ZTS 8-K — Smart Summary

Zoetis Inc. reported Q1 2026 financial results on May 7, 2026, with revenue of $2.3 billion (3% reported increase, flat organic operational) and net income of $601 million ($1.42 per diluted share). The company revised its full year 2026 guidance downward, citing increased price sensitivity among pet owners, softer demand for premium products, and heightened competition in key categories.

• Revenue: $2,262 million in Q1 2026 vs. $2,198 million in Q1 2025, +3% reported, flat on organic operational basis
• Net income: $601 million vs. $602 million in Q1 2025, flat on reported basis
• Reported diluted EPS: $1.42 vs. $1.34 in Q1 2025, +6% on reported basis
• Adjusted net income: $646 million vs. $633 million in Q1 2025, +2% reported and +1% organic operational
• Adjusted diluted EPS: $1.53 vs. $1.41 in Q1 2025, +9% reported and +7% organic operational
• Gross profit (GAAP): $1,621 million vs. $1,580 million in Q1 2025; adjusted gross profit $1,624 million vs. $1,581 million
• Adjusted cost of sales as % of revenue: 28.2% in Q1 2026 vs. 28.1% in Q1 2025
• Income before taxes: $758 million vs. $773 million in Q1 2025, -2%

• U.S. segment revenue: $1,090 million vs. $1,183 million in Q1 2025, -8% reported and -8% organic operational
• U.S. Companion Animal revenue: $865 million vs. $973 million, -11% reported and -11% organic operational
• U.S. Livestock revenue: $225 million vs. $210 million, +7% reported and +7% organic operational
• U.S. segment earnings: $697 million vs. $779 million, -11% reported
• International segment revenue: $1,149 million vs. $985 million in Q1 2025, +17% reported and +10% organic operational
• International Companion Animal revenue: $654 million vs. $568 million, +15% reported and +7% organic operational
• International Livestock revenue: $495 million vs. $417 million, +19% reported and +14% organic operational
• International segment earnings: $639 million vs. $527 million, +21% reported
• Total Companion Animal revenue: $1,519 million vs. $1,541 million, -1% reported and -4% organic operational
• Total Livestock revenue: $720 million vs. $627 million, +15% reported and +12% organic operational
• Contract Manufacturing & Human Health revenue: $23 million vs. $30 million, -23% reported

• Weighted-average basic shares used in Q1 2026 EPS calculation: 422.1 million vs. 447.6 million in Q1 2025, reflecting a reduction in share count
• Weighted-average diluted shares: 422.4 million in Q1 2026 vs. 448.0 million in Q1 2025
• Certain significant items and acquisition and divestiture-related costs for full year 2026 guidance: approximately $100 million
• Acquisition-related costs in Q1 2026: $2 million pre-tax; restructuring and cost-reduction charges: $20 million pre-tax (primarily employee termination costs)
• Zoetis entered a definitive agreement to acquire Neogen Corporation's animal genomics business, expected to close in the second half of 2026

• Kristin Peck, Chief Executive Officer
  • "The first quarter unfolded in a more challenging operating environment than we anticipated. Pet owners demonstrated increased price sensitivity, resulting in a decline in veterinary visits and softer demand for premium innovative products, where Zoetis leads. At the same time, competition intensified across key pet care categories, including dermatology and parasiticides."
  • "With a robust pipeline of more than 12 potential blockbusters, a proven science-to-scale model that has consistently enabled us to compete and win, and a resilient, diversified business supported by strong industry fundamentals, we are well positioned to deliver our next wave of innovation and remain confident in our ability to deliver sustained value for shareholders."

• Full year 2026 revenue revised to $9,680 million to $9,960 million (organic operational growth of 2% to 5%)
• Full year 2026 reported net income: $2,680 million to $2,760 million
• Full year 2026 adjusted net income: $2,870 million to $2,950 million (organic operational growth of 2% to 6%)
• Full year 2026 reported diluted EPS: $6.35 to $6.50
• Full year 2026 adjusted diluted EPS revised to $6.85 to $7.00
• Adjusted cost of sales as % of revenue: approximately 28.5%; adjusted SG&A: $2,350 to $2,400 million; adjusted R&D: $735 to $745 million
• Effective tax rate on adjusted income: approximately 20.5%
• Guidance reflects foreign exchange rates as of April 24, 2026