Zoetis : First Quarter 2026 Financial Results - Investor Presentation

Published: 2026-05-07 07:16:21 ET ZTS

Published on 05/07/2026 at 07:16 am EDT

May 7, 2026

FIRST QUARTER FINANCIAL RESULTS

REVENUE

organic operational1 YoY

(2)% Volume | 2% Price

ADJ. NET INCOME2

organic operational1 YoY

ADJ. DILUTED EPS2

organic operational1 YoY

KEY HIGHLIGHTS

Companion Animal declined 4%, driven by increased pet owner price sensitivity and competitive pressures in key categories

Librela stabilized sequentially in the U.S.; Lenivia and Portela launched in certain European markets and Canada

Livestock delivered 12% growth across species and geographies,

including price and volume

Diagnostics delivered 10% growth, driven by reference labs, chemistry and innovative technologies

Effective Jan. 1, 2026, eliminated one-month financial reporting lag for subsidiaries outside the U.S.; adjusted year-end for all to Dec. 31

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

3 share, excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items.

FIRST QUARTER FINANCIAL RESULTS

Zoetis continued to advance innovation through lifecycle and geographic expansions in the quarter; Received its first major market approval for the year

An antibiotic for the treatment of bacterial skin

Convenia® infections and urinary tract infections for dogs, received approval for a new formulation in Canada,

ahead of expected timeline.

Apoquel® The first and only chewable treatment for the relief of

Chewable allergic itch in dogs, received approval in Thailand.

ALPHA JECT®

micro 4

The company's first fish vaccine approved in Japan, reinforcing the continued demand for fish as a protein.

Ketofen®

Approved in Japan for cattle pain management.

Expected Approvals 2026

HVT-ND

Expected blockbusters2

1 Completion of final validation expected in 2026

2 A blockbuster has annual sales of at least $100 million

Long-Acting Cytopoint

Next-Gen Chemistry Dx1

FIRST QUARTER FINANCIAL RESULTS

First Quarter Segment Highlights1

United States

U.S. SEGMENT REVENUE

8% decline

Year over Year (YOY)

U.S. COMPANION ANIMAL REVENUE

11% decline YOY

U.S. LIVESTOCK REVENUE

7% growth YOY

International

INT'L. SEGMENT REVENUE

10% growth YOY

INT'L. COMPANION ANIMAL REVENUE

7% growth YOY

INT'L. LIVESTOCK REVENUE

14% growth YOY

1 Growth calculations are provided on an organic operational basis (a non-GAAP financial measure) which excludes the impact of

5 foreign exchange and certain significant acquisitions and divestitures, unless noted otherwise.

Understanding First Quarter 2026 Underlying Results

(millions of dollars)

U.S.

Organic Operational2

Divestitures

Operational1

Foreign Exchange

Reported Change

2025

2026

First Quarter

Companion animal

$865

$973

(11)%

Livestock

225

210

1,090

1,183

(8)%

International

Companion animal

654

568

15%

Livestock

495

417

19%

12%

(2)%

14%

1,149

985

17%

(1)%

10%

Total

Companion animal

1,519

1,541

(1)%

(4)%

Livestock

720

627

15%

10%

(2)%

12%

Contract manufacturing & human health

(23)%

(24)%

$2,262

$2,198

(1)%

1 Operational results (a non-GAAP financial measure) excludes the impact of foreign exchange.

6 2 Organic operational results (a non-GAAP financial measure) excludes the impact of foreign exchange and divestitures.

Effective January 1, 2026, Zoetis eliminated the one-month financial reporting lag by its subsidiaries operating outside of the U.S. and adjusted its year-end for all subsidiaries to December 31 (the "Fiscal Year Alignment").

Zoetis has retroactively applied the new accounting principle to prior financial statement periods, which will allow for a comparison of the financial results to historical operations.

For additional information on the Fiscal Year Alignment, including the recast of certain line items for the quarterly periods of 2025 and annual periods of 2024 and 2025, refer to the presentation of supplemental financial information on our website at https://investor.zoetis.com/financials/quarterly-results

First quarter 2026 revenue in the International Segment was positively impacted by approximately

$100 million that shifted from Q4 2025 to early 2026 as a result of the company's Fiscal Year Alignment. This approximately $100 million impact was driven by:

The timing of price increases in certain international markets referenced in the company's full-year 2025 results;

Delayed processing of customer orders referenced in the company's full-year 2025 results; and

Differences in the performance of the business when comparing Q4 2025 to a stronger Q4 2024.

FIRST QUARTER FINANCIAL RESULTS

Revised 2026 Guidance

Revenue

$9,680M - $9,960M

Adj. Net Income1

$2,870M - $2,950M

Adj. Diluted EPS1 Organic Operational Growth2

$6.85 - $7.00

KEY ASSUMPTIONS

2.0% - 5.0%

Revenue

2.0% - 6.0%

Adj. Net Income1

Our guidance is now incorporating the Fiscal Year Alignment for subsidiaries outside the U.S. effective Jan 1, 2026; adjusted year-end for all to Dec. 31

Captures current macro-pricing pressures and competitive headwinds, particularly on Companion Animal in developed markets, including the U.S.

Reflects sharpened commercial execution and cost management initiatives.

1 Adjusted net income (ANI) 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.

2 Organic operational results (a non-GAAP financial measure) excludes the impact of foreign exchange and certain acquisitions and divestitures.

Sharpening Commercial Execution

Targeted DTC activity, simplifying point-of-sale choices, ensuring convenient, authorized access across clinics, retail, and home delivery

In Livestock, reinforcing supply continuity to ensure demand is not constrained by availability

Accelerating Science-to-Scale Innovation

Shortening time from approval to launch and translating that into growth

External Business Development Opportunities

Strategic pursuit of opportunities to unlock new sources of growth over time

Capital Allocation & Cost Management

Comprehensive cost and productivity program to drive operational efficiencies

Simparica franchise revenue declined 1%1

U.S. impacted by softer vet clinic traffic, lower compliance trends, and a more competitive market backdrop

Despite a modest year over year decline in

Simparica Franchise Revenue

(Millions of dollars)

1Q Revenue YoY

share resulting from increased competition and promotional activity, our share in the clinic has improved sequentially versus the second half of last year

Simparica Trio remains the market leading canine parasiticide in the U.S., with puppy share well above patient share

Internationally, Simparica Trio continues to redefine the standard of care, driving the continued shift toward oral paras across key markets

1 Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.

$400

$300

$200

$100

$380 $385

(1)%1

1Q25 1Q26

Key dermatology franchise revenue declined 11%1

Pet owner price sensitivity and competition

had a compounding effect on performance in the

Key Derm Franchise Revenue

(Millions of dollars)

1Q Revenue YoY

quarter

Fewer patient visits are driving lower prescription volumes, impacting new patient starts and ongoing compliance

Long-acting Cytopoint remains on track for a 2026 U.S. approval

20M medicalized dogs worldwide remain untreated or under-treated, signaling potential for continued market expansion, driven by new patient growth

1 Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.

$400

$300

$200

$100

$377

$347

(11)%1

1Q25 1Q26

Revenue declined 8%1, driven by Librela and partially offset by growth in Solensia

U.S. Librela sales have stabilized sequentially, a meaningful indicator of improving dynamics

OA Pain mAb Franchise Revenue

(Millions of dollars)

(8)%1

1Q Revenue YoY

and confidence

Over 34 million doses of Librela have been distributed globally since our launch in 2021, representing extensive real-world clinical experience

Continued portfolio expansion with the launches of Lenivia and Portela in select International markets

$150

$100

$50

$145 $140

1 Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.

1Q25 1Q26

Companion Animal diagnostics revenue grew 10%1

International was a clear standout, reflecting

Companion Animal Diagnostics Revenue

(Millions of dollars)

10%1

1Q Revenue YoY

strong geographic expansion and increasing adoption of diagnostic tools in markets where the standard of care continues to evolve

Growth was driven by our reference labs and innovative franchises including

Vetscan Imagyst and Opticell

Spending remains resilient in areas tied to

urgent care and diagnostics

$120

$80

$40

$113

1 Organic operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange and certain acquisitions and divestitures.

$100

1Q25 1Q26

Revenue increased 12%1, with broad-based growth across geographies and species, driven by both price and volume

Favorable underlying market conditions

supported by strong global protein demand

U.S. performance driven by strong producer profitability in U.S. beef cattle and disease outbreak in U.S. poultry

International performance benefited from strong end-market demand, supply recovery and the timing of price increases

Livestock Revenue ex MFA

(Millions of dollars)

12%1

1Q Revenue YoY

$6192

$800

$600

$400

$720

$200

1 Organic operational results (a non-GAAP financial measure) excludes the impact of foreign exchange and certain acquisitions and divestitures.

2 Livestock revenue shown excludes MFA revenue of $8 million in 1Q25.

1Q25 1Q26

FIRST QUARTER FINANCIAL RESULTS

First Quarter

2026

2025

Change

(millions of dollars, except per share data)

Revenue

$2,262

$2,198

Reported Net Income

601

602

Reported Diluted Earnings Per Share

$1.42

$1.34

Adjusted Net Income1

646

633

Adjusted Diluted Earnings Per Share1

$1.53

$1.41

1 Adjusted net income 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.

First Quarter

(millions of dollars)

2026

2025

Change

Foreign Exchange

Operational1

Revenue

$2,262

$2,198

(1)%

Adjusted Cost of Sales2

638

617

(5)%

as a percent of revenue3

28.2%

28.1%

Adjusted SG&A Expenses2

585

565

Adjusted R&D Expenses2

179

162

10%

Adjusted Operating Expenses4

768

731

Effective Tax Rate on Adjusted Income2

20.7%

21.9%

Adjusted Net Income2

$646

$633

NA - Not applicable

1 Operational results (a non-GAAP financial measure) excludes the impact of foreign exchange.

2 Adjusted net income and its components (non-GAAP financial measures) are defined as reported GAAP net income and its components, excluding purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. Adjusted cost of sales, adjusted selling, general and administrative (SG&A) expenses and adjusted research and development (R&D) expenses are income statement line items prepared on the same basis, and, therefore, components of the overall adjusted income measure. Effective tax rate on adjusted income (a non-GAAP financial measure) equals the adjusted provision for taxes on income (a non-GAAP financial measure) divided by adjusted income before provision for taxes on income (a non-GAAP financial measure).

3 Adjusted gross margin (a non-GAAP financial measure) was 71.8% in the first quarter of 2026 and 71.9% in the first quarter of 2025.

4 Adjusted operating expenses (a non-GAAP financial measure) of $768 million in the first quarter of 2026 and $731 million in the first quarter of 2025 includes adjusted amortization of intangible assets of $4 million in the first quarter of 2026 and 2025.

First Quarter

(millions of dollars)

2026

2025

Change

Revenue

$1,090

$1,183

(8)%

Companion Animal

865

973

(11)%

Livestock

225

210

Cost of Sales

194

199

(3)%

Gross Profit

896

984

(9)%

Gross Margin

82.2%

83.2%

Operating Expenses

199

205

(3)%

Other (Income)/Deductions-net

Earnings1

$697

$779

(11)%

NA - Not applicable, **Calculation not meaningful

1 Defined as income before provision for taxes on income.

First Quarter

(millions of dollars)

2026

2025

Change

Foreign Exchange

Operational1

Revenue

$1,149

$985

17%

Companion Animal

654

568

15%

Livestock

495

417

19%

12%

Cost of Sales

334

295

13%

10%

Gross Profit

815

690

18%

11%

Gross Margin

70.9%

70.1%

Operating Expenses

175

163

Other (Income)/Deductions-net

Earnings2

$639

$527

21%

15%

NA - Not applicable, **Calculation not meaningful

1 Operational results (a non-GAAP financial measure) excludes the impact of foreign exchange.

2 Defined as income before provision for taxes on income.

First Quarter

(millions of dollars)

2026

2025

Change

Foreign Exchange

Operational1

Total International $1,149 $985 17% 8% 9%

Australia

13%

11%

Brazil

11%

12%

(1)%

Canada

Chile

China

15%

10%

France

(5)%

(14)%

Germany

11%

(4)%

Italy

30%

16%

14%

Japan

(4)%

13%

Mexico

37%

17%

20%

Spain

38%

16%

22%

United Kingdom

(2)%

Other Developed Markets

169

133

27%

11%

16%

Other Emerging Markets

291

238

22%

19%

1 Operational results (a non-GAAP financial measure) excludes the impact of foreign exchange. Note: operational revenue results is not reflective of organic operational results.

Based on current operating environment and presentation of financials for Fiscal Year Alignment

Full Year 2026 as of May 7, 2026

Selected Line Items (millions of dollars, except per share amounts)

Revenue

Organic operational growth1

$9,680 to $9,960

2% to 5%

Adjusted cost of sales as a percentage of revenue2 Approximately 28.5%

Adjusted SG&A expenses2 $2,350 to $2,400

Adjusted R&D expenses2 $735 to $745

Adjusted interest expense and other (income)/deductions-net2 Approximately $215

Effective tax rate on adjusted income2 Approximately 20.5%

Adjusted diluted EPS2 $6.85 to $7.00

Adjusted net income2

Organic operational growth1,3

$2,870 to $2,950

2% to 6%

Certain significant items and acquisition and divestiture-related costs4 Approximately $100

Reported diluted EPS $6.35 to $6.50

The guidance reflects foreign exchange rates as of April 24, 2026 and includes the assumed impacts as a result of fluctuations in foreign exchange rates relative to the U.S. dollar compared to weighted average foreign exchange rates from 2025, as noted above.

1 Organic operational results (a non-GAAP financial measure) excludes the impact of foreign exchange and certain acquisitions and divestitures.

2 Adjusted net income and its components and adjusted diluted EPS are defined as reported 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 selling, general and administrative (SG&A) expenses, adjusted research and development (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. Effective tax rate on adjusted income (a non-GAAP financial measure) equals the adjusted provision for taxes on income (a non-GAAP financial measure) divided by adjusted income before provision for taxes on income (a non-GAAP financial measure). Adjusted net income and its components, adjusted diluted EPS, and the effective tax rate on adjusted net income, 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.

3 We do not provide a reconciliation of forward-looking non-GAAP adjusted net income operational growth to the most directly comparable GAAP reported financial measure because we are unable to calculate with reasonable certainty the foreign exchange impact of unusual gains and losses, acquisition-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 GAAP reported results for the guidance period.

4 Primarily includes certain nonrecurring (income)/costs, net related to acquisitions, divestitures and other charges.

Q&A

Appendix

(millions of dollars)

Revenue by Product Category

2026

2025

Change

Foreign

Exchange

Operational1

Divestitures

Organic

Operational2

First Quarter

Key Dermatology

347

377

(8)%

(11)%

Key Dermatology (international)

131

128

(5)%

OA Pain mAbs

140

145

(3)%

(8)%

OA Pain mAbs (international)

(2)%

Companion animal diagnostics

113

100

13%

10%

Small animal vaccines (international)

21%

13%

International

Librela

101

109

(7)%

(13)%

Librela (international)

10%

(7)%

Solensia

11%

Solensia (international)

17%

10%

Simparica franchise

385

380

(1)%

Simparica franchise (international)

147

120

23%

14%

Simparica Trio

297

295

(1)%

Simparica Trio (international)

38%

29%

Simparica

(3)%

Simparica (international)

1 Operational results (a non-GAAP financial measure) excludes the impact of foreign exchange.

2 Organic operational results (a non-GAAP financial measure) excludes the impact of foreign exchange and certain acquisitions and divestitures.

Reported Results to Organic Operational Results

First Quarter

2026

2025

Change

Foreign Organic

Exchange Operational1 Divestitures Operational2

(millions of dollars, except per share data)

Adjusted diluted EPS

1.53

1.41

1 Operational results (a non-GAAP financial measure) excludes the impact of foreign exchange.

2 Organic operational results (a non-GAAP financial measure) excludes the impact of foreign exchange and certain acquisitions and divestitures.

Disclaimer

Zoetis Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 11:15 UTC.