Jay Mazelsky
President and Chief Executive Officer at IDEXX Laboratories
Thank you, Brian, and good morning. I'm pleased to share that IDEXX has delivered strong results in the third quarter, as teams across the company continued excellent execution to advance our strategic priorities. Demand for companion animal health care remains high, building on stepped-up levels during the pandemic and supported by a continued focus on service within veterinary clinics.
Veterinarians are looking for partners to support their growth, while they provide high levels of care in an efficient manner. These professionals continue to turn to IDEXX for the support in the third quarter. This was reflected in yet another quarter of record placements of premium capital instruments, strong momentum in PIMS placements amidst its continued desire for cloud-native products, consistent new business gains and sustained high customer retention levels. These continued trends demonstrate that veterinarians appreciate IDEXX's integrated ecosystem, and the layers of innovation would support and improve each step of clinic workflows.
The result was expansion across IDEXX execution growth drivers, including relatively higher net price realization, which drove IDEXX CAG Diagnostics recurring revenue growth to significantly outpace clinical visit growth. This supported a solid same-store diagnostics revenue growth in the US, despite moderating impacts from reductions in clinic capacity levels this year.
This morning, I'll highlight how IDEXX continued to advance our key strategic initiatives in the quarter, while delivering strong financial results. I'll begin with a review of recent trends in the companion animal sector.
Third quarter CAG sector trends were supported by solid global demand for veterinary services, building on a significant step-up in pet ownership and patient visits during the pandemic. US same-store diagnostics revenues grew 7% per practice during the third quarter, a sequential increase from the prior quarter and well above total same-store practice revenue growth of 4% in the quarter.
Services remain a key focus for veterinarians. And within services, diagnostics is a key component in providing valuable health care insights, supporting practice economics and driving revenue growth. Consistent with trends through this year, diagnostics revenue growth at the practice level continues to be driven by increases in both the frequency and utilization of diagnostics, resulting in 9.5% growth in diagnostics revenue per visit for the quarter, building on the strong gains seen through the pandemic.
IDEXX grew overall US CAG Diagnostics recurring revenue at approximately 10% normalized despite recent clinic visit growth headwinds as we benefit from decades of focus and investment, which brings differentiated value to our customers. As Brian noted, IDEXX's execution drivers contributed approximately 1,300 basis points to US growth in Q3 on a normalized basis. This reflects benefits from continued expansion of our premium instrument installed base, adoption of IDEXX innovations, consistent business gains, record retention levels and increased price realization.
On a multi-year basis, critical visit growth was healthy in the quarter with solid growth in both wellness and non-wellness visits. Three-year CAGR wellness visit growth in particular was in line with historic trends of 2% to 3%, demonstrating that US pet owners are continuing to prioritize pet health care. This trend continues to be supported by IDEXX's turnkey preventive care program, which included approximately 200 new US enrollments in the quarter.
This is the second quarter of year-over-year increased enrollments, showing that customers continue to appreciate the simple yet comprehensive testing in pet owner communication tools included in this program. This program is just one example of how we are engaging with our customers to support them through near-term challenges related to managing clinic capacity in meeting growing demand for health care services. We are building on our strong customer relationships to drive continued solid organic growth in our CAG business.
With that, let's now turn to discuss IDEXX's strong progress against our key strategic growth initiatives. As mentioned, excellent execution across the IDEXX organization supported strong performance during a dynamic third quarter with commercial teams delivering today, while also building the foundation for long-term growth across regions.
Record quarterly placements of premium instruments supported another quarter of double-digit growth in our worldwide premium instrument installed base. Global premium instrument placements grew 10% in the quarter, and placements in new and competitive accounts grew even faster at 13%, supporting strong EVI gains across regions. These results, combined with continued sustained new business gains and 98% Catalyst customer retention rates, will support future recurring revenue growth, aligned with the long-term financial framework shared at our recent Investor Day.
Sustained high levels of commercial performance were aided in part by continued improvement in the rate of in-person visits for account managers, up to 75% in the US and nearly 70% in Europe. IDEXX sales representatives are welcome in the clinic as trusted advisers to their customers, adding value by helping customers provide high standards of medical care, drive strong practice economics and improved practice efficiency. These results are also supported by our world-class innovative products like ProCyte One and customer-friendly marketing programs that help support the adoption of IDEXX Innovations.
ProCyte One provides customers with an efficient lower cost hematology platform at the point of care and is especially sought after in international regions where veterinarians have been trained to do hematology testing first when doing a basic workup on a patient. This platform is integral to our strategy to address the approximately 230,000 long-term global instrument placement opportunity that Dr. Tina Hunt shared at Investor Day, and third quarter results continue to be very encouraging.
ProCyte One was a key driver of 26% growth in premium hematology placements in the quarter, with international regions representing approximately 75% of ProCyte One placements and more than 60% of its installed base. Attach rates for ProCyte One are consistently high. Over 95% of ProCyte One customers overall and more than 80% of competitive customers also utilize our chemistry platform, demonstrating the excellent placement quality and strong multiplier benefit of this platform.
These results are further supported by benefits from investments we have made to expand our global commercial organization, where we are seeing positive reach to revenue trends and deeper customer relationships. Customer survey work in Germany and France demonstrates that customers have had an overwhelmingly positive experience during the first year of the new commercial ecosystem.
Over 90% of customers in Germany, for example, indicate that their commercial experience is the same or better than a year ago with the highest satisfaction rates and practices to receive continuous commercial engagement. This feedback highlights the benefit of our high-touch commercial model, where diagnostic subject matter experts partner with practice centers and staff to drive practice patient care and business objectives.
Our commercial and operational teams in the Asia-Pacific region are also driving successful execution against our strategic plans. Asia-Pacific premium instrument placements are at a record high and were delivered while hiring and onboarding new sales professionals in Japan and opening a new reference lab in Brisbane, Australia during the quarter.
Concurrent seamless execution of our commercial investments across multiple regions is not easy to do, and to do so while also delivering against our business goals. This demonstrates the value of the investments we've made in these teams, which will continue to benefit us as we work to address the significant long-term addressable opportunity outside the US.
In addition to these excellent commercial results, we also delivered multiple new technologies to our customers during the quarter. Since VMX in January, we have announced eight new product service and software solution enhancements across IDEXX modalities, each of which add value to the relationship that customers have with IDEXX, while demonstrating our commitment to a technology for life strategy. Five out of eight of these projects were launched in the third quarter.
These are: number one, expanding the comprehensiveness of our fecal antigen reference lab test by adding a flea tapeworm assay, which now detects up to 5 times more than traditional methods; number two, providing faster access to PCR results for North American customers by opening a next-day PCR lab in Louisville; number three, improved veterinary insight into the treatment of feline chronic kidney disease by adding an improved disease marker, FGF-23, to our reference lab menu; number four, improving the efficiency, convenience and sustainability of the Catalyst SDMA test by reformulating the test to include onboard reagents; and number five, delivering enhanced accuracy and longer room temperature storage in our best-in-class 4Dx Plus Test.
The rollout of these new products and services was enthusiastically received by our customers and highlighted the IDEXX team's ability to deliver high-quality new products, which will help increase standards of animal health care and develop our sector, while also providing very high customer service levels.
Another strategic area of innovation is IDEXX's software and diagnostic imaging businesses, which include a full suite of software product offerings to create a connected ecosystem within the clinic that supports each step of clinic workflow through the patient appointment. The Practice Information Management System and its easily updatable customer-friendly front-end interface is the center of this solution.
Record third quarter PIMS placements highlight strong customer interest in the whole product solution that IDEXX offers. Furthermore, the shift to cloud-based products that we highlighted at Investor Day continued in the quarter as over 90% of placements were cloud-based subscriptions, reflecting 50% growth in cloud-based placements compared to the prior year and demonstrating the value that last year's ezyVet acquisition continues to bring to the business. Strong results across this business in the quarter were not limited to PIMS products, diagnostic imaging systems placements, Web PACS subscriptions, PIMS application adoption like payment processing and VetConnect PLUS with clinical decision support engage with all advanced at healthy levels in the quarter.
We know veterinarians are looking for ways to obtain, understand and communicate diagnostics insights in a digital and streamlined way, and our software portfolio is well positioned to provide them with these solutions. The benefits of these products and solutions to IDEXX and our customers are compelling. They have highly favorable economics, given the recurring nature of the revenue stream and high incremental gross margins. They also drive customer engagement, which supports high levels of retention since they improve our customers' productivity and overall experience.
IDEXX's innovation agenda also extends beyond our companion animal business. We recently took the opportunity to advance our Water business by acquiring Tecta Pathogen Detection System, with an automated microbiology detection platform that uses patented technology to automate the incubation, reading and results notification for E. Coli and total coliform testing in drinking water supplies.
This application provides an automated data-enabled instrument in EPA-approved coliform testing solution that complements our core water solutions by providing value for customers operating under rush [Phonetic] conditions. We're excited to be able to invest in the attractive area of water testing and leverage our commercial resources to scale this new technology.
This innovation agenda demonstrates a relentless focus on providing our customers with world-class products that increase in value over time. Products not only provide them with important insights, but also help increase workflow efficiency and effectiveness. In addition to these top-notch products, our customer focus is supported by extremely high service levels to ensure customers have a wonderful experience with IDEXX, allowing us to earn their business every day.
Our frontline supply chain and customer service teams continue to deliver high levels of service, reflected in another quarter of approximately 99% product availability despite ongoing challenges in the external environment. This strong performance leverages years of investment in our supply chain and customer support resources as we continue to deliver on the operational needs of our customers.
That concludes our review. I'm proud to report another quarter of strong results as IDEXX remains well positioned to deliver solid growth and financial results over the long run, while also delivering on our mission to create a better future for animals, people in our planet. Our performance reflects the commitment and talents of our IDEXX team.
On behalf of the management team, I'd like to thank our more than 10,000 colleagues for the passion and engagement they bring to our purpose and strategy every day. You're making a meaningful difference to the health and well-being at pets, people and livestock around the world.
So, now we'll end the prepared section of the call and open the line for Q&A.