Zoetis (ZTS) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $2.391B, down 1% reported; adjusted EPS rose 3% to $1.75, while GAAP net income fell 18% to $591M.

• Livestock, International and Diagnostics growth partly offset continued Companion Animal pressure, particularly in the U.S.

• Priorities included defending key franchises, advancing pipeline milestones and improving operating efficiency.

Financial highlights

• Adjusted net income was $720M, down 5% reported and 7% operationally; adjusted diluted EPS was $1.75, up 3% reported and 1% operationally.

• Adjusted gross margin was 71.0%, versus 71.3% a year earlier; adjusted cost of sales was 29.0% of revenue versus 28.7%.

• Adjusted operating expenses were $749M versus $751M; adjusted SG&A was $571M and adjusted R&D was $174M.

• Q3 income before taxes declined 18% to $729M; nine-month operating cash flow was $1.880B, down from $2.056B.

Outlook and guidance

• FY2026 revenue guidance narrowed to $9.220B–$9.320B, with an organic operational decline of 2%–1%; the prior range was $9.120B–$9.320B.

• Adjusted net income guidance increased to $2.600B–$2.640B, with an organic operational decline of 7%–5%; adjusted diluted EPS guidance rose to $6.25–$6.35 from $6.15–$6.25.

• Reported diluted EPS guidance is $5.50–$5.60; guidance uses FX rates as of October 20, 2026.

• 2027 planning assumes no improvement in macro conditions or pet-owner spending, with current competitive pressures expected to persist through most of the year.