ | 3,215,360 |
The following table presents revenue by principal geographic area, based on customers’ domiciles:
(in thousands) |  | For the Years Ended December 31,
|  | 2023 |  | 2022 |  | 2021
Americas |  |  |  |  |  |
United States |  | $ | 2,391,427 |  |  | $ | 2,182,959 |  |  | $ | 1,995,683 |
Canada |  | 150,110 |  |  | 142,743 |  |  | 139,727 |
Latin America & Caribbean |  | 83,923 |  |  | 75,035 |  |  | 66,623 |
|  | 2,625,460 |  |  | 2,400,737 |  |  | 2,202,033 |
Europe, the Middle East and Africa |  |  |  |  |  |
Germany |  | 149,789 |  |  | 137,876 |  |  | 146,762 |
United Kingdom |  | 121,745 |  |  | 110,400 |  |  | 114,955 |
France |  | 96,797 |  |  | 84,479 |  |  | 90,836 |
Italy |  | 53,787 |  |  | 48,192 |  |  | 52,062 |
Spain |  | 52,332 |  |  | 46,982 |  |  | 48,169 |
Switzerland |  | 34,830 |  |  | 30,646 |  |  | 31,984 |
Netherlands |  | 30,508 |  |  | 26,882 |  |  | 29,656 |
Other |  | 176,396 |  |  | 161,577 |  |  | 167,525 |
|  | 716,184 |  |  | 647,034 |  |  | 681,949 |
Asia Pacific Region |  |  |  |  |  |
Australia |  | 95,465 |  |  | 96,408 |  |  | 94,414 |
Japan |  | 75,569 |  |  | 77,661 |  |  | 84,275 |
China |  | 44,168 |  |  | 49,193 |  |  | 63,166 |
Other |  | 104,107 |  |  | 96,291 |  |  | 89,523 |
|  | 319,309 |  |  | 319,553 |  |  | 331,378 |
Total |  | $ | 3,660,953 |  |  | $ | 3,367,324 |  |  | $ | 3,215,360 |
Major Categories of Revenue for our Products and Services Diagnostic Products and Accessories. Diagnostic products and accessories revenues, including IDEXX VetLab® consumables and accessories, rapid assay, LPD, Water, and OPTI testing products, are predominantly recognized and invoiced at the time of shipment, which is when the customer obtains control of the product based on legal title transfer and we have the right to payment. We also provide customers with certain consumables that are recognized upon utilization by the customer, which is when we have the right to payment and the risks and rewards of ownership transfer. Shipping costs reimbursed by the customer are included in revenue and cost of sales. As a practical expedient, we do not account for shipping activities as a separate performance obligation. Laboratory Diagnostic and Consulting Services. Laboratory diagnostic and consulting services revenues are recognized and invoiced when the laboratory diagnostic service is performed. Instruments, Software and Systems. CAG Diagnostics capital instruments, diagnostic imaging systems, veterinary software licenses and computer hardware revenues are recognized and invoiced when the customer obtains control of the products based on legal title transfer and we have the right to payment, which generally occurs at the time of installation and customer acceptance. Our instruments, software, and systems are often included in one of our significant customer programs, as further described below. SaaS Subscriptions. We offer a variety of veterinary software and diagnostic imaging SaaS subscriptions including ezyVet, Animana, Neo, Pet Health Network Pro, Petly Plans, Web PACS, rVetLink, SmartFlow, and Vet Radar. We recognize revenue for our SaaS subscriptions over time on a ratable basis over the contract term, beginning on the date our service is made available to the customer. Our subscription contracts vary in term from monthly to two years. Customers typically pay for our subscription contracts in equal monthly amounts over the term of the arrangement. Deferred revenue related to our SaaS subscriptions is not material. Extended Warranties and Post-Contract Support. CAG Diagnostics capital instruments and diagnostic imaging systems extended warranties typically provide customers with continued coverage for a period of one to five years beyond the first-year standard warranty. Customers can either pay in full for the extended warranty at the time of instrument or system purchase, or can be billed on a quarterly basis over the term of the contract. We recognize revenue associated with extended warranties over time on a ratable basis using a time-elapsed measure of performance over the contract term, which approximates the expected timing in which applicable services are performed. Veterinary software post-contract support provides customers with access to technical support when and as needed through access to call centers and online customer assistance. Post-contract support contracts typically have a term of twelve months and customers are billed for post-contract support in equal quarterly amounts over the term. We recognize revenue for post-contract support services over time on a ratable basis using a time-elapsed measure of performance over the contract term, which approximates the expected timing in which applicable services are performed. Contracts with Multiple Performance Obligations We enter into arrangements with multiple performance obligations where customers purchase a combination of IDEXX products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately requires significant judgment. We determine the transaction price for a contract based on the total consideration we expect to receive in exchange for the transferred goods or services. To the extent the transaction price includes variable consideration, such as volume rebates or expected price adjustments, we apply judgment in constraining the estimated variable consideration due to factors that may cause reversal of revenue recognized. We evaluate constraints based on our historical and projected experience with similar customer arrangements. We allocate revenue to each performance obligation in proportion to the relative standalone selling prices, and recognize revenue when transfer of the related goods or services has occurred for each obligation. 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 using relevant information available and apply suitable estimation methods including, but not limited to, the cost plus a margin approach. We recognize revenue as each performance obligation is satisfied, either at a point in time or over time, as described in the revenue categories above. We do not disclose information about remaining performance obligations that are part of arrangements with an original expected duration of one year or less. The following customer arrangements represent our most significant customer contracts that contain multiple performance obligations: Customer Commitment Arrangements. We offer customers incentives upon entering into multi-year arrangements to purchase annual minimum amounts of products and services. Free or Discounted Instruments and Systems. Many of our customer commitment arrangements, such as our IDEXX 360 program, provide customers with free or discounted instruments or systems upon entering into multi-year arrangements to purchase annual minimum amounts of products and services. We allocate total consideration, including future committed purchases and expected price adjustments, based on relative standalone selling prices to identified performance obligations and recognize instrument revenue and cost at the time of installation and customer acceptance in advance of billing the customer, which is also when the customer obtains control of the instrument based on legal title transfer. Our right to future consideration related to instrument revenue is recorded as a contract asset within other current and long-term assets. The contract asset is transferred to accounts receivable when customers are billed for products and services over the term of the arrangement. We have determined that these arrangements do not include a significant financing component. On December 31, 2022, our contract assets were $190.8 million, of which approximately $43.2 million was reclassified to accounts receivable when customers were billed for related products and services during the year ended December 31, 2023. Furthermore, as a result of new placements under commitment arrangements, net of subsequent amounts reclassified to accounts receivable and allowances established for credit losses, our contract assets were $223.1 million at December 31, 2023. We monitor customer purchases over the term of their arrangement to assess the realizability of our contract assets and review estimates of variable consideration. Impairments and revenue adjustments that relate to performance obligations satisfied in prior periods, including cumulative catch-up adjustments to revenue arising from contract modifications, during the years ended December 31, 2023 and 2022, were not material. Up-Front Consideration Paid to Customers. We provide customers with incentives in the form of IDEXX Points upon entering into multi-year arrangements to purchase annual minimum amounts of future products and/or services (previously referred to as “up-front customer loyalty programs”). If a customer breaches their agreement, they are required to refund all or a portion of the up-front consideration, or make other repayments, remedial actions, or both. Up-front incentives to customers (previously referred to as “customer acquisition costs”) in the form of IDEXX Points or, from time to time, cash, are not made in exchange for distinct goods or services and are capitalized as consideration paid to customers within other current and long-term assets, which are subsequently recognized as a reduction to revenue over the term of the customer arrangement. If these up-front incentives are subsequently utilized to purchase instruments, we allocate total consideration, including future committed purchases less up-front incentives and estimates of expected price adjustments, based on relative standalone selling prices, to identified performance obligations, and recognize instrument revenue and cost at the time of installation and customer acceptance. To the extent invoiced instrument revenue exceeds recognized instrument revenue, we record deferred revenue as a contract liability, which is subsequently recognized upon the purchase of products and services over the term of the contract. We have determined these arrangements do not include a significant financing component. On December 31, 2022, our capitalized consideration paid to customers was $158.0 million, of which approximately $50.9 million was recognized as a reduction of revenue during the year ended December 31, 2023. Furthermore, as a result of new payments to customers, net of subsequent recognition, our capitalized consideration paid to customer was $168.9 million at December 31, 2023. We monitor customer purchases over the term of their arrangement to assess the realizability of our capitalized consideration paid to customers and review estimates of variable consideration. Impairments and revenue adjustments that relate to performance obligations satisfied in prior periods, including cumulative catch-up adjustments to revenue arising from contract modifications, during the years ended December 31, 2023 and 2022, were not material. Rebate Arrangements. Our rebate arrangements provide customers the opportunity to earn future rebates based on the volume of products and/or services they purchase over the term of the arrangement. Rebate incentives are typically offered in multi-year arrangements that include customer commitments to purchase annual minimum amounts of products and services, or, to a lesser extent, are sometimes offered without future purchase commitments. We account for the customer’s right to earn rebates on future purchases as a separate performance obligation and determine the standalone selling price based on an estimate of rebates the customer will earn over the term of the arrangement. Total consideration allocated to identified performance obligations is limited to goods and services that the customer is presently obligated to purchase and does not include estimates of future purchases that are optional. We allocate total consideration to identified performance obligations, including the customer’s right to earn rebates on future purchases, which is deferred and subsequently recognized upon the purchase of products and/or services, partly offsetting rebates as they are earned. On December 31, 2022, our deferred revenue related to rebate and up-front consideration arrangements was $36.1 million, of which approximately $12.6 million was recognized when customers purchased eligible products and services during the year ended December 31, 2023. Furthermore, as a result of new customer purchases under rebate and up-front consideration arrangements, net of subsequent recognition, our deferred revenue was $32.9 million at December 31, 2023, of which approximately 33%, 26%, 19%, 13%, and 9% are expected to be recognized during 2024, 2025, 2026, 2027, and thereafter, respectively. For our customer commitment arrangements, we estimate future revenues related to multi-year arrangements to be approximately $3.8 billion, of which approximately 28%, 24%, 20%, 15%, and 13% are expected to be recognized during 2024, 2025, 2026, 2027, and thereafter, respectively. These future revenues relate to performance obligations not yet satisfied, for which customers have committed to future purchases, net of the expected revenue reductions from consideration paid to customers and expected price adjustments, and as a result, are lower than stated contractual commitments by our customers. Instrument Rental Arrangements. Revenues from instrument rental and reagent rental arrangements are recognized either as operating leases on a ratable basis over the term of the arrangement or as sales-type leases at the time of installation and customer acceptance. Customers typically pay for the right to use instruments under rental arrangements in equal monthly amounts over the term of the rental arrangement. For some arrangements, customers are provided with the right to purchase the instrument at the end of the lease term. Our reagent rental arrangements provide customers the right to use our instruments upon entering into multi-year arrangements to purchase annual minimum amounts of consumables. These types of arrangements include an embedded lease for the right to use our instrument and we determine the amount of lease revenue allocated to the instrument based on relative standalone selling prices. Lease revenues are presented in product revenue on our consolidated income statement. Lease revenue was approximately $20.7 million, $20.3 million, and $20.8 million for the years ended December 31, 2023, 2022, and 2021, respectively, including both operating leases and sales-type leases. Sales-type Reagent Rental Arrangements. Our reagent rental arrangements that effectively transfer control of instruments to our customers are classified as sales-type leases and we recognize instrument revenue and cost in advance of billing the customer, at the time of installation and customer acceptance. Our right to future consideration related to instrument revenue is recorded as a lease receivable within other current and long-term assets, and is transferred to accounts receivable when customers are billed for products and services over the term of the arrangement. On December 31, 2022, our lease receivable assets were $18.4 million, of which approximately $4.3 million was reclassified to accounts receivable when customers were billed for related products and services during the year ended December 31, 2023. Furthermore, as a result of new placements under sales-type reagent rental arrangements, net of subsequent amounts reclassified to accounts receivable, and allowances established for credit losses, our lease receivable assets were $23.1 million at December 31, 2023. The impacts of discounting and unearned income at December 31, 2023, were not material. Profit and loss recognized at the commencement date and interest income during the year ended December 31, 2023, were not material. We monitor customer purchases over the term of their arrangement to assess the realizability of our lease receivable assets. Impairments during the year ended December 31, 2023, were not material. Operating-type Reagent Rental Arrangements. Our reagent rental arrangements that do not effectively transfer control of instruments to our customers are classified as operating leases and we recognize instrument revenue and costs ratably over the term of the arrangement. The cost of the instrument is capitalized within property and equipment. During the year ended December 31, 2023, we transferred instrume nts of $14.6 million compared to $17.4 million during the year ended December 31, 2022, from inventory to property and equipment. We estimate future revenue to be recognized related to our reagent rental arrangements of approximately $56.4 million, of which approximately 26%, 23%, 18%, 15%, and 18% are expected to be recognized during 2024, 2025, 2026, 2027, and thereafter, respectively. These future revenues relate to performance obligations not yet satisfied for which customers have committed to future purchases, net of expected price adjustments, and as a result, may be lower than stated contractual commitments by our customers. Other Customer Incentive Arrangements. Certain arrangements with customers include discounts or rebates on the sale of products and services applied retrospectively, such as volume rebates achieved by purchasing a specified purchase threshold of goods and services. We account for these discounts as variable consideration and estimate the likelihood of a customer meeting the threshold in order to determine the transaction price using the most predictive approach. We typically use the most-likely-amount method for incentives that are offered to individual customers, and the expected-value method for arrangements that are offered to a broad group of customers. Revenue adjustments that relate to performance obligations satisfied in prior periods, including cumulative catch-up adjustments to revenue arising from contract modifications, during the years ended December 31, 2023 and 2022, were not material. Refund obligations related to customer incentive arrangements are recorded in accrued liabilities for the actual issuance of incentives, incentives earned but not yet issued, and estimates of incentives to be earned in the future. Combined Arrangements. At times, we combine aspects of customer commitment arrangements, instrument rental arrangements and other incentives within a single customer arrangement. We separate each significant element and include the contract assets, consideration paid to customers, deferred revenues, and estimated future revenues within the most relevant disclosures above. Each customer contract is presented as a net contract asset or net contract liability on our consolidated balance sheet. Deferred Extended Warranties and Post-Contract Support Revenue On December 31, 2022, our deferred revenue related to extended warranties and post-contract support was $26.4 million, of which approximately $19.8 million was recognized during the year ended December 31, 2023. Furthermore, as a result of new arrangements, our deferred revenue related to extended warranties and post-contract support was $26.0 million at December 31, 2023. We do not disclose information about remaining performance obligations that are part of contracts with an original expected duration of one year or less, and do not adjust for the effect of the financing components when the period between customer payment and revenue recognition is one year or less. Deferred revenue related to extended warranties and post-contract support with an original duration of more than one year was $9.7 million at December 31, 2023, of which approximately 43%, 29%, 16%, 7%, and 5% are expected to be recognized during 2024, 2025, 2026, 2027, and thereafter, respectively. We have determined these arrangements do not include a significant financing component. IDEXX Points IDEXX Points may be applied to trade receivables due to us, converted to cash, or applied against the purchase price of IDEXX products and services. We consider IDEXX Points equivalent to cash. IDEXX Points that have not yet been used by customers are included in accrued liabilities until utilized or expired. Breakage is not material because customers can apply IDEXX Points to trade receivables at any time. Costs to Obtain a Contract We capitalize sales commissions and the related fringe benefits earned by our sales force when considered incremental and recoverable costs of obtaining a contract that includes future performance obligations. Our contracts include performance obligations related to various goods and services, some of which are satisfied at a point in time and others over time. Commission costs related to performance obligations satisfied at a point in time are expensed at the time of sale, which is when revenue is recognized. Commission costs related to long-term service contracts and performance obligations satisfied over time, including extended warranties and SaaS subscriptions, are deferred and recognized on a systematic basis that is consistent with the transfer of the goods or services to which the asset relates. We apply judgment in estimating the amortization period, which ranges from 3 to 7 years, by taking into consideration our customer contract terms, history of renewals, and expected length of customer relationship, as well as the useful life of the underlying technology and products. Amortization expense is included in sales and marketing expenses in the accompanying consolidated statements of income. Deferred commission costs are periodically reviewed for impairment. On December 31, 2022, our deferred commission costs, included within other current and long-term assets, were $19.2 million, of which approximately $6.5 million of commission expense was recognized during the year ended December 31, 2023. Furthermore, as a result of commissions related to new extended warranties and SaaS subscriptions, net of subsequent recognition, our deferred commission costs were $19.7 million at December 31, 2023. Impairments of deferred commission costs during the years ended December 31, 2023 and 2022, were not material.

X
- References No definition available. + Details
Name: | us-gaap_RevenueFromContractWithCustomerAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration