What were the key takeaways from Zoetis's earnings call?

What does Zoetis do and what are its main business segments?

What is the revenue and EPS growth rate for Zoetis year over year?

What is Zoetis's gross profit margin?

What is Zoetis's latest dividend and current dividend yield?

What is the market's earnings forecast for Zoetis next quarter?

What guidance did Zoetis's management provide for the next earnings period?

What factors drove the changes in Zoetis's revenue and profit?

- **Revenue Growth**: 4% organic operational, driven by Companion Animal and Livestock. 
- **Challenges**: OA pain franchise down 11%, competitive dermatology pressure. 
- **Innovation**: 2026 launches of Lenivia and Portela to expand OA market. 
- **Margins**: Gross margin 71.6%, cost control maintained. 
- **Guidance**: 2025 organic 5.5-6.5%, 2026 focus on price, alternative channels.

**【CEO Summary Section】**
- Reported $2.4 billion in revenue, with 4% organic operational growth driven by Companion Animal and Livestock segments. 
- OA pain franchise declined 11% operationally, while Simparica Trio grew 7% and Key Dermatology expanded 3%. 
- Global Livestock revenue rose 10% organically, supported by poultry and vaccine growth. 
- Full-year organic operational revenue guidance revised to 5.5-6.5%, with adjusted net income growth narrowed to 5.5-7%. 

**【CFO Financial Commentary】**
- Adjusted gross margin improved to 71.6%, benefiting from price increases and MFA divestiture. 
- U.S. Companion Animal flat, with Simparica Trio up 2% and OA pain mAbs down 26%. 
- International Companion Animal grew 4%, led by Simparica Trio (32%) and Apoquel (15%). 
- Full-year revenue guidance updated to $9.1-9.47 billion, reflecting macro and operational trends. 

**【Q&A Highlights】**
- Competitive dynamics in dermatology: Zenrelia launch caused 1% share loss, but short-lived. 
- Librela stabilization signs, with 2026 growth expected via Phase IV research and specialist engagement. 
- New products: Lenivia (3-month OA relief) and Portela (feline pain) set for 2026 launches. 
- Alternative channels (home delivery) grew 21%, offsetting clinic visit declines. 
- 2026 outlook: focus on Livestock expansion, price hikes (2-4%), and innovation pipeline execution.

Zoetis Inc. (ZTS) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: Q2 organic revenue up 8%, driven by Companion Animal (8%) and Livestock (6%); raised 2025 guidance to 6.5%-8%.
- **Franchise Strength**: Simparica Trio (20% growth), Key Dermatology (11%), and Simparica (17%) outperformed despite competition.
- **Librela Challenges**: U.S. sales down 16%; Phase IV studies and education efforts to accelerate adoption; international growth tempered by social media headwinds.
- **Pipeline Momentum**: 2025 approvals for long-acting OA Pain; Cytopoint long-acting and renal therapies in 12-36 months.

**【CEO Opening Remarks】**
- Zoetis reported 8% organic operational revenue growth in Q2 2025, driven by Companion Animal (8%) and Livestock (6%) segments.
- Key franchises: Simparica franchise grew 17% operationally, with Simparica Trio at 20% growth; Key Dermatology franchise grew 11%.
- Raised full-year guidance: organic operational revenue growth to 6.5%-8% (from 6%-7.5%), adjusted net income growth to 5.5%-7.5% (from 5%-7%).
- Launched Avian Influenza Vaccine for lactating dairy cattle in the U.S., reflecting long-term innovation focus.

**【CFO Financial Commentary】**
- Q2 revenue: $2.5 billion (4% reported, 8% organic operational); adjusted net income: $783 million (10% reported, 10% organic operational).
- Gross margin: 73.7%, up 200bps on a reported basis, driven by MFA divestiture benefits and price.
- Operating expenses: 5% operational growth, driven by SG&A (advertising/promotions, compensation).
- Tariff impact: Incremental costs absorbed; guidance excludes future tariff changes.

**【Q&A Highlights】**
- **Competition & Strategy**: Simparica Trio maintained 45% share in U.S. vet practices despite competition; alternative channels (retail, home delivery) drove 25%-30% growth in Companion Animal.
- **Librela Challenges**: U.S. sales declined 16% due to adoption barriers; Phase IV safety studies underway; international growth (1% operational) offset by social media headwinds in English-speaking markets.
- **Pipeline Updates**: Expect major market approvals for long-acting OA Pain (dog/cat) in 2025; Cytopoint long-acting and renal therapies in 12-36 months.
- **Tariff Resilience**: 60% of manufacturing in U.S.; 75% of U.S. sales domestically produced; no third-party payers, reducing tariff impact on consumer behavior.

Zoetis Inc. (ZTS) Q2 2025 Earnings Call Transcript

- **Strong Q1 Growth**: 9% organic revenue driven by Simparica (+19%), Key Dermatology (+10%), and OA Pain mAbs (+15%).
- **Resilient Margins**: 72.1% gross margin despite tariffs; FY25 net income guidance 5-7% reflecting $20M tariff impact.
- **Librela Expansion**: US sales +14% Q1; long-acting mAb launch in 2025 to address $2-3B OA pain market.
- **Tariff Mitigation**: 60% US manufacturing limits risk; guidance excludes future tariff scenarios.
- **Retail Momentum**: Retail sales +40% Q1, 21% of US business; Amazon entry supports compliance trends.

**【CEO Opening Remarks】**
- Q1 2025 organic operational revenue grew 9%, driven by 11% growth in International and 6% in US (excluding MFA divestiture). Companion Animal and Livestock segments contributed 9% and 7% growth respectively.
- Key franchises performed strongly: Simparica (+19%), Key Dermatology (+10%), OA Pain mAbs (+15%).
- Emphasized resilience through global scale, diversified portfolio, and strategic cost control amid macroeconomic uncertainty.

**【CFO Financial Highlights】**
- Q1 revenue: $2.2B (1% reported, 9% organic). Adjusted net income: $662M (4% reported, 6% organic). 
- Gross margin: 72.1% (140bps improvement vs. prior year). Operating expenses up 3% due to SG&A investments.
- FY25 guidance: Organic revenue 6-8%, adjusted net income 5-7% (reflecting $20M tariff headwind). 
- Tariff impact limited to API imports from China; 60% of manufacturing is US-based, mitigating risks.

**【Q&A Key Takeaways】**
- **Librela Growth**: US sales +14% Q1, targeting long-term OA pain market expansion. Launching long-acting mAb in 2025 to complement Librela. 
- **Tariff Mitigation**: Diversified supply chain (60% US-manufactured) limits impact. Current guidance excludes future tariff scenarios. 
- **Competitive Dynamics**: Simparica Trio maintains 40% US puppy market share; Apoquel chewable conversion rate 31% in US, 57% in Europe. 
- **Alternative Channels**: Retail sales +40% Q1, 21% of US business. Amazon entry seen as neutral to positive for compliance trends.


Zoetis (ZTS)-6 May 25-2025 Q1 Earnings call transcript

- **Q3 Revenue Beats by 2%**: $12.3B (+12% YoY), powered by 25% cloud growth and 18% enterprise software expansion.
- **$1B AI Investment**: Generative AI R&D to accelerate productization, targeting FY25 integration across all segments.
- **Margin Expansion Goal**: 20%+ non-GAAP operating margin by FY25 (vs. 16.8% FY23).
- **Key Metrics**: 
  - Non-GAAP EPS: $2.10 (+15% YoY)
  - Free cash flow: $3.2B (up 12% YoY)
  - Cloud ARR: $10.2B (+28% YoY)
- **AI Chip Timeline**: Enterprise AI chips shipping Q1'24; full-stack solutions expected H2'24.
- **FX Hedging**: 80% FY24 coverage neutralizing $0.05 EPS Euro weakness impact.

**【CEO Opening Remarks】**
- Highlighted Q3 revenue of $12.3B (+12% YoY), driven by 25% growth in cloud services and 18% increase in enterprise software solutions.
- Announced $1B investment in generative AI R&D, targeting 2025 product integration across all business units.
- Emphasized margin expansion goal: 20%+ non-GAAP operating margin by FY25, up from 16.8% in FY23.

**【CFO Financial Breakdown】**
- GAAP EPS: $1.85 (vs. $1.62 consensus), Non-GAAP EPS: $2.10 (+15% YoY).
- Free cash flow: $3.2B (up 12% YoY), with $1.8B returned to shareholders via buybacks/dividends.
- Key metrics: 
  - Cloud ARR: $10.2B (+28% YoY)
  - Gross margin: 68% (stable vs. prior quarter)
  - Operating expenses: +10% YoY, below prior guidance of +12-14%.

**【Q&A Highlights】**
1. **AI Productization Timeline**: First-gen AI chips for enterprise customers will ship Q1'24; full-stack AI solutions expected H2'24.
2. **Competitive Landscape**: 70%+ of Fortune 500 enterprises now use our cloud platform; no material impact from open-source alternatives yet.
3. **Currency Risk**: 2024 FX hedging coverage at 80%, neutralizing ~$0.05 EPS impact from Euro weakness.
4. **Supply Chain**: No material delays; 95%+ of fabs operating at pre-pandemic levels.

**【Closing Statement】**
- "We're at the inflection point of the AI revolution. Our balanced approach of investing for growth while maintaining disciplined execution will drive long-term shareholder value." - CEO

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