Zoetis Announces Third Quarter 2026 Results; Highlights Progress Advancing
Zoetis Announces Third Quarter 2026 Results; Highlights Progress Advancing Innovation Across Diversified Portfolio and Narrows Full Year 2026 Revenue Guidance, Raises Full Year 2026 Adjusted EPS Guidance
◦ International segment revenue: $1.1 billion, increased 4% reported and organic operational basis
PARSIPPANY, N.J. – November 5, 2026 – Zoetis Inc . (NYSE:ZTS), the world's leading animal health company, today reported its financial results for the third quarter of 2026.
"Our third-quarter performance was in line with our expectations. Continued pressure in Companion Animal was partially offset by growth in Livestock and Diagnostics, reflecting the breadth of our portfolio," said Kristin Peck, Chief Executive Officer of Zoetis. "We remain focused on defending our position and directing our resources where they can have the greatest impact. And with the scale, expertise, and pipeline to keep setting the pace of innovation in animal health, we are confident in our ability to create long-term value for customers and shareholders."
The company reported revenue of $2.4 billion for the third quarter of 2026, a decrease of 1% on a reported and an organic operational 1 basis compared with the third quarter of 2025. Net income for the third quarter of 2026 was $591 million, decreasing 18% on a reported basis. Diluted EPS was $1.44, decreasing 12% on a reported basis.
Adjusted net income 2 for the third quarter of 2026 was $720 million, decreasing 5% on a reported basis and 7% on an organic operational basis. Adjusted diluted EPS was $1.75, increasing 3% on a reported basis and 1% on an organic operational basis. Adjusted net income for the third quarter of 2026 excludes the net impact of $129 million for purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. 1 |
Zoetis organizes and manages its commercial operations across two segments: United States (U.S.) and International. Within these segments, the company delivers a diverse portfolio of products for companion animals and livestock, tailored to local trends and customer needs. In the third quarter of 2026 :
was $1.2 billion, decreasing 6% on both a reported and an organic operational basis relative to the third quarter of 2025. Companion animal revenue decreased 8%, reflecting macro-driven price sensitivity and competitive pressure in dermatology, as well as generic competition. Livestock revenue increased 5% on both a reported and organic operational basis in the quarter, supported by strength across cattle, swine and poultry.
was $1.1 billion, increasing 4% on both a reported and an organic operational basis compared with the third quarter of 2025. Companion animal revenue increased 1% on a reported basis and remained flat on an organic operational basis, led by parasiticides and osteoarthritis (OA) pain, while partially offset by lower sales of key dermatology products. Livestock revenue increased 8% on a reported basis and 9% on an organic operational basis, driven by growth in cattle and fish.
Zoetis continued to advance innovation across its diversified portfolio, and remains on track for expected 2026 product approvals, with select approvals anticipated in 2027 now expected in Q4 2026.
In October, Zoetis received U.S. Food and Drug Administration (FDA) approval for
, a long-acting antibacterial injection for dogs. This is the second major market approval this year, with both achieved ahead of the expected timelines, and expands Zoetis' portfolio of therapies designed to broaden treatment options for dogs. Convenia RTU for Dogs is expected to be available to veterinarians in the first quarter of 2027.
for cats, expanding access to long-acting osteoarthritis pain relief that can last up to three months with a single injection.
received U.S. FDA Emergency Use Authorization (EUA) for the treatment of New World screwworm infestations in dogs and puppies. The authorization adds to Zoetis' existing response, including Dectomax and Dectomax ® -CA1 for other species at risk. 2 | Additional approvals from the quarter include:
was approved in the U.S. and Mexico to help protect pigs against porcine reproductive and respiratory syndrome.
received an additional claim in Brazil to help protect dogs against Bordetella bronchiseptica .
received an additional claim in Canada to help protect dogs against subclinical arthritis caused by Borrelia burgdorferi .
A peer-reviewed study published in Parasites & Vectors found that dogs treated with Simparica Trio had significantly lower average heartworm counts than dogs treated with NexGard ® Plus, with few dogs in the Simparica Trio group having adult heartworms at the study's conclusion.
• The study is available through the newly launched Zoetis Medical Hub , which brings together medical expertise and peer-reviewed research.
• Narrowed revenue to a range of $9.220 billion to $9.320 billion (organic operational growth of (2)% to (1)%)
• Raised adjusted net income to a range of $2.600 billion to $2.640 billion (organic operational growth of (7)% to (5)%)
This guidance reflects foreign exchange rates as of October 20, 2026. Additional details on guidance, including reconciliations of non-GAAP financial measures and the most directly comparable GAAP financial measures, are included in the financial tables and will be discussed on the company's conference call.
Zoetis will host a webcast and conference call November 5, 2026, at 8:30 a.m. ET to review third quarter 2026 results, discuss financial guidance and respond to questions from financial analysts. The live webcast and corresponding slides can be accessed by visiting https://investor.zoetis.com/events-presentations. A replay of the webcast will be available following the event.
Zoetis is the world’s leading animal health company, driven by a singular purpose: to nurture our world and humankind by advancing care for animals. With a legacy of nearly 75 years, Zoetis continues to pioneer ways to predict, prevent, detect, and treat animal illness, supporting veterinarians, livestock 3 | producers, and pet owners in over 100 countries. We integrate deep scientific expertise, data-driven R&D, advanced manufacturing, and commercial excellence to deliver meaningful innovation across medicines, vaccines, diagnostics, biopharmaceuticals, and digital solutions. Guided by our vision to be the most trusted and valued animal health company, Zoetis is committed to setting new standards for the future of animal care through innovation, customer obsession, and purpose-driven colleagues. To learn more, visit Zoetis.com.
1 Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.
2 Adjusted net income and its components and adjusted diluted earnings per share (non-GAAP financial measures) are defined as reported net income and reported diluted earnings per share, excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items.
Forward-Looking Statements : This press release contains forward-looking statements, which reflect the current views of Zoetis with respect to: business plans or prospects, future operating or financial performance, future guidance, future operating models; R&D costs; timing and likelihood of success; expectations regarding products, product approvals or products under development and expected timing of product launches; expectations regarding competing products; expectations regarding financial impact of divestitures; disruptions in our global supply chain; expectations regarding the performance of acquired companies and our ability to integrate new businesses; expectations regarding the financial impact of acquisitions; future use of cash, dividend payments and share repurchases; foreign exchange rates, tax rates, tariffs, changes in tax regimes and laws and any changes thereto; possible impacts of the Fiscal Year Alignment; and other future events. These statements are not guarantees of future performance or actions. Forward-looking statements are subject to risks and uncertainties. If one or more of these risks or uncertainties materialize, or if management's underlying assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward-looking statement. Forward-looking statements speak only as of the date on which they are made. Zoetis expressly disclaims any obligation to update or revise any forward- looking statement, whether as a result of new information, future events or otherwise. A further list and description of risks, uncertainties and other matters can be found in our most recent Annual Report on Form 10-K, including in the sections thereof captioned “Forward-Looking Statements and Factors That May Affect Future Results” and “Item 1A. Risk Factors,” in our Quarterly Reports on Form 10-Q and in our Current Reports on Form 8-K. These filings and subsequent filings are available online at www.sec.gov , www.zoetis.com , or on request from Zoetis.
Use of Non-GAAP Financial Measures: We use non-GAAP financial measures, such as adjusted net income, adjusted diluted earnings per share, operational results (which exclude the impact of foreign exchange) and organic operational results (which exclude the impact of foreign exchange and certain acquisitions and divestitures), to assess and analyze our results and trends and to make financial and operational decisions. We believe these non-GAAP financial measures are also useful to investors because they provide greater transparency regarding our operating performance. The non-GAAP financial measures included in this press release should not be considered alternatives to measurements required by GAAP, such as net income, operating income, and earnings per share, and should not be considered measures of liquidity. These non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Reconciliations of non-GAAP financial measures and the most directly comparable GAAP financial measures are included in the tables accompanying this press release and are posted on our website at www.zoetis.com. 4 | Internet Posting of Information: We routinely post information that may be important to investors on the 'Investor Relations' section of our website at www.zoetis.com , as well as on LinkedIn , Facebook , X (formerly Twitter) and YouTube . We encourage investors and potential investors to consult our website regularly and to follow us on social media for company news and information.
Media Contacts: Investor Contacts: Jennifer Albano Mathieu Aussermeier 1-862-399-0810 (o) 1-862-460-0181 (o) jennifer.albano@zoetis.com mathieu.aussermeier@zoetis.com Laura Panza Nick Soonthornchai 1-973-975-5176 (o) 1-973-443-2792 (o) laura.panza@zoetis.com nick.soonthornchai@zoetis.com
(a) Acquisition-related costs represent external, incremental costs that directly relate to transacting and integrating businesses, included in Restructuring charges and certain acquisition and divestiture-related costs .
(b) Included in Provision for taxes on income . Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction's applicable tax rate.
(a) For the three and nine months ended September 30, 2026, primarily driven by employee termination costs under a comprehensive cost and productivity program, with the nine-month period also reflecting employee termination costs from additional organizational structure refinements, included in Restructuring charges and certain acquisition and divestiture-related costs ..
For the three and nine months ended September 30, 2025, primarily related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, included in Restructuring charges and certain acquisition and divestiture-related costs .
(b) Represents costs related to our multi-year business process transformation program, which includes the implementation of a new enterprise resource planning (ERP) system, related digital technology solutions and other related costs, included in Selling, general and administrative expenses and Cost of sales . This comprehensive program is a major global and cross-functional company-wide effort that we believe will transform how we work across our business and contribute to all of our strategic priorities. Due to the nature, scope and magnitude of this investment, these costs are incremental transformational costs that are far in excess of the historical normal level of spending to support operations and are not expected to recur in the foreseeable future.
(c) For the three and nine months ended September 30, 2026, represents impairment charges on in-process research and development assets, acquired from PetMedix in 2023, resulting from updated estimates of development and commercial assumptions, included in Other (income)/deductions–net , as well as charges related to the exit of certain sites, included in Restructuring charges and certain acquisition and divestiture-related costs .
For the three and nine months ended September 30, 2025, represents certain asset impairment charges related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, included in Restructuring charges and certain acquisition and divestiture- related costs , as well as charges related to our aquaculture product portfolio, included in Other (income)/deductions–net .
(d) Represents a net loss related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets sold in 2024, included in Other (income)/deductions–net .
(e) Included in Provision for taxes on income . Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction's applicable tax rate. 9 | ZOETIS INC.
(a) Adjusted cost of sales, adjusted selling, general, and administrative (SG&A) expenses, adjusted research and development (R&D) expenses, and adjusted net income (non-GAAP financial measures) are defined as the corresponding reported U.S. GAAP income statement line items excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. These adjusted income statement line item measures are not, and should not be viewed as, substitutes for the corresponding U.S. GAAP line items. The corresponding GAAP line items and reconciliations of reported to adjusted information are provided in Condensed Consolidated Statements of Income and Reconciliation of GAAP Reported to Non-GAAP Adjusted Information.
(b) Operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange.
(c) Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures. 10 | ZOETIS INC.
Selected Line Items Full Year 2026 (millions of dollars, Full Year 2026 as of August 6, 2026 except per share amounts) as of November 5, 2026 (Prior Guidance) ────────────────────────────────────────────────────────────────────────────── Revenue $9,220 to $9,320 $9,120 to $9,320 Organic operational (2)% to (1)% (3)% to (1)% results(a) Adjusted cost of sales as a percentage Approximately 29.0% Approximately 29.0% of revenue(b) Adjusted SG&A expenses(b) $2,340 to $2,370 $2,330 to $2,380 Adjusted R&D expenses(b) $705 to $715 $720 to $730 Adjusted interest expense and other Approximately $215 Approximately $215 (income)/deductions-net(b) Effective tax rate on Approximately 20% Approximately 20.5% adjusted income(b) Adjusted diluted EPS(b) $6.25 to $6.35 $6.15 to $6.25 Adjusted net income(b) $2,600 to $2,640 $2,570 to $2,620 Organic operational (7)% to (5)% (9)% to (5)% results(a)(c) Certain significant items and acquisition and Approximately $210 Approximately $150 divestiture-related costs(d) Reported diluted EPS $5.50 to $5.60 $5.55 to $5.65
Certain (millions significant of dollars, items and Purchase except per Reported acquisition accounting Adjusted(b) share and amounts) divestiture… costs(d) Cost of sales as a ~ 29.1% ~ (0.1%) ~ 29.0% percentage of revenue SG&A $2,373 to ~ $(22) ~ $(11) $2,340 to expenses $2,403 $2,370 R&D $707 to $717 ~ $(2) $705 to $715 expenses Interest expense and ~ $215 ~ $215 other (income)/d… Effective ~ 20% ~ 20% tax rate Diluted EPS $5.50 to ~ $0.53 ~ $0.22 $6.25 to $5.60 $6.35 Net income $2,300 to $2,600 to attributab… $2,340 ~ $210 ~ $90 $2,640 to Zoetis
(a) Organic operational results (a non-GAAP financial measure) exclud es the impact of foreign exchange and certain acquisitions and divestitures.
(b) Adjusted net income and its components and adjusted diluted EPS are defined as reported U.S. GAAP net income and its components and reported diluted EPS excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. Adjusted cost of sales, adjusted SG&A expenses, adjusted R&D expenses, and adjusted interest expense and other (income)/deductions-net are income statement line items prepared on the same basis, and, therefore, components of the overall adjusted income measure. Despite the importance of these measures to management in goal setting and performance measurement, adjusted net income and its components and adjusted diluted EPS are non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, adjusted net income and its components and adjusted diluted EPS (unlike U.S. GAAP net income and its components and diluted EPS) may not be comparable to the calculation of similar measures of other companies. Adjusted net income and its components and adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance. Adjusted net income and its components and adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS.
(c) We do not provide a reconciliation of forward-looking non-GAAP adjusted net income operational results to the most directly comparable U.S. GAAP reported financial measure because we are unable to calculate with reasonable certainty the foreign exchange impact of unusual gains and losses, acquisition and divestiture-related expenses, potential future asset impairments and other certain significant items, without unreasonable effort. The foreign exchange impacts of these items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period.
(d) Primarily includes certain nonrecurring costs related to acquisitions, divestitures and other charges. 11 |
(a) Organic operational revenue results (a non-GAAP financial measure) is defined as revenue results excluding the impact of foreign exchange and certain acquisitions and divestitures. 14 |
Full text with the tables
EXHIBIT 99.1
Zoetis Announces Third Quarter 2026 Results; Highlights Progress Advancing
Innovation Across Diversified Portfolio and Narrows Full Year 2026 Revenue
Guidance, Raises Full Year 2026 Adjusted EPS Guidance
Third Quarter 2026 Highlights
•
Revenue: $2.4 billion
,
decreased 1% reported and organic operational 1
◦
U.S. segment
revenue
: $1.2 billion, decreased 6% reported and organic operational
◦ International segment revenue: $1.1 billion, increased 4% reported and organic
operational basis
•
Net Income: $591 million
,
decreased 18% reported
•
Adjusted net income: $720 million
,
decreased 5% reported and 7% organic operational
•
Diluted EPS: $1.44, decreased 12% reported
•
Adjusted diluted EPS: $1.75, increased 3% reported and 1% organic operational
PARSIPPANY, N.J. – November 5, 2026 – Zoetis Inc . (NYSE:ZTS), the world's
leading animal health company, today reported its financial results for the
third quarter of 2026.
"Our third-quarter performance was in line with our expectations. Continued
pressure in Companion Animal was partially offset by growth in Livestock and
Diagnostics, reflecting the breadth of our portfolio," said Kristin Peck, Chief
Executive Officer of Zoetis. "We remain focused on defending our position and
directing our resources where they can have the greatest impact. And with the
scale, expertise, and pipeline to keep setting the pace of innovation in animal
health, we are confident in our ability to create long-term value for customers
and shareholders."
THIRD QUARTER 2026 FINANCIAL RESULTS
The company reported revenue of $2.4 billion for the third quarter of 2026, a
decrease of 1% on a reported and an organic operational 1 basis compared with
the third quarter of 2025. Net income for the third quarter of 2026 was $591
million, decreasing 18% on a reported basis. Diluted EPS was $1.44, decreasing
12% on a reported basis.
Adjusted net income 2 for the third quarter of 2026 was $720 million, decreasing
5% on a reported basis and 7% on an organic operational basis. Adjusted diluted
EPS was $1.75, increasing 3% on a reported basis and 1% on an organic
operational basis. Adjusted net income for the third quarter of 2026 excludes
the net impact of $129 million for purchase accounting adjustments, acquisition
and divestiture-related costs and certain significant items.
1 |
THIRD QUARTER 2026 SEGMENT HIGHLIGHTS
Zoetis organizes and manages its commercial operations across two segments:
United States (U.S.) and International. Within these segments, the company
delivers a diverse portfolio of products for companion animals and livestock,
tailored to local trends and customer needs. In the third quarter of 2026 :
•
Revenue in the
U.S. segment
was $1.2 billion, decreasing 6% on both a reported and an organic operational
basis relative to the third quarter of 2025. Companion animal revenue decreased
8%, reflecting macro-driven price sensitivity and competitive pressure in
dermatology, as well as generic competition. Livestock revenue increased 5% on
both a reported and organic operational basis in the quarter, supported by
strength across cattle, swine and poultry.
• Revenue in the
International segment
was $1.1 billion, increasing 4% on both a reported and an organic operational
basis compared with the third quarter of 2025. Companion animal revenue
increased 1% on a reported basis and remained flat on an organic operational
basis, led by parasiticides and osteoarthritis (OA) pain, while partially offset
by lower sales of key dermatology products. Livestock revenue increased 8% on a
reported basis and 9% on an organic operational basis, driven by growth in
cattle and fish.
INNOVATION PIPELINE ADVANCEMENTS AND PORTFOLIO UPDATES
Zoetis continued to advance innovation across its diversified portfolio, and
remains on track for expected 2026 product approvals, with select approvals
anticipated in 2027 now expected in Q4 2026.
Regulatory Approvals and Portfolio Expansion
In October, Zoetis received U.S. Food and Drug Administration (FDA) approval for
Convenia
®
RTU for Dogs
, a long-acting antibacterial injection for dogs. This is the second major
market approval this year, with both achieved ahead of the expected timelines,
and expands Zoetis' portfolio of therapies designed to broaden treatment options
for dogs. Convenia RTU for Dogs is expected to be available to veterinarians in
the first quarter of 2027.
Zoetis launched
Lenivia
®
for dogs in Great Britain and received Swiss approval for
Portela
®
for cats, expanding access to long-acting osteoarthritis pain relief that can
last up to three months with a single injection.
During the quarter,
Simparica Trio
®
received U.S. FDA Emergency Use Authorization (EUA) for the treatment of New
World screwworm infestations in dogs and puppies. The authorization adds to
Zoetis' existing response, including Dectomax and Dectomax ® -CA1 for other
species at risk.
2 |
Additional approvals from the quarter include:
•
Fostera
®
PRRS Needle-free microdose
was approved in the U.S. and Mexico to help protect pigs against porcine
reproductive and respiratory syndrome.
•
Vanguard
®
B Oral
received an additional claim in Brazil to help protect dogs against Bordetella
bronchiseptica .
•
Vanguard
®
crLyme
received an additional claim in Canada to help protect dogs against subclinical
arthritis caused by Borrelia burgdorferi .
•
Alfaxan
®
Multidose
4%
was approved in Japan and Mexico for sedation of cats.
New Peer-Reviewed Research and Zoetis Medical Hub Launch
•
A peer-reviewed study published in Parasites & Vectors found that dogs treated
with Simparica Trio had significantly lower average heartworm counts than dogs
treated with NexGard ® Plus, with few dogs in the Simparica Trio group having
adult heartworms at the study's conclusion.
• The study is available through the newly launched Zoetis Medical Hub , which
brings together medical expertise and peer-reviewed research.
FULL YEAR 2026 FINANCIAL GUIDANCE
Zoetis is providing updated guidance:
• Narrowed revenue to a range of $9.220 billion to $9.320 billion (organic
operational growth of (2)% to (1)%)
• Raised adjusted net income to a range of $2.600 billion to $2.640 billion
(organic operational growth of (7)% to (5)%)
• Raised adjusted diluted EPS to a range of $6.25 to $6.35
This guidance reflects foreign exchange rates as of October 20, 2026. Additional
details on guidance, including reconciliations of non-GAAP financial measures
and the most directly comparable GAAP financial measures, are included in the
financial tables and will be discussed on the company's conference call.
WEBCAST & CONFERENCE CALL DETAILS
Zoetis will host a webcast and conference call November 5, 2026, at 8:30 a.m. ET
to review third quarter 2026 results, discuss financial guidance and respond to
questions from financial analysts. The live webcast and corresponding slides can
be accessed by visiting https://investor.zoetis.com/events-presentations. A
replay of the webcast will be available following the event.
About Zoetis
Zoetis is the world’s leading animal health company, driven by a singular
purpose: to nurture our world and humankind by advancing care for animals. With
a legacy of nearly 75 years, Zoetis continues to pioneer ways to predict,
prevent, detect, and treat animal illness, supporting veterinarians, livestock
3 |
producers, and pet owners in over 100 countries. We integrate deep scientific
expertise, data-driven R&D, advanced manufacturing, and commercial excellence to
deliver meaningful innovation across medicines, vaccines, diagnostics,
biopharmaceuticals, and digital solutions. Guided by our vision to be the most
trusted and valued animal health company, Zoetis is committed to setting new
standards for the future of animal care through innovation, customer obsession,
and purpose-driven colleagues. To learn more, visit Zoetis.com.
1 Organic operational results (a non-GAAP financial measure) is defined as
results excluding the impact of foreign exchange and certain acquisitions and
divestitures.
2 Adjusted net income and its components and adjusted diluted earnings per share
(non-GAAP financial measures) are defined as reported net income and reported
diluted earnings per share, excluding purchase accounting adjustments,
acquisition and divestiture-related costs and certain significant items.
DISCLOSURE NOTICES
Forward-Looking Statements : This press release contains forward-looking
statements, which reflect the current views of Zoetis with respect to: business
plans or prospects, future operating or financial performance, future guidance,
future operating models; R&D costs; timing and likelihood of success;
expectations regarding products, product approvals or products under development
and expected timing of product launches; expectations regarding competing
products; expectations regarding financial impact of divestitures; disruptions
in our global supply chain; expectations regarding the performance of acquired
companies and our ability to integrate new businesses; expectations regarding
the financial impact of acquisitions; future use of cash, dividend payments and
share repurchases; foreign exchange rates, tax rates, tariffs, changes in tax
regimes and laws and any changes thereto; possible impacts of the Fiscal Year
Alignment; and other future events. These statements are not guarantees of
future performance or actions. Forward-looking statements are subject to risks
and uncertainties. If one or more of these risks or uncertainties materialize,
or if management's underlying assumptions prove to be incorrect, actual results
may differ materially from those contemplated by a forward-looking statement.
Forward-looking statements speak only as of the date on which they are made.
Zoetis expressly disclaims any obligation to update or revise any forward-
looking statement, whether as a result of new information, future events or
otherwise. A further list and description of risks, uncertainties and other
matters can be found in our most recent Annual Report on Form 10-K, including in
the sections thereof captioned “Forward-Looking Statements and Factors That May
Affect Future Results” and “Item 1A. Risk Factors,” in our Quarterly Reports on
Form 10-Q and in our Current Reports on Form 8-K. These filings and subsequent
filings are available online at www.sec.gov , www.zoetis.com , or on request
from Zoetis.
Use of Non-GAAP Financial Measures: We use non-GAAP financial measures, such as
adjusted net income, adjusted diluted earnings per share, operational results
(which exclude the impact of foreign exchange) and organic operational results
(which exclude the impact of foreign exchange and certain acquisitions and
divestitures), to assess and analyze our results and trends and to make
financial and operational decisions. We believe these non-GAAP financial
measures are also useful to investors because they provide greater transparency
regarding our operating performance. The non-GAAP financial measures included in
this press release should not be considered alternatives to measurements
required by GAAP, such as net income, operating income, and earnings per share,
and should not be considered measures of liquidity. These non-GAAP financial
measures are unlikely to be comparable with non-GAAP information provided by
other companies. Reconciliations of non-GAAP financial measures and the most
directly comparable GAAP financial measures are included in the tables
accompanying this press release and are posted on our website at www.zoetis.com.
4 |
Internet Posting of Information: We routinely post information that may be
important to investors on the 'Investor Relations' section of our website at
www.zoetis.com , as well as on LinkedIn , Facebook , X (formerly Twitter) and
YouTube . We encourage investors and potential investors to consult our website
regularly and to follow us on social media for company news and information.
Media Contacts: Investor Contacts:
Jennifer Albano Mathieu Aussermeier
1-862-399-0810 (o) 1-862-460-0181 (o)
jennifer.albano@zoetis.com mathieu.aussermeier@zoetis.com
Laura Panza Nick Soonthornchai
1-973-975-5176 (o) 1-973-443-2792 (o)
laura.panza@zoetis.com nick.soonthornchai@zoetis.com
ZTS-COR
ZTS-IR
ZTS-FIN
5 |
ZOETIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(millions of dollars, except per share data)
… T… S… …
… M… % 3… … %
… E… 2… C… 2… … … …
──────────────────────────────────────────────────────────────────────────────
… $ 2… $ … … $ 7… $ 7… —
…
…
…
…
… 6… … — 2… 1… 2
…
…
…
… 5… … — 1… 1… —
…
…
…
… 1… … … 5… 5… 5
…
…
…
… 31 … … 93 97 -4
…
…
…
…
…
… 43 4 * 1… 34 *
…
…
…
…
…
…
… 62 … 7 1… 1… 12
…
…
…
… 72 … * 47 -… *
…
…
…
…
… 7… … … 2… 2… -8
…
…
…
…
…
… 1… … … 4… 5… -…
…
…
…
…
…
… 5… … … 1… 2… -8
…
…
…
…
…
…
… — — * — — *
…
…
…
…
…
… $ 5… $ … … $ 1… $ 2… -8
…
…
…
…
…
… $ 1… $ … … $ 4… $ 4… -2
…
…
…
…
…
… $ 1… $ … … $ 4… $ 4… -2
…
…
…
…
…
…
…
…
…
…
…
… 4… … 4… 4…
… 4… … 4… 4…
* Calculation not meaningful.
6 |
ZOE…
INC.
REC…
OF
GAAP
REP…
TO
NON…
ADJ…
INF…
CER…
LINE
ITE…
(UN… Three
(mi… Mont…
of Ended
dol… Sept… Acqu…
exc… 30, and
per 2026 Pur… Dive… Cer…
sha… GAAP Acc… Rela… Sig… Non-…
dat… Repo… Adj… Cost… Ite… Adju…
──────────────────────────────────────────────────────────────────────────────
Cost
of $ 698 $ -1 $ — $ -3 $ 694
sal…
Gro… 1,693 1 — 3 1,6…
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7 |
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──────────────────────────────────────────────────────────────────────────────
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8 |
ZOETIS INC.
NOTES TO RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars)
(1) Acquisition and divestiture-related costs include the following:
Three Months Nine Months
Ended Ended
September 30, September 30,
2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Acquisition-… $ 2 $ — $ 6 $ 1
costs(a)
Total
acquisition
and 2 — 6 1
divestiture-…
costs—pre-tax
Income — — 1 —
taxes(b)
Total
acquisition
and $ 2 $ — $ 5 $ 1
divestiture-…
costs—net of
tax
(a) Acquisition-related costs represent external, incremental costs that
directly relate to transacting and integrating businesses, included in
Restructuring charges and certain acquisition and divestiture-related costs .
(b) Included in Provision for taxes on income . Income taxes include the tax
effect of the associated pre-tax amounts, calculated by determining the
jurisdictional location of the pre-tax amounts and applying that jurisdiction's
applicable tax rate.
(2) Certain significant items include the following:
Three Nine
Months Months
Ended Septemb… Ended Septemb…
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Other
restru…
charges $ 30 $ 4 $ 125 $ 11
and
cost-r…
initia…
Busine…
process 7 8 18 26
transf…
progra…
Certain
asset 89 — 89 27
impair…
charge…
Net
loss on — — — 3
sale of
busine…
Other 7 -4 9 -5
Total
certain 133 8 241 62
signif…
items—…
Income 30 -1 51 8
taxes(…
Total
certain
signif… $ 103 $ 9 $ 190 $ 54
items—…
of
tax
(a) For the three and nine months ended September 30, 2026, primarily driven by
employee termination costs under a comprehensive cost and productivity program,
with the nine-month period also reflecting employee termination costs from
additional organizational structure refinements, included in Restructuring
charges and certain acquisition and divestiture-related costs ..
For the three and nine months ended September 30, 2025, primarily related to a
transition from internal to external innovation and manufacturing of certain
products and the closure of a related site, included in Restructuring charges
and certain acquisition and divestiture-related costs .
(b) Represents costs related to our multi-year business process transformation
program, which includes the implementation of a new enterprise resource planning
(ERP) system, related digital technology solutions and other related costs,
included in Selling, general and administrative expenses and Cost of sales .
This comprehensive program is a major global and cross-functional company-wide
effort that we believe will transform how we work across our business and
contribute to all of our strategic priorities. Due to the nature, scope and
magnitude of this investment, these costs are incremental transformational costs
that are far in excess of the historical normal level of spending to support
operations and are not expected to recur in the foreseeable future.
(c) For the three and nine months ended September 30, 2026, represents
impairment charges on in-process research and development assets, acquired from
PetMedix in 2023, resulting from updated estimates of development and commercial
assumptions, included in Other (income)/deductions–net , as well as charges
related to the exit of certain sites, included in Restructuring charges and
certain acquisition and divestiture-related costs .
For the three and nine months ended September 30, 2025, represents certain asset
impairment charges related to a transition from internal to external innovation
and manufacturing of certain products and the closure of a related site,
included in Restructuring charges and certain acquisition and divestiture-
related costs , as well as charges related to our aquaculture product portfolio,
included in Other (income)/deductions–net .
(d) Represents a net loss related to the sale of our medicated feed additive
product portfolio, certain water soluble products and related assets sold in
2024, included in Other (income)/deductions–net .
(e) Included in Provision for taxes on income . Income taxes include the tax
effect of the associated pre-tax amounts, calculated by determining the
jurisdictional location of the pre-tax amounts and applying that jurisdiction's
applicable tax rate.
9 |
ZOETIS INC.
ADJUSTED SELECTED COSTS, EXPENSES AND INCOME (a)
(UNAUDITED)
(millions of dollars)
…
…
…
… % … … …
… … … … … … … … …
──────────────────────────────────────────────────────────────────────────────
$ … $ … — % — % — %
… % … % … … …
… … — % — % — %
… … — % — % — %
… … … % 2 % … % — % …
…
…
…
… %
… …
… … … … … … …
… … …
$ … $ … 1 % 3 % … %
… % … % … … …
… … — % 1 % … %
… … 5 % 1 % 4 %
… … … % 2 % … % — % …
(a) Adjusted cost of sales, adjusted selling, general, and administrative (SG&A)
expenses, adjusted research and development (R&D) expenses, and adjusted net
income (non-GAAP financial measures) are defined as the corresponding reported
U.S. GAAP income statement line items excluding purchase accounting adjustments,
acquisition and divestiture-related costs and certain significant items. These
adjusted income statement line item measures are not, and should not be viewed
as, substitutes for the corresponding U.S. GAAP line items. The corresponding
GAAP line items and reconciliations of reported to adjusted information are
provided in Condensed Consolidated Statements of Income and Reconciliation of
GAAP Reported to Non-GAAP Adjusted Information.
(b) Operational results (a non-GAAP financial measure) is defined as results
excluding the impact of foreign exchange.
(c) Organic operational results (a non-GAAP financial measure) is defined as
results excluding the impact of foreign exchange and certain acquisitions and
divestitures.
10 |
ZOETIS INC.
2026 GUIDANCE
Selected Line Items Full Year 2026
(millions of dollars, Full Year 2026 as of August 6, 2026
except per share amounts) as of November 5, 2026 (Prior Guidance)
──────────────────────────────────────────────────────────────────────────────
Revenue $9,220 to $9,320 $9,120 to $9,320
Organic operational (2)% to (1)% (3)% to (1)%
results(a)
Adjusted cost of sales as
a percentage Approximately 29.0% Approximately 29.0%
of revenue(b)
Adjusted SG&A expenses(b) $2,340 to $2,370 $2,330 to $2,380
Adjusted R&D expenses(b) $705 to $715 $720 to $730
Adjusted interest expense
and other Approximately $215 Approximately $215
(income)/deductions-net(b)
Effective tax rate on Approximately 20% Approximately 20.5%
adjusted income(b)
Adjusted diluted EPS(b) $6.25 to $6.35 $6.15 to $6.25
Adjusted net income(b) $2,600 to $2,640 $2,570 to $2,620
Organic operational (7)% to (5)% (9)% to (5)%
results(a)(c)
Certain significant items
and
acquisition and Approximately $210 Approximately $150
divestiture-related
costs(d)
Reported diluted EPS $5.50 to $5.60 $5.55 to $5.65
The guidance reflects foreign exchange rate s as of October 20, 2026.
Reconciliations of 2026 reported guidance to 2026 adjusted guidance follows:
Certain
(millions significant
of dollars, items and Purchase
except per Reported acquisition accounting Adjusted(b)
share and
amounts) divestiture…
costs(d)
Cost of
sales as a ~ 29.1% ~ (0.1%) ~ 29.0%
percentage
of revenue
SG&A $2,373 to ~ $(22) ~ $(11) $2,340 to
expenses $2,403 $2,370
R&D $707 to $717 ~ $(2) $705 to $715
expenses
Interest
expense and ~ $215 ~ $215
other
(income)/d…
Effective ~ 20% ~ 20%
tax rate
Diluted EPS $5.50 to ~ $0.53 ~ $0.22 $6.25 to
$5.60 $6.35
Net income $2,300 to $2,600 to
attributab… $2,340 ~ $210 ~ $90 $2,640
to Zoetis
(a) Organic operational results (a non-GAAP financial measure) exclud es the
impact of foreign exchange and certain acquisitions and divestitures.
(b) Adjusted net income and its components and adjusted diluted EPS are defined
as reported U.S. GAAP net income and its components and reported diluted EPS
excluding purchase accounting adjustments, acquisition and divestiture-related
costs and certain significant items. Adjusted cost of sales, adjusted SG&A
expenses, adjusted R&D expenses, and adjusted interest expense and other
(income)/deductions-net are income statement line items prepared on the same
basis, and, therefore, components of the overall adjusted income measure.
Despite the importance of these measures to management in goal setting and
performance measurement, adjusted net income and its components and adjusted
diluted EPS are non-GAAP financial measures that have no standardized meaning
prescribed by U.S. GAAP and, therefore, have limits in their usefulness to
investors. Because of the non-standardized definitions, adjusted net income and
its components and adjusted diluted EPS (unlike U.S. GAAP net income and its
components and diluted EPS) may not be comparable to the calculation of similar
measures of other companies. Adjusted net income and its components and adjusted
diluted EPS are presented solely to permit investors to more fully understand
how management assesses performance. Adjusted net income and its components and
adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S.
GAAP net income and its components and diluted EPS.
(c) We do not provide a reconciliation of forward-looking non-GAAP adjusted net
income operational results to the most directly comparable U.S. GAAP reported
financial measure because we are unable to calculate with reasonable certainty
the foreign exchange impact of unusual gains and losses, acquisition and
divestiture-related expenses, potential future asset impairments and other
certain significant items, without unreasonable effort. The foreign exchange
impacts of these items are uncertain, depend on various factors, and could have
a material impact on U.S. GAAP reported results for the guidance period.
(d) Primarily includes certain nonrecurring costs related to acquisitions,
divestitures and other charges.
11 |
…
…
… %
… C…
… R… F… O…
… … C… E… O… D… O…
──────────────────────────────────────────────────────────────────────────────
$ … $ … … % — % … % — % … %
… … 7 % 1 % 6 % … % 7 %
… … … % … % … % — % … %
$ … $ … … % 1 % … % … % … %
$ … $ … … % — % … % — % … %
… … 5 % — % 5 % — % 5 %
$ … $ … … % — % … % — % … %
$ … $ … 1 % 1 % — % — % — %
… … 8 % 2 % 6 % … % 9 %
$ … $ … 4 % 1 % 3 % … % 4 %
$ … $ … … % — % … %
… … 6 % — % 6 %
$ … $ … … % — % … %
$ … $ … 6 % 1 % 5 %
… … 3 % 1 % 2 %
… … 2 % … % 3 %
… … … % 5 % … %
… … … % 4 % 6 %
$ … $ … 7 % 1 % 6 %
12 |
…
…
… %
… …
… … … O…
… … … … O… D… O…
──────────────────────────────────────────────────────────────────────────────
$ … $ 4… -4 % 1 % … % — % … %
… 2… 11 % 3 % 8 % … % … %
… 89 -9 % — % … % — % … %
$ … $ 7… — % 1 % … % — % … %
$ … $ 3… -… % — % … % — % … %
… 6… 11 % — % … % — % … %
$ … $ 3… -7 % — % … % — % … %
$ … $ 1… 8 % 4 % 4 % — % 4 %
… 1… 11 % 4 % 7 % … % 9 %
$ … $ 3… 9 % 4 % 5 % … % 6 %
$ … $ 4… -4 % 2 % … %
… 2… 9 % 2 % 7 %
$ … $ 4… -4 % 1 % … %
$ … $ 1… 13 % 2 % … %
… 3… 6 % 3 % 3 %
… 3… 8 % 1 % 7 %
… 2… 14 % 6 % 8 %
… 74 7 % 6 % 1 %
$ … $ 2… 11 % 3 % 8 %
13 |
ZOETIS INC.
CONSOLIDATED REVENUE BY KEY INTERNATIONAL MARKETS
(UNAUDITED)
(millions of dollars)
T…
M…
E…
S… % R… Fo… Or…
3… 2… 2… C… C… Ex… Di… Op…
──────────────────────────────────────────────────────────────────────────────
… $ 1… $ 1… 4 % 1 % -1 % 4 %
…
… 1… 92 13 % 9 % — % 4 %
… 1… 1… 9 % 6 % — % 3 %
… 70 76 -8 % — % -10 % 2 %
… 34 33 3 % -2 % — % 5 %
… 61 51 20 % 6 % — % 14 %
… 37 35 6 % -3 % -1 % 10 %
… 51 62 -… % -2 % -1 % -15 %
… 30 34 -… % -2 % — % -10 %
… 26 34 -… % -6 % — % -18 %
… 49 42 17 % 10 % — % 7 %
… 37 36 3 % -2 % -2 % 7 %
… 75 79 -5 % 1 % -2 % -4 %
…
…
… 1… 1… 11 % 1 % — % 10 %
…
…
… 2… 2… 7 % -2 % -1 % 10 %
…
N…
M…
E…
S… %
3… C…
2… 2… R… F… D… O…
C… E… O…
… $ 3… $ 3… 9 % 4 % -1 % 6 %
…
… 2… 2… 13 % 10 % — % 3 %
… 3… 2… 10 % 9 % — % 1 %
… 2… 2… -1 % 1 % -7 % 5 %
… 1… 1… 4 % 2 % -1 % 3 %
… 1… 1… 8 % 6 % — % 2 %
… 1… 1… -2 % 3 % -1 % -4 %
… 1… 1… 3 % 4 % -1 % — %
… 1… 1… 8 % 5 % -1 % 4 %
… 1… 1… -6 % -6 % -1 % 1 %
… 1… 1… 24 % 14 % — % 10 %
… 1… 1… 14 % 4 % -2 % 12 %
… 2… 2… -4 % 2 % -1 % -5 %
…
…
… 5… 4… 14 % 5 % -1 % 10 %
…
…
… 8… 6… 16 % — % -1 % 17 %
…
(a) Organic operational revenue results (a non-GAAP financial measure) is
defined as revenue results excluding the impact of foreign exchange and certain
acquisitions and divestitures.
14 |
Z…
I…
S… Th…
(… Mo…
(… En… %
of Se… Ch…
d… 30, Re… For…
U… 20… 20… Ch… Exc… Op…
──────────────────────────────────────────────────────────────────────────────
R… $ 1,… $ 1,3… -6 % — % -6 %
C…
of 222 222 — % — % — %
S…
G… 1,… 1,1… -7 % — % -7 %
P…
G… 82… % 83.2 %
M…
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E…
O… — — * * *
(…
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E…
I…
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C…
of 347 342 1 % — % 1 %
S…
G… 769 732 5 % 2 % 3 %
P…
G… 68… % 68.2 %
M…
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E…
O… — — * * *
(…
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E…
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S…
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a…
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16 |