Zoetis Inc 10-Q for FY2026 Q1

Zoetis Inc. (ZTS)

10-Q 2026-05-07 For: 2026-03-31

Added on May 07, 2026

About this 10-Q

Zoetis Inc filed this 10-Q on May 7, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.26B; up 2.9% from $2.2B a year earlier
Net income: $601M; down 0.2% from net income of $602M a year earlier
Diluted EPS: $1.42; up 6.0% from $1.34 a year earlier

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☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended
			March 31, 2026
			or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the transition period from __________ to __________


	Three Months Ended
	March 31,
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)		2026		2025(a)
Revenue		$	2,262	$	2,198
Costs and expenses:
Cost of sales		641		618
Selling, general and administrative expenses		588		574
Research and development expenses		180		162
Amortization of intangible assets		31		32
Restructuring charges and certain acquisition and divestiture-related costs		22		—
Interest expense, net of capitalized interest		62		54
Other (income)/deductions—net		(20)		(15)
Income before provision for taxes on income		758		773
Provision for taxes on income		157		171
Net income before allocation to noncontrolling interests		601		602
Less: Net income/(loss) attributable to noncontrolling interests		—		—
Net income attributable to Zoetis Inc.		$	601	$	602
Earnings per share attributable to Zoetis Inc. stockholders:
Basic		$	1.42	$	1.34
Diluted		$	1.42	$	1.34
Weighted-average common shares outstanding:
Basic		422.1		447.6
Diluted		422.4		448.0
Dividends declared per common share		$	0.530	$	0.500


	Three Months Ended
	March 31,
(MILLIONS OF DOLLARS)		2026		2025(a)
Net income before allocation to noncontrolling interests		$	601	$	602
Other comprehensive income, net of tax(b):
Unrealized losses on derivatives for cash flow hedges, net of tax of $(1) and $(4) for the three months ended March 31, 2026 and 2025, respectively		(2)		(13)
Unrealized gains/(losses) on derivatives for net investment hedges, net of tax of $4 and $(10) for the three months ended March 31, 2026 and 2025, respectively		14		(33)
Foreign currency translation adjustments		20		132
Benefit plans: Actuarial gains, net of tax of $0 for the three months ended March 31, 2026 and 2025, respectively		—		2
Total other comprehensive income, net of tax		32		88
Comprehensive income before allocation to noncontrolling interests		633		690
Less: Comprehensive income/(loss) attributable to noncontrolling interests		—		—
Comprehensive income attributable to Zoetis Inc.		$	633	$	690


	March 31,		December 31,
(MILLIONS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)	2026		2025(a)
Assets
Cash and cash equivalents(b)	$	1,941	$	2,450

Accounts receivable, less allowance for doubtful accounts of $19 in 2026 and $17 in 2025	1,506		1,409
Inventories	2,550		2,464


Other current assets	477		450
Total current assets	6,474		6,773
Property, plant and equipment, less accumulated depreciation of $3,002 in 2026 and $2,935 in 2025	3,719		3,693
Operating lease right-of-use assets	282		289
Goodwill	2,778		2,774
Identifiable intangible assets, less accumulated amortization	959		998
Noncurrent deferred tax assets	591		636
Other noncurrent assets	351		327
Total assets	$	15,154	$	15,490

Liabilities and Equity


Accounts payable	$	507	$	445
Dividends payable	224		232
Accrued expenses	751		841
Accrued compensation and related items	239		401
Income taxes payable	211		145

Other current liabilities	121		109
Total current liabilities	2,053		2,173
Long-term debt, net of discount and issuance costs	9,045		9,042
Noncurrent deferred tax liabilities	130		137
Operating lease liabilities	193		197
Other taxes payable	281		276

Other noncurrent liabilities	219		250
Total liabilities	11,921		12,075
Commitments and contingencies (Note 15)
Stockholders’ equity:

Common stock, $0.01 par value: 6,000,000,000 authorized; 501,891,243 and 501,891,243 shares issued; 420,348,495 and 424,927,535 shares outstanding at March 31, 2026, and December 31, 2025, respectively	5		5
Treasury stock, at cost, 81,542,748 and 76,963,708 shares of common stock at March 31, 2026 and December 31, 2025, respectively	(11,288)		(10,685)
Additional paid-in capital	1,105		1,101
Retained earnings	14,183		13,798
Accumulated other comprehensive loss	(772)		(804)
Total Zoetis Inc. equity	3,233		3,415
Equity attributable to noncontrolling interests	—		—
Total equity	3,233		3,415
Total liabilities and equity	$	15,154	$	15,490


Three months ended March 31, 2026
	Zoetis
												Accumulated		Equity
								Additional				Other		Attributable to
		Common Stock			Treasury Stock			Paid-in		Retained		Comprehensive		Noncontrolling		Total
(MILLIONS OF DOLLARS AND SHARES)		Shares	Amount		Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance, December 31, 2025(a)		501.9	$	5	77.0	$	(10,685)	$	1,101	$	13,798	$	(804)	$	—	$	3,415
Net income		—	—		—	—		—		601		—		—		601
Other comprehensive income		—	—		—	—		—		—		32		—		32

Share-based compensation awards(b)		—	—		(0.3)	9		4		—		—		—		13
Treasury stock acquired(c)		—	—		4.8	(612)		—		—		—		—		(612)

Dividends declared		—	—		—	—		—		(216)		—		—		(216)
Balance, March 31, 2026		501.9	$	5	81.5	$	(11,288)	$	1,105	$	14,183	$	(772)	$	—	$	3,233

Three months ended March 31, 2025(a)
	Zoetis
												Accumulated		Equity
								Additional				Other		Attributable to
		Common Stock			Treasury Stock			Paid-in		Retained		Comprehensive		Noncontrolling		Total
(MILLIONS OF DOLLARS AND SHARES)		Shares	Amount		Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance, December 31, 2024(a)		501.9	$	5	53.4	$	(7,445)	$	1,182	$	12,112	$	(1,010)	$	—	$	4,844
Net income		—	—		—	—		—		602		—		—		602
Other comprehensive income		—	—		—	—		—		—		88		—		88

Share-based compensation awards(b)		—	—		(0.3)	4		(2)		—		—		—		2
Treasury stock acquired(c)		—	—		2.7	(447)		—		—		—		—		(447)

Dividends declared		—	—		—	—		—		(224)		—		—		(224)
Balance, March 31, 2025(a)		501.9	$	5	55.8	$	(7,888)	$	1,180	$	12,490	$	(922)	$	—	$	4,865


Zoetis Inc.
(Exact name of registrant as specified in its charter)


	Three months ended March 31, 2025
(MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA)	As previously reported		Increase/ (decrease)		As recast
Revenue	$	2,220	$	(22)	$	2,198
Income before provision for taxes on income	$	810	$	(37)	$	773
Provision for taxes on income	$	179	$	(8)	$	171
Net income attributable to Zoetis Inc.	$	631	$	(29)	$	602
Earnings per share - Basic	$	1.41	$	(0.07)	$	1.34
Earnings per share - Diluted	$	1.41	$	(0.07)	$	1.34



(MILLIONS OF DOLLARS)	Accrual
Balance, December 31, 2025(a)	$	25
Provision	20


Utilization and other(b)	(12)

Balance, March 31, 2026(a)	$	33


											After
(MILLIONS OF DOLLARS)	2026		2027		2028		2029		2030		2030		Total
Maturities	$	—	$	750	$	1,350	$	2,000	$	750	$	4,300	$	9,150


	Notional
	March 31,		December 31,
(MILLIONS)	2026		2025
Derivatives not Designated as Hedging Instruments:
Foreign currency forward-exchange contracts	$	2,393	$	2,198

Derivatives Designated as Hedging Instruments:
Foreign exchange derivative instruments (in foreign currency):
Euro	1,025		925
Danish krone	400		400
Swiss franc	35		—




Fixed-to-floating interest rate swap contracts	$	250	$	250


		Fair Value of Derivatives
		March 31,		December 31,
(MILLIONS OF DOLLARS)	Balance Sheet Location	2026		2025
Derivatives Not Designated as Hedging Instruments:
Foreign currency forward-exchange contracts	Other current assets	$	15	$	8

Foreign currency forward-exchange contracts	Other current liabilities	(18)		(9)
Foreign currency forward-exchange contracts	Other noncurrent liabilities	(1)		—
Total derivatives not designated as hedging instruments		$	(4)	$	(1)

Derivatives Designated as Hedging Instruments:




Foreign exchange derivative instruments	Other current assets	$	7	$	6
Foreign exchange derivative instruments	Other noncurrent assets	3		—
Foreign exchange derivative instruments	Other current liabilities	(22)		(25)
Foreign exchange derivative instruments	Other noncurrent liabilities	(18)		(39)



Fixed-to-floating interest rate swap contracts	Other noncurrent liabilities	(16)		(16)
Total derivatives designated as hedging instruments		(46)		(74)
Total derivatives		$	(50)	$	(75)


(MILLIONS OF DOLLARS)	U.S.		International		Total
Balance, December 31, 2025	$	1,515	$	1,259	$	2,774


Other(a)	—		4		4
Balance, March 31, 2026	$	1,515	$	1,263	$	2,778


	As of March 31, 2026						As of December 31, 2025
					Identifiable						Identifiable
	Gross				Intangible Assets		Gross				Intangible Assets
	Carrying		Accumulated		Less Accumulated		Carrying		Accumulated		Less Accumulated
(MILLIONS OF DOLLARS)	Amount		Amortization		Amortization		Amount		Amortization		Amortization
Finite-lived intangible assets:
Developed technology rights	$	1,945	$	(1,388)	$	557	$	1,940	$	(1,352)	$	588
Brands and tradenames	362		(253)		109		362		(251)		111
Other	295		(216)		79		293		(211)		82
Total finite-lived intangible assets	2,602		(1,857)		745		2,595		(1,814)		781
Indefinite-lived intangible assets:
Brands and tradenames	67		—		67		67		—		67
In-process research and development	141		—		141		144		—		144
Product rights	6		—		6		6		—		6
Total indefinite-lived intangible assets	214		—		214		217		—		217
Identifiable intangible assets	$	2,816	$	(1,857)	$	959	$	2,812	$	(1,814)	$	998



			Currency Translation Adjustments
					Other Currency		Benefit Plans		Accumulated Other
	Cash Flow		Net Investment		Translation		Actuarial		Comprehensive
(MILLIONS OF DOLLARS)	Hedges		Hedges		Adjustments		Gains/(Losses)		Loss
Balance, December 31, 2025	$	70	$	(39)	$	(838)	$	3	$	(804)
Other comprehensive (loss)/income, net of tax	(2)		14		20		—		32

Balance, March 31, 2026	$	68	$	(25)	$	(818)	$	3	$	(772)

Balance, December 31, 2024	$	89	$	62	$	(1,160)	$	(1)	$	(1,010)
Other comprehensive (loss)/income, net of tax	(13)		(33)		132		2		88

Balance, March 31, 2025	$	76	$	29	$	(1,028)	$	1	$	(922)


	Earnings						Depreciation and Amortization(a)
	Three Months Ended						Three Months Ended
	March 31,						March 31,
(MILLIONS OF DOLLARS)	2026			2025			2026		2025
U.S.
Revenue	$	1,090		$	1,183
Cost of sales	194			199
Gross profit	896			984
Gross margin	82.2		%	83.2		%
Operating expenses(b)	199			205
Other (income)/deductions-net	—			—
U.S. Earnings	697			779			$	23	$	23

International
Revenue(c)	1,149			985
Cost of sales	334			295
Gross profit	815			690
Gross margin	70.9		%	70.1		%
Operating expenses(b)	175			163
Other (income)/deductions-net	1			—
International Earnings	639			527			26		23

Total operating segments	1,336			1,306			49		46

Other business activities	(141)			(133)			13		11
Reconciling Items:
Corporate	(315)			(278)			25		29
Purchase accounting adjustments	(28)			(32)			31		32
Acquisition and divestiture-related costs	(2)			—			—		—
Certain significant items	(27)			(6)			—		—
Other unallocated	(65)			(84)			1		1
Total Earnings(d)	$	758		$	773		$	119	$	119


Commission File Number:			001-35797


(Registrant’s telephone number, including area code)


	Three Months Ended
	March 31,
(MILLIONS OF DOLLARS)		2026		2025
United States		$	1,090	$	1,183
Australia		89		79
Brazil		90		81
Canada		73		70
Chile		38		35
China		63		55
France		37		39
Germany		59		55
Italy		39		30
Japan		35		32
Mexico		48		35
Spain		40		29
United Kingdom		78		74
Other developed markets		169		133
Other emerging markets		291		238
		2,239		2,168
Contract manufacturing & human health		23		30
Total Revenue		$	2,262	$	2,198


	Three Months Ended
	March 31,
(MILLIONS OF DOLLARS)		2026		2025
U.S.
Companion animal		$	865	$	973
Livestock		225		210
		1,090		1,183
International
Companion animal		654		568
Livestock		495		417
		1,149		985
Total
Companion animal		1,519		1,541
Livestock		720		627
Contract manufacturing & human health		23		30
Total Revenue		$	2,262	$	2,198


					% Change
	Three Months Ended					Related to
	March 31,					Foreign
(MILLIONS OF DOLLARS)	2026		2025(a)		Total	Exchange	Operational(b)
Revenue	$	2,262	$	2,198	3	4	(1)
Net income attributable to Zoetis	601		602		—	1	(1)
Adjusted net income(b)	646		633		2	1	1


Description	Principal Amount	Interest Rate	Terms
2017 Senior Notes due 2027	$750 million	3.000%	Interest due semi annually, not subject to amortization, aggregate principal due on September 12, 2027
2018 Senior Notes due 2028	$500 million	3.900%	Interest due semi annually, not subject to amortization, aggregate principal due on August 20, 2028
2025 Senior Notes due 2028	$850 million	4.150%	Interest due semi annually, not subject to amortization, aggregate principal due on August 17, 2028
2025 Convertible Senior Notes due 2029	$2,000 million	0.250%	Interest due semi annually, not subject to amortization, aggregate principal due on June 15, 2029
2020 Senior Notes due 2030	$750 million	2.000%	Interest due semi annually, not subject to amortization, aggregate principal due on May 15, 2030
2022 Senior Notes due 2032	$750 million	5.600%	Interest due semi annually, not subject to amortization, aggregate principal due on November 16, 2032
2025 Senior Notes due 2035	$1,000 million	5.000%	Interest due semi annually, not subject to amortization, aggregate principal due on August 17, 2035
2013 Senior Notes due 2043	$1,150 million	4.700%	Interest due semi annually, not subject to amortization, aggregate principal due on February 1, 2043
2017 Senior Notes due 2047	$500 million	3.950%	Interest due semi annually, not subject to amortization, aggregate principal due on September 12, 2047
2018 Senior Notes due 2048	$400 million	4.450%	Interest due semi annually, not subject to amortization, aggregate principal due on August 20, 2048
2020 Senior Notes due 2050	$500 million	3.000%	Interest due semi annually, not subject to amortization, aggregate principal due on May 15, 2050


	Issuer Purchases of Equity Securities(a)
	Total Number of Shares Purchased(b)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under Plans or Programs
January 1 - January 31, 2026	2,622,327	$125.96	2,621,747	$2,096,787,887
February 1 - February 28, 2026	1,089,066	$127.11	972,319	$1,973,222,695
March 1 - March 31, 2026	1,239,514	$121.40	1,239,070	$1,822,468,737
	4,950,907	$125.07	4,833,136	$1,822,468,737


Exhibit 18						Preferability Letter of KPMG LLC, dated May 7, 2026, relating to Change in Accounting Principle*
Exhibit 31.1						Chief Executive Officer–Certification pursuant to Sarbanes-Oxley Act of 2002 Section 302
Exhibit 31.2						Chief Financial Officer–Certification pursuant to Sarbanes-Oxley Act of 2002 Section 302
Exhibit 32.1						Chief Executive Officer–Certification pursuant to Sarbanes-Oxley Act of 2002 Section 906
Exhibit 32.2						Chief Financial Officer–Certification pursuant to Sarbanes-Oxley Act of 2002 Section 906
EX-101.INS						Inline XBRL INSTANCE DOCUMENT
EX-101.SCH						Inline XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL						Inline XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT
EX-101.LAB						Inline XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT
EX-101.PRE						Inline XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT
EX-101.DEF						Inline XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT
EX-104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


	Zoetis Inc.

May 7, 2026	By:	/S/ KRISTIN C. PECK
		Kristin C. Peck
		Chief Executive Officer and Director

May 7, 2026	By:	/S/ WETTENY JOSEPH
		Wetteny Joseph
		Executive Vice President and Chief Financial Officer