Zoetis (ZTS) BofA Securities Animal Health Summit summary

Financial performance and guidance

• Achieved 6% revenue growth and 7% adjusted net income growth, with double-digit EPS growth in a challenging macro environment.

• 2026 guidance set at 3%-5% revenue growth and 3%-6% adjusted net income growth, reflecting prudent expectations amid competition and market dynamics.

• Margin expansion expected to continue, though at a slower pace due to lower top-line growth and ongoing investments.

• Guidance incorporates 2-3 points of price increases and considers competitive pressures on key products.

• Mix of livestock and companion animal businesses factored into margin and growth outlook for 2026.

Calendar and reporting changes

• Transitioning to a synchronized calendar year reporting for both U.S. and international operations starting Q1 2026.

• Historical reporting used a one-month lag for international; 2026 guidance remains on the legacy basis until the change.

• Recasted financials for 2024 and 2025 will be provided to ensure comparability.

• No impact of a 13-month year or 4-month quarter; all periods will remain 12 months.

• Operational changes, such as timing of price increases, have been made to align with the new calendar.

Competitive landscape and product differentiation

• Confident in portfolio differentiation, especially in dermatology with products like Apoquel (film-coated and chewable) and Cytopoint.

• Recent competitor launches, such as Merck’s NUMELVI, were anticipated and factored into guidance.

• Market for dermatology products remains expandable, with high satisfaction and compliance rates supporting continued growth.

• Simparica franchise expected to lead growth, followed by KeyDerm and pain franchises.

• Pricing strategy remains value-driven, with fine-tuning based on market and product dynamics.