Good morning and welcome to IDEXX's 2022 Investor Day. It's a great pleasure to welcome you here in person at our worldwide headquarters in Maine, and also welcome those folks who are joining us virtually through webcast. My name is Jay Mazelsky. I'm president and CEO of IDEXX, and we have approximately four-hour program planned for you this morning. I'll be joined by members of my management team, who will also provide an overview of selected topics. With that, let's dive right into the agenda. I'll give you a quick overview and then get started. I'll start with an overview of the IDEXX strategy, the opportunity, and selected market trends. I'll be followed by Dr. Tina Hunt, who heads up our franchise leading point of care diagnostics business and global operations group. Tina will provide an update on the business, innovation, and what we see as the opportunities. Julie Godon, Vice President and General Manager of our Rapid Assay business, will provide an update on our innovation agenda, including our most recent product launch and enhanced 4Dx Plus, and provide a perspective on vector-borne disease screening marketplace and the opportunity. We'll take a break. We'll reconvene. Mike Lane, who heads up our global reference lab business, as well as the IT group, will provide a perspective on the role that reference lab plays as an extension of the practice, the depth and breadth of our offering, spotlight our specialty consulting services with a focus on teleradiology. Michael Schreck, who heads up our software and services business, will really provide a perspective on software and how it's become a strategic enabler for our customers in terms of being able to support a high standard of care as well as practice productivity. Jim Podlasek, who's our global commercial leader, will provide a perspective on the capability and the extension of the capabilities we built commercially in which to engage our customers with subject matter experts and trusted advisors to really drive diagnostics utilization. We'll take a short break and come back. George Fennell, who's our global leader for the Americas commercial organization in CAG, will facilitate a conversation with Dr. Bruce Francke. Dr. Francke is the owner of a practice of Bay Animal Hospital in Essexville, Michigan, will provide perspectives on the dynamics within today's practice environment, as well as a partnership with IDEXX. Brian McKeon, our Chief Financial Officer, will provide a financial overview of the business, and then we'll have a short amount of time for Q&A. For those of you who are physically here and plan on staying, we have our special lobster lunch planned, and you'll have a chance to interface with the rest of the management team. With that, and before getting started, let me remind you that today's event is covered by the safe harbor disclaimer. A copy of this is on our website. If you wish to familiarize yourself more deeply with it, you can go to our website. Let me get started with the overview of the IDEXX opportunity, our strategy, and selected market trends. The focus of today's discussion will be on the enduring growth opportunity we see for IDEXX, enabled by our long-term growth strategy. Our focus will primarily be on the companion animal diagnostics and information management businesses, since this comprises 90%+ of the company by revenue. You'll hear several key themes from me and the management team throughout the morning. First is that we've taken a very consistent strategic approach to the business, developing the opportunity in terms of bringing relevant innovations to solve challenging patient and business problems within a practice, to engage in a high-touch, high-frequency commercial model, form partners with customers as subject matter experts, and deliver an exceptional customer experience, not just at the product launch, but throughout the lifecycle of the product itself and throughout the relationship with the customer. You'll also hear about a tremendous opportunity. We introduced this model last year. It's a $37 billion total addressable opportunity. We think that's very much intact, and I'll share with you some additional insights on that, and that with our compelling strategy and executing strongly, we believe that there's an opportunity to grow our top line double digits and with increasing profit margins at a high ROIC. Successful strategies are often enabled and animated by engaging purposes. We believe we have such a purpose at IDEXX, which is to create exceptional long-term value for our customers, for our employees, and for our shareholders. Core to our strategy to being able to do that is innovation, and the key enabler as a growth company behind innovation is talent that's diverse and highly engaged. In what ways, and we have several ways in which to really drive a highly engaged workforce, but it's creating workplaces that are dynamic, supportive, and reflective of the customers in which we serve and the communities in which we live and work. We also have other corporate objectives. These include being able to improve access to patient healthcare, to be able to ensure safe drinking water and food supplies through testing solutions, and to help create the veterinary workforce of the future. We think by executing our strategy well and by supporting these corporate responsibilities, we can have a positive and strong impact in the world in which we live and work. For those of you interested in going deeper into our corporate responsibility goals, we just published our 2021 corporate responsibility report. You could access it on our website and, you'll learn more about our strategy in that regard. Now, as we look at the long-term growth potential in the business, we see for IDEXX a very long-term, decades-long organic growth opportunity. This is the $37 billion total addressable opportunity we shared with you last year at Investor Day. Let me just quickly remind you how we built this up as a model. We took a look at the total number of clinical visits that we do today, broke it down by wellness and non-wellness visits. We looked at best practices in terms of when would blood work ideally be included as part of a clinical visit. Blood work is defined as chemistry and/or hematology. We said we can grow those clinical visits from where they are today to a much higher rate to this best practice standard. We did the same thing internationally, though we made some modifications just based on mix, given that it's more of a sick patient testing market than wellness. We extended it out by the diagnostics use, where on the wellness side, it's $60-$65. On the non-wellness side, it's $105-$110. You get the $37 billion total addressable opportunity. A couple words or a couple of takeaways or thoughts connected with this slide. First off, if you take a look at where we sell today, about two-thirds of the served market is in the US. Two-thirds of the opportunity, the addressable opportunity, is outside the US in international regions. It's exactly opposite, and that speaks to where we think some of the future growth can come from. The other thing that I would point out for our US country or region is we've been at this for 30 years. We've been developing the market, we've been perfecting product fit. We've really worked with our partners, the veterinarians, on this belief journey. Over those decades, only 19% of clinical visits today in the US include blood work, chemistry or hematology. About a fifth, 22% of the US region or country is served. If you take a look at those international regions and countries, it's 7%, so a little bit more than a third of that 19%. It just gives you a sense of just the scale and scope of the opportunity still before us, and we'll talk about that. Let me give you a slightly different cut in terms of how we look at this. These are 14 countries, and we picked 14 countries based on the size of CAG Diagnostics revenue and penetration over the amount of diagnostics on average per practice that's used from left to right. Not surprisingly, what you see is the US on the left-hand side. About 17% of practice revenues in the US are generated from diagnostics. If you average the other 13 countries, it's about 5%. So it's less than a third. It's about 5%. So we think the U.S. represents. It's still early in the use of diagnostics, as I shared with you earlier, but there's just a terrific opportunity going forward based on relevant product fit, working in partnership with customers to create awareness and education and, you know, deeper appreciation that the role of diagnostics, you know, can play, and obviously inspiring a higher diagnostics utilization. You can see from this slide that as a result of being able to consistently develop this market, 30+ years in the U.S., you know, more recently, at least a decade plus of really intensive effort in our European regions, that we've been able to grow our top line fast, organically fast. It's even accelerated, as you can see from during the pandemic. This has been a result of our multimodality innovations. It's been a result of really customer-friendly programs, really allowing the veterinarian to practice how she or he wants to. In part, during the pandemic, where you've seen that acceleration, in part an expansion of the pet population. CAG Diagnostics revenue, as you can see from the chart, comprises almost 80% of the total revenue of the company. CAG Diagnostics recurring revenue consists of consumables from our in-clinic analyzers, SNAP tests, reference lab testing services, and specialty consulting. This growth has been resilient through different economic cycles. You can see from the chart in front of you that we've consistently grown 10%+ throughout a long period of time, and with a premium, by the way, to personal consumption expenditure growth. Now there have been times, like in 2008, 2009, when we had the Great Recession, that our CAG revenue grew approximately 5%. This is a very resilient business that's different than saying, you know, we're immune to different economic cycles. Keep in mind that 2008, 2009 period, we're a very different company than, you know, we're a decade plus later than when we were. Much more capable in terms of our overall product portfolio. Catalyst One, ProCyte One, SediVue, a full suite of software solutions, a reference lab network, which is broad and deep and delivers exceptional service. Our go-to market model direct. We have direct representation, and you'll see some slides that just, you know, give you a sense of the scale of this commercial model is different. Keep in mind, this humanization of pets, this pet owner-pet bond has never been stronger. It's never been stronger and growing. We think that we're in a much stronger position as a company than we were back in 2008 and 2009, and that really speaks to the durability of the business. Let me shift a little bit and now provide some data from the pet owner perspective. These are amazing statistics. This is from Harris in the summer of 2021, and this was a survey of pet owners. You could read the survey data, and from our perspective, what it says is that pet owners consider the dogs and cats to be indispensable members of their family. This is an attribute of the market that we're blessed to serve that really speaks to these very long-term, sustainable, positive drivers whenever you have this type of, you know, affinity. Pretty remarkable, but every survey we've seen, surveys that we've done ourselves have come back with this sort of responsiveness, this sort of attachment to, you know, their pets. The other, I think, important aspect from a secular trend standpoint is that when you take a look at share of wallet, and I think about this as ability to pay for pet healthcare spend in general. Today across different economic segments, what you see is it's relatively modest as a percentage of personal consumption expenditure, 2% or less across these different economic segments. You break it down further, and what you see is the proportion of healthcare spend or diagnostics that enables or drives healthcare spend is even smaller than that. From at least the capacity standpoint, the amount of money that's spent on pet healthcare and, you know, health and wellness of the beloved members of our families is small and certainly can be sustained in dynamic economic times. I think an important question is not just can we spend, but does the pet owner want to spend? Will they prioritize spending on pet healthcare at the expense of other categories they may spend more money on, whether it's travel or entertainment or personal grooming? What you see from this data is that pet owners say that they are willing to prioritize, that this is something that they would cut back in other areas. You know, in fact, a different survey, but about 20% of pet owners say they would sooner spend for the health and well-being of their pet than they would for themselves. Pretty remarkable data, and, you know, again, we think that this is an important set of points within a good economic environment, but also one in which it might be a little more dynamic or uncertain. Let me now take a step back and talk about the pet owner a bit and some of those trends. I wanna talk about the practice environment, and we'll have a chance, this morning with Dr. Francke to talk about some of the dynamics within the practice environment. A couple of, I think, important takeaways from this slide, which is that medical services is growing faster than practice revenue. Medical services is growing faster than practice revenue, and that growth rate has accelerated. You can see on the right-hand side, the columns where we take the five-year period and then the five-year latter period, and you see that it's growing. The question is, why is that the case? A few reasons. Pet owners want the very best care for their pets, and they're willing to pay for it. Veterinarians, this is their passion. This is why they went to veterinary school. This is what they want to be able to do, which is deliver excellent care. You have this convergence of pet owners and veterinarians wanting the same thing. Keep in mind there are some other trends. Retail sales within the practices have moved outside the practice environment, in part as a result of, you know, online stores, e-commerce, those sort of things. From a profit center or revenue anchor within the practice, they can't rely on that. Not surprising, we saw this pre-pandemic. It only accelerated during the pandemic, but there's really a pivot or focus on medical services. To be able to treat a patient, the BBL, or to assess baseline health, you often need to diagnose before you do that. The way you diagnose is through diagnostics, what we as a company offer. What you see is diagnostics, which enables the care envelope, is growing faster than medical services, which is growing faster than practice revenue. This is something that we think is a durable trend. It makes a lot of sense. There are aligned reasons for it in terms of both pet owner and veterinarian and practice owner. We think it's quite positive for the business. Now let me take a look at diagnostics growth and break it down by its components. Clinical visit, growth, frequency, and utilization. What frequency refers to is when a pet sees a veterinarian, and we define that as a clinical visit. When is diagnostics used? Frequency. Utilization speaks to when it's used, how much is consumed? What's the comprehensiveness of the diagnostics, let's say panel or menu that's used? What you can see, and we break this out by three different periods, it grew strongly during the pandemic, all three pieces, clinical visits, frequency, and utilization. The frequency and utilization piece very much aligned with my earlier story on medical services and the growth in medical services has sustained itself coming out of the pandemic, as you can see from the right-hand side of the chart. Let's take another look with the next slide at diagnostics, and it's not just by its component pieces, but by the modality. You know, we often get the question, if you test in your in-clinic modalities, the vet lab business, does it cannibalize testing in the reference lab business and vice versa? I think what this chart demonstrably shows you is that testing begets testing. When customers use more diagnostics in clinic, in this example, they use more from a reference lab standpoint. It's not surprising. Let me just, you know, maybe this upper level and provide some context. All practices or nearly all practices use both reference labs and in clinic. It's just a question of proportion or mix. If I bring my dog in for his annual wellness visit, and he's fine and energetic, chances are we're gonna do blood work, and that blood work is gonna be sent to the reference labs. Why not? There's not a time-sensitive dimension to it. If I get the results back next day or the veterinarian tracks me down two days later, that's fine. We can have that conversation. It's not gonna, you know, change anything in terms of the health trajectory of my dog. Now, I bring that same dog in at some point later. He's very sick. He's vomiting. He's lethargic. I'm worried about him, and the veterinarian's worried about him too. They do an in-clinic test in that situation. They decide that, you know, based on the results that have come back, they need to do another test or a follow-up test because the first round was indeterminate. That can drive potentially testing to the reference labs, or sort of the best outcome is that they figure out what's going on with Blake, and we begin therapeutic treatments within that 15-20-minute patient window, and he starts getting better immediately. What you see is that testing does beget testing. It's all part of this care protocol. In fact, when you go to the top 2% of practices, top 2%, they test diagnostics at a 2x level to the average or mean. You talk to any of these practices that do that, they'll tell you, we have care protocols. We incorporate diagnostics as part of care protocols because we're convinced based on science and best medicine that that's the way you deliver the best outcomes. You know, our focus is on being able to support these customers in their practices and help through awareness and education and this belief journey, move those customers from left to right on this chart. Let me talk about a key element of our strategy that builds off that prior slide and discussion. The key part of the strategy is to really inspire customers to adopt our multimodal solutions, reference labs and our in-clinic solutions. You can see we've been able to grow this, you know, strongly over time. 2021, 55% of our customers used both. If you double-click on that 55%, more than 50% of those customers use our practice information management systems, use our PIM systems. These are all-in customers, and what they tell us is in using the IDEXX ecosystem, it all just works better together. We really like it. It's been a consistent source of growth for us as we inspire our customers to use a greater proportion of our solutions over time. You know, an important part of this strategy is to integrate the pieces in a way that works for our customers, that supports their workflow and can be configured to their workflow. You'll hear more about that this morning in terms of what that looks like and steps that we can take and where we think that creates a competitive advantage for us. The big thing through the customer lens is we focus with them on diagnostics utilization as opposed to advocating for one modality or the other. Key advantage. By taking this approach, this is helping us grow faster than the overall sector. This is for a 5+ year period. What you see is clinical revenue is growing faster than practice revenue, diagnostics revenue is growing faster than clinical revenue, and IDEXX diagnostics revenue has approximately a 400 basis point premium to the overall diagnostics revenue within the sector. We think that the substantial premium that we've been able to realize over time is very much a factor of the decades-long investments, our very long track record in innovation and commercial engagement, our channel being able to provide testing that's highly relevant and delivered in a very customer-friendly way. As we look forward, I wanna take a step up and really talk about the sector as a whole. Through the framework of trends, both long-term tailwinds, as well as some moderating factors on a short-term basis. I've spoken to the humanization of pets, this notion of strengthening pet-parent bond, which we think is a very important attribute of the industry in which we work. I also wanna talk about innovation, and not just innovation from the standpoint of what IDEXX does, as important as that is, and we'll speak to that throughout the morning. Innovation in general, whether it's coming from the therapeutic and pharmaceutical companies, specialty diets, insurance, what have you. Because pet owners want the best medicine for their pets, and because veterinarians want to deliver the best standard of care, there's an incredible appetite for innovation that solves new problems. When you have something that's relevant and important and does that, there's an appetite for it, and it gets picked up. We think based on what we're doing and what we see others doing in the industry as a whole, that trend has a lot of energy and a lot of investment dollars behind it. We think that's quite exciting. I would also say to that last bullet on the left-hand side, the practices have never been hungrier for technology solutions, whether it's software to support each step of the patient visit, workflow optimization, specialty consulting services that Mike Lane will speak to. There's an incredible appetite for being able to adopt technology solutions that support their missions, that act as extensions of their practice. Certainly, there are some near-term moderating factors in the marketplace. You know, practice capacity, we've spoken at length to that in other forums. You know, the industry, we all work in the same economy, whether it's in the U.S. or outside of the U.S. As a result of the pandemic, there's been challenges in terms of, you know, retaining labor, really supporting this huge step up, which I'll speak to in a minute, during the pandemic. There's been some reset in terms of what's sustainable and practice has taken some time to really work through creating, you know, a more productive model. The macroeconomic environment certainly creates some uncertainty, dynamics and, you know, we're watching that. I think none of us have a crystal ball, but our focus is on being able to help our customers, you know, through different economic cycles. Over the next couple slides, I'll speak to this lapping of the pandemic demand step up as will Brian as part of his presentation. There we go. Let me talk a little bit about the step up in pet population during the pandemic, but through the lens of who are the pet owners that did this, and what do we think this overall trend means? You know, very interestingly, over 50% of the new pet-holding households were adopted by younger generation, Millennials and Generation Z. In fact, if you go out 5 years from now, the majority of pet owners are gonna be the younger generation. We think this is an extremely positive development. We know that the younger generation, they look to their veterinarian as trusted partners and advisors. They're willing to spend... You've seen some of the statistics. They're willing to spend for the health and happiness of the member of their family. They consider pets, dogs and cats, to be members of their family. We think that this is an extremely positive trend that will only, you know, get stronger and really sustain the type of, you know, growth we've seen in the sector. Another, you know, cut at this, and this follows. I'm pointing to the right-hand side of the chart, where you take a look at the healthcare spend over the lifetime of the pet, as puppies and kittens become dogs and cats, become senior dogs and cats and geriatrics. The increase in healthcare spend follows very, you know, directionally or thematically what we see on the human side, that as we get older, chronic conditions emerge, we may get sicker, we consume more healthcare. In this case, the interesting aspect of this is that the proportion of diagnostics actually grows through the life stages of the pet, from about 12% to 20%. We think that this is, again, a very positive, sustaining tailwind to the business. I would also point out that part of our strategy, part of what we do as a company is to help develop the sector. Programs like preventive care, for example, bringing testing earlier into the, you know, into the life of the young adult dog, establishing baselines, maybe uncovering something that's not clinically obvious or symptomatic, so that you can begin monitoring it and treating it. We think that we can positively influence where healthcare is spent and how it is spent. As we talk about, you know, the future trajectory, this chart shows the average clinical visits per practice over time pre-pandemic, through the pandemic, and then out of it. You know, I would point to the clinical visit trend in a specific year within the pandemic, Q1 2020 to Q1 2021. 13% step up in clinical visits. 13%. That one year period, that compares to historical rate pre-pandemic of we saw between 2% and 3%. That was a gigundous step up in terms of patients and pets. You know, veterinarians and practice owners and their staff, they did an amazing job. Heroic job in terms of servicing this need. They worked the nights and through weekends, they put in place special processes. You know, they just, they left it all on the field. You know, as we came out of the pandemic, you know, some of this wasn't sustainable. We live in a real world, and so there are labor challenges, you know, I think throughout the economies of the Western world and Asia-Pacific, and there was some pullback as a result of, you know, exhaustion and trying to put the practices, trying to put the industry on a more sustainable foot. You know, we've seen some of those moderating forces in the first part of this year and clinical visit growth moderate about 2%, you know, negative from where it was, but from a much, much higher base. Now, interestingly, we think that there is substantial underserved demand, and that's what this chart is showing. Take a look at the dotted line. There's a dotted line on the right-hand side, the upper one. That shows you based on this expansion in the number of pets, forget the pandemic, but if it just continued at the 2%-3% clinical visit growth we've seen historically, that is an annual visit growth based on the number of pets. The solid line with the -2% is where we are. It's substantial underserved demand based on historically, a number of pets and what you'd expect to see from clinical visits. Now, we think that's gonna resolve itself over time. Practices are working hard. You'll hear about new processes they're putting in place. We think that as a company, we're not waiting for this to just magically get fixed. We're doing things on a really day-to-day basis to help practices really support higher level of capacity with productivity. Let's talk about some of the things we're doing. Software is a strategic piece of our strategy. It's a strategic piece of what practices look to. You know, if you think about a practice, whether it's an independent group or part of a corporate group, these are businesses, small businesses. You know, software is used to run the business, whether you're looking at workflow management, workflow optimization, staff productivity, client communications, pet owner, you know, all those things matter, and software can help. Our cloud-based PIM systems, you know, I think are contemporary and are leaders in being able to support practice capacity and standard of care objectives that veterinarians have. Michael will speak to our strategy there. We have other applications like VetConnect PLUS, which puts the test results in the hands of the veterinarian or at the PIM systems. Test results, historical test trending, and increasingly, clinical decision support. You know, general practitioners are incredibly busy. General practitioners, they go into the clinic, and they may have a wellness visit, and a dog comes in who's very sick. They're doing teeth cleaning, surgery. It's just like there's this huge breadth of medical and clinical activities that they're responsible for. The nice thing about clinical decision support is it can provide next step considerations. It can help guide what they may be looking at based on the test results. It's a very powerful application. A number of the presenters this morning will share with you how we're thinking about it and how it's used in real-life situation. Then the pet owner engagement application software on the right-hand side. You know, this, the younger generation of pet owners, they're digital natives. They want to be able to engage the practice differently. They want to be able to make online appointments. They want to be able to communicate with the veterinarian, you know, through these digital means and vice versa. The other way is true also. We think that this suite and the integration of this suite can result in, you know, very significant step-ups. Michael will share with you some interesting data in terms of the percentage of time the veterinarians are spend on things that are just administrative, not caring for the patients. We're very excited by that. We're also very excited by our VetLab business, our premium in-clinic instrumentation business and the role that it plays in terms of supporting the practices. You know, we've grown our premium installed base on instruments 18%, 18% figure since 2010. Now, more recently, that's been driven in part by our new hematology analyzer, ProCyte One, which has a very high attach rate with our chemistry analyzer, Catalyst One. This is customers look to these solutions to be able to support the care objectives within their practice. It fits workflow. We'll talk extensively about what we think the differentiation advantages we have, you know, with this. As we shared on our recent earnings calls, we've had record instrument placements, you know, over many quarters. Again, this is a result of this hunger we see for technology to be able to support the, you know, the dynamic upload or up register in practice capacity. R&D investment and innovation is really our lifeblood. It's where we put a lot of our investment dollars and passion before. We see tons of unmet clinical, medical, business problems yet to be solved. We believe we have deep competencies as a company in terms of instrumentation and bioassays and software and AI and machine learning to be able to address these problems. We spent over $160 million in R&D in 2021, and recently shared with you that we spent $80 million, a discrete R&D spend related to some in-licensing in deals. As it turns out, this has been a good investment. You can see on the right-hand side that engaged diagnostics practices grow diagnostics faster than non-engaged IDEXX practices. Diagnostics drives medical services or care. You can see from there that clinical revenue of IDEXX engaged practices also grow faster than clinical revenue in non-engaged practices. We think that this is a result of a customer first mindset, really centering our innovation strategy on things that are important to them. When that's the case, and they use it, and it can improve care that they deliver, they grow faster and we in turn grow faster. The point-of-care or point-of-care portfolio or VetLab business, it's an incredibly strategic part of our business portfolio. You know, all things being equal, if a test has a real-time orientation to it, the pet comes in, they're sick, they're in the practice environment for 15, 20 minutes, you wanna know, if you can, what may be ailing the patient. This is something that we've invested in decades. We're very good at the animal health, the clinic environment, very demanding. It's demanding from the standpoint of clinical performance, usability, reliability, physical footprint, cost profile. You have to get all of those things right, and we've done it extremely well. We think it's a very compelling, being able to test in the clinic for those situations is a very compelling value proposition. It's compelling for the pet owner who wants to know what's wrong and let's begin treating my dog or cat. It's compelling for the veterinarian. They wanna know and begin treatment, and they don't wanna have to spend their day or two in follow-up. You know, the pet owner's willing to pay for it. We have this. We had an opportunity, and I'll describe a little bit more about how we think about it with the next slide, to make a discrete, R&D in-licensing investment and bring two new point of care platforms and applications to IDEXX. We took advantage of it because we think it addresses some new testing categories that are very compelling. When I say new testing categories, they're not substitutes for chemistry, hematology or urine sediment. They're new testing categories. Let me describe a little bit in terms of how we think about product development through the vet lab or premium instrument lens. Very often when there's an unmet clinical need, we look around both internally and the external world, whether it's on the human health side and say, "Is there a solution out there that we can partner for, adapt and bring to the veterinary marketplace?" The veterinary marketplace has some very strict requirements around what does performance look like? How does it workflow? What's the time to result? What's the cost profile? How reliable does it have to be? You know, animal samples, though we're all mammals, are very challenging and different than human blood samples. You know, as we look at those opportunities, if we don't see anything outside of our own walls, we develop it. ProCyte One is a great example of a hematology analyzer, which we didn't think many of the attributes around usability and in cost and performance could be found. We developed it, and it took about almost five years from a product development standpoint. In other cases, SediVue is a great case of that, there were applications, there were uses within the human health side which we felt could be adapted. You just can't take it from here and put it into a clinic. The algorithms are very different, and again, some of the performance attributes are different. We were able to do that, and it took a couple of years, but in 2016 we launched a product. You can see from an installed base standpoint, we have sold over 14,000 SediVues with 40,000 more potential opportunities on a go-forward basis. This has contributed to the growth of our premium install base. It's contributed... It's made contributions to the growth of our recurring revenue stream. It speaks to, on so many different levels, how we think about innovation and a technology for life orientation. We're now on SediVue Neural Network 6.0. We've released five releases after the initial one, keeping our customers current with features, leveraging these 800 million image database to be able to improve the accuracy of the algorithm. I think a great example of how we think about innovation and the different factors or consideration. This slide, you know, is a slide that shows how it all comes together in an integrated way. Our point of care diagnostics business, Rapid Assay reference labs, specialty consulting services integrated with software solutions, whether it's our practice information system, Web PACS, increasingly overlaid with AI and machine learning for clinical decision support or automating routine tasks. Really relentlessly supporting the focus of the customer on the care, their care objectives and the workflow within the practice. We think that this is a great example of these combined innovation offerings working in a way where the, you know, sum of the parts just delivers a very high level of customer satisfaction as well as loyalty. You know, you can develop all the best solutions, you know, in the world, but you need a way to get them to customers, to position them in front of customers and help them walk through this belief journey that we've been speaking to. Our commercial organization is the way in which we do that. You can see it's an area where we have expanded our capability very significantly over time. We have over 1,100 sales professionals who are subject matter experts, who have become trusted advisors to our customers, who are in a high-touch, high-frequency model, who talk about our products, who work with our customers as partners, as trusted advisors through this belief journey of using relevant testing. Jim is gonna provide, you know, some real detail on the playbook, how we think about this. It's really an ecosystem at the end of the day. The net result of this, and you can see from this slide where we're measuring Net Promoter Score, but you could be looking at customer satisfaction or any other measure, that customers tell us that they're very pleased in their partnership with us. These are Net Promoter Scores for the company and for individual products that are at world-class levels. All the other surveys we use, you know, we get the same type of feedback. Interestingly, what customers say, it's not just the product features as good as they are. It comes down to the fact that we trust your commercial organization. We think that they have our best interests in mind. We love the customer experience that you deliver, even during challenging times like the pandemic. We don't worry about product continuity or availability. You're one of the few companies we didn't worry about through. That you're flexible in terms of the way we can do business with you and the way we interface and operate. It's all of those pieces. All of those pieces drive this world-class level of customer satisfaction. Let me take it up a level as I complete my talk over the next couple of slides, which is we see this amazing enduring opportunity before us. There's an opportunity in this sector, but there's an opportunity driven by our strategy and others to be able to develop it. This is a model where we took a look at over what we think is a multiple decade runway in front of us, 25 years. We took a look. We started with clinical visits in the U.S., and we said, you know, 19% of clinical visits today include blood work. Why can't over a 25-year period, through innovating and doing our job and executing well, why can't that average customer in the U.S. do what the top customers are already doing in the U.S.? It's not like it's what's the top one or two or five customers. These are hundreds of customers. We think that based on it's reasonable, based on best practice standards, based on the trends that we see, they can. Then we took a look at our international regions, and we asked the question a little bit differently. We said, "You know, today we know they're using blood work a lot less in each clinical visit. Why over the next 25 years with our strategy, with relevant product fit, with a commercial engagement model, can't we help partner with them to grow use of blood work to what we see on average in the U.S. so 25 years later?" We said, "That's reasonable. We think that we can. If you go through that math and sum this up, what you see is there's an opportunity within our sector to grow CAG Diagnostics recurring revenue 9% for a multi-decade horizon. We believe that as IDEXX, we can enjoy a premium to that 9% growth, that we can grow faster as a result of the compelling advantages we bring from a value proposition standpoint as well as the experience in really developing this sector. We think we're gonna play a key role in being able to do that, and we'll share with you this morning some of the insights and approaches that we have in mind. In summary, IDEXX has a very attractive, durable, recurring revenue business model and is a leader in a sector with tremendous long-term growth, organic growth opportunity. We're well-positioned to build on decades-long investment in innovation, infrastructure, our commercial capabilities to develop the long-term potential of our core businesses while generating exceptional financial returns. Next, I'd like to introduce Dr. Tina Hunt, who heads up our point of care diagnostics business and worldwide operations, who will provide our first overview of business and highlights innovation. Tina. Thank you, Jay. Good morning. Let me build on the context that Jay was setting and give you a hypothetical example to dig deeper into real-time care. Your seven-year-old dog, let's call her Luna, who is usually very active and playful, has been very quiet and reserved. She even had an accident in the house, which is very unlike her. You're worried, and you call your veterinary clinic to set the first available appointment. At the appointment, your veterinarian examines Luna, but because your pup can't tell her what's wrong, the veterinarian has to rely on diagnostics to figure out what's going on. She asks the technician to run a full set of blood work and urinalysis while she herself goes into the adjacent room, exam room to get started on the next patient. Less than 10 minutes later, she walks back and goes over Luna's results with you. She shows you a picture of Luna's urine, which is teeming with bacteria. Luna has UTI or urinary tract infection. The good news is that she can get started on antibiotics right away and should feel better soon. Your veterinarian also goes over Luna's blood work with you. Liver looks good, kidneys look good. The glucose is elevated from a previous history. To rule out diabetes, she wants to run fructosamine before you leave. She also wants you to set up another appointment in a few days to make sure that the infection cleared and Luna has no complications. As you're picking up antibiotics up front and setting the next appointment, the technician walks by and lets you know Luna's fructosamine levels were good. She's cleared of diabetes. You leave relieved and with a clear action plan. This access to comprehensive diagnostics in minutes let your veterinarian manage Luna's case completely and efficiently in one visit. Not only did it result in a better outcome for Luna, the staff didn't have to call you back later with results and recommendations. A veterinarian can see upwards of 20 patients a day, so these follow-on calls can really add up, taking significant time from the staff. As we saw in Luna's case, it also results in better economic outcomes for the practice. Follow-on diagnostics, diet and pharmacy sales, a higher compliance with the veterinarian's recommendations. At IDEXX, we have been executing on a long-standing strategy of designing a purpose-designed point-of-care diagnostic suite built from the ground up with a very deep understanding of what our customers need to practice this real-time care. We provide a broad set of diagnostics which are as good as any reference lab. They have to be for veterinarians to trust the accuracy of the results. Each analyzer is intuitive, easy to operate, because the users are not highly trained, nor do they need to be in order to run a point-of-care suite. They're all very fast. They provide results in minutes with very little hands-on time, resulting in tremendous productivity benefits. As we have talked about, time and efficiency are the most precious commodities in a clinic today. When new staff is hired, which is often these days, training them is much easier on our intuitive platforms backed by extensive support, education, and tools. Our entire suite is connected, digitally connected end-to-end with a broader ecosystem through IDEXX VetLab Station. That's the screen that you see in the center there. Ensuring automatic charge capture, so no charges are lost because clinics are so busy these days. All our analyzers are also connected via SmartService, our cloud IoT platform. We can monitor the performance of our entire installed base, remote in to resolve any issues if needed, send software upgrades, resulting in a very smooth and frictionless customer experience. This holistic software and diagnostics approach that is a major IDEXX differentiator really optimizes, greatly optimizes the clinic workflow, freeing them up to take care of pets, which only they can do. Nobody else in the industry offers this, because it's not easy. This is a result of decades of focused investment. A profound outcome of this investment is that we offer veterinarians the ultimate choice and flexibility to run diagnostics in-clinic or in our reference labs, depending on the situation. Since all our solutions are connected to the cloud, irrespective of where the diagnostics were run, the veterinarian can access the complete patient history on VetConnect PLUS, including trends and graphs on any device at any time. In fact, our VetConnect PLUS mobile app that we updated last fall has over 30,000 users a month and gets a 4.8 out of 5 star rating on the iOS store. You will hear us consistently talk about AI-powered clinical decision support tools that we are bringing to veterinarians to translate complex diagnostic results into clinical insights and actionable next steps, helping a veterinarian swiftly move through a case. This results in tremendous productivity benefits for the veterinarians because it takes stuff off their shoulders, gives them time back in their days. Chemistry and hematology are the two most frequently run testing categories both in clinic and in our reference labs, and they usually run together. Chemistry tells what's going on with the organs, and hematology will tell us about the components of the blood and things like anemia, inflammation, or blood disorders. For chemistry, we have our phenomenally successful Catalyst platform. ProCyte Dx, our premier hematology offering, is highly regarded in the industry and perfectly suits the needs of high volume and specialty clinics. To address the needs of a broad segment of customers who wanted affordable access to best-in-class technology, we launched ProCyte One last year, completely redefining ease of use for a category that is extremely complex. Customers love it. Intuitive, elegantly simple to operate, comprehensive menu, smart quality control, exceptional performance. We also offer our innovative pay-per-run model on ProCyte One, enabled by SmartService and our extensive software IT ecosystem. It's very customer-friendly. Customers don't pay us until they run the test themselves and get paid. We couldn't be more pleased with the very fast ramp right out the gate with over 5,200 ProCyte Ones placed as of end of June. More than half of them are outside North America. As expected, we are seeing a step-level increase in our total hematology placements with a multiplier impact. 95% of these ProCyte Ones are placed with or next to a Catalyst. We're successfully executing on our successful playbook of developing a phenomenal analyzer that hits the sweet spot of menu, performance, and affordability. Just like Catalyst One, ProCyte One will also be another game changer. Jay talked about how our customers validate the advocacy of our platforms with Net Promoter Score, double-blind Net Promoter Score year after year. What you see here are the NPS results for hematology analyzers. As a reminder, an NPS of 50 is considered world-class. ProCyte Dx has always received very high NPS results. It is gratifying to see ProCyte One also getting high accolades from our customers, even more compelling when compared to other offerings on the market. Clinics are busy. They want easy-to-use analyzers that are ready to go with no downtime. They want broad and advanced menu, accurate results they can trust. They also tell us that they value how we serve and support them. Our technical and medical consulting teams get very high marks for the exceptional service. All this adds up in a customer's mind when they think about how company is partnering with them. When we launched Catalyst One, our chemistry and immunoassay platform in 2014, we opened broad customer access globally. Our Catalyst install base is large and continues to grow. Even in the current economic environment, we're seeing high placement success because customers see the immense value of Catalyst One, and our customer loyalty is very high at 99%. A key driver of this is our long-term innovation approach, a long-term view. With our technology for life customer-centric approach, we create platforms that continue to increase in value over time versus one and done boxes. An illustration of this strategy is the constant innovation heartbeat of new menu additions on a Catalyst platform. We regularly upgrade the capability of our entire install base with silent software upgrades sent automatically via SmartService. As we increase the depth and breadth of capability of our platforms, they become more valuable to our customers, and it is symbiotic. Our customers bring more value to us because they're running broader panels. They're running diagnostics on more patients. We see that on average, customers who adopt a new menu run 7% more core chemistry panels than non-adopters. These new testing categories, CRP, progesterone, SDMA, these are greenfield opportunities that bring new recurring revenue streams to IDEXX with long runway as customer adoption and utilization continue to increase. Let's double-click and look deeper into one of them. Kidney disease is a very common health issue in both cats and dogs. Before SDMA, which we launched in 2015 in our reference labs, 75% of kidney function could be lost before a veterinarian knew something was wrong using traditional tests. SDMA completely changed their paradigm with its remarkable ability to flag kidney function decline much earlier. Now, veterinarians can intervene when only 25% of the kidney function is lost, having a huge impact on the longevity and quality of life for pets. There is a large and growing number of publications that validate the profound diagnostic importance of SDMA. To further support veterinarians in assessing a patient's kidney health, in addition to new tests, we are launching a clinical decision support module right next to the results, starting with staging of chronic kidney disease and next step considerations. We introduced SDMA on our Catalyst platform in 2018. Over 40,000 customers use it today. 5 million runs last year. While that is great progress in just four years, SDMA is included in only one out of every four chemistry panels on Catalyst. It has such outsized diagnostic utility that from day one, we included it in every single chemistry panel in our reference labs. We believed that no chemistry panel is complete without it. There is huge potential to realize SDMA's diagnostic importance on the point-of-care side. To address some of the barriers, we have made it faster and easier to run. It's truly a remarkable technological achievement. We've put all the reagents to run the test on just one single slide, eliminating the need for a separate 3-cup reagent consumable or multiple pipette tips. Less steps, faster to run, and it is stored right next to the Chem CLIPs, so clinics remember to run it. We're also reducing our environmental impact. Significantly less plastic and a much smaller box. We're going from this to this. Dramatically smaller footprint, especially as you think about cold storage and shipping. We're in the process of rolling SDMA out globally, the new test. Europe and Australia are already running it, and we are set to launch it in North America next month. Across the board, the enthusiastic customer response. SDMA also has multiplier impact on our other diagnostics. For example, further magnifying the clinical utility of your analysis. Jay shared that we are seeing great progress with SediVue. As yellow bars on the chart show, over 14,500 customers are enjoying SediVue's ability to provide urine sediment results in three minutes. Veterinarians really value the ability to share high-resolution images with pet parents real-time. As we saw in Luna's case, very powerful to share before and after pictures of a bacterial infection that has cleared by following the treatment recommendations. We also expanded SediVue's capability in addition to Neural Network 6.0 that Jay talked about by adding, addressing a key need that veterinarians had in interpreting complex results in front of a client, especially as they're running from one appointment to another. We added result interpretation algorithms to facilitate clinical decisions and next steps to consider. SediVue is playing an important role in our IDEXX 360 program globally, helping customers access a broad portfolio of diagnostics. Customers are investing in technology, and they want the best. Even though we are seeing record number of placements, there is huge potential of 230,000 opportunities to place our premium analyzers. As you can see, significant runway to place Catalyst. Most of it is outside North America. The opportunity for hematology is even greater at over 100,000 because not all clinics with chemistry have hematology today. We've made it very affordable with ProCyte One. Tremendous greenfield opportunity for SediVue, even if we frame it conservatively against our own premium chemistry and hematology customers. VetLab is a fabulous business with extensive and lasting competitive advantage and phenomenal global TAM. The underlying fundamentals that drive the enduring recurring revenue for this business are very strong, despite some short-term headwinds. We're executing really well on multiple growth drivers for this business. Our install base is continuing to expand at an accelerated pace, thanks to the customer partnership approach of our commercial teams and the phenomenal launch of ProCyte One. Utilization of diagnostics is increasing, and the IDEXX Premium is holding. We are executing on our innovation agenda, bringing new test menu to market and a very robust R&D pipeline. Our deep customer focus across the organization earns us high customer loyalty, and we're able to take appropriate level of price increases. The future is very bright. There is incredible global runway to place our best-in-class platform suite, expand the adoption and utilization of our test menu, and bring innovations that address unmet customer needs. We're very excited about the platform opportunities that we are developing in our R&D pipeline. We've consistently demonstrated that we know how to develop exceptional products, bring them to market, and scale very quickly. Let me quickly pivot and provide a quick update on our global operations. Our global supply chain teams have been successfully managing through an unprecedented and very tough environment over the last 2.5 years. Pandemic, volatile demand, widespread supply chain disruptions, labor shortages, geopolitical instability. We have not been immune to all the challenges that everyone else is facing. Thanks to the dedication and commitment of our teams, we have maintained exceptional customer experience with 99% product availability delivered on time. As we all see in our daily lives, the pandemic has exposed significant vulnerabilities in the global supply chains. We're trying to stay ahead of that by building our capacity and resiliency to multiple shocks in the system. This is an area of intense focus for us as a company, as we continue to position ourselves for long-term growth in a very turbulent environment. Our goal is to ensure excellent customer experience and deliver savings to the bottom line by optimizing and getting greater leverage from our investments. We're very dedicated to supporting pets live longer, healthier lives and addressing the challenges of our customers, while at the same time, doing our part in taking care of the planet we all live in. As we continue to grow, we are being intentional about reducing the environmental impact. Our corporate social responsibility report outlines our environmental sustainability roadmap, which is integrated with our business strategy. We publish science-based targets to reduce scope one and two greenhouse gas emissions and source 100% renewable electricity by 2030. We're committed to sustainable packaging and shipping practices. We have industry-leading instrument circularity with our technology for life approach and regional service depots. Our innovations have environmental stewardship as a key design requirement, as exemplified by our recent launches of ProCyte One and Catalyst SDMA, and our new 4Dx Plus launch. To tell you more about that, it is my pleasure to introduce Julie Godon, Vice President and General Manager of our Rapid Assay business. Thank you, Tina. This is a powerful diagnostic tool. Lab-accurate results in minutes, and it fits right in the palm of your hand. This is our SNAP platform, and I'll be talking to you about SNAP today. SNAP has been a cornerstone for our veterinary practice for decades, enabling veterinarians to use this as a critical screening tool and advance the standard of care for their pets. I'm gonna highlight our 4Dx Plus product today, it's one of our flagship brands in the SNAP line, and speak a little bit about vector-borne disease and how 4Dx Plus has really made a big difference. What is vector-borne? A tick or a mosquito is infected. They bite your dog, they transmit the disease through blood. You therefore have vector-borne illness. Vectors vary depending where you live. If you're in the Northeast or mid-Atlantic region, you tend to live in a Lyme endemic region, high prevalence of Lyme. If you're down south, more mosquitoes, humid climate, we tend to see more heartworm there. What you're seeing behind me is a map. We do serosurvey studies over the years, and you're seeing the timeframe from 2010 to 2021. We've overlaid the vector-borne diseases that we screen for with this product. That's heartworm, Lyme, Anaplasma, and Ehrlichia. It's pretty impactful when you look at this visual. What you're seeing is these ticks are migrating south, they're migrating west, and there's massive geographic expansion in this visual of the United States. We're seeing this, by the way, we're tracking this in other international regions, and we're seeing similar trends of vector-borne. What was most astounding about this last round of data, when we took a look at it, we saw that all these diseases that we're tracking, they're showing up in all 50 states. Really remarkable change over the last couple of years. I think this underscores why prevention and screening for vector-borne is so critical. What's even more remarkable is we've been at this for 30 years, and we've barely scratched the surface in terms of the level of screening that could be done. If we have 97 million dogs out there in the U.S. market, and we know that less than half of them are getting preventive care screening. Only one in five dogs today is getting a vector-borne screen on an annual basis. If we focused on heartworm and just look at the heartworm folks, the population of 18% there, and if we just took heartworm and could make sure that they were elevating their care and screening for vector-borne disease, that would be about a $200 million incremental opportunity. Really lots of runway here with vector-borne alone. Our 4Dx Plus brand has such a great story, and it's really a testament to how IDEXX has been a strong thought leader in this space. The path to get to where we sit today, it's really built off three core building blocks. Number one is innovation. We started out with heartworm 30 years ago. We've continued to innovate, adding reps to our assays, increasing sensitivity of our markers, adding clinical value to the experience when people are screening. We're always thinking about innovation as we think about the next product. We've also, number two, building block, really focused on education and awareness of vector-borne disease. We've driven the industry forward with good science, clinical publications. We have data surveillance, like I showed you earlier, to make sure that we're tracking where are these infectious disease today and where are they headed. Number three, we've invested in commercial capability. We've really made sure that out on the front line, we have our professional service veterinarians, and they are out there advocating for vector-borne disease screening and preventive care. This is really a win-win story for all. Better outcomes for our pets, our practices are getting ongoing revenue from screening, and we're collecting that valuable data about these infectious disease. We don't just have SNAP 4Dx Plus. We have some other offerings as well. We are in wellness and in sick spaces with our SNAP line. We test for feline retrovirus, pancreatitis, cardiac, intestinal parasites, to name a few. Our commitment to innovation over these years and our focus on international expansion has really led to some nice, healthy growth. You can see 13% CAGR over the last time frame. We're continuing to focus on these growth areas, and we have lots of opportunity in front of us. Our latest innovation, we're really proud about the latest launch from 4Dx Plus, and we've really taken things to the next level. This is quite pioneering. We've, for the first time, introduced an integrated solution set. This is really a total product concept. We've built on world-class accuracy, and we're enhancing the sensitivity of the markers. We are adding value to our clinics with clinical decision support, so we can give them next step considerations on the path they may take. We've extended room temperature storage, which makes things more efficient and easy for them in the office. We always start with accuracy first. Our number one priority is accuracy because this really is a performance category. Why is that? If your pet contracts a vector-borne disease and they're left untreated, they can have adverse outcomes down the line. We wanna catch all those positives. Performance is number one priority. If you take a look at the chart on the left, you can see how our test compares to our competitors. It's been said, not all tests are created equal. The best just got better with our latest release because we now detect 30% more Anaplasma positives. Now recall the map I showed you earlier. We're seeing Anaplasma in all 50 states now. Just 10 years ago, it was only in 38 states. It's an important time to be increasing sensitivity here. This is really coming back to our performance and accuracy. Why does this matter for the veterinarian? Let's think about an average practice. Say Doctor Jones screens 800 dogs a year for vector-borne disease on an annual basis. She lives in a part of the country where there's 5% prevalence of Anaplasma. She would be catching about 12 dogs more per year with this new test, and that means she can give them early detection, she can talk about preventive client protocols to the client, and she can give them the appropriate treatment. If you extend that to the U.S. based on the number of annual tests for tick-borne disease screening, that's about 140,000 more dogs per year that we're catching with this new test. Raising the standard of care with this solution. Tina and Jay mentioned clinical decision support, but I can't express enough how excited I am about this layer of innovation as part of our solution set. Clinical decision support takes machine learning, it combines it with our deep medical expertise, and the result is pet-specific clinical insights. It's sort of like a GPS. If you know where you're going, but you need the checks and balances along the way, you are moving along the plan. The results have been really great. We've seen that those that use clinical decision support are two times more likely to use follow-up diagnostics. If you come back to our 4Dx product here, let's think about a Lyme positive. The customer is using our CDS tool. 75% more of those folks are now following up with a Lyme Quant C6 in the lab. That is so important because that's telling them if it's an active infection and if a treatment plan is warranted. Our solution set is great because we've really increased the performance once again, and we've added extra benefits to the clinicians during their experience of screening. We've also built on IDEXX's proven model of using instruments to capture diagnostic results. We have taken our handheld Snap and we connect it up to our Snap Pro analyzer. We have 50,000 of these out there, and our customers are using Snap Pro to run the Snap test very easily, capture the results, and capture those patient charges and invoices as well along the way. We know that our active and connected user base, that's those that use our machines regularly and are connected into our systems, we know they're four times more loyal to the Snap franchise. We see these active and connected numbers ticking up both internationally and in the U.S. Another testament to IDEXX's ecosystem and really listening to what our customers value and what makes it easiest for them. In closing, Rapid Assay is a growing opportunity. We have been advancing our SNAP line for many years, and we continue to stay true to the tenets of innovation and customer experience. We know there's a growing infectious disease, specifically vector-borne, growing today, and there's an untapped opportunity for more screening. We're bringing solutions like our 4Dx Plus solution set out there to increase performance, add workflow efficiency, and bring new tools like clinical decision support. We're going to be moving into a break next, and when we come back, Mike Lane, who's our Executive Vice President and General Manager of the Global Reference Laboratories, will be talking to you about our deep menu and service in that space in conjunction with in-clinic. Thanks. Great. Welcome back from the break. Again, I'm Mike Lane. I'm Executive Vice President and General Manager, Global Reference Laboratories, IDEXX Laboratories. It's a pleasure to be here with you today to share the tremendous momentum we have in innovating, in executing our reference laboratory and medical consulting capabilities. Veterinarians around the world have never been busier. In our reference laboratories and medical consulting network, an expert talent serves as an extension of our customers' practices, providing efficiency, capacity, and access. Access to advanced capabilities that we've developed over decades with significant and sustained investment in R&D, IT, logistics, and commercial capability. Access to the most complete and advanced menu designed for the needs of both well and sick patients. This menu continues to expand with five significant new menu additions and service improvements this year. Access to over 600 medical specialists that serve as an extension of the practice, providing expert interpretation and support to our customers, generally with their most difficult medical cases. Access to end-to-end workflow solutions that make practices more productive and at the same time, make patient care easier. Access to numerous growth opportunities as veterinarians around the world work to raise the standard of care. Elevating standards of care is clearly a global opportunity, and delivering exceptional service requires a sophisticated hub and spoke network with dozens of day labs that serve as a workforce multiplier for the veterinary practice during the day, regional labs that run throughout the night where veterinarians and their teams are taking a well-deserved rest, so we can have results back to them the next morning. State-of-the-art core labs like our Kornwestheim lab that delivers the full breadth and depth of our diagnostic menu in hundreds of specialists that form a follow-the-sun service network on complete digital platforms, increasingly 24 hours a day, 7 days a week, 365 days a year to serve as a direct extension of the veterinarian's team. These capabilities allow us to ensure that the sun never sets in serving our customers, and we continue to invest. Current examples include our new state-of-the-art Louisville lab that enables a next-day PCR service for our U.S. customers. Next month, we go live with our Brisbane core lab that will serve as the center of our Australian network. These investments not only enable exceptional service for our customers, they also enable us to attract the very best talent in the industry. Delivering exceptional service never takes a day off. In fact, during the pandemic, literally, we delivered every day for our customers, and the result is very high customer loyalty reflected in the high net promoter scores you saw, record retention levels that form the foundation of our recurring revenue growth, which now well exceeds $1 billion, with gross margin consistently expanding to now 50%. High volume drop through from this volume-led growth allows us to sustain investment and importantly, our unrelenting commitment and investment in menu. We started the year with announcements with advancements in cancer diagnostics, helping veterinarians with their difficult cancer cases with new tools to aid in diagnosis and treatment decisions, including advanced genomic tests. As Julie described, we then improved the best. The best just got better with Lab 4Dx, with improved Anaplasma sensitivity and clinical decision support. Next month, we begin the rollout of the next two breakthrough innovations in diagnostics. IDEXX Fecal Dx antigen with flea tapeworm and FGF-23, a new kidney biomarker. In 2014, we introduced innovative accuracy with routine parasite screening with fecal antigen technology. We doubled the detection of the most common parasites relative to conventional methods. Now with flea tapeworm, we're gonna increase that by 5 times versus conventional methods. Conventional methods are with a microscope, whether it's at the lab or in a clinic with the staff spending valuable time or point-of-care instruments that automate a microscope. These all rely on the presence of eggs to detect these infections. Antigen technology does not rely on the presence of eggs and therefore detects many more infections. Now, flea tapeworm is relevant globally because it's relevant wherever there are fleas, which is pretty much everywhere in the world. Tremendous opportunity to continue to grow as 80% of fecal tests are still done in the clinic using valuable staff. As practices increasingly see the higher standard of care of antigen technology, the benefits of us being an extension of their practice so that their staff can focus. This is one of the fastest-growing categories in the reference laboratory with huge opportunity ahead. Now, also next month, we begin the rollout of FGF-23. Kidney disease is an area that is essential, of course, for pet health and also is associated with numerous underlying other diseases. This is one of the reasons that IDEXX has spent so much time and investment in advancing renal diagnostic solutions for our customers. As Tina described with IDEXX SDMA at the point of care in the reference lab, SediVue at the point of care where urine fresh is best. Now FGF-23, a new tool to help practices with cats with chronic kidney disease in therapy and treatment decisions, including dietary change recommendations for the health and well-being for their cat. A consistent theme here, we're introducing this along with clinical decision support. Clinical decision support, another layer of innovation and efficiency enabling practice productivity and fast, accurate clinical decisions. Now, we have long runway to elevate standards of care globally. We do this along two vectors, adoption of the breadth of our testing offering and adoption of the depth of testing. Here you see the 23,000 U.S. customers that have adopted different diagnostic categories, and we see similar patterns of opportunity internationally. Practices adopt these highly differentiated tests, for example, SDMA in chemistry or 4Dx in immunology or fecal antigen parasitology or next-day PCR in molecular diagnostics and grow these testing categories. You can see in many of these categories, we have more customers that don't yet use us than do. This is particularly true when you look at medical consulting services on the right. Medical consulting services is a team of hundreds, 600, highly advanced, highly trained, in many cases, years of additional training beyond veterinary school in specialties ranging from anatomic pathology and clinical pathology, radiology, cardiology, oncology, internal medicine, dermatology. If you think about the general practitioner, which makes up really the majority of our customer base, general practitioners are incredibly busy dealing with such a wide range of patients and medical conditions and situations, dealing with preventive and sick exams. Providing guidance to pet owners on prevention, vaccines, diagnostics, nutrition, and dealing with both relatively minor and then also more severe medical cases. When that general practitioner needs to go deep medically, this is when they often access our team of medical specialists. Let me give you an example with our teleradiology business, how this works. IDEXX teleradiology is a team of board-certified radiologists that have years of additional training in radiology. Based on our scale, you can imagine that our IDEXX radiologists see hundreds, if not thousands of unique case types. Whereas a general practitioner may see something on a radiograph once or twice a year or even every other year in certain circumstances. They want to access the experts. This is a complete digital platform that forms as a direct extension of their team, where they can transmit the radiographs, and we can provide that expert interpretation real-time remotely. Let me further show how this works. Imagine, if you will, this split-screen view happening simultaneously. On the left, we've got the veterinarian, the general practitioner and their team, totally focused on the pet in front of them that's on the table. On the right, we have our IDEXX board-certified radiologist. This individual could be anywhere in the world, depending on the time of day, to provide 24/7, 365 coverage for our customer. These radiographs are transmitted to the cloud, and in real time, we're providing expert clinical interpretation of those radiographs so that the veterinarian and their team on the left can make the best possible decisions for that pet that's right in front of them. This is why this is one of the fastest-growing businesses at IDEXX. The value that we provide as practices recognize I can expand my team with experts real-time seamlessly across a digital platform. Since 2009, this has been, with 26% compound annual growth, one of the fastest-growing businesses in a scale now reaching close to $100 million. In summary, IDEXX Teleradiology is just one example of our technology-enabled and highly differentiated service platform that it brings growth opportunities to the practice to expand standards of care and also profitable growth for the practice. What we do is not easy. We've been at it over 25 years, innovating, investing in reference laboratory and medical consulting capability. 25 years developing the most complete and comprehensive menu so every patient can experience the highest standard of care. 25 years advancing our highly differentiated lab and consulting capabilities so every practice can experience the efficiency and productivity benefits of accessing the reference laboratory. 25 years of assembling an exceptionally talented and dedicated team that wakes up every day totally focused on advancing the health and well-being of pets around the world. Thank you. I'd like to now introduce Michael Schreck. Michael is Senior Vice President and General Manager, and will discuss how our veterinary software business is also supporting their very busy veterinary practices with our innovative offering. Thank you. Thank you, Mike. Good morning, everyone. It's great to be with you. Real human beings, right? Together. Are you ready to talk about some software? I hope so, 'cause that's what we're gonna do. As Mike said, my name is Michael Schreck. I'm responsible for our global software business. For the last two decades, I've been building vertical SaaS solutions that solve industry problems like unlocking capacity, creating efficiency. For the last two years, I've been at IDEXX, and I joined right after COVID began. I feel like I have a front row seat watching an industry recognize and deepen its appreciation for the power of cloud-based software. Watching that happen, in addition to my previous experience, gives me a perspective that I hope you'll appreciate. I'm gonna walk through three things as we walk through these slides. One is, IDEXX's software and artificial intelligence is gonna play an outsized role in creating capacity and alleviating our near-term industry issues. Second, software is a fantastic business, and it's a great business here at IDEXX. It has a ton of momentum, and it's having significant impact on our customers. Three, you've heard it in all of our presentations so far, the IDEXX ecosystem, the software ecosystem, touches every part of the practice. It can have impact in a way that's unique and powerful. It enables diagnostics. The more software, the more diagnostics you buy. It's a powerful ecosystem, and I'm gonna highlight that as well. As a consequence of those things, IDEXX is well-positioned to deliver solutions. Not products, solutions that our customers need, both to deal with today and the opportunities of tomorrow. You've heard a lot about, and your own research has reinforced there's some things coming at our practices. That means the industry is at an inflection point, and I think it's a positive inflection point. It's one where software can have a bigger impact than it did before. Let me give you an example. During COVID, if you were on our cloud-based solutions, our mobile-first solutions, and you had to go from intake in the lobby to curbside check-in, we could get you that in days. That dynamic workflow change, we could handle in the cloud in days. If you suddenly couldn't take payment at point of sale, and you needed text to pay, digital wallets, things of that nature, no problem. Our cloud-based PIMs have integrated payment technologies. We can get that to happen in days. Finally, the Gen Zers in the room will appreciate this. You've seen our focus on mobile-first technology with VetConnect PLUS. Mobile first allows us to have flexible workflow. It lets us not be tethered to a desktop. It even lets these heroic people go home. They get to go home. That's the power of these technologies. If you were on our cloud-based systems, mobile-first systems, that was not a problem. That's the power of the cloud. Just adding one more quick point. The rising generations you've heard, you know, whether it's Gen Z's or Millennials, they're gonna be 50% of our customers by 2026. They will also be over half the pet parents by 2026. They're new pet parents. They're first-time pet parents. As a consequence, they expect. These are digital natives, as Jay said. They expect to interact with their phone. I'm convinced Gen Zers came out of the womb, right, with an iPhone attached to one hand. Mobile-first technology is critical to support the way they wanna interact with practices. They don't wanna call. I've never seen a Gen Zer call anybody or receive a call. It just doesn't happen. That kind of mobile technology is super important, and many of the short-term challenges and big picture opportunities are gonna be facilitated by these cloud-based mobile-first technologies. You have to start there, right? How do you get there? Well, you need a flexible, modern platform. That's a cloud-based platform. That's why we're all in with cloud. I think practices have enough to worry about to not add IT manager to their job description. I'm confident when they went to medical school, they didn't say, "You know, I really wanna practice IT." Wouldn't that be great? I wanna practice IT, right, doctor? I mean, I wanna practice medicine. When you think about the situation, if you visited the practices, you'd know this, right? You've seen it, which is there is a server farm in the closet in a physical location of a practice if you're on an on-prem system. That system is teeming with sensitive data. It doesn't support a mobile environment. Ultimately, you're trying to stitch together a whole bunch of software to make it kinda work. We look at it and say, the reason why we're all in for cloud is it's our job. We wanna take that off of the practice's shoulders, manage that in the cloud in a seamless ecosystem, which I'll cover in a minute. That's the power of a vertical SaaS approach, right? Ask Vista, ask Thoma Bravo, ask, you know. This is a powerful business model 'cause you can go deeper, and you can solve more important business problems by going deeper. We're committed to that vertical SaaS approach to support our customers more deeply, and I'll cover that in a second. That's why we're committed to cloud, 'cause you need the platform to be able to do it. You've heard about our ecosystem. Our software ecosystem is committed to a cloud experience, a frictionless experience, whether you're in diagnostics, practice management or the software that we use to share data with some of the largest corporate groups and consolidators, as well as partners who come to us and say, "You have the treasure trove of data," which we do. They get an opportunity to understand it by participating and utilizing our software. This ecosystem touches every part of the practice. I'll touch a little bit on diagnostic software in a second, but first I wanna focus at the heart of this ecosystem. The heart of this ecosystem is a cloud-based practice management system. We have two premier offerings. We have ezyVet, which is tuned for a segment of the market that's advanced practices, and then we have Neo that's tuned for more general practices, smaller. They need to get up and running quickly. Let me go through ezyVet for a minute and use it as a way to sort of highlight how vertical SaaS works and the power it is for our customers as well as for our business. We acquired this in June of 2021. It was already one of the largest and fastest-growing cloud-based software platforms in the world. Since we've acquired it's accelerated even faster. When you think about its capabilities, you have the platform, right? ezyVet is a platform. It's powerful, it's integrated, it automates a bunch of important things that I'll cover in a second on the diagnostic side, and it deeply integrates a payment experience. Now, why does that matter? Well, if you're not using an integrated payment experience, you sometimes forget charges. Sometimes you fat-finger things. You certainly have to have manual reconciliation at the end of the day, which means someone doesn't get to go home on time. So lost charges and manual work. That's the power of having an integrated payment system inside of your cloud network. We basically say, "Don't worry about it. Whatever happens in the PIMS automatically charges, goes to the invoice, automatically pay." And if they wanna pay digitally, you know, that's fine. In fact, we added buy now, pay later to help our Gen Z friends, you know, deal with the COVID experience. That's what they bought with was buy now, pay later, so we added it. And we could do that quickly with a cloud platform. Now, with integrated payments in the platform, we're creating value for our customers' efficiency and ultimately increasing their revenue by avoiding lost charges. That also expands our recurring revenue, right? It's twice as much recurring revenue that comes to us as a result of having those two things together. There's a third layer that we've added this past year, which is digital workflow in ezyVet. We have a deeply integrated state-of-the-art digital workflow platform that supports surgical procedures, so you don't have to do that on a whiteboard, which has potential for human error, and you get to manage and automate all the things that have to happen in a complex, say, surgery. That product is just over a year old, and over 15% of the ezyVet customer base has already adopted that technology, which I think says that there's a huge appetite for efficiency through digital software technology. That also has an impact on us. We create more value for our customers. That triples our recurring revenue. So it's a win-win-win. Now, Neo, quickly. It's a brilliantly simple solution. It is SaaS in every way. You can buy it and have it up in days. It is simple to understand. It's simple to use. You get online implemented, online trained, and you're ready to go. As a consequence, 40% of Neo's customers are fresh start customers. That makes sense, right? It's easy to use, quick to get up and running, and so Neo plays in that market really well. We have two of the fastest-growing cloud-based platforms in the world between ezyVet and Neo. As a consequence, this is the fastest growing part, rather, of our software portfolio. These are growing 50%, over 50% in revenue, recurring revenue year-over-year. We're excited about that. The cloud is coming, and cloud's having its moment, we like to say, and IDEXX is leading that parade. You know, you're probably familiar with Moore's Crossing the Chasm framework. We have crossed the chasm in the last year in terms of cloud adoption. COVID has reinforced that. You can see that early adoption was slow. That's normal. 2% adoption, sort of slow adoption. Let's try the cloud. Let's see if it works. COVID and other factors have reinforced that, you know, no, you need to get to a flexible modern technology. You need to do it now. You've seen that adoption rate annually go from 2% to 6%. If you extrapolate that out, you know, the vast majority of the entire industry will be on cloud by the end of the decade. You can see IDEXX software and our commitment to cloud is growing much faster. As you can see, in the last three years, our total PIMS placements, the installs, have grown 40% on a compound basis. You can see the mix change, right? I mean, we used to be kind of 50/50 as recently as 2019. We're now at 80%+ are cloud. That means our global PIMS portfolio by the end of this year or early 2023, will be 50% cloud, probably twice what the industry average will be. That's how we're helping our customers. Maybe just for the analysts in the room or share this with your analysts, the other thing that's exciting about having these two premier cloud-based PIMS is when our base, our on-prem base is ready to move, we're ready to give them the solutions that work best for them. As a consequence, we're keeping the vast majority of our customers in the family. Our net churn is below 2%. Said another way, we have 98%+ customer retention. ezyVet has below 1% user churn. These are durable, recurring revenues. We look at that when you plug that into a DCF, right? I mean, that's just a fantastic outcome. I'll let the analysts work on that. When you add that plus growing share of wallet, you get the financial impact that you want, right? You're layering cohort after cohort of durable, recurring revenue streams, larger share of wallet, right? The platform, payments, workflow. You begin to see the growth that happens in our business, in our software business. You see the mix increasing in terms of recurring revenue as a consequence. We're super excited. Our recurring revenues over the last three years have grown 22% on a compound basis. The great thing about software, here's the newsflash, software is a great business. Same code, same team, more customers. It's almost all operating leverage that comes through from a software platform. You can see that on the gross margin, right? You're seeing the margins growth as a consequence of having those layers of recurring revenue and expansion of share of wallet. As you've heard, software is also the way our customers are increasingly experiencing our diagnostics. Software lets us innovate in a way you couldn't if they're experiencing it through a paper-based result. This ecosystem means the more you buy from us, the better it works. It brings it all together for our customers. If you're on our software systems and you buy our diagnostics, you just buy more. Cornerstone is our full-featured on-prem system. ezyVet, as we talked about, is our cloud-based, full-featured system. These are some of the most sophisticated advanced practices in the world in the large category, and they just buy more diagnostics. I'll give you just one example of why that might be. In ezyVet, before a procedure, let's say a surgical procedure kicks off, it preloads all of the diagnostic testing that's required during that procedure and after. Once the procedure begins, it triggers the order to the diagnostics, whether it's an in-house or reference lab order, and then it automatically puts it on the invoice. You have automatic charge capture. Now, that may sound. That's such a big deal. This is one of the biggest places where we lose revenue, our customers lose revenue, because they're in the middle of a chaotic or busy moment doing surgery. They don't always remember, how could they, to add the diagnostic results to the invoice. That's just one way you're seeing, and there's many other reasons why we see this growth, but we're super excited about the relationship. This just demonstrates the relationship between software and diagnostics. The way our customers are experiencing diagnostics is changing, and you've gotten a flavor from that from everyone who's presented before me. I wanna highlight it maybe from a little different point of view, which is the experience of diagnostics and the innovation that's capable because it's on a software platform allows you to do so many different things. Let me highlight three things. We launched this mobile app on the most recent architecture, most recent language. It's a powerful user experience. It allows personalization. It allows standardization. Our CAG customers look at that and say, "That's great. We can now standardize some of our workflow across our network. Additionally, well, when we launched this, we did it simultaneously in the fall of last year to the whole globe in seven languages, and the reception's been terrific. We've had almost 10 million views of results on the platform, and obviously, we have a 96% approval rating in the App Store, so we're super pleased about that. But by having that experience, which is mobile first, it allows CDS, which you've heard a lot about become even more powerful because right there next to the results are what hundreds of millions of patient records tell us is the right diagnostic interpretation. What is the right next step? As you heard from Mike and others, someone may see a certain clinical situation once, twice a year, and our models have seen it millions of times. We know what the best next step is, we know what the proper interpretation is, and we're here to make that more efficient, unlock capacity for our clinicians, and allow them to do so with confidence. That's what CDS does. This is a one way we're creating capacity in our industry. We're also doing this with pet parents. We're committed to digitizing the pet parent journey. It's what our Gen Z friends would expect, and it's gonna unlock a ton of capacity because in some practices, a third of their capacity is spent playing phone tag with pet parents. You know, I was in a parking lot with my dog in the emergency room, and my wife called that front desk six times in under two hours. There were 25 other cars. I mean, you can do the math. That was crazy. That was a very disruptive experience. If we had had this, which I'll describe, where the results, it would've told us where the results were, it would've come to us in a consumer-friendly way, we would've not had to ask those questions. It would've allowed our practitioner to just do their job, practice medicine. We're now delivering on an automated basis, consumer-friendly summaries. The moment the practice gets their results in a medical environment, the consumers are getting their consumer-friendly results similarly. That's gonna unlock capacity. Let me finish. IDEXX is at the heart of some of the most important issues, and software's gonna play an outsized role in unlocking capacity, elevating the standard of care, improving practice efficiency, and deepening engagements with pet parents in a digital way. It starts in the cloud, and we're leading that effort. We're all in. That delivers durable, recurring revenue streams. As we go deeper, we get bigger share of wallet, and those streams stay with us for a very long time. That yields a very attractive standalone software business here at IDEXX. As I hope you've also gotten a sense for, it also is a powerful enabler of diagnostics. It's how we, our customers will experience diagnostics, and it's where we can innovate the most. The value of our cloud-based approach is that in our ecosystem, the more you use it, the better it gets, and therefore, the more you use it. We're well-positioned really to help deal with the headwinds of today and really the opportunities of tomorrow. Thank you. It's my pleasure to introduce to the stage our Chief Commercial Officer, Jim Polewaczyk. Thank you, Michael. Great job. Hey, good morning, everyone. It is, I agree with Michael. It is energizing to have humans back in the room and be doing this in person. Thank you for making the trek to Maine to join us this morning, and certainly a warm welcome to those of you joining us virtually as well. You just heard from my colleagues relative to our innovation story here at IDEXX. As a commercial leader in this organization, I get energized every time. I mean, I know this story really well, but I get energized. The reason I get energized is I understand the value that it holds for our customers as we continue to work globally around the world for the benefit of the pets that we all love so much. I'm gonna complement that innovation story now with speaking to our global commercial approach. This approach at its core is all around driving and influencing sector growth and development through inspiring and educating veterinarians around the world on the increasing value that diagnostics and software can play relative to the clinical, economic, and practice efficiency benefits associated with their medical practices. We focus on these efforts through strong commercial execution in an expanding high-touch customer partnership model and with a lot of this expansion activity now occurring internationally, which I'll touch upon. These efforts really complement the innovation portfolio and ensure that this innovation is represented to our customers with increasing frequency and reach by diagnostic category experts who are there to educate, inform in more regions with more frequency around the world. Jay talked a lot about the opportunity, but I think it's worth reiterating because commercially, we're very fortunate to participate in a sector with such huge opportunity associated with it. The pet health sector, and more specifically, the category of diagnostics and information management, currently estimated at $6.8 billion, continues to grow as a result of a number of favorable dynamics. These include the humanization of pets, the increasing standards of care around the world, and certainly the strengthening bond we all have with our four-legged family members, a bond that was no doubt enhanced as a result of COVID-related dynamics. The U.S. continues to be our largest segment, with 62% of revenues for companion animal diagnostics and software coming from it. International regions continue to grow in size and relevance as this love of pets and treating them as beloved family members is really universal in nature. Jay also touched upon the tremendous long-term potential we have as a result of some of these dynamics. Again, while the majority of the business comes today from the U.S., over time, two-thirds of the $37 billion total addressable opportunity for our business will come from international regions that are much earlier today in their adoption and utilization cycles for diagnostics and software. In this context, the major component of our commercial strategy is to expand our commercial presence with a high touch customer partnership model in more regions around the world. Let me talk a little bit about our approach to commercial expansion internationally. One of the ways we do this in a very thoughtful, efficient manner is we leverage a commercial playbook of best practices that have been developed and refined over a number of years since our go direct transition here in the U.S. back in 2014. This commercial playbook of best practices really is all about putting a diagnostic ecosystem of commercial experts in place in a particular region or country. This is all focused on that educational component for our customers to drive clinical belief and inspire clinical belief around the utilization of diagnostics. This ecosystem consists of a number of talented professionals that we put on ground. This includes what we call veterinary diagnostic consultants. These are the quarterbacks, if you will, the account managers. They're complemented by professional service veterinarians. These are talented clinicians providing peer-to-peer education in the context of clinics. Field support representatives, these are wonderful folks that we have in the field, primarily come from a background as veterinary technicians and/or practice managers. They truly understand the inner workings of clinics, and they do a wonderful job around that entire customer experience, training, onboarding, educating, and also helping from a practice workflow perspective because they travel around and see best practices that are happening, and they can be there from a consulting perspective with other practices in their particular territories. Finally, specialists. These are folks who can go as deep as they need to relative to Tina's suite of in-clinic connected analyzers or Mike's expansive reference lab menu as well. It's really this diagnostic ecosystem that we put in place. Over the past couple of years, we have put this strategic intent into action. In 2021, we completed 4 major expansions in the midst of the pandemic. There's a lot going on here behind the scenes. We expanded our commercial presence in the countries of Germany, France, Spain, and South Korea. Earlier this year, we completed some very exciting expansions in the countries of Italy and Brazil. Japan is another opportunity-rich country for our business and for IDEXX. We're in the midst of an expansion as we speak, which we expect to be completed in the second half of 2022. To make sure each of these expansions are done as efficiently as possible, we also engage two other factors. One is this top-down approach, leveraging a commercial playbook, works really well, but every country has a little bit of uniqueness associated as well. We really employ a global approach. We take input from every country and region, ensure that's incorporated into the commercial model to optimize our approach for that particular situation. We also have employed a global centers of excellence approach, and what this ensures is that we're not leaving it to every country to figure it out on their own. We have some experts who descend on that country and that region and help with everything from talent acquisition, the development, the training, the onboarding of that talent, ensuring we're equipping these folks with the right systems and tools and analytical insight so that when they're on the ground, calling on customers, we're optimizing their capacity. It's a really important part of our commercial model. Then finally, equipping them with the right customer-centric programs to help inspire and drive demand. Using this sort of playbook of best practices and global centers of excellence, our commercial approach will be continue to take very thoughtful and disciplined steps to expand our commercial presence and execution in key countries around the world over the coming years. As a result of this, Jay highlighted this, but we now have over 1,100 field-based diagnostic category experts calling on customers around the world each and every day. From a benchmarking perspective, one of the things we aspire in terms of frequency and reach is to reach 80% of our customers and 90% of our IDEXX revenue in any given quarter. You'll see in the U.S., this equates to approximately 125 accounts per VDC, Veterinary Diagnostic Consultant. The ratio varies a little bit internationally, but again, these expansion efforts are all about aspiring to get closer to our customers with the right frequency and reach, as we educate and inform on the value of diagnostics and software. This enhanced commercial scale is a perfect complement to the innovation portfolio that you heard about earlier today. I'm not gonna get into details of the products. You've heard about them, but there's an important point that innovation and differentiated innovation provides to a commercial organization, and that is customer access. We've talked about how busy clinicians are these days with overwhelming demand for their time and their services. As my colleague, George Fennell, who you'll hear about in a few minutes, will speak to eloquently, is the best thing for a commercial organization is to be able to go into customers and talk about things that are new, things that benefit customers, either clinically, economically, or from a practice capacity perspective. That's what our innovation portfolio allows us to do. It gains us, it earns us access to customers. Whether customers choose to experience the benefits of our real-time care portfolio or our expansive menu of reference lab offerings, our commercial diagnostic experts are there to provide education, information, and ultimately consideration of the options available to customers, which enable them to practice medicine the way they want to practice medicine. Michael just spoke very excitedly about our software innovations, but I'm equally as excited. I wanna touch upon VetConnect PLUS for a moment because in a capacity constrained environment where we're looking for practice efficiencies, when you can take a complete diagnostic ecosystem of tools and services and have those diagnostic results flow into one portable portal that is then accessible any way you wanna see those results, anywhere you are, that is extremely powerful as an efficiency enabler. Then when you add on the additional capabilities of diagnostic tools like our clinical decision support modules, it's really powerful and enables improved decision-making at your fingertips. We're really excited as a commercial organization with the pipeline we have today to speak to customers with and certainly what's coming down the road. The benefits of in-clinic and reference lab testing truly complement each other. Testing begets testing, as you heard earlier from Jay. We design our products and services to seamlessly integrate with each other. We go in commercially to speak with customers and educate. We can talk about a diagnostic ecosystem of tools and services that really complement clinical workflows and how doctors wanna practice. As a result, this really has led more customers to want to do business with us across modalities. It's a core component of our commercial strategy, and we're seeing similar levels of success internationally as well, albeit in an earlier state of maturity, but customers around the world resonate with this total diagnostic approach. Let me touch upon IDEXX 360. This is, I think, a wonderful example of a customer-centric program that really combines our commercial capabilities and our innovation to help accelerate the standards of care around the world. The program essentially allows customers to access our in-clinic connected suite of analyzers with no capital outlay to them, which they essentially fund for with their diagnostics growth over time. Now, the beauty about this is that diagnostics growth can come from any one of our modalities, which really speaks to the empowerment associated with this program. So whether customers choose to practice medicine through our reference labs or in clinic through our SNAP family of tests or using some of our software innovations, it all supports customer choice. Customers truly resonate with this approach. As a result, we've seen an increasing number of customers here in the US choose to do business with us through our IDEXX 360 program. Obviously, the level of integration and connectivity our products support really enable a program like this as well. Still, when you look at other regions around the world, including Europe and Asia Pacific, while in an earlier state of maturity, we're seeing an increasing number of customers resonate with this customer centricity, empowerment, and flexibility approaches as well. We're seeing increasing number of our analyzers across Europe and Asia Pacific, you know, being placed as a result of our IDEXX 360 program. Another core component to our commercial strategy is around education. I think Dr. Bruce Francke would echo this. At the end of the day, veterinarians are scientists. They wanna see clinical data, and they wanna be educated around that clinical data that supports the efficacy of products and services and how it fits into their medical protocols. I think the combination of education combined with what we do from a commercial capability perspective and innovation is a powerful combination, and it speaks to the opportunity we still have. You heard earlier that here in the U.S., our most advanced market, it's still only 15% of clinical visits include blood work. That speaks to the enormous runway we have to continue to educate and inspire clinicians both here, but also around the world, on the value that diagnostics can bring. We take an omni-channel approach towards this customer education. This includes everything from the peer-to-peer education that happens in clinics through our professional service veterinarians. It includes major sponsorships at symposiums and conferences. It includes an increasing online presence through webinars. I do wanna highlight our IDEXX Learning Center. This is an online portal that has an expansive library of educational offerings, both from a diagnostics as well as a practice management side of things. It's the content is carefully developed and curated and made accessible to our customers around the world, and we're seeing huge uptake relative to folks engaging with this platform, as a source of inspiration around the tools that they have to practice medicine the way they choose to. Education will continue to be a core way that we inspire clinical belief change with our customers. Now, underpinning those educational efforts is a very large investment we continue to make in peer-reviewed clinical studies. Again, veterinarians are scientists. They wanna see evidence-based data that supports the clinical efficacy of the tools that they're using. This has really been at the heart of IDEXX for the 30+ years we've existed as a company. As a result of that, we continue to work with key opinion leaders around the world, both from a regional perspective and a global perspective, and a host of clinical studies in the areas of vector-borne disease, parasitology, nephrology, cardiology, you name it. Education and the clinical data, more and more supported by big data studies, will continue to be a core part of our commercial strategy around the world. Finally, let me talk a little bit about the customer experience. You heard it a bit from Tina and Mike relative to NPS results and the satisfaction customers have with the quality of our products and services. I think that reflects the fact that ensuring in this time and capacity-constrained environment that our customers find themselves in, our ability to provide a wonderful customer experience is paramount. It is a company-wide mission, it's a priority, and it's a responsibility of all of us here at IDEXX. We measure that in a couple different dimensions. One is around the relationship that we have with our customers, and you can measure that relationship by the relationship they have with the 1,100+ diagnostic category experts in there, forming those partnerships, trusted relationships on a daily basis. I also mentioned the fact that we have over 900 phone-based customer technical and medical support personnel, who in real time are supporting customers around the world each and every day. If a customer has an issue, they may have a diagnostic workup that they'd like some medical advice on, you know, just some thought partnership on what I might do next, we've got professionals on the phone, readily available, providing excellent service levels. Now, this, these customer interactions are increasingly supported by technology as well. We've made a large investment in platforms like Salesforce Service Cloud that has been rolled out globally across all modalities, as well as a global telephony system. This really helps us enable round-the-clock, follow-the-sun kind of a support strategy here at IDEXX. The other dimension is the responsiveness, and Tina highlighted this as part of the wonderful work our operations, logistics, supply chain folks did during the pandemic. The fact that during the pandemic, despite all the headwinds with supply chain issues and logistics around the world, we are at a point of over 99% product availability. I would echo the same for Mike's reference labs teams, showing up every day in the midst of a pandemic to process samples and deliver results. It was heroic efforts that I think matched the heroic efforts that folks like Dr. Bruce Francke and his team did in clinic. This is, again, a key effort for us. It's not a commercial effort, it's an IDEXX-wide responsibility. But as a result of these efforts, you know, the retention rates and the loyalty rates you heard that are up around 99%, this is a large contributing factor towards the loyalty and retention we see every day. Look, in summary, I've been with this company, been fortunate enough to be here for over 15 years, I have never been more optimistic and confident about our ability to continue to influence and develop this wonderful opportunity that we have ahead of us. I think the combination of enhanced commercial capability, scale, and execution, combined with the expanding and differentiated innovation portfolio we have across modalities. Certainly the educational and clinical insight that we can provide to customers will all help us continue to earn a premium to sector growth and get us closer towards that $37 billion total addressable market opportunity we have as IDEXX. With that, thank you so much for your time today. We're gonna now take a 15-minute break. When we come back, though, we've got probably the most exciting aspect of the agenda, and that's we're actually gonna hear from one of our customers. We'll have George Fennell, our Senior Vice President, General Manager for our Americas region, facilitating a conversation with Dr. Bruce Francke. Dr. Bruce is a veterinarian and a practice owner in Michigan. It's a real pleasure to have him join us where he'll speak a bit about his thoughts on his partnership with IDEXX, thoughts on what's happening in practice in real life, as well as what's happening in the industry. With that, we'll see you back in 15. Thank you. Good morning and welcome back. My name is George Fennell. I'm a senior vice president here at IDEXX. I look after the company's commercial operations in the Americas. On my left, I have the privilege of a virtual fireside chat this morning with Dr. Bruce Francke from Bay Animal Hospital. To orient you, we're in the great state of Michigan, and we're about a mile and a half from Lake Huron. There's your geography lesson from where we're gonna go. Over the course of the next 30 minutes or so, if Bruce and I do our jobs well, we will offer some real practical considerations as to how customers and specifically an IDEXX customer are navigating through the challenges and how they've navigated over the last two and a half years. More importantly, what's ahead for veterinarians and veterinary practice teams. I'm gonna start with a bit of an icebreaker, Bruce. Welcome. Sure. Welcome. All right. Yes, I'm happy to be here. Good deal. Bruce and I, this is our first time doing this, and so we'll appreciate your indulgence as we dive in. By my count, we go back to the first time we were able to sort of detect something was happening pandemic-wise in very early March of 2020. It's two and a half years later. Bruce, I guess the way to break the ice this morning is I'm interested to know how, one, you are doing and the other 31 members of your team at Bay Animal Hospital. How are they doing, and how have they held up? You know, George, when I knew I was coming here, I interviewed several of my team members individually as well as some of my colleagues, my veterinary colleagues from outside my practice. You know, what I thought they were gonna say is, "Yeah, we're okay." You know, because, like, we've adjusted our playbook, we've done a lot, we've been very innovative in running our practice. The answer that I got instead was, "We're exhausted. We're overwhelmed." It wasn't so much because of what we're doing at the current moment. Like, we're not working longer hours or anything like that. It's been two and a half years of working full blast. Right. Which means that, you know, I think in most jobs, like, you have a little bit of downtime here and there. Right On a daily basis. Like, maybe it's a half hour where you have a little not much to do or something. Our team members are not like that. For two and a half years, we all have a stack of things that we could be doing at any given moment. We have to triage what's most important and work on that. There is really almost no downtime. On top of that, we work shorthanded most of the time. So, like, we have not only had most of our team have gotten COVID at some time or another. Mm-hmm They have family members that get COVID, and then they have to isolate from the team, and we'll talk a little bit about what that's meant for us. We could be down anywhere from one or two people in a given day to one week we had seven people out with COVID. Five of those people were vaccinated. We were probably one or two key players at that point from actually having to shut down for a couple of days. They've also been working shorthanded full blast for two and a half years. Right. Because we don't have enough supply to meet the demand right now, they've had to say no to some customers. Clients coming, yeah. Yeah, patients that we couldn't see. We're the largest practice in our area, so we've always been the go-to when you can't- Right Get into, you know, your own veterinarian, for whatever reason. Sure. Call Bay Animal Hospital, and they'll get you in, and we just don't have the capacity to see all of them anymore. People don't realize how emotionally stressful that is on veterinary team members, because we wanna save the world. We don't wanna ever say no to an animal that needs our help, and we've had to do that. I think that over that time, it's just worn on the team members. At the same time, I've seen remarkable innovation, like, Herculean attempts to be able to reinvent things and. Right To try to increase capacity and efficiency and all that kind of stuff. We have a much better playbook now. Yep. It's just that our people kind of need a break, you know? Right. It's not coming. Well, that's because there's no end in sight. Yeah, right. For clients, is there? No. No. No. There's no end in sight. I guess one of the questions I wanna maybe double-click into a bit here, Bruce, is this labor management has to be something you have developed a plan for. How have you kept your team intact for these last couple of years? What strategies have you incorporated to keep them coming back to Bay Animal Hospital to do this important work that there's no end in sight for? Talk to us a little bit about how you've just managed the team as its own contained workforce. Well, I think that people need a couple of things to be happy at work. You know, some of these things we can give them, some that we can't. The things that they really need is they need to feel appreciated. I think they get that from most of our clients, although I will probably touch on. Yes Some that don't give them that. They need to be appreciated by management. You need to tell them how much you appreciate them on a regular basis. We actually have assigned a person in our hospital for just in charge of staff appreciation and, like. Mm-hmm just to try to make sure that we celebrate our wins as much as we Sure talk about our, you know, our challenges. also work schedules. What we're finding out is, you know, sometimes people need to work from home maybe, and that's not a traditional thing. Sure A small town veterinarian would do is allow work from home. We allow them now to do their continuing education at home. We'll pay them during that time. We make sure that they get lunches. That seems like a little thing, but like Seems basic, doesn't it? It's very, very hard to do when you have so much demand for your services. Just making sure, like, we have a person in charge of that, just making sure that every team gets to go for lunch. We've doubled down on cross-training so that we actually stopped boarding because we're a veterinary clinic first and a boarding facility second. Second which wasn't very popular with our customers. It allowed us to take cross-trained individuals that were working in boarding and use them as assistants and that kind of thing, so we could double down on the medicine. That cross-training has saved us so many times when people can't show up for work. I think the big thing with them is that we also have increased wages. Yeah. at a faster pace than we ever have before. We'll talk a little bit about later, I think at the end, like, what I think that's gonna mean for the profession. Sure. That's meant that we've had to increase prices to do that too. All these things we look at what makes a person happy, and we don't want our people fleeing to another industry. Right. So. You know, where staff retention is concerned, I mean, how in your order of priorities in charge of this practice, where is staff retention as one of your priorities? It's my highest priority. Mm-hmm. We have years and years of training. I'm not just blowing smoke, but we have some of the best veterinary technicians that are in the business. The assistants that support them are very well trained too. We've put significant investment into training these people. Yeah. I don't have to go look for the best people. I already have them in my building. I just need more of them. Yeah. It will cost me more to replace a seasoned technician than it does for me to give them a pay raise or to try to rework their working hours or. Yeah ... or allow them to have a flexible schedule or whatever then. It is of the highest priority because turnover is not good for a veterinary hospital. Yeah. When you think about it, without divulging anything confidential or overly sensitive, pay increases to your team members, you've got veterinarians, you've got technicians, you've got staff, give us an order of magnitude. I mean, I think we're talking about here. Yeah Bigger than a breadbox, smaller than a Volkswagen. Is good enough. Give us an idea of when you increase their pay, what's the order of magnitude? What are we talking about here? Yeah, I think probably everybody. Well, we also increased our entry-level wages too by- Okay a lot, like, probably, like, 25% or so. Okay. Mm-hmm. all of the technicians and the assistants, managers, everybody's gotten pay raises that, you know, maybe some of them maybe have done as low as, like, 7% up to maybe in the twenties. Yeah %. Okay. Some of the ones that were lower, once they get cross-trained, they'll go up too. Okay. In order to do that, we have to raise revenue. We have definitely had the highest fee increases that we've ever had. Mm-hmm. Because it's still a business, so it's gotta make its own way at the end of the day. Right. If we don't do that, we're in danger of losing them. Right. Yeah. Let's talk a little bit. Tell the audience, if you will, how are you thinking about fee increases? This would be fees paid by clients for the services that the team is providing. We've talked about wages for a minute. How do you think about it, and how often do you think about it? How often have you done it? Ordinarily, we would only have two fee increases in a given year. Okay. We would do one at the beginning of the year and then one probably after Q2 or so. Okay. That's been pretty much the pattern for the 32 years that I've been a veterinarian. This year, we've had four already. I kinda feel like I'm the Fed Chairman trying to figure out how high I need to raise my fees to make everything work and not cause a negative effect. Mm-hmm On my business. We have had the largest by far fee increases I've ever had in my lifetime. The demand is so high that we have not really heard a lot of negatives from our customers about it, and it's allowed us to do what we do for the team. Right. Also, hopefully, have some money to invest in equipment, which I'm probably gonna touch on and stuff too. Yeah, we will. Mm-hmm. It's uncomfortable because you know that most veterinary services are fee for service, and there's not a lot of third-party payment. Yeah. We're doubling down on trying to educate people about pet health insurance because I think the day for pet health insurance is here. Mm-hmm. Even in small town America. I hope that we're at the point where we don't have to have another fee increase this year, but I'm gonna watch the numbers and see what happens, you know? Sure. Mm-hmm. That, I think, part is a little uncomfortable sometimes, but I think very necessary, and I think some good things will come from that. Sure. One of the things I wanna pick up on, Bruce, is something you touched on, the labor dynamics. It looks like everybody is scheduled to come in on a Tuesday, and then it's Wednesday morning, and three people can't come in. All of a sudden, the paradigm changes. Just talk to us a little bit about the agility you've had to develop in your team to be able to handle these labor dynamics where somebody's COVID positive, could be a staff member, it could be a family member of a staff member. How do you adapt in real time? Because everybody that's planning to come for an appointment isn't caring whether or not you've got everybody there. Talk to us about team agility and what strategies you implement to deal with that. Oh, George, this is right in our wheelhouse now. Now. We don't really know. I've said my people are very dedicated, but they get sick, and they have to be isolated sometimes when they're not sick. I talk about we kinda show up every morning and work with who's there to work with. Lately, it's been a little bit better because COVID numbers are lower in our area. We can go back to curbside, like, in a heartbeat. Okay. Like five minutes. We have that played down. We have all the signage that we need and everything, and curbside is more efficient because you don't talk about Sally's softball game or anything. It's just, you know, you just kind of like do the work, communicate with the client. Sometimes we walk out to the car, sometimes we call them, but it's very efficient. It's like clockwork. Boom, boom. We can just get a lot of patients through. When we're short-staffed, we go back to curbside, and our customers just know that that's what we need to do. They understand that. They do understand it at this point, yeah. Okay. We can do it seamlessly, and then we also will pull people from you know, maybe there's some project that doesn't get done that day, but because we've doubled down on cross-training all of our employees, we can pull them into an area where they're more needed on that particular day. Okay. that has been remarkable to see. Like, our team is so adaptable now, so. Let's just pull the thread a little bit, if you will, on the curbside and the productivity, and maybe just talk to us about the trade-off associated with that in-person interaction. Yeah that clients often really like. They appreciate hearing from you and unpacking the story of their pet's health versus the trade-offs of curbside, which allows for that productivity. How do you assess that, and how do you manage the client experience through that dynamic? When all is said and done, veterinary medicine is not an animal business, it's a people business. Mm-hmm. That bond that we make with the customer is what keeps them coming back. Okay. This is a challenge that we're all trying to deal with, and because people need at least a certain amount of face time, or they need at least some communication time. Right with the team members. I think one of the things that we really do is, we try to use our support staff more to, Mm-hmm kind of engage with that too. You know, but this is a challenge. This is one of the big challenges that needs to be solved by our profession right now. Mm-hmm because we don't have a great supply of veterinarians. Right or veterinary technician time. Digital, I think, is gonna have a lot to do with that. Sure. Well, we heard from Michael just a little earlier about the role that software can play there. For instance, I might jump on VetConnect, and I do some, you know, preventive healthcare screening or recheck on a patient, and I'll type them up a personal note. "Hey, Buffy's blood work's looking great today. Remember we talked about, you know, using that other medication. Well, I'm gonna get some of that ready for you. And by the way, hope Sally's softball game went well. Yeah. Yeah. Yeah. You know, we gotta get creative about this. Sure 'Cause there's only so many hours in the day, and there isn't a moment in time when I don't have a stack of phone calls that need to be made. We have to find creative ways to deal with that. Still, when we can, I wanna have them in face-to-face. In our playbook, too, is like if you get a little bit too wordy, they'll say, "Dr. Francke, I need you. Yeah, right. In surgery, please or something, you know, and like, so. Anywhere else in practice perhaps. Yeah. Yeah. Yeah. We wanna make that connection, but we don't have time to spend a half hour chit-chatting with anybody at this point. Yeah. You haven't probably for the last couple of years. No either. No, we haven't. What I'm hearing you say also, without saying it, is you're not anticipating that end in sight either. Yeah. Yeah. No. The difference is that in the very beginning of the pandemic, when we really didn't know what we were allowed to do, we didn't really know how this disease was spread, and so we were wearing face shields and all those. Right different types of things. I kind of described our first couple of weeks as Brownian motion, because we were just running around slamming into the sides of the chart. Yeah. You know, in random ways until we figured out how to make that work, and we did it very quickly. Now we got it down. Yeah. We know what to do. I think it's amazing that you'd be able to pivot in a few minutes to a totally different intake model, and clients have adapted to that. Yeah I just wanted to maybe expand in sort of another area. Given the intensity of demand for services and the busyness of the team, there are some trade-offs that you're not gonna make clinically. Yeah As it relates to a client that comes in. Can you maybe just talk to the audience about how you've empowered your staff to use their experience that you've invested in to move cases along without compromising your medical standards? Yeah. The biggest thing is that we don't have time to retrace our steps, so we need as much information as quickly as possible on our cases, because we just don't have time to do a half of a workup and then maybe two days later, if it's not doing better, do another half of a workup or, Sure anything like that. We've empowered our team members, which are very well trained, to make certain recommendations on diagnostics before we even see the pet. One of the things, we have a code that we call a stat panel. Mm-hmm. It's a Chem 15, a CBC, an SDMA, electrolytes, and a urinalysis. Any of our technicians have the power to go ahead and recommend that for a sick pet before we even walk into the room. Mm-hmm. If we need to expand on it, we will. If there was ever a test that I didn't think was necessary, I would just credit it back to the client, but that rarely ever happens because those are very basic tests that we need for working up any sick animal. That panel, that stat panel is our third most billed item in our whole practice. Wow. When you look at percentage of gross. Yeah is the third most common thing that we do in our practice. I think empowering your team because you just don't have time to go in and, you know. You know that if you have a- Yeah A vomiting, diarrhea animal that hasn't eaten for two days, that you're gonna need all those tests, right? You can just get them going. I don't even know that I have a vomiting, diarrhea animal that hasn't eaten in two days, and I already have laboratory tests. Yeah. Which is really important and it's good medicine. Good medicine is good business. Can I talk, speaking of good business while still managing in the pandemic, can you maybe talk to the audience a little bit about investing in the practice, building capabilities, how are you thinking about and how have you thought about investing in the practice to be able to meet these demands that your clients are having? We've invested a lot in communications technology. The things I'm gonna talk about right now are things that might be mundane if you live in San Diego, California, or something. In small town America, where a lot of small vet practices are, it's very difficult to get things like reliable internet connections. Mm-hmm. We had cable connection that we share with the whole neighborhood. It's woefully inadequate for us now. Mm. Actually, I think probably within the next week or so, the cable's already pulled. We're going to a direct fiber-optic connection. Mm-hmm ... which required about six workers about two days to be able to install because they had to be brought down the road to our practice, you know. Mm-hmm. We're investing in once we have that in place, we'll have voice over internet protocol phones, because one of our choke points right now is that we can only communicate with five people simultaneously outside the hospital. I might sit down at a desk, and there's no open phone lines to make my phone call. I look at that as a wasted 45 seconds, a wasted minute and a half. I might work on something else, but these are the little things we're looking for, a minute here, three minutes there. That's why something like the SediVue is so important to us. Yeah. Communications, just investing in technology to do that, we're buying laptop computers so that our employees can work from home, which that was really unheard of in small veterinary practices. Right. We found out they can. They can make phone calls. They can do all kinds of projects at home. They can do continuing education at home. Mm-hmm. They like that because some of them drive a half hour. Right you know, 45 minutes even to get to work. Yep. If they can sit at home and they're productive. Yep Why not let them? Yep. Yeah. Good. One of the things that we've touched on, and Jay made some comments in his remarks about this recalibrating or resetting of the offered hours that you extend out to clients. It's a big decision to change the hours of a veterinary hospital. Yes. I know you've made some of those changes. For the good of the team listening and the audience listening, talk us through what was in your thought process as you recalibrated, and what did you move from? What did you move to? Then I'm interested in how did people react? Yeah. This is a difficult one for me. It was a little bit of a hard pill to swallow because my dream for the practice was to become a 24/7 practice at some time. You can sense when people are stressed. What we found out was that we looked at the revenue that we generate on a Saturday, for instance. Mm-hmm when we're like at a small number of team members, and we said, "Right now, that just doesn't make any sense to be open on Saturdays. Mm-hmm. I've always said, if I can improve one thing about my life, it would be not to have to work on Saturday. We closed on Saturdays, and we thought it might be a temporary thing. What we found out was that if we give our team two solid days on the weekend to recharge their batteries, they come back Monday morning with a better attitude. Yeah. We really have not seen a decrease in patient visits because we just added like one on at our kind of middle of the day when we slow down for diagnostic an appointment each slot there and an appointment in the morning. Yeah. We've been able to see just as many people. We give our people time to recharge. In addition to that, we've decided to close on Christmas Eve and New Year's Eve and Black Friday. Yep. We give them that time to spend with their family. Mm-hmm. You just have to look at things a little bit differently, I think. There's two stakeholder groups then that are impacted by that. There's clients- Right who might have been used to coming to see you on Saturday, and then your team members. The real question is now that you've repossessed the novelty of a Saturday- Yeah. being not working, like this is the novelty, will you go back to working Saturdays? How are you thinking about that? With the current climate and how hard it is for me to find veterinarians and technicians, I would say that for the foreseeable future, we will not go back to Saturdays. Because it's been that well received? It has been that good for the team. Okay. Now I realize that creates an issue for the local emergency clinic, too. Right ... who did have to close for a week because of COVID at one point, so that created some issues for us. You can't pour from an empty cup, George. Yeah. Like you. Yeah If you take every ounce of energy the team member has, they just wanna quit the profession. You gotta stop somewhere short of that, and they wanna do good for the pets and everything. Right. You can't pour from an empty cup. We've had to figure out, like, how much can we comfortably do and still have something left in the tank to give the next day. Right. We decided that was what we needed to do. Yep. Clients, you know, that's as a big practice in your community, client reaction to that schedule change. Some people didn't like it, but most people understood. Okay. I think they see. They come in our parking lot, and they see that sometimes every single parking spot is full. They see animals coming in, going out. Like, you know, I have one client mentioned to me like, "I'll bet you I saw 15 animals come in and out of your building." Like, what. I said, "Yeah, we saw 609 animals last week. Yeah. They understand how busy we are, I think. Some of them, like, because of their work schedules or whatever, we've had to give them, like, the late evening appointments or something. Okay. Okay. I think as long as you have some non-conventional hours. Yep that work for the person that works nine to five or- Right You know, if you can get them in at six o'clock or, you know, something like that, you're okay. Right. Okay. I think. What I'm hearing you say is that, for the good of the team, you needed to give them a chance to get some water in their cup. Right. To give back. The clients, even if they don't all understand, most understood and still offering some atypical hours for that profile is still a necessary part of it. It sounds like you found a way to feather in through the workweek, an already busy workweek, ways to actually offset those Saturday hours for the mental health benefits perhaps that they create. Right still getting the work done during the week. Right. Is that fair to say? Yes. The other thing that we've done for clients is if, you know, there are people that are very early in the morning, so if they wanna drop their sick pet off. Yeah For a drop-off appointment, we have a lot of cages 'cause we're not boarding right now. Right. I think we have 40 cages in our practice or something like that. Yeah We'll take a drop-off and then integrate it in. Fit it in during the day. you gotta remember to take care of your internal clients too. Like, my team members, you don't wanna set their pets on the back burner, they make appointments too. Yep. We put them right in there just like a normal client because who do we have to take care of better than our own team members' pets? So. Good. As we maybe wind our very brief chat here, I know we could go for a while, you and I, Bruce, on this. The challenges of an overwhelming demand for veterinary healthcare services, a finite capacity and supply, and the challenges of workflow are all colliding as a result of no one having a playbook to deal with a pandemic and this massive growth in new pets, as Jay highlighted. You've been a veterinarian for 32 years. What are our chances? I think this is gonna. As silly as this might sound to some people, this is gonna lead to the golden age of veterinary medicine because what's happened is, for 32 years I've been hearing this, you know, sob story from my own profession, even bought into it myself once that we can't pay our people as much, and we do this because we love helping animals, but it's not financially rewarding, and we can't do anything about it. Now all of a sudden, we're being forced to do something about it or we're gonna lose our good people. Yeah. Through, you know, great challenge comes great change. What's gonna end up happening is we're gonna come out of this on the other side, this is my opinion, and we're gonna have people that are better compensated, have more work-life balance, and we'll be able to keep and attract the best people. Mm-hmm. Because who would wanna become a veterinary technician nowadays if they thought that they couldn't at least pay their bills. Right I really am, like, I'm bullish on veterinary medicine, because we're gonna go through some pain, and then we're gonna come out the other side a much stronger profession, I think, because of this. Good. Well, maybe we'll let that be the final word here. At this point in the program, I will look to have a warm round of applause for Dr. Francke and his willingness to join us here on stage. With that, I will introduce Brian McKeon to the stage for his remarks before Q&A with Jay. Thank you, Bruce. We'll go this way. Thanks, George and Dr. Francke. I wanna also share how great it is to be here in person with you all again in Maine this year. I'm Brian McKeon, IDEXX's CFO, and I get to do the last presentation of the day, which is our financial review. As we've done in the past, we'll be spending today talking about our financial performance and also talking about the long-term drivers of our financial potential and IDEXX's business potential. I'll spend some time today talking about how we're adapting our approach in the current environment. You heard a lot in the presentations today about some of the dynamics that we're working through, and we'll talk about how we're positioning ourselves to deliver solid financial performance as we build off of what was a significant expansion in demand for pet healthcare during the pandemic. A few key messages you should hear today. The first is that our consistent long-term focus on developing attractive core businesses is yielding outstanding financial results. We saw a significant step-up in our revenue and profit over the last two years, and we're building on those gains solidly this year. The reason we're able to do that is that the IDEXX teams are executing really well. What they're executing against is really the key driver of the long-term financial potential that we see in the company, and that relates to increasing pet healthcare through expanded utilization of diagnostics supported by IDEXX solutions. As we look forward, we see the drivers of our long-term organic growth potential of 10%+ annually as being intact. That's driven by faster growth in CAG Diagnostics recurring revenues. As we grow our recurring revenues and add new capabilities, like in our software business, we think that positions us very well to continue delivering strong profit gains, cash flow gains, and that's reflected in consistent long-term goals. Let me start with just a brief overview of our strategic focus and our financial performance. As I mentioned, IDEXX is focused consistently over time on developing some attractive core businesses. We serve three major spaces. Our largest business is companion animal healthcare. That's actually about 90% of our revenues. We also have a very profitable E. coli water testing business and a synergistic livestock diagnostic testing business. These businesses have common characteristics. They all have strong underlying organic growth potential that we're focused on accelerating as a company through innovation and direct engagement with our customers. The strategy's centered on helping our customers grow faster, and as we do that successfully, we grow faster as well. These are all global businesses. They leverage common technologies and platforms across regions. They're supported increasingly by global centers of excellence. They're all innovation driven, primarily centered in diagnostics, but increasingly with integration with information management solutions. From a financial point of view, they all have large, durable, recurring revenue bases. What that enables us to do is, as we grow the recurring revenues, because we're an innovation-driven company, they throw off high incremental margins, and that allows us to reinvest towards long-term sector development and earn high returns on invested capital as we're investing in businesses that we know really well. If you look at our financial performance over time, this consistent focus, combined with strong execution, has yielded outstanding financial results ahead of our long-term goals. Over the last five years, on average, we delivered 12% annual organic revenue growth, over 800 basis points of operating margin improvement, and an average 28% growth in comparable EPS and 59% return on invested capital. That reflects the attractive flow-through economics of the recurring revenue model that I highlighted. You see those benefits augmented in terms of the significant expansion we saw in demand during the pandemic for companion animal healthcare. Now, the key driver of our financial performance is our CAG diagnostics recurring revenue base. This represents about 80% of overall revenues. We've grown this consistently over time. In fact, we grew it 14% over the last five years on a compound basis. That's at the high end of our long-term goals of 11%-14% growth and reflected strong performance across U.S. and international regions. In fact, in the two years during the pandemic, we were growing at about 12% annually, pretty consistently heading into 2020. We saw that growth rate accelerate over 2020 and 2021 to 17% in each of those two years. Now, as we've grown these revenues, they've become more durable over time. This chart shows U.S. customer retention rates for Catalyst consumables and reference lab services. You can see we've always had relatively high levels of customer retention, and these have continued to improve over time, hit 99% and 98% respectively in 2021. We've seen these same high levels of retention sustained this year, and we see similar levels in international markets. What this reflects, and I think you heard this in a number of presentations today, is we've had a very consistent focus on providing technology for life solutions to our customers that integrate diagnostics and information management. We support it through a high level of customer engagement, and we align what we're doing with helping our customers grow faster. Through that process, we generate a high level of customer satisfaction. We're aligning ourselves with helping our customers be successful, and that results in a very high level of customer retention. From a financial point of view, this is important because I think it reinforces the exceptional duration of IDEXX's cash flows and the significant value that we see in the IDEXX business. Transitioning to more recent trends, we're building off the significant growth in revenues that we saw through the pandemic. The first half of this year, we had 8% organic gains, compared to 24% gains in the first half of 2021. If you take a step back and look on a multi-year basis, over five years, we had a 13% compounded increase, consistent high gains across U.S. and international regions. Again, that's a bit ahead of the trends that we saw going through the pandemic, going into the pandemic. Now, a key driver of the increased solid growth and the increased growth that we saw through the pandemic, in addition to just broad-based increase in diagnostic services, is growth in the pet population. From during 2020 and 2021, this is U.S. data, we estimate that there were 17 million incremental pets added to the pet population. That's a 10% overall increase, and that compares to about a 1% growth rate heading into the pandemic years. As we look forward in our long-term projections, we use a 1% growth rate. We think that's a good long-term estimate for growth. This growth in the pet population is actually gonna have long-term tailwind benefits for the sector. You know, we know, as shown earlier today, that as these pets age, they're gonna have increased healthcare needs. That's gonna have an additional tailwind effect, and that's factored into the higher sector growth estimates that we shared at last year's Investor Day. Now in the near term, this has created support for higher clinical visit growth in 2021, and it's created a moderate headwind as we've lapped some of those benefits in 2022. Now, the significant impact that we've seen more recently of this large expansion demand, and we just heard about in Dr. Francke's discussion, is the step up in demand has put a lot of pressure on veterinary clinics to deal with that. We're working through right now a reset in some of the capacity dynamics in the sector this year. Just to restate some of the data that Jay shared earlier, the veterinary clinics were supporting 2%-3% growth in clinical visits annually for a number of years. I think that was a relatively consistent rate of growth. We saw this step up 13% in a one-year period and actually sustained throughout 2021. If you look at the typical seasonal drop off you see sometimes in clinical visits, that didn't happen in 2021. It was a very strong back half of the year. As described, I think post the Omicron wave and, you know, just through the realization of the challenges of maintaining, you know, kind of the level of energy that was required to support this demand, there was a reset this year, and that's how we think about it. It's really a headwind that is coming from a pullback in capacity that we think can be addressed over time. We do anticipate it will improve over time, but this is something that we're planning to work through for the balance of this year. I just wanna reinforce to folks, we changed our outlooks twice this year, and this was the factor that drove the change in the outlook. We went from a 2%-3% growth in the second half of 2021, and in relatively quick period of time, we saw about a 600 basis point swing in the clinical visit growth levels. That was what we had factored into our outlook. We think we've adjusted that appropriately now, and we're well positioned to kind of calibrate how we're managing the business, growing the business aligned with the reality of the near-term situation. Now as we're working through some of the clinical visit headwinds, we're delivering solid revenue growth as a company, and that's supported by an expanding IDEXX growth premium. Services at the clinic level have continued to expand over time, diagnostic services faster than overall service revenues. If you look at the diagnostic revenues per clinical visit in U.S. clinics, they were growing about 5% heading into the pandemic. They're now growing 9%. We're growing at an even higher premium. We're growing at 11% premium that reflects some of the benefits we bring through innovation and really strong execution by our commercial teams. What that's allowing us to do is to offset some of these near-term headwinds from clinical visits and continue to deliver solid performance, leveraging these executional drivers. What this chart shows is we tried to break down our first half performance over the last couple of years with some more granularity on the executional drivers. What I think you'll see here is we've had consistent strong new business gains, strong utilization gains, actually ahead of the pace that we saw heading into these years. We're actually getting increased net price realization, which we think is appropriate in the current higher inflation environment. These dynamics are reflected in our updated outlook. This chart summarizes key metrics in our business for the first half of the year as well as for the second half of the year. We've centered our second half outlook around a midpoint expectation for CAG diagnostic recurring revenue growth of 7.5% or roughly 8%, normalized for days. What that reflects is expectations we'll still be working through some headwinds on the clinical visit side, but we'll offset that with continued strong execution and increased benefits from net price realization. In fact, we are estimating a 5.5%-6% benefit from net price in the second half of this year, which will have some carryover benefits heading into 2023. As we're positioning ourselves to deliver continued solid growth, we're gonna be delivering solid operating margin improvements. The second half of the year, as you can see here, reflects solid operating margin gains, and that's aligned with sustaining the strong operating margin performance that we delivered in 2021. I know there's a lot of interest in 2023. We're not gonna be giving guidance today, but I just wanna spend a moment and talk about how we're managing the business right now in the context of these dynamics. Our focus right now is focusing on what we can control, driving strong execution, advancing what we think are appropriate price changes with our customers and leveraging the investments that we've made in the business. As we've done in the past, calibrating our pace of investment so that we can deliver solid profit improvement as we grow. Overall, positioning ourselves to work through some of these transitory headwinds, and we think of them as transitory headwinds, and work back towards the significant long-term growth potential that we continue to see in the IDEXX business. Let's spend some time talking about that. In terms of our long-term growth outlook, as I mentioned, the key drivers of our long-term potential are intact. We're maintaining a consistent long-term view for 10%+ annual organic revenue growth, supported by 11%-14% CAG diagnostic recurring revenue increases. The underlying analytics to this are similar to the dynamics that we shared in detail at last year's investor day, and they reflect continued positive long-term growth drivers that we see. That includes strong underlying CAG sector demand trends, favorable dynamics in terms of increased ownership by Gen Z and millennials, global utilization expansion. The key driver of that $37 billion TAM is the ability to increase utilization of diagnostics over time, and those rates have actually increased through the pandemic and sustained even as we're working through some of the near-term headwinds. As Tina mentioned, we've got 230,000 premium placement opportunities on our existing platforms. As we develop new platforms, that adds the opportunity for additional recurring revenue streams and multiplier benefits in our business. Finally, as Michael Schreck shared, our software business is becoming a significant business in its own right and becoming a meaningful revenue and profit driver that can reinforce the optimism we have on the long-term potential for the company. Now, in terms of operating margin performance, we have the same long-term goals. We believe we can deliver 50-100 basis points of comparable operating margin improvement on average annually over time. The key driver there is we think we have plenty of room to continue expanding our gross margins. As we've shared in the past, our CAG recurring annuity revenues are off 60% plus incremental gross margins that's aligned with the innovation that we're bringing through our solutions. We'll have sustained solid net price realization, and we think we have plenty of runway to keep improving lab productivity as we scale our business globally. As we shared earlier, our software business and our shift to the cloud is adding an incremental positive growth driver to our gross margin story that we can build on over time. As we've done in the past, we plan to deliver modest OpEx leverage as we're reinvesting towards innovation and commercial capability and getting leverage out at our overall scale as a business and the benefits from our focus on our organic growth strategy. As we look forward, we have a consistent view on our ability to generate strong cash flow. We've historically converted net income to free cash flow at a rate of 80%-90%. We continue to see that as a good long-term metric for the company. This year, our metrics are a bit below that, largely driven by the discrete R&D investments that we've highlighted, as well as a catch-up on some manufacturing and warehousing capacity following the 34% expansion in our diagnostic revenues over the last two years. We continue to look at capital spending, an outlook on capital spending at about 4%-5% of revenues, and that's principally driven by growth capital investments in things like lab capacity, manufacturing capacity, and software development. In terms of our balance sheet, we're in a very good place. We have relatively low leverage ratios. We've actually been de-levering over the last few years, and that reflects the strong cash generation in the business and a conservative approach to managing the balance sheet through the pandemic. We have plenty of flexibility to support our capital allocation priorities, and we'll use our balance sheet as appropriate in that context. As we look at our capital allocation priorities, they start, of course, with our organic growth strategy, but that's complemented by corporate development activity that helps to augment our value proposition and add additional value creation opportunities. In the past, we've deployed capital on things like close-in lab acquisitions. There's still opportunities for us to do that, principally in international markets. We've been increasing capital allocation towards adding software capability in our business, and we're very happy with the addition of ezyVet to the IDEXX family. It's been a great growth driver and we see long-term potential there, well ahead of what we actually were hoping for in our acquisition models when we initially looked at the company. We're also we also deploy capital and spend a lot of time actually just working on partnering with other companies that are looking to apply technology and know-how in the companion animal space. We're a natural partner just given our customer reach and our innovation capability to help companies apply technology in companion animal healthcare. We're very excited about the in-licensing opportunities that we've advanced recently. We think that these have a significant potential to add value to the company if you look at the success we've had in areas like our SediVue platform expansion. As we move forward, you should expect us to apply a consistent approach on capital allocation. Again, it starts with focus on our core business strategy, and we'll also continue to deploy capital towards share repurchase, excess capital towards share repurchases. This is a strategy that has been very successful for us over time. In fact, since we initiated our buyback programs, we bought back over 40% of the company stock at an average share price of $32 a share. For long-term shareholders, that enhances per share returns and supports the very high return on invested capital that we've been able to deliver in the business. In summary, we continue to be very excited about the potential for IDEXX as a business. This is my 20th year with the company, and I think you feel that every year, and this year is no different. We are delivering solid financial performance as we work through some near-term headwinds, and we think we can do that effectively and position ourselves well for what we see as a consistent long-term potential for the business. That's reflected in consistent long-term financial goals for 10%+ annual organic revenue growth and 15%-20% EPS gains. That concludes our presentations today. We're now gonna move to Q&A. Jay will be joining me on stage. We have our management team available as well. I think we have mics in the room, and we can be happy to take your questions. Thanks. Erin Wright, Morgan Stanley. In terms of, I'll start with innovation first, the two new platforms. Can you talk about the timing and magnitude of when those will contribute more meaningfully from a financial perspective? You mentioned the SediVue timeline in terms of the 2 years. Is that what we should be thinking about in terms of two years from now? Then also, will these be completely different from other types of products that we see on the market today? How can we think about the differentiation of those offerings? Thanks. Yeah. Thank you for the question. A couple of just maybe broader points in terms of our point of care strategy. As I had mentioned, it's a very compelling value proposition for our customers in terms of being able to deliver, you know, the real time care at that patient window. It is something that over time, we're constantly examining a set of untreated or unaddressed customer challenges that they may have and technology that's available to be able to address it. You know, very often what we find is from a performance and reliability and usability and cost profile standpoint, the technology hasn't been ready or, you know, even if we were to develop it ourselves. We were very excited by being able to, you know, what we believe represent very attractive opportunities to be able to bring that technology through an IP licensing agreement in-house and develop it and bring some of the competencies you heard about as part of Tina's presentation in terms of platform development, assays and software and overall commercialization. I think, you know, there's different timeframes just to explicitly address your question connected with individual technology situations and what it requires to bring product to marketplace. If we start from a, you know, let's say, a more earlier, more embryonic stage, and we're developing something in-house that requires a lot of work to develop something in-house, like with ProCyte One, which was an in, an IDEXX developed product. You know, as I mentioned, we spent almost five years in doing that. If in fact something is readier and it's just a question of adaptation, I think SediVue represents, you know, reasonable analog, and that's about 2 years for that particular platform. In terms of getting into the specifics of those two new testing categories, we're not prepared to do that just from a competitiveness standpoint. What I would say, it's something we're very excited by, and we believe that it fits that profile of being able to address that unmet need and do what we do best, which is innovatively apply the technology to new testing categories. Just one follow-up for Brian on 2023 and margin expansion. You reiterated the 50-100 basis points margin expansion annually. We should be adding back the R&D expense this year and thinking about the 50-100- Yes basis points as we think about 2023. The R&D expense is the $80 million investment or $0.72 a share impact we view as discrete. As we think about our margin improvement, we would adjust for that and look to build off of that. Great. Chris Schott at JP Morgan. I just want to talk a little bit about pricing. I know you presented a lot of data in terms of how the pet has increasingly been integrated into the family, but I guess just how do you evaluate the risk that we reach a price point as we see some of these inflation pressures at the vet level, as you guys increase your price, that you start impacting demand, especially as we maybe head into a weaker economic environment than we've been in. Can you just share a little bit about as you think about this algorithm, as you're going out to 2023 and 2024, that you know, could price eventually start to play a role here you have to watch more closely? Yeah, just maybe a couple of different ways of thinking about that. You know, we think price is an output, not an input in the following sense. It's really a function of the value that, you know, we're able to deliver for the customer. There are things that we provide to customers when they use our diagnostics that they don't pay for. So for example, VetConnect PLUS is an investment that we make, and customers enjoy VetConnect PLUS on a complimentary basis if they use our diagnostics, and that includes clinical decision support. There are other instances in which, you know, we provide and Tina went through this in a fair amount of depth, you know, constant upgraded enhancements and menu. They only pay for the customers only pay for that when they actually use the test. We, as an overall philosophy, wanna make sure that we continue to deliver outstanding value, that the value proposition of the test and the solution remains strong. Then based on that, we obviously price. We look to price in a reasonable way. Clearly, this year and given the inflationary environment and the cost of being able to support customers, you know, whether you look at supply chains or cost of some materials, you know, we took a mid-year price increase. We think it was, you know, reasonable and just reflective of the overall environment that we and others are working. Overall, you know, we look for a certain amount of balance. You know, you heard Dr. Francke address the pricing side from the practice philosophy. I think what he described we find is fairly typical. They monitor it. I think there is an evolution on the part of practice owners to recognize the fact that they need to keep their best people. From the perspective of being able to pay well and create attractive, sustainable career paths, I think there's a deeper appreciation of the need to do that. In some cases, practices have increased their price. Pet owners, at the end of the day, wanna get the very best care for their, you know, beloved members of their household. They're willing, generally, to pay those prices. That's not to say they're willing to pay any price, but as long as it's within that reasonableness of, you know, what professionally, highly educated, highly trained veterinarians and staff are provide, Bill, from our experience, they're willing to do that. Thanks. Mike Ryskin, Bank of America. Thanks for the presentation, guys. I wanna focus on the commentary on vet visit volumes, what you've seen so far, what you saw over the COVID pandemic and sort of what expectations could be. As you called out, you know, you saw a little bit of turbocharged growth in 2020, 2021, and that's normalized a little bit this year. Sort of taking that and taking Dr. Francke's comments on, you know, everyone's burnt out, they can't really stuff any more volume into it. I guess I'm wondering is, you know, do you expect a return to growth next year in that underlying market, you know, vet volume visit trend? Why aren't we still at capacity, and why won't it take a couple more years for that to sort of re-normalize? We're not trying to call the exact month, the exact quarter when it returns, but we do believe it will revert to more of a historical trend of 2%-3% growth. I think that chart that we showed, you know, in terms of just calling out the underserved demand in terms of, you know, number of patients and what that implies in terms from just a normal visit growth perspective, you know, I think provides, you know, interesting perspective and some forces that I think over time will correct. Look, I mean, industries adapt. That's the great thing about, you know, our capitalist system, whether it's in the U.S. or outside of the U.S. There's a lot of changes that practice owners are making. Dr. Francke spoke to many of those to be able to serve that high demand. There's a lot of things that we're doing from a solution standpoint. For whether it's software or premium instrumentation, you know, Mike Lane spoke to our reference lab as an extension of the practice, providing specialty consulting services. These forces are working towards resolving the capacity situation. I think it's gonna improve over time in terms of, you know, exactly calibrating what that looks like and whether it's a jump or whether it's a gradual improvement. I think we're all gonna monitor and do our best to do the things that we can control. Thank you very much. David Westenberg from Piper Sandler. I just wanted to touch on, you know, everyone has a recession in their mind in kind of 2023, and, you know, you go back and you show the graphs from 2009. Now out of 2009, IDEXX did have slower growth from 2010 to 2014. When we're thinking about growth on a go-forward basis, can you talk about the differences in IDEXX today versus where you were coming out of the last recession so that we're comfortable with kind of the growth expectations on a go-forward basis, that 2016, you know, 2017, 2018 is the real IDEXX and not the. It wasn't some, you know, recessionary or coming out of a recessionary environment that hit growth rates in, you know, 2010, 2011, 20- Sure. You know, I think every recession is a little bit different. You know, there are things you can sort of draw up and make comparisons, you know, to. I think it's, you know, it's true that, and as I mentioned as part of my discussion, we're a very different company today than we were over a decade, you know, ago. When we were coming out of the Great Recession in 2009, you know, we worked through distributors. This go-to-market model that Jim spoke to didn't exist. This ability to drive diagnostics utilization was in a different state of development. We didn't have the software business we, you know, we have today. I think all of these pieces make for a fundamentally, you know, different opportunity. You know, I think the 2009 Great Recession analogy is illustrative, but you know, not necessarily fully dispositive in terms of the conclusions you can draw, you know, from this. Yeah. I'd also add some of the demographic changes just that have evolved over a decade, but you can see the growth in young pet owner ownership and all our information shows younger generations having a higher bond with pets, proclivity to spend, prioritize their healthcare needs. I think there are a number of factors that are very positive and, you know, I think we'll be positioned to manage our growth appropriately, but I think we're very optimistic, remain very optimistic about the underlying demand expansion. I think it's important not to lose sight of there are some headwinds we're working through in the short term, but that long-term trajectory accelerated, you know, from where it was a very strong growth rate pre-pandemic. The drivers of that expanding utilization, you know, adoption of our technologies continue to sustain at a really solid rate. I think we feel those drivers are intact and we're confident that we can, you know, achieve our growth objectives over time. Okay. Brian. Yeah. Ryan Daniels from William Blair. Thank you for the question and the presentation. Thought it was interesting the amount of time you talked about clinical decision support among your users. Obviously, that can help with productivity and best practices. I'm curious, number one, what portion of the base business of your customers is using your clinical decision support? Number two, given that it appears to be an accelerator for follow-up diagnostic use, I think you mentioned 2x more likely, how do you as an organization kind of push that forward, to help stimulate further growth? Is it a technology? Is it education? Just what types of things can you do to move that forward? Thanks. Yes. The, you know, the very, I think, important thing to keep in mind around our VetConnect PLUS cloud-based platform is clinical decision support largely lives on that application. Yet if you take a look at VetConnect PLUS, it's in over 35,000 practices on a global basis, cloud-based platform. So when we roll out clinical decision support, what that means is, overnight, we put it at the fingertips of all of those practices using VetConnect PLUS. It's an incredibly powerful channel for us. You know, VetConnect PLUS, when we rolled that out in 2012, it was the summer of 2012, as test results and some trending. We kept improving it, we kept investing in it. Oh, by the way, we don't charge customers for that, you know, per se. If you use our diagnostics, you get to use VetConnect PLUS. Now what we've done is, with these clinical decision support modules, we've started to build these and roll them out and apply them to the point where, you know, not today, but sometime in the future, we'll have a critical mass of menu connected with being able to support different clinical situations. You heard about a couple of those today from the leaders of the business. You know, I'd say that, you know, in terms of the actual use, it's in the low thousands in terms of what we actually have today, but growing. The more menu we have, the more times that a clinician, veterinarian uses it and they say, "Wow, this is actually pretty good. This is helpful," the more they will use it. This is one of those, we think, cascades that will happen, you know, over time. Okay, one more question. Thanks. Nathan Roth from Goldman Sachs. I wanted to follow up on your comments on capacity. I guess, what are you seeing with respect to new practice formation, and how important do you think that is to easing the capacity constraints? If I could ask another one on the international opportunity, I think you said, you know, two-thirds of the opportunity is outside the U.S. I think international growth has been pretty consistent with U.S. growth over a longer time horizon. You know, as you do these market expansions that you talked about in 2021 and 2022, what type of lift do you see kind of after doing that, and one way we see acceleration in the international growth? Brian McKeon, do you wanna talk about the lift, and then I'll talk about new practice formation? Yeah. I think the executional metrics that we're seeing in international are quite good. We had 25% premium instrument placement growth in Q2. New business gains are strong. Retention levels are high. I think the key dynamic that we're working through in international, of course, is it's a similar kind of dynamics on capacity challenges. In addition, I think there's been more significant macro impact in places like Europe. I think we are getting the return from our investments from the sales organizations. I just think it's, you know, you can't see it as clearly in the results yet because we have some other headwinds, but I think these areas, you know, in terms of the payback from commercial expansions, we think are two- to three-year paybacks, very high return. It's obviously aligned with expanding annuity revenues. I think our capability is better than it's ever been. We've got a globally organized kind of commercial capability where we're really importing or exporting the playbook from the U.S. strategy. I think it'll, to some degree, depend on what happens with the underlying sector dynamics, but we think we're well positioned to get benefits from those expansions over time. Yeah. The other thing I would add to that is, you know, when folks look at the U.S. region today, they see 19% of clinical visits that include blood work. You know, that didn't happen overnight. When we went back and we actually took a look at the different sort of discrete items that we did that over time cumulatively made an impact, it was really over a 30-year period. I mean, we started our first reference lab in the U.S. a little bit over 20 years, almost 25 years ago. So you know, it's adding in all the pieces, the reference labs, the account manager model, the software solutions, the broader solution, and the, you know, solution fit that creates this accelerated growth that actually develops the sector. You know, the I think the great thing about the international regions and countries, if you take a look at pet owners, and I'm gonna just focus now on Europe, they spend as much on specialty diets, I'm gonna normalize it, you know, per capita, but on specialty diets and therapeutics as we do in the U.S. as pet owners. The diagnostics piece is a little bit different. They're a little earlier in terms of, you know, the adoption of that. Our investments and our model can support that and does support the development that we think can earn us a growth premium to the overall sector. You know, in terms of, you also asked about practice formation. We are seeing an increase if we take a look at the U.S., a slight increase in practice formations, greenfield formations in the U.S. You know, whether that's due to the fact that a number of practices through the last three, four years were sold to corporate consolidators and their tie-up, you know, agreements are now complete, and they wanna get back, you know, into the business. Hard to pull that out at a country level, but certainly we are seeing some momentum to that effect. Okay, that's it. We're... Thank you so much for coming to Maine and visiting us. Hopefully, you found this morning informative. I know from our perspective, we very much enjoy interfacing with investors and analysts. We get a lot out of it. Hopefully, you can stay and join us for lunch. We have a, you know, Maine lobster lunch planned, and the management team will be around, and you could interface with them and ask questions. If you haven't already, we have a couple videos on some of our software applications out there in the foyer, and take a quick look at those. Thank you very much and enjoy the rest of your day. Thank you. Thank you.