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Zoetis Inc. (NYSE: ZTS) trims 2026 guidance as Q2 net income falls 5%

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Zoetis Inc. reported second-quarter 2026 revenue of $2,468 million, essentially flat versus the prior year and down 1% on an organic operational basis. Net income was $691 million, or $1.65 per diluted share, down 5% and up 1%, respectively, on a reported basis. Adjusted net income was $781 million and adjusted diluted EPS $1.87, down 1% and up 5% on a reported basis and down 2% and up 4% on an organic operational basis.

U.S. revenue fell 7% to $1,266 million, with companion animal sales down 11% amid softer clinic demand, price sensitivity and generic competition, partly offset by 23% growth in U.S. livestock. International revenue rose 8% to $1,173 million, driven by parasiticides, diagnostics and new osteoarthritis monoclonal antibody launches.

Zoetis updated its 2026 outlook, now guiding to revenue of $9.120–$9.320 billion (organic operational revenue growth of (3)% to (1)%), reported net income of $2.330–$2.380 billion, adjusted net income of $2.570–$2.620 billion (organic operational growth of (9)% to (5)%), reported diluted EPS of $5.55–$5.65 and adjusted diluted EPS of $6.15–$6.25, compared with prior adjusted EPS guidance of $6.85–$7.00.

Positive

  • None.

Negative

  • 2026 outlook cut: revenue guidance reduced to $9.120–$9.320 billion with organic operational revenue now expected to decline (3)% to (1)%, versus prior guidance of 2% to 5% organic operational growth on $9.680–$9.960 billion revenue.
  • Profit guidance reduced: 2026 adjusted diluted EPS lowered to $6.15–$6.25 from $6.85–$7.00, with adjusted net income organic operational growth revised to (9)% to (5)% from a prior range of 2% to 6%.

Filing Explained

The completed VitalRADS acquisition adds teleradiology capabilities to Zoetis’s diagnostics business.

The filing is a Form 8-K, used to report specified material events within four business days; its second-quarter results and 2026 guidance are furnished, and the release says they are not deemed filed for Section 18 purposes.

Within that disclosure, Zoetis reports that it completed the acquisition of VitalRADS in July. The completed acquisition adds a cloud-based teleradiology platform and extends diagnostics capabilities beyond in-vitro testing into veterinary imaging interpretation.

The filing defines organic operational results as excluding foreign exchange and certain acquisitions and divestitures, while adjusted measures exclude purchase-accounting adjustments, acquisition and divestiture-related costs, and certain significant items.

Relative to the May 7 guidance, the full-year revenue range is now $9.120 billion to $9.320 billion, and adjusted diluted EPS is $6.15 to $6.25.

The filing cautions that its non-GAAP measures are not substitutes for GAAP measures and should not be treated as measures of liquidity.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Q2 2026 Revenue $2,468 million Three months ended June 30, 2026; essentially flat versus $2,474 million in Q2 2025
Q2 2026 Net Income $691 million Three months ended June 30, 2026; decreased 5% year over year
Q2 2026 Diluted EPS $1.65 Earnings per share attributable to Zoetis—diluted; up 1% from $1.63 in Q2 2025
Q2 2026 Adjusted Net Income $781 million Non-GAAP adjusted net income; down 1% reported and 2% on an organic operational basis
2026 Revenue Guidance $9,120–$9,320 million Full year 2026 guidance as of August 6, 2026; organic operational revenue growth (3)% to (1)%
2026 Adjusted Diluted EPS Guidance $6.15–$6.25 Full year 2026 adjusted diluted EPS guidance; prior guidance $6.85–$7.00
Six-Month 2026 Revenue $4,730 million Six months ended June 30, 2026; up 1% versus $4,672 million in 2025
U.S. Companion Animal Q2 2026 Revenue $1,044 million U.S. companion animal revenue in Q2 2026; decreased 11% year over year
organic operational results financial
"Revenue and Adjusted Net Income Declined 1% and 2%, Respectively, on an Organic Operational basis"
adjusted diluted EPS financial
"Adjusted Net Income of $781 Million, or Adjusted Diluted EPS of $1.87"
Adjusted diluted EPS is a company’s profit per share after adding back or removing one-time items (like restructuring costs or gains) and dividing by the number of shares including potential shares from options and convertible securities. Investors use it as a cleaner view of ongoing earnings—like looking at a car’s regular fuel efficiency rather than a trip boosted by downhill coasting—to judge underlying performance and compare companies without temporary distortions.
New World screwworm medical
"With New World screwworm now confirmed in the United States, Zoetis has been well prepared"
teleradiology medical
"acquisition of VitalRADS, a veterinary teleradiology services platform"
Teleradiology is the practice of sending medical images—like X-rays, CT scans, and MRIs—digitally to radiologists who read and report them from a different location, much like emailing photos to a remote expert for a second opinion. It matters to investors because it can reduce healthcare costs, expand services to underserved areas, and create scalable revenue streams for technology and service providers, while also exposing businesses to regulation, data-security, and reimbursement risks.
enterprise resource planning (ERP) system technical
"multi-year business process transformation program, which includes the implementation of a new enterprise resource planning (ERP) system"
An enterprise resource planning (ERP) system is an integrated software platform that brings together a company's core operations—accounting, inventory, sales, purchasing, and human resources—into a single, shared system, replacing disconnected spreadsheets and standalone apps. For investors, an ERP matters because it can improve efficiency, reduce errors, and provide real-time financial and operational data that supports better forecasts and faster growth, while implementation costs and transition risk can affect short-term results.
Q2 2026 revenue $2,468 million Essentially flat versus Q2 2025 revenue of $2,474 million; decreased 1% on an organic operational basis
Q2 2026 net income $691 million Decreased 5% year over year; diluted EPS increased 1% to $1.65
Q2 2026 adjusted net income $781 million Decreased 1% on a reported basis and 2% on an organic operational basis; adjusted diluted EPS rose to $1.87
Six-month 2026 net income $1,292 million Decreased 3% versus $1,328 million for the six months ended June 30, 2025
Guidance

Updated 2026 guidance: revenue of $9.120–$9.320 billion (organic operational revenue growth of (3)% to (1)%); reported net income of $2.330–$2.380 billion; adjusted net income of $2.570–$2.620 billion (organic operational growth of (9)% to (5)%); reported diluted EPS of $5.55–$5.65; adjusted diluted EPS of $6.15–$6.25, versus prior adjusted EPS guidance of $6.85–$7.00.

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FAQ

How did Zoetis (ZTS) perform financially in Q2 2026?
Zoetis reported Q2 2026 revenue of $2,468 million, essentially flat year over year. Net income was $691 million, down 5%, while diluted EPS rose to $1.65. Adjusted net income was $781 million and adjusted diluted EPS was $1.87.

How did Zoetis (ZTS) segment performance differ in Q2 2026?
In Q2 2026, U.S. revenue fell 7% to $1,266 million, with companion animal sales down 11% and livestock up 23%. International revenue grew 8% to $1,173 million, supported by parasiticides, diagnostics and new osteoarthritis monoclonal antibody products.

How did Zoetis (ZTS) revise its full-year 2026 financial guidance?
Zoetis now expects 2026 revenue of $9.120–$9.320 billion, implying organic operational revenue growth of (3)% to (1)%. It guides to adjusted net income of $2.570–$2.620 billion and adjusted diluted EPS of $6.15–$6.25, below its prior outlook.

What non-GAAP measures did Zoetis (ZTS) highlight for Q2 2026?
Zoetis emphasized adjusted net income of $781 million and adjusted diluted EPS of $1.87. On an organic operational basis, revenue declined 1% and adjusted net income declined 2%. The company uses adjusted and organic operational results to assess underlying performance.

How did Zoetis (ZTS) U.S. companion animal and livestock businesses perform?
In Q2 2026, U.S. companion animal revenue decreased 11% to $1,044 million, pressured by softer demand and competition. U.S. livestock revenue grew 23% to $222 million, supported by favorable cattle economics, supply timing and increased poultry vaccine sales.

What strategic initiatives and approvals did Zoetis (ZTS) report in this period?
Zoetis highlighted more than 12 potential blockbuster pipeline candidates, EU approval of Poulvac Procerta HVT-ND, launches of OA pain treatments Lenivia and Portela, FDA conditional approval for Dectomax-CA1, and the acquisition of VitalRADS to expand diagnostics.
0001555280false00015552802026-08-062026-08-06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): August 6, 2026
Zoetis Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3579746-0696167
(State or other jurisdiction(Commission File(I.R.S. Employer
of incorporation)Number)Identification No.)
10 Sylvan Way
Parsippany
New Jersey
07054
(Address of principal executive offices)(Zip Code)

(973) 822-7000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐    Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareZTSNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

                                     Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐







Item 2.02 Results of Operations and Financial Condition

On August 6, 2026, Zoetis Inc. (the Company) issued a press release reporting its financial results for the second quarter of 2026 and its guidance for full year 2026. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 2.02 and the attached Exhibit 99.1 is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits

(d)    Exhibits
Exhibit No.Description
99.1
Press Release of Zoetis Inc. dated August 6, 2026, reporting Zoetis' financial results for the  
second quarter of 2026 and its guidance for full year 2026.
EX-101.INSInline XBRL INSTANCE DOCUMENT
EX-101.SCHInline XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CALInline XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT
EX-101.LABInline XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT
EX-101.PREInline XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT
EX-101.DEFInline XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)




SIGNATURE
Under the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the authorized undersigned.
Zoetis Inc.
August 6, 2026
By:/S/ WETTENY JOSEPH
Wetteny Joseph
Executive Vice President and
Chief Financial Officer



EXHIBIT 99.1
zoetisca04a01a01a01a01a18.jpg

Zoetis Announces Second Quarter 2026 Results

•Revenue Flat at $2.5 Billion and Net Income of $691 Million, or $1.65 per Diluted Share, Decreasing 5% and Increasing 1%, Respectively, on a Reported Basis
•Adjusted Net Income of $781 Million, or Adjusted Diluted EPS of $1.87
•Revenue and Adjusted Net Income Declined 1% and 2%, Respectively, on an Organic Operational Basis
•Revises Full Year 2026 Revenue Guidance to $9.120 - $9.320 Billion to Organic Operational Revenue Growth of (3)% to (1)%
•Revises Full Year 2026 Adjusted Net Income Guidance to Organic Operational Growth of (9)% to (5)%
•Revises Guidance for Adjusted Diluted EPS to $6.15 - $6.25

PARSIPPANY, N.J. – August 6, 2026 – Zoetis Inc. (NYSE:ZTS), the world's leading animal health company, today reported its financial results for the second quarter of 2026.

The company reported revenue of $2.5 billion for the second quarter of 2026, flat compared with the second quarter of 2025, decreasing 1% on an organic operational1 basis. Net income for the second quarter of 2026 was $691 million, or $1.65 per diluted share, decreasing 5% and growing 1%, respectively, on a reported basis.

Adjusted net income2 for the second quarter of 2026 was $781 million, or $1.87 per diluted share, decreasing 1% and increasing 5%, respectively, on a reported basis, decreasing 2% and increasing 4%, respectively, on an organic operational basis. Adjusted net income for the second quarter of 2026 excludes the net impact of $90 million for purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items.

"Second quarter results reflected a more pressured Companion Animal market, as lower clinic visits and pet owner price sensitivity reduced demand across parts of our portfolio and heightened competition in key categories," said Kristin Peck, Chief Executive Officer at Zoetis. "At the same time, these dynamics reinforce the enduring attractiveness of the markets Zoetis has helped define and advance. We are adapting our commercial strategy to the marketplace in front of us, deploying targeted investments, accelerating innovation, and pursuing business development to strengthen our position in areas aligned with the future of animal health. We also continue to benefit from the breadth of our diversified portfolio, including strength in Livestock and Diagnostics. As we advance our robust pipeline, including more than 12 potential blockbusters over the coming years, we are acting with urgency and
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remain confident in the long-term fundamentals of animal health and in Zoetis' ability to compete, lead, and create shareholder value."

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 second quarter of 2026:
•Revenue in the U.S. segment totaled $1.3 billion, decreasing 7% on both a reported and an organic operational basis relative to the second quarter of 2025. Companion animal product sales decreased 11% due to continued softer end-market demand. The company's key dermatology franchise and Simparica Trio® faced persistent macro-driven price sensitivity and heightened competitive pressure. Also contributing to the decline was the impact of generic competition on the Cerenia® and Convenia® brands, as well as lower sales of Librela®. Sales of livestock products increased 23% on both a reported and organic operational basis in the quarter, supported by strength across cattle and poultry. Cattle performance was underpinned by favorable producer economics in beef cattle and supply timing. Poultry performance benefited from increased vaccine sales tied to disease outbreak activity.

•Revenue in the International segment was $1.2 billion, increasing 8% on a reported basis and 6% on an organic operational basis compared with the second quarter of 2025. Companion animal product sales grew 8% on a reported basis and 5% on an organic operational basis, led by the company's parasiticides portfolio, including Simparica Trio, along with contributions from Revolution® and Stronghold®. Also contributing to growth was companion animal diagnostics, as well as osteoarthritis (OA) pain with the launch of Lenivia® and Portela™, the company's long-acting monoclonal antibody pain products that provide dogs and cats with up to three months of pain relief. These gains were partially offset by lower sales of key dermatology products as well as challenging market conditions impacting the broader portfolio. Sales of livestock products grew 8% on a reported basis and 6% on an organic operational basis, driven by growth in cattle and poultry.

INVESTMENTS IN GROWTH
Zoetis continued to advance innovation across its diversified portfolio, including a pipeline with more than 12 potential blockbuster3 candidates in areas such as chronic kidney disease, oncology, cardiology, anxiety and obesity. During the quarter, the company advanced major-market approvals, expanded access to industry-leading treatments in new geographies, enhanced diagnostics capabilities, and delivered solutions to support customers facing emerging and transboundary infectious disease threats. Together, these efforts reflect Zoetis' focus on translating science, global scale and customer insights into solutions that improve the health of companion animals and livestock around the world.
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Delivering on Commitment to Innovation
Zoetis is executing on its commitment to deliver a significant approval in a major market every year for the next several years. In July, the company received marketing authorization from the European Commission for Poulvac® Procerta® HVT-ND. This approval reinforces Zoetis’ focus on ensuring a stable and reliable protein supply, helping protect poultry production against Newcastle and Marek’s disease.

Lenivia and Portela, long-acting monoclonal antibody therapies providing dogs and cats with up to three months of OA pain relief from a single injection, launched in Canada and the EU and were approved in Great Britain. Lenivia was also approved in Switzerland.

Supporting Prevention and Treatment of New World Screwworm
With New World screwworm now confirmed in the United States, Zoetis has been well prepared to support customers’ prevention and treatment strategies. Dectomax®-CA1, the first parasite control product to receive FDA conditional approval for the prevention and treatment of New World screwworm myiasis in beef cattle, together with Dectomax®, received emergency use authorization in the U.S. for prevention of infestations in swine, sheep, deer, horses, lactating and dry dairy cows, and dairy replacement heifers. This response underscores Zoetis’ long-standing support for a One Health approach and its ability to deliver targeted solutions when disease threats affect animals, customers, and the broader food supply.

Additional approvals from the quarter include:
•Vanguard® crLyme received a label update in the U.S. for effectiveness against subclinical arthritis caused by Borrelia burgdorferi, representing a significant pipeline acceleration.
•Bonqat®, an oral medication to help alleviate acute anxiety and fear associated with transportation and veterinary visits in cats, was approved in China.
•Synovex® One Grower gained an expanded label approval in the U.S. to increase the rate of weight gain in growing beef steers and heifers in dry lots or on pasture with insufficient forage.
•Suvaxyn® PRRS Needle-Free Microdose, a vaccine that helps prevent porcine reproductive and respiratory syndrome, was approved in the EU. This approval includes a needle free intramuscular administration claim and a new multidose presentation.
•Fostera® Gold PVC MH Flex, a vaccine to help prevent infection from Mycoplasma hyopneumoniae and Porcine circovirus, was approved in Japan.

Accelerating Diagnostics Capabilities
In July, Zoetis completed the acquisition of VitalRADS, a veterinary teleradiology services platform. This milestone advances Zoetis’ strategic pursuit of opportunities that unlock new sources of growth by expanding its Global Diagnostics offering with around-the-clock access to board-certified veterinary specialists through a cloud-based teleradiology platform. The acquisition will extend Zoetis’ capabilities
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beyond in-vitro testing into veterinary imaging interpretation and advance its vision of a more complete end-to-end Virtual Reference Lab.

Zoetis also expanded the capabilities of Vetscan Opticell™, making it the first and only point of care hematology analyzer to offer cellular hemoglobin mean – previously available only in reference laboratories. This expansion adds greater diagnostic depth in clinics and delivers value to veterinary teams through time, cost, and space savings.

Together, these investments strengthen Zoetis’ diagnostics capabilities and reinforce the company’s differentiated position in animal health with scale across both diagnostics and therapeutics.

Advancing Sustainability in Animal Health for a Better Future
In June, Zoetis published its 2025 Sustainability Report, marking the completion of its initial Driven to Care aspirations set in 2021 and introducing the strategy’s next phase, with an even sharper focus across Communities, Animals and the Planet. The report also highlighted that the Zoetis Foundation fulfilled its commitment to distribute $35 million in grants from 2021 to 2025, helping strengthen the animal health ecosystem by advancing opportunities for veterinary professionals and livestock farmers.

FINANCIAL GUIDANCE
Zoetis is providing updated guidance based on the current operating environment.
•Revenue of $9.120 billion to $9.320 billion (organic operational growth of (3)% to (1)%)
•Reported net income of $2.330 billion to $2.380 billion
•Adjusted net income of $2.570 billion to $2.620 billion (organic operational growth of (9)% to (5)%)
•Reported diluted EPS of $5.55 to $5.65
•Adjusted diluted EPS of $6.15 to $6.25
This guidance reflects foreign exchange rates as of July 21, 2026. Additional details on guidance 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 today at 8:30 a.m. ET to review second 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 producers, and pet owners in over 100 countries. We integrate deep scientific expertise, data-driven
4 |

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.
3 A blockbuster has annual sales of at least $100 million.
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.

5 |

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 AlbanoSteve Frank
1-862-399-0810 (o)1-973-822-7141 (o)
jennifer.albano@zoetis.comsteve.frank@zoetis.com
Laura PanzaNick 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
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ZOETIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(millions of dollars, except per share data)
Three Months EndedSix Months Ended
June 30,June 30,
20262025% Change20262025% Change
Revenue$2,468 $2,474 —$4,730 $4,672 1
Costs and expenses:
Cost of sales673 664 11,314 1,282 2
Selling, general and administrative expenses592 614 (4)1,180 1,188 (1)
Research and development expenses173 166 4353 328 8
Amortization of intangible assets31 33 (6)62 65 (5)
Restructuring charges and certain acquisition and divestiture-related costs77 30 *99 30 *
Interest expense, net of capitalized interest61 53 15123 107 15
Other (income)/deductions–net(5)2 *(25)(13)92
Income before provision for taxes on income866 912 (5)1,624 1,685 (4)
Provision for taxes on income175 186 (6)332 357 (7)
Net income before allocation to noncontrolling interests691 726 (5)1,292 1,328 (3)
Less: Net income/(loss) attributable to noncontrolling interests— — *— — *
Net income attributable to Zoetis Inc.$691 $726 (5)$1,292 $1,328 (3)
Earnings per share attributable to Zoetis—basic$1.65 $1.63 1$3.08 $2.98 3
Earnings per share attributable to Zoetis—diluted$1.65 $1.63 1$3.08 $2.97 4
Weighted-average shares used to calculate earnings per share
Basic417.6 445.1 419.9 446.3 
Diluted417.7 445.5 420.1 446.7 
* Calculation not meaningful.

7 |

ZOETIS INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars, except per share data)
Three Months Ended June 30, 2026
GAAP ReportedPurchase Accounting Adjustments
Acquisition and Divestiture- Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(a)
Cost of sales$673 $(1)$— $(3)$669 
Gross profit1,795 1 — 3 1,799 
Selling, general and administrative expenses592 (3)— (3)586 
Amortization of intangible assets31 (26)— — 5 
Restructuring charges and certain acquisition and divestiture-related costs77 — (2)(75)— 
Income before provision for taxes on income866 30 2 81 979 
Provision for taxes on income175 6 — 17 198 
Net income attributable to Zoetis691 24 2 64 781 
Earnings per common share attributable to Zoetis–diluted1.65 0.06 — 0.16 1.87 
Three Months Ended June 30, 2025
GAAP ReportedPurchase Accounting Adjustments
Acquisition and Divestiture- Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(a)
Cost of sales$664 $(1)$— $(2)$661 
Gross profit1,810 1 — 2 1,813 
Selling, general and administrative expenses614 (2)— (9)603 
Research and development expenses166 (1)— — 165 
Amortization of intangible assets33 (29)— — 4 
Restructuring charges and certain acquisition and divestiture-related costs30 — (1)(29)— 
Other (income)/deductions–net2 — — (8)(6)
Income before provision for taxes on income912 33 1 48 994 
Provision for taxes on income186 8 — 9 203 
Net income attributable to Zoetis726 25 1 39 791 
Earnings per common share attributable to Zoetis–diluted1.63 0.06 — 0.09 1.78 
(a) Non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS. Despite the importance of these measures to management in goal setting and performance measurement, non-GAAP adjusted net income and its components and non-GAAP 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, non-GAAP adjusted net income and its components and non-GAAP 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. Non-GAAP adjusted net income and its components, and non-GAAP adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance.
See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).
8 |

ZOETIS INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars, except per share data)
Six Months Ended June 30, 2026
GAAP ReportedPurchase Accounting Adjustments
Acquisition and Divestiture- Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(a)
Cost of sales$1,314 $(2)$— $(5)$1,307 
Gross profit3,416 2 — 5 3,423 
Selling, general and administrative expenses1,180 (2)— (7)1,171 
Research and development expenses353 (1)— — 352 
Amortization of intangible assets62 (53)— — 9 
Restructuring charges and certain acquisition and divestiture-related costs99 — (4)(95)— 
Other (income)/deductions–net(25)— — (1)(26)
Income before provision for taxes on income1,624 58 4 108 1,794 
Provision for taxes on income332 13 1 21 367 
Net income attributable to Zoetis1,292 45 3 87 1,427 
Earnings per common share attributable to Zoetis–diluted3.08 0.11 — 0.21 3.40 
Six Months Ended June 30, 2025
GAAP ReportedPurchase Accounting Adjustments
Acquisition and Divestiture- Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(a)
Cost of sales$1,282 $(2)$— $(2)$1,278 
Gross profit3,390 2 — 2 3,394 
Selling, general and administrative expenses1,188 (5)— (15)1,168 
Research and development expenses328 (1)— — 327 
Amortization of intangible assets65 (57)— — 8 
Restructuring charges and certain acquisition and divestiture-related costs30 — (1)(29)— 
Other (income)/deductions–net(13)— — (8)(21)
Income before provision for taxes on income1,685 65 1 54 1,805 
Provision for taxes on income357 15 — 9 381 
Net income attributable to Zoetis1,328 50 1 45 1,424 
Earnings per common share attributable to Zoetis–diluted2.97 0.12 — 0.10 3.19 
(a) Non-GAAP adjusted net income and its components and non-GAAP adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS. Despite the importance of these measures to management in goal setting and performance measurement, non-GAAP adjusted net income and its components and non-GAAP 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, non-GAAP adjusted net income and its components and non-GAAP 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. Non-GAAP adjusted net income and its components, and non-GAAP adjusted diluted EPS are presented solely to permit investors to more fully understand how management assesses performance.
See Notes to Reconciliation of GAAP Reported to Non-GAAP Adjusted Information for notes (1) and (2).

9 |

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 EndedSix Months Ended
June 30,June 30,
2026202520262025
Acquisition-related costs(a)
$2 $1 $4 $1 
Total acquisition and divestiture-related costs—pre-tax2 1 4 1 
Income taxes(b)
— — 1 — 
Total acquisition and divestiture-related costs—net of tax$2 $1 $3 $1 
(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 Months EndedSix Months Ended
June 30,June 30,
2026202520262025
Other restructuring charges and cost-reduction/productivity initiatives(a)
$75 $7 $95 $7 
Business process transformation program(b)
6 11 11 18 
Certain asset impairment charges(c)
— 27 — 27 
Net loss on sale of business(d)
— 3 — 3 
Other— — 2 (1)
Total certain significant items—pre-tax81 48 108 54 
Income taxes(e)
17 9 21 9 
Total certain significant items—net of tax$64 $39 $87 $45 
(a)    For the three and six months ended June 30, 2026, primarily driven by employee termination costs under a comprehensive cost and productivity program, with the six-month period also reflecting employee termination costs from additional organizational structure refinements.
For the three and six months ended June 30, 2025, primarily consisted of employee termination costs 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)    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.



10 |

ZOETIS INC.
ADJUSTED SELECTED COSTS, EXPENSES AND INCOME(a)
(UNAUDITED)
(millions of dollars)
Three Months Ended
June 30,% Change
20262025Reported ChangeForeign Exchange
Operational(b)
Divestitures
Organic Operational(c)
Adjusted cost of sales$669 $661 1 %3 %(2)%
as a percent of revenue27.1 %26.7 %NANANA
Adjusted SG&A expenses586 603 (3)%1 %(4)%
Adjusted R&D expenses173 165 5 %1 %4 %
Adjusted net income781 791 (1)%1 %(2)%— %(2)%
Six Months Ended
June 30,% Change
20262025Reported ChangeForeign Exchange
Operational(b)
Divestitures
Organic Operational(c)
Adjusted cost of sales$1,307 $1,278 2 %6 %(4)%
as a percent of revenue27.6 %27.4 %NANANA
Adjusted SG&A expenses1,171 1,168 — %2 %(2)%
Adjusted R&D expenses352 327 8 %2 %6 %
Adjusted net income1,427 1,424 — %1 %(1)%— %(1)%
(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.
11 |

ZOETIS INC.
2026 GUIDANCE

Selected Line Items
(millions of dollars, except per share amounts)
Full Year 2026
 as of August 6, 2026
Full Year 2026
 as of May 7, 2026
(Prior Guidance)
Revenue$9,120 to $9,320$9,680 to $9,960
   Organic operational results(a)
(3)% to (1)%2% to 5%
Adjusted cost of sales as a percentage of revenue(b)
Approximately 29.0%Approximately 28.5%
Adjusted SG&A expenses(b)
$2,330 to $2,380$2,350 to $2,400
Adjusted R&D expenses(b)
$720 to $730$735 to $745
Adjusted interest expense and other (income)/deductions-net(b)
Approximately $215Approximately $215
Effective tax rate on adjusted income(b)
Approximately 20.5%Approximately 20.5%
Adjusted diluted EPS(b)
$6.15 to $6.25$6.85 to $7.00
Adjusted net income(b)
$2,570 to $2,620$2,870 to $2,950
   Organic operational results(a)(c)
(9)% to (5)%2% to 6%
Certain significant items and acquisition and divestiture-related costs(d)
Approximately $150Approximately $100
Reported diluted EPS$5.55 to $5.65$6.35 to $6.50
The guidance reflects foreign exchange rates as of July 21, 2026.
Reconciliations of 2026 reported guidance to 2026 adjusted guidance follows:
(millions of dollars, except per share amounts)Reported
Certain significant items and acquisition and divestiture-related costs(d)
Purchase accounting
Adjusted(b)
Cost of sales as a percentage of revenue~ 29.2%~ (0.2%)~ 29.0%
SG&A expenses$2,350 to $2,400~ $(12)~ $(8)$2,330 to $2,380
R&D expenses$722 to $732~ $(2)$720 to $730
Interest expense and other (income)/deductions-net~ $215~ $215
Effective tax rate~ 20.6%~ (0.1%)~ 20.5%
Diluted EPS$5.55 to $5.65~ $0.38~ $0.22$6.15 to $6.25
Net income attributable to Zoetis$2,330 to $2,380~ $150~ $90$2,570 to $2,620
(a)    Organic operational results (a non-GAAP financial measure) excludes 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.
12 |

ZOETIS INC.
CONSOLIDATED REVENUE BY SEGMENT(a) AND SPECIES
(UNAUDITED)
(millions of dollars)
Three Months Ended
June 30,% Change
20262025Reported ChangeForeign Exchange
Operational(b)
Divestitures
Organic Operational(c)
Revenue:
Companion Animal$1,708 $1,790 (5)%1 %(6)%— %(6)%
Livestock731 651 12 %2 %10 %(1)%11 %
Contract Manufacturing & Human Health29 33 (12)%1 %(13)%— %(13)%
Total Revenue$2,468 $2,474 — %2 %(2)%(1)%(1)%
U.S.:
Companion Animal$1,044 $1,176 (11)%— %(11)%— %(11)%
Livestock222 180 23 %— %23 %— %23 %
Total U.S. Revenue$1,266 $1,356 (7)%— %(7)%— %(7)%
International:
Companion Animal$664 $614 8 %3 %5 %— %5 %
Livestock509 471 8 %4 %4 %(2)%6 %
Total International Revenue$1,173 $1,085 8 %3 %5 %(1)%6 %
Companion Animal:
Dogs and Cats$1,634 $1,719 (5)%1 %(6)%
Horses74 71 4 %1 %3 %
Total Companion Animal Revenue$1,708 $1,790 (5)%1 %(6)%
Livestock:
Cattle$390 $323 21 %3 %18 %
Swine117 118 (1)%2 %(3)%
Poultry115 104 11 %1 %10 %
Fish83 81 2 %4 %(2)%
Sheep and other26 25 4 %8 %(4)%
Total Livestock Revenue$731 $651 12 %2 %10 %
(a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K.
(b) Operational revenue results (a non-GAAP financial measure) is defined as revenue results excluding the impact of foreign exchange.
(c) 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.
13 |

ZOETIS INC.
CONSOLIDATED REVENUE BY SEGMENT(a) AND SPECIES
(UNAUDITED)
(millions of dollars)
Six Months Ended
June 30,% Change
20262025Reported ChangeForeign Exchange
Operational(b)
Divestitures
Organic Operational(c)
Revenue:
Companion Animal$3,227 $3,331 (3)%2 %(5)%— %(5)%
Livestock1,451 1,278 14 %4 %10 %(1)%11 %
Contract Manufacturing & Human Health52 63 (17)%1 %(18)%— %(18)%
Total Revenue$4,730 $4,672 1 %2 %(1)%— %(1)%
U.S.:
Companion Animal$1,909 $2,149 (11)%— %(11)%— %(11)%
Livestock447 390 15 %— %15 %— %15 %
Total U.S. Revenue$2,356 $2,539 (7)%— %(7)%— %(7)%
International:
Companion Animal$1,318 $1,182 12 %6 %6 %— %6 %
Livestock1,004 888 13 %5 %8 %(2)%10 %
Total International Revenue$2,322 $2,070 12 %5 %7 %(1)%8 %
Companion Animal:
Dogs and Cats$3,077 $3,196 (4)%2 %(6)%
Horses150 135 11 %3 %8 %
Total Companion Animal Revenue$3,227 $3,331 (3)%2 %(5)%
Livestock:
Cattle$782 $664 18 %4 %14 %
Swine240 223 8 %4 %4 %
Poultry233 210 11 %2 %9 %
Fish149 136 10 %7 %3 %
Sheep and other47 45 4 %7 %(3)%
Total Livestock Revenue$1,451 $1,278 14 %4 %10 %
(a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K.
(b) Operational revenue results (a non-GAAP financial measure) is defined as revenue results excluding the impact of foreign exchange.
(c) 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 |

ZOETIS INC.
CONSOLIDATED REVENUE BY KEY INTERNATIONAL MARKETS
(UNAUDITED)
(millions of dollars)

Three Months Ended
June 30,% Change
20262025Reported ChangeForeign ExchangeDivestitures
Organic Operational(a)
Total International$1,173 $1,085 8 %3 %(1)%6 %
Australia94 83 13 %11 %— %2 %
Brazil103 93 11 %11 %— %— %
Canada72 71 1 %— %(5)%6 %
Chile34 34 — %— %— %— %
China62 67 (7)%7 %— %(14)%
France40 42 (5)%3 %— %(8)%
Germany69 57 21 %2 %— %19 %
Italy40 37 8 %1 %— %7 %
Japan41 43 (5)%(11)%— %6 %
Mexico47 39 21 %15 %— %6 %
Spain43 40 8 %2 %(1)%7 %
United Kingdom72 81 (11)%(1)%(1)%(9)%
Other developed markets187 175 7 %3 %— %4 %
Other emerging markets269 223 21 %1 %(1)%21 %
Six Months Ended
June 30,% Change
20262025Reported ChangeForeign ExchangeDivestitures
Organic Operational(a)
Total International$2,322 $2,070 12 %5 %(1)%8 %
Australia183 162 13 %11 %— %2 %
Brazil193 174 11 %11 %— %— %
Canada145 141 3 %3 %(6)%6 %
Chile72 69 4 %2 %— %2 %
China125 122 2 %5 %— %(3)%
France77 81 (5)%6 %— %(11)%
Germany128 112 14 %6 %— %8 %
Italy79 67 18 %8 %(1)%11 %
Japan76 75 1 %(8)%— %9 %
Mexico95 74 28 %16 %— %12 %
Spain83 69 20 %7 %(1)%14 %
United Kingdom150 155 (3)%3 %(1)%(5)%
Other developed markets356 308 16 %7 %— %9 %
Other emerging markets560 461 21 %1 %(1)%21 %
(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.




15 |

ZOETIS INC.
SEGMENT(a) EARNINGS
(UNAUDITED)
(millions of dollars)
Three Months Ended
June 30,% Change
20262025Reported ChangeForeign Exchange
Operational(b)
U.S.:
Revenue$1,266 $1,356 (7)%— %(7)%
Cost of Sales214 208 3 %— %3 %
Gross Profit1,052 1,148 (8)%— %(8)%
    Gross Margin83.1 %84.7 %
Operating Expenses215 218 (1)%— %(1)%
Other (income)/deductions-net— — ***
U.S. Earnings$837 $930 (10)%— %(10)%
International:
Revenue$1,173 $1,085 8 %3 %5 %
Cost of Sales340 321 6 %4 %2 %
Gross Profit833 764 9 %3 %6 %
    Gross Margin71.0 %70.4 %
Operating Expenses172 171 1 %3 %(2)%
Other (income)/deductions-net— 1 ***
International Earnings$661 $592 12 %4 %8 %
Total Reportable Segments$1,498 $1,522 (2)%1 %(3)%
Other business activities(c)
(135)(129)5 %
Reconciling Items:
Corporate(d)
(315)(324)(3)%
Purchase accounting adjustments(e)
(30)(33)(9)%
Acquisition and divestiture-related costs(f)
(2)(1)*
Certain significant items(g)
(81)(48)69 %
Other unallocated(h)
(69)(75)(8)%
Total Earnings(i)
$866 $912 (5)%
(a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K.
(b) Operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange.
(c) Other business activities includes the research and development costs managed by our research and development organization, as well as our contract manufacturing business and human health business.
(d) Corporate includes, among other things, certain costs associated with information technology, administration expenses, interest income and expense, certain compensation costs and other costs not charged to our operating segments.
(e) Purchase accounting adjustments include certain charges related to the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment not charged to our operating segments.
(f) Acquisition and divestiture-related costs include costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs, as well as costs associated with divesting and disintegrating a portion of our business.
(g) Certain significant items includes substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items primarily include certain asset impairment charges, restructuring charges and implementation costs associated with cost-reduction/productivity initiatives that are not associated with an acquisition, costs related to our business process transformation program, as well as the impact of divestiture gains and losses.
(h) Includes overhead expenses associated with our global manufacturing and supply operations not directly attributable to an operating segment, as well as certain procurement costs.
(i) Defined as income before provision for taxes on income.
* Calculation not meaningful.
16 |

ZOETIS INC.
SEGMENT(a) EARNINGS
(UNAUDITED)
(millions of dollars)
Six Months Ended
June 30,% Change
20262025Reported ChangeForeign Exchange
Operational(b)
U.S.:
Revenue$2,356 $2,539 (7)%— %(7)%
Cost of Sales408 407 — %— %— %
Gross Profit1,948 2,132 (9)%— %(9)%
    Gross Margin82.7 %84.0 %
Operating Expenses414 423 (2)%— %(2)%
Other (income)/deductions-net— — ***
U.S. Earnings$1,534 $1,709 (10)%— %(10)%
International:
Revenue$2,322 $2,070 12 %5 %7 %
Cost of Sales674 616 9 %6 %3 %
Gross Profit1,648 1,454 13 %4 %9 %
    Gross Margin71.0 %70.2 %
Operating Expenses347 334 4 %5 %(1)%
Other (income)/deductions-net1 1 ***
International Earnings$1,300 $1,119 16 %5 %11 %
Total Reportable Segments$2,834 $2,828 — %2 %(2)%
Other business activities(c)
(276)(262)5 %
Reconciling Items:
Corporate(d)
(630)(602)5 %
Purchase accounting adjustments(e)
(58)(65)(11)%
Acquisition and divestiture-related costs(f)
(4)(1)*
Certain significant items(g)
(108)(54)*
Other unallocated(h)
(134)(159)(16)%
Total Earnings(i)
$1,624 $1,685 (4)%
(a) For a description of each segment, see Zoetis' most recent Annual Report on Form 10-K.
(b) Operational results (a non-GAAP financial measure) is defined as results excluding the impact of foreign exchange.
(c) Other business activities includes the research and development costs managed by our research and development organization, as well as our contract manufacturing business and human health business.
(d) Corporate includes, among other things, certain costs associated with information technology, administration expenses, interest income and expense, certain compensation costs and other costs not charged to our operating segments.
(e) Purchase accounting adjustments include certain charges related to the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment not charged to our operating segments.
(f) Acquisition and divestiture-related costs include costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs, as well as costs associated with divesting and disintegrating a portion of our business.
(g) Certain significant items includes substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items primarily include certain asset impairment charges, restructuring charges and implementation costs associated with cost-reduction/productivity initiatives that are not associated with an acquisition, costs related to our business process transformation program, as well as the impact of divestiture gains and losses.
(h) Includes overhead expenses associated with our global manufacturing and supply operations not directly attributable to an operating segment, as well as certain procurement costs.
(i) Defined as income before provision for taxes on income.
* Calculation not meaningful.
17 |

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