Zoetis Inc.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 4 November 2025: press release. Guidance figures: 2 raised, 7 lowered, 4 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue up 1%, organic 4%: Revenue was $2.4 billion, up 1% reported and 4% on an organic operational basis, against $2,388 million a year earlier. Source
• U.S. revenue down 2% reported: U.S. segment revenue was $1.3 billion, down 2% reported and up 3% on an organic operational basis. U.S. segment earnings were $899 million, up 1%. Source
• International revenue up 6% organic: International segment revenue was $1.1 billion, up 3% reported and 6% on an organic operational basis. International segment earnings were $556 million, up 3%. Source
• Osteoarthritis mAb sales declined: Declines in osteoarthritis mAb products, Librela for dogs and Solensia for cats, offset growth in parasiticides, diagnostics and dermatology in the U.S. segment. Source
• Adjusted cost of sales ratio fell: Adjusted cost of sales was 28.4% of revenue, down from 29.3% a year earlier, and fell 3% on an organic operational basis. Source
• Adjusted net income guidance lowered: Adjusted net income guidance is $2.800 to $2.840 billion, down from $2.825 to $2.875 billion. The organic growth range narrowed to 5.5% to 7.0%. Source
• Lenivia approved in Canada: Canada approved Lenivia, a long-acting antibody for osteoarthritis pain in dogs dosed up to three months. Launch in Canada is expected in 2026. Source

“we achieved significant regulatory milestones, including major new product approvals, geographic expansions and differentiating lifecycle innovations across products and species.”

Kristin Peck, Chief Executive Officer of Zoetis

Guidance

What changed from last quarter

• Guidance lowered: Full-year revenue guidance and organic operational revenue growth guidance were both lowered. Source
• Guidance lowered: Adjusted net income guidance was lowered, and the organic operational growth range for adjusted net income was narrowed to 5.5% to 7.0%. Source
• Guidance lowered: Adjusted SG&A expense guidance and the effective tax rate on adjusted income were lowered. Source
• Guidance raised: Guidance for the adjusted cost of sales ratio and for adjusted interest expense and other, net was increased. Source
• Guidance kept: Guidance for reported diluted EPS, adjusted diluted EPS and adjusted R&D expenses was kept. Source
• New: Canada approved Lenivia, an osteoarthritis pain product for dogs, which was not reported in the prior quarter. Source
• New: The company announced a realignment of its U.S. field structure as part of an evolved U.S. go-to-market strategy. Source
• New: The FDA granted a conditional approval for Dectomax-CA1 Injectable against New World screwworm in cattle. Source

Results and growth drivers

• Revenue up 1%, organic 4%: Revenue was $2.4 billion, up 1% reported and 4% on an organic operational basis, against $2,388 million a year earlier. Source
• Adjusted EPS up 8% reported: Adjusted net income was $754 million, or $1.70 per diluted share, up 5% and 8% reported and 9% and 12% on an organic operational basis. Source
• Reported net income up 6%: Net income was $721 million, or $1.63 per diluted share, up 6% and 9% on a reported basis. Source

Segments and regions

• U.S. revenue down 2% reported: U.S. segment revenue was $1.3 billion, down 2% reported and up 3% on an organic operational basis. U.S. segment earnings were $899 million, up 1%. Source
• U.S. innovative companion animal flat: Sales of innovative U.S. companion animal products were flat. Parasiticides, diagnostics and Apoquel Chewable grew, offset by declines in osteoarthritis mAbs, Librela and Solensia. Source
• U.S. livestock up 14% organic: U.S. livestock sales fell 9% reported, largely from the medicated feed additive divestiture, and rose 14% organic operational, led by cattle and ceftiofur supply. Source
• International revenue up 6% organic: International segment revenue was $1.1 billion, up 3% reported and 6% on an organic operational basis. International segment earnings were $556 million, up 3%. Source
• International livestock up 8% organic: International livestock sales fell 2% reported, reflecting the divestiture, and rose 8% on an organic operational basis across core species. Source
• China revenue down 26%: China revenue was $45 million against $61 million a year earlier, down 26% reported. Source

“we are well positioned to advance animal care, bring new products to market and deliver sustainable growth and value for our shareholders.”

Kristin Peck, Chief Executive Officer of Zoetis

Products and customers

• Dogs and cats up 2%: Dogs and cats revenue was $1,586 million, up 2%. Horses rose 14% to $66 million. Cattle rose 2%, while swine and poultry fell. Source
• Osteoarthritis mAb sales declined: Declines in osteoarthritis mAb products, Librela for dogs and Solensia for cats, offset growth in parasiticides, diagnostics and dermatology in the U.S. segment. Source
• Parasiticides and dermatology grew: International companion animal sales rose 8% reported and 4% operationally, led by Simparica, Revolution, Stronghold, Apoquel and Cytopoint. Source
• Contract manufacturing up 10%: Contract manufacturing and human health revenue rose 10% to $23 million. Source
• Fish up, poultry and swine down: Fish revenue rose 11% to $78 million, while poultry fell 24% to $106 million and swine fell 15% to $111 million. Source

Costs, margins and pricing

• Adjusted cost of sales ratio fell: Adjusted cost of sales was 28.4% of revenue, down from 29.3% a year earlier, and fell 3% on an organic operational basis. Source
• U.S. gross margin rose: U.S. gross margin was 83.2%, up from 80.8%. International gross margin was 68.6%, unchanged from the prior year. Source
• Adjusted SG&A and R&D rose 2%: Adjusted SG&A rose 2% to $570 million and adjusted R&D rose 2% to $169 million, each with 1% organic operational growth. Source
• Excluded items totalled $33 million: Adjusted net income excludes the net impact of $33 million for purchase accounting, acquisition and divestiture-related costs and certain significant items. Source
• Transformation program costs continue: Business process transformation program costs were $8 million in the quarter and $26 million for nine months. The company said these costs are not expected to recur in the foreseeable future. Source

Full-year guidance changes

• Revenue guidance lowered: Full-year revenue guidance was revised to $9.400 to $9.475 billion from $9.450 to $9.600 billion, reflecting broader macro trends and the operational environment. Source
• Adjusted net income guidance lowered: Adjusted net income guidance is $2.800 to $2.840 billion, down from $2.825 to $2.875 billion. The organic growth range narrowed to 5.5% to 7.0%. Source
• Adjusted EPS guidance held: Adjusted diluted EPS guidance of $6.30 to $6.40 and reported diluted EPS guidance of $5.90 to $6.00 were both maintained. Source
• Guidance assumes late October rates: Guidance reflects foreign exchange rates as of late October 2025 and the impact of enacted tariffs and assumptions on announced tariffs. Source
• Cost ratio and interest guidance raised: Guided adjusted cost of sales rose to about 28.3% of revenue from about 28.0%, and guided adjusted interest and other net rose to about $175 million. Source

Capital, cash and shareholder returns

• Diluted share count declined: Diluted weighted-average shares were 443.2 million for the quarter, against 453.5 million a year earlier. Nine-month diluted shares were 445.6 million against 456.1 million. Source
• Interest expense slightly higher: Interest expense, net of capitalized interest, was $58 million against $57 million. Nine-month interest expense fell to $165 million from $174 million. Source
• Adjusted tax rate guided lower: The effective tax rate on adjusted income is guided at approximately 20.5%, down from approximately 21%. Source

Strategy and investment

• Lenivia approved in Canada: Canada approved Lenivia, a long-acting antibody for osteoarthritis pain in dogs dosed up to three months. Launch in Canada is expected in 2026. Source
• Portela approved in EU: Portela, a cat osteoarthritis pain antibody with a three-month dosing interval, received EU marketing authorization. EU availability is anticipated in 2026. Source
• U.S. field structure realigned: The company is realigning its U.S. field structure to create a simpler, more agile commercial organization, which it expects to deepen customer relationships. Source
• Screwworm conditional approval in U.S.: The FDA granted conditional approval for Dectomax-CA1 Injectable against New World screwworm myiasis in cattle, described as the first such product with that approval. Source
• Vetscan Opticell expands into EU: After a U.S. launch, the point-of-care hematology analyzer Vetscan Opticell was expanded into the EU, with AI-powered classification for complete blood count analysis. Source

Coming up, as management said on 4 November 2025

• Lenivia EU authorization expected: Marketing authorization for Lenivia in the EU is expected in the fourth quarter of 2025, following a positive CVMP opinion. Source
• Lenivia Canada launch in 2026: The company expects to launch Lenivia in Canada in 2026, and to make it commercially available in the EU in 2026. Source
• Portela EU availability in 2026: The company anticipates making Portela commercially available in the EU in 2026. Source

Figures management reported

Risks management discussed

• External: Guidance was updated for broader macro trends and the operational environment in the back half of the year. Source
• External: Guidance includes the impact of enacted tariffs and assumptions on announced tariffs. Source
• Financial: Guidance is based on foreign exchange rates as of late October 2025, and the foreign exchange impact of certain items is uncertain. Source
• Operational: Certain restructuring and site-closure costs relate to a shift from internal to external innovation and manufacturing of some products. Source

Earlier plans management reported on

• Met: Management said growth moderated in the quarter in line with its expectations, and it cited regulatory milestones achieved. Source
• Not stated: Referring to January's JP Morgan conference, the company restated its expectation of a significant approval in a major market each year. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.