Zoetis Inc. Q3 FY2025 earnings call

• Revenue growth: 4% revenue growth and 9% growth in adjusted net income on an organic operational basis. • Segment performances: International 6% organic growth, U.S. 3% growth excluding MFA divestiture. Companion Animal 2% operational growth, Livestock 10% organic operational growth. • Franchises: Parasitics Simparica franchise grew 7%, Key Dermatology 3% operationally, OA pain franchise declined 11%. • Innovation: Continued to differentiate portfolio with over 130 geographic expansion and life cycle innovations. • U.S. commercial structure: Evolving to better serve customers and enhance agility/efficiency. • Livestock: 10% organic operational revenue growth, on track for third consecutive year of above-market growth.

International segment delivered 6% organic operational revenue growth. U.S. contributed 3% growth excluding the impact of the MFA divestiture. Companion Animal revenue grew 2% operationally and Livestock organic operational revenue grew 10%. Parasiticides: Simparica franchise grew 7% operationally. Key Dermatology franchise grew 3% operationally. Osteoarthritis or OA pain franchise declined 11% operationally.

• Revised organic operational revenue range to 5.5% to 6.5%. • Narrowed organic operational adjusted net income growth range to 5.5% to 7%. • Maintained reported diluted and adjusted diluted EPS guidance range of $5.90 to $6 and $6.30 to $6.40, respectively.

• Competitive dynamics in dermatology with aggressive promotions and sampling. • Social media impact leading to misperceptions affecting OA pain franchise. • Macro factors including vet clinic visits and promotional activity impacting growth.

Q: What meaningfully changed intra-quarter after raising guidance last quarter and key surprises like competition or destock?

A: Saw macro impact in U.S. clinics with therapeutic visits down, factored into thinking for remainder of year.

Q: How does competition in dermatology fit into guidance for 2026?

A: High confidence in growing key franchise areas despite competitive pressures, with unmet market opportunity.

Q: Thoughts on new long-acting OA drugs launch relative to Librela?

A: Will apply learnings from Librela, start with specialists, raise OA awareness, invest in Phase IV research.

Q: How is derm portfolio performance due to distributor inventory vs competitive pressure?

A: Distributor inventory levels not a major factor, competitive patient share gains limited.

Q: On Livestock growth drivers for 2026?

A: Sustainable secular trends like increased protein demand and population growth support continued growth.