2dc008010eb775ec673bd9042d40d424bfdceff31742f03b88e24616ac193d85

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| U.S. Segment Revenue | **1,112**  **[0001555280-23-000072_exhibit9912-31x22q4.htm:1]**  | **1,005**  **[0001555280-23-000148_exhibit99q12023.htm:1]**  | **1,165**  **[0001555280-23-000203_exhibit99q22023.htm:1]**  | **1,174**  **[0001555280-23-000245_exhibit99q32023.htm:1]**  | **1,211**  **[0001555280-24-000141_exhibit9912-31x23q4.htm:1]**  | **1,163**  **[0001555280-24-000247_exhibit99q12024.htm:10]**  | **1,308**  **[0001555280-24-000295_exhibit99q22024.htm:13]**  | **1,346**  **[0001555280-24-000332_zts-20240930.htm:39]**  |
| International Segment Revenue | **901**  **[0001555280-23-000072_exhibit9912-31x22q4.htm:1]**  | **978**  **[0001555280-23-000148_exhibit99q12023.htm:1]**  | **995**  **[0001555280-23-000203_exhibit99q22023.htm:1]**  | **956**  **[0001555280-23-000245_exhibit99q32023.htm:1]**  | **982**  **[0001555280-24-000141_exhibit9912-31x23q4.htm:1]**  | **1,007**  **[0001555280-24-000247_exhibit99q12024.htm:10]**  | **1,035**  **[0001555280-24-000295_exhibit99q22024.htm:13]**  | **1,021**  **[0001555280-24-000332_zts-20240930.htm:39]**  |

2faa710f4e73d9e93be871f430959ec0cecb84d806e640cd18975f430b74830b

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Total Revenue**    | **2,040**  **[0001555280-23-000072_exhibit9912-31x22q4.htm:0]**  | **2,000**  **[0001555280-23-000148_exhibit99q12023.htm:0]**  | **2,200**  **[ZTS_3307947_2]**  | **2,151**  **[0001555280-23-000245_exhibit99q32023.htm:0]**  | **2,200**  **[0001555280-24-000141_exhibit9912-31x23q4.htm:0]**  | **2,190**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **2,361**  **[0001555280-24-000295_exhibit99q22024.htm:0]**  | **2,400**  **[0001555280-24-000330_exhibit99q32024.htm:0]**  |
| **Companion Animal** | **1,303**  **[0001555280-23-000072_exhibit9912-31x22q4.htm:10]**  | **1,225**  **[0001555280-23-000148_exhibit99q12023.htm:8]**  | **1,489**  **[0001555280-23-000203_exhibit99q22023.htm:10]**  | **1,414**  **[0001555280-23-000245_exhibit99q32023.htm:11]**  | N/A | **1,450**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **1,649**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **1,609**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| - Dogs and Cats      | N/A | **1,153**  **[0001555280-23-000150_zts-20230331.htm:8]**  | N/A | N/A | N/A | **1,384**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **1,581**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **1,551**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| - Horses             | N/A | **72**  **[0001555280-23-000150_zts-20230331.htm:8]**  | N/A | N/A | N/A | **66**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **68**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **58**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| **Livestock**        | **710**  **[0001555280-23-000072_exhibit9912-31x22q4.htm:10]**  | **758**  **[0001555280-23-000148_exhibit99q12023.htm:8]**  | **671**  **[0001555280-23-000203_exhibit99q22023.htm:10]**  | **716**  **[0001555280-23-000245_exhibit99q32023.htm:11]**  | N/A | **720**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **694**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **758**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| - Cattle             | N/A | **399**  **[0001555280-23-000150_zts-20230331.htm:8]**  | N/A | N/A | N/A | **391**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **350**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **391**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| - Poultry            | N/A | **139**  **[0001555280-23-000150_zts-20230331.htm:8]**  | N/A | N/A | N/A | **139**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **132**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **139**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| - Swine              | N/A | **142**  **[0001555280-23-000150_zts-20230331.htm:8]**  | N/A | N/A | N/A | **127**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **130**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **131**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| - Fish               | N/A | **49**  **[0001555280-23-000150_zts-20230331.htm:8]**  | N/A | N/A | N/A | **45**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **62**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **70**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| - Sheep and Other    | N/A | **29**  **[0001555280-23-000150_zts-20230331.htm:8]**  | N/A | N/A | N/A | **18**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **20**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **27**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |
| **Contract Manufacturing & Human Health** | **27**  **[0001555280-23-000072_exhibit9912-31x22q4.htm:10]**  | **17**  **[0001555280-23-000148_exhibit99q12023.htm:8]**  | **20**  **[0001555280-23-000203_exhibit99q22023.htm:10]**  | **21**  **[0001555280-23-000245_exhibit99q32023.htm:11]**  | N/A | **20**  **[0001555280-24-000247_exhibit99q12024.htm:9]**  | **18**  **[0001555280-24-000295_exhibit99q22024.htm:11]**  | **21**  **[0001555280-24-000330_exhibit99q32024.htm:11]**  |

1d6904b67cc963058f2cbf50eb3d6e98b758b56a8be68a8b3bbbb0f0b2741664

Adjustments for Non-Cash Items [USD, M]

Stock-Based Compensation [USD, M]

Changes in Working Capital [USD, M]

Capital Expenditures (CapEx) [USD, M]

Proceeds from / Repayments of Debt [USD, M]

Share Repurchases [USD, M]

Dividend Payments [USD, M]

Net Change in Cash [USD, M]

a4a903db52a6b48ee1470c0e15fa0a6ffe31d4937ba3c4c7d4e3f5cb7090d265

Zoetis Inc. is a global leader in the animal health industry, specializing in the discovery, development, manufacture, and commercialization of a wide range of products and services for animal health **[0001555280-24-000299_zts-20240630.htm:32]**. The company offers medicines, vaccines, diagnostic products and services, biodevices, genetic tests, and precision animal health solutions for both companion animals and livestock across eight core species, including dogs, cats, horses, cattle, swine, poultry, fish, and sheep **[0001555280-24-000143_zts-20231231.htm:2]**. Zoetis operates through two geographic segments, the United States and International, and markets its products directly to veterinarians and livestock producers in about 45 countries, while also contracting with distributors in regions where it does not have a direct commercial presence **[0001555280-24-000299_zts-20240630.htm:32]** **[0001555280-24-000143_zts-20231231.htm:73]**.

1. **Parasiticides** - Provides treatments to protect animals from parasites, ensuring their health and well-being.
2. **Vaccines** - Develops and manufactures vaccines to prevent diseases in various animal species.
3. **Dermatology** - Offers products for the treatment and management of skin conditions in animals.
4. **Other Pharmaceuticals** - Includes a range of pharmaceutical products for various health conditions in animals.
5. **Anti-infectives** - Supplies medications to treat infections in animals, promoting recovery and health.
6. **Animal Health Diagnostics** - Delivers diagnostic products and services to detect and monitor animal health issues.
7. **Medicated Feed Additives** - Produces additives for animal feed to enhance health and growth.

9082c1896ebe6b8ac62ada8851ddb97c76a1d6d4d42930d4b2f720539a215568

a31aa2f3bd14cbf1eac4e1049bb9eea30184c8dd707b3ea781fad034f8c9aebc

1. Given the anticipated entry of new competitors in the dermatology space, particularly those with products carrying boxed warnings, what specific strategies is Zoetis implementing to defend market share for Apoquel and Cytopoint, and how might these strategies affect your promotional activities?

2. With the growth of alternative channels like retail and home delivery contributing significantly to sales (alternative channels were up 34% year-on-year in Q3), how is Zoetis adapting its sales and marketing strategy to address the shift away from traditional veterinary clinic visits, and what impact do you expect this to have on your relationships with veterinarians?

3. Considering that price contributed 6% to your 14% operational revenue growth in Q3 and that you anticipate the recent tailwinds from higher inflation to normalize, how do you plan to sustain your revenue growth as price-driven gains potentially decrease?

4. The MFA divestiture is expected to impact your Q4 revenue growth by reflecting a reduction of U.S. and international sales; can you elaborate on the magnitude of this impact and discuss the strategies you have in place to mitigate any negative effects on your overall financial performance?

5. You mentioned that headwinds in China have had approximately a 1% unfavorable impact on growth this year; could you provide more details on the specific challenges you're facing in the Chinese market and how you plan to address them to normalize growth in 2025?

bf579191b917dbfbb1c493a1257b6d317a21b57dddd344ee6b4db1a09c980669

b4adda614bcd068debfefe8fb48265680d1c1a6faa4f9b2dfe276bf8c2064f60

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Revenue**: $9.2 billion to $9.3 billion (10% to 11% operational growth)  **[ZTS_3405576_6]** .
  - **Adjusted Net Income**: $2.67 billion to $2.695 billion (13.5% to 14.5% operational growth)  **[ZTS_3405576_6]** .
  - **Adjusted Diluted EPS**: $5.86 to $5.92  **[ZTS_3405576_6]** .
  - **Reported Diluted EPS**: $5.33 to $5.39  **[ZTS_3405576_6]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Revenue**: $9.1 billion to $9.25 billion (9% to 11% operational growth)  **[ZTS_3396569_8]** .
  - **Adjusted Net Income**: $2.64 billion to $2.69 billion (13.5% to 15.5% operational growth)  **[ZTS_3396569_8]** .
  - **Adjusted Diluted EPS**: $5.78 to $5.88  **[ZTS_3396569_8]** .
  - **Reported Diluted EPS**: $5.35 to $5.45  **[ZTS_3396569_8]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Revenue**: $9.05 billion to $9.20 billion (8.5% to 10.5% operational growth)  **[ZTS_3382120_7]** .
  - **Adjusted Net Income**: $2.62 billion to $2.67 billion (13% to 15% operational growth)  **[ZTS_3382120_7]** .
  - **Adjusted Diluted EPS**: $5.71 to $5.81  **[ZTS_3382120_7]** .
  - **Reported Diluted EPS**: $5.34 to $5.44  **[ZTS_3382120_7]** .
  - **Simparica Trio**: Double-digit operational growth  **[ZTS_3382120_7]** .
  - **Key Dermatology Products**: High single-digit growth  **[ZTS_3382120_7]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Revenue**: $9.075 billion to $9.225 billion (7% to 9% operational growth)  **[ZTS_3373042_6]** .
  - **Adjusted Net Income**: $2.65 billion to $2.70 billion (9% to 11% operational growth)  **[ZTS_3373042_7]** .
  - **Adjusted Diluted EPS**: $5.74 to $5.84  **[ZTS_3373042_7]** .
  - **Reported Diluted EPS**: $5.34 to $5.44  **[ZTS_3373042_7]** .
  - **Adjusted Gross Margin**: Approximately 29.5% of revenue  **[ZTS_3373042_7]** .
  - **Adjusted SG&A Expenses**: $2.17 billion to $2.22 billion  **[ZTS_3373042_7]** .
  - **Adjusted R&D Expenses**: $665 million to $675 million  **[ZTS_3373042_7]** .
  - **Adjusted Interest Expense and Other Income and Deductions**: Approximately $210 million  **[ZTS_3373042_7]** .
  - **Adjusted Effective Tax Rate**: 20% to 21%  **[ZTS_3373042_7]** .
  - **Capital Expenditures**: $800 million to $850 million  **[ZTS_3373042_7]** .
  - **Foreign Exchange Impact**: Negative impact on net revenue growth by 90 basis points and adjusted net income growth by 150 basis points  **[ZTS_3373042_6]** .

70a56738d341658455ef0dbfaf563fa31cd9e76f1689520a107ed5fa29661310

40cdaefed57213fb873272d5b62570f6977d24967ccdd1d01c2c73a2f761a954

- **Boehringer Ingelheim Animal Health Inc.** - The animal health division of Boehringer Ingelheim GmbH  **[0001555280-24-000143_zts-20231231.htm:16]** .
- **Merck Animal Health** - The animal health division of Merck & Co., Inc.  **[0001555280-24-000143_zts-20231231.htm:16]** .
- **Elanco Animal Health**  **[0001555280-24-000143_zts-20231231.htm:16]** .
- **IDEXX Laboratories**  **[0001555280-24-000143_zts-20231231.htm:16]** .
- **Several new start-up companies** working in the animal health area  **[0001555280-24-000143_zts-20231231.htm:16]** .

df662e1107a35d6ca8fbbe9eddd21c3820deb14867679161fdefda7fb30b0ce5

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

c179c6df8b792b88086ffa71e845f38e8e9657e7cc44288f6a8639405f4a3a78

| Name                   | Position                                                                 | Start Date         | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|------------------------|--------------------------------------------------------------------------|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Kristin C. Peck        | Chief Executive Officer and Director                                     | January 2020       | Kristin C. Peck has been the CEO of Zoetis since January 2020 and a Director since October 2019. She played a significant role in Zoetis's IPO in 2013 and has held various executive roles within the company  **[0001104659-24-045571_tm242891d4_def14a.htm:19]** **[0001555280-24-000143_zts-20231231.htm:27]** .                                                                                                                   |
| Wetteny Joseph         | Executive Vice President and Chief Financial Officer                     | June 2021          | Wetteny Joseph joined Zoetis as EVP and CFO in June 2021. He previously worked at Catalent and held senior financial positions at HD Supply and Hughes Supply  **[0001555280-24-000143_zts-20231231.htm:27]** .                                                                                                                                                                       |
| Nick Ashton            | Executive Vice President and President, Global Manufacturing and Supply  | May 2022           | Nick Ashton has been EVP and President of Global Manufacturing and Supply since May 2022. He joined Zoetis in 2020 and has over 25 years of experience in production and supply chain management  **[0001555280-24-000143_zts-20231231.htm:27]** .                                                                                                                                   |
| Ester Banque           | Executive Vice President and President, U.S. Operations                  | July 2023          | Ester Banque started as EVP and President of U.S. Operations in July 2023. She joined from Bristol-Meyers Squibb and has extensive experience from her time at Novartis  **[0001555280-24-000143_zts-20231231.htm:28]** .                                                                                                                                                             |
| Jamie Brannan          | Executive Vice President and Chief Commercial Officer                    | November 11, 2024  | Jamie Brannan was appointed EVP and Chief Commercial Officer on November 11, 2024. He has been with Zoetis since 2016 and previously served as EVP and Group President of International Operations, Aquaculture, and Global Diagnostics  **[0001555280-24-000335_exhibit991brannancco111124.htm:0]** **[0001555280-24-000335_zts-20241111.htm:2]** **[0001555280-24-000335_exhibit991brannancco111124.htm:1]** .                                                                                       |
| Heidi C. Chen          | Executive Vice President, General Counsel and Corporate Secretary        | October 2012       | Heidi C. Chen has been EVP and General Counsel since October 2012 and Corporate Secretary since July 2012. She oversees the Human Health Diagnostics business since January 2020  **[0001555280-24-000143_zts-20231231.htm:28]** **[0001555280-23-000074_zts-20221231.htm:28]** .                                                                                                                                                 |
| Rimma Driscoll         | Executive Vice President and Head of Global Strategy, Commercial and Business Development | November 2022      | Rimma Driscoll has been EVP and Head of Global Strategy since November 2022. She joined Zoetis in 2016 and has held various roles in business development  **[0001555280-24-000143_zts-20231231.htm:28]** **[0001555280-23-000074_zts-20221231.htm:28]** .                                                                                                                                                                        |
| Jeannette Ferran Astorga| Executive Vice President, Corporate Affairs, Communications and Chief Sustainability Officer | January 2022       | Jeannette Ferran Astorga has been EVP, Corporate Affairs, Communications and Chief Sustainability Officer since January 2022. She joined Zoetis in September 2020 as VP, Head of Sustainability  **[0001555280-24-000143_zts-20231231.htm:28]** **[0001555280-23-000074_zts-20221231.htm:28]** .                                                                                                                                   |
| Roxanne Lagano         | Executive Vice President, Chief Human Resources Officer and Global Operations | November 2012     | Roxanne Lagano has been EVP and Chief Human Resources Officer since November 2012. She took on additional responsibilities for Global Operations and Security in January 2020  **[0001555280-24-000143_zts-20231231.htm:29]** **[0001555280-23-000074_zts-20221231.htm:28]** .                                                                                                                                                   |
| Wafaa Mamilli          | Executive Vice President, Chief Digital & Technology Officer and Group President for China, Brazil and Precision Animal Health | November 2022      | Wafaa Mamilli has been EVP, Chief Digital & Technology Officer since November 2022. She joined Zoetis from Eli Lilly and Company  **[0001555280-24-000143_zts-20231231.htm:29]** **[0001555280-23-000074_zts-20221231.htm:29]** .                                                                                                                                                                                                |
| Robert J. Polzer       | Executive Vice President and President, Research and Development         | January 2022       | Robert J. Polzer has been EVP and President of Research and Development since January 2022. He joined Zoetis in 2015 and has over 20 years of experience with Pfizer  **[0001555280-24-000143_zts-20231231.htm:29]** **[0001555280-23-000074_zts-20221231.htm:29]** .                                                                                                                                                             |
| Keith Sarbaugh         | Executive Vice President and Chief Digital & Technology Officer          | November 11, 2024  | Keith Sarbaugh was promoted to EVP and Chief Digital & Technology Officer on November 11, 2024. He joined Zoetis in March 2023 and has nearly 25 years of technology leadership experience  **[0001555280-24-000335_zts-20241111.htm:1]** **[0001555280-24-000335_exhibit991brannancco111124.htm:1]** .                                                                                                                                      |
| Jared Shriver          | President, U.S. Operations                                               | November 11, 2024  | Jared Shriver was promoted to President, U.S. Operations on November 11, 2024. He has been with Zoetis for nearly 20 years, holding various commercial roles  **[0001555280-24-000335_zts-20241111.htm:2]** **[0001555280-24-000335_exhibit991brannancco111124.htm:1]** .                                                                                                                                                                     |
| Gavin D.K. Hattersley  | Member of the Board of Directors, Corporate Governance and Sustainability Committee | April 2024        | Gavin D.K. Hattersley has been a Director at Zoetis since April 2024. He is also the President and CEO of Molson Coors Beverage Company  **[0001104659-24-045571_tm242891d4_def14a.htm:15]** .                                                                                                                                                                                            |

d7c55a734d59094119fd9c4594def26b5b73a60ee925d5ab37ad02ccaf52dddb

| Program Details          | Program 1                  | Program 2                  |
|--------------------------|----------------------------|----------------------------|
| Approval Date            | December 2021  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**     | August 2024  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**       |
| End Date/Duration        | Multi-year  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**        | Multi-year  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**        |
| Total additional amount  | **$3.5 billion**  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**  | **Up to $6 billion**  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**  |
| Remaining authorization  | **$200 million**  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**  | **$6,199,536,894**  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**  |
| Details                  | Shares repurchased at management's discretion  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**  | Shares repurchased at management's discretion  **[0001555280-24-000332_zts-20240930.htm:51]** **[0001555280-24-000332_zts-20240930.htm:60]** **[0001555280-24-000332_zts-20240930.htm:25]**  |

c19bfa1a6c8e745a4c498933a637b133f33e3f5fce5dfd4e1ae38a1bde945f40

**Annual guidance for FY 2024:**
- **Revenue**: $9.2 billion to $9.3 billion  **[ZTS_3405576_6]**  (raised from $9.1 billion to $9.25 billion  **[ZTS_3396569_8]** )  
- **Adjusted Net Income**: $2.67 billion to $2.695 billion  **[ZTS_3405576_6]**  (raised from $2.64 billion to $2.69 billion  **[ZTS_3396569_8]** )  
- **Adjusted Diluted EPS**: $5.86 to $5.92  **[ZTS_3405576_6]**  (raised from $5.78 to $5.88  **[ZTS_3396569_8]** )  
- **Reported Diluted EPS**: $5.33 to $5.39  **[ZTS_3405576_6]**  (lowered from $5.35 to $5.45  **[ZTS_3396569_8]** )  

7d1b76b9c07beaa5e5096336d792015b4f778076f006f70edba9d36f202dc6f3

| Name      | Start Date | End Date | Reason for Change |
|-----------|------------|----------|-------------------|
| KPMG LLP  | 2011  **[0001555280-24-000143_zts-20231231.htm:108]**  | Present  | Current auditor   |

039beb895da052a4a7c7fc1f5403ec4898f55ba997cb297dc28c1ae9b890e695

e42a4b024d2b62ad60f053450476eb46af754aa35c7227ec762dbbc9abfe1b88

- Total Revenue: $2,388 million (**+11%** YoY)  **[0001555280-23-000247_zts-20230930.htm:29]** **[0001555280-24-000332_zts-20240930.htm:39]** **[0001555280-24-000332_zts-20240930.htm:10]** **[0001555280-24-000332_zts-20240930.htm:2]**   
- U.S. Segment: $1,346 million (**+15%** YoY)  **[0001555280-23-000247_zts-20230930.htm:29]** **[0001555280-24-000332_zts-20240930.htm:39]** **[0001555280-24-000332_zts-20240930.htm:10]** **[0001555280-24-000332_zts-20240930.htm:2]**   
- International Segment: $1,021 million (+7% YoY)  **[0001555280-23-000247_zts-20230930.htm:29]** **[0001555280-24-000332_zts-20240930.htm:39]** **[0001555280-24-000332_zts-20240930.htm:10]** **[0001555280-24-000332_zts-20240930.htm:2]**   
- Companion Animal: $1,609 million (+14% YoY)  **[0001555280-23-000247_zts-20230930.htm:9]** **[0001555280-24-000332_zts-20240930.htm:39]** **[0001555280-24-000332_zts-20240930.htm:10]** **[0001555280-24-000332_zts-20240930.htm:2]**   
- Livestock: $758 million (+6% YoY)  **[0001555280-23-000247_zts-20230930.htm:9]** **[0001555280-24-000332_zts-20240930.htm:39]** **[0001555280-24-000332_zts-20240930.htm:10]** **[0001555280-24-000332_zts-20240930.htm:2]**   
- Other Pharmaceuticals: $169 million (**-46%** YoY)  **[0001555280-23-000247_zts-20230930.htm:9]** **[0001555280-24-000332_zts-20240930.htm:39]** **[0001555280-24-000332_zts-20240930.htm:10]** **[0001555280-24-000332_zts-20240930.htm:2]**   
- Operating Income (EBIT): $874 million (**+22%** YoY)  **[0001555280-23-000247_zts-20230930.htm:2]** **[0001555280-23-000247_zts-20230930.htm:30]** **[0001555280-24-000332_zts-20240930.htm:2]** **[0001555280-24-000332_zts-20240930.htm:30]**   
- Net Income: $682 million (+14% YoY)  **[0001555280-23-000247_zts-20230930.htm:2]** **[0001555280-23-000247_zts-20230930.htm:24]** **[0001555280-24-000332_zts-20240930.htm:2]** **[0001555280-24-000332_zts-20240930.htm:30]**   

a4ecf31ddf2432a6beb06947dbf82fe00bea0f134582b49fa9e3005dd788cbfd

ca9fe9b8ef3c437eaf2c3662fd694112218b674b075840f1b76383a2b75a6826

Price growth (percent)

Volume growth from new products (percent)

Volume growth from other in-line products (percent)

Volume growth from key dermatology products (percent)

1e7aa41ec68053597f5d2a2a598ae4f0f66154af7393915652ad7168b3771b8c

| Year | Amount Due (millions) | Debt Type | Interest Rate (%) | % of Total Debt |
|------|-----------------------|-----------|-------------------|-----------------|
| 2025 | $750 **[0001555280-24-000332_zts-20240930.htm:18]** | 2015 Senior Notes | 4.500 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 11.3% = (750 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2025 | $600 **[0001555280-24-000332_zts-20240930.htm:18]** | 2022 Senior Notes | 5.400 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 9.0% = (600 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2027 | $750 **[0001555280-24-000332_zts-20240930.htm:18]** | 2017 Senior Notes | 3.000 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 11.3% = (750 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2028 | $500 **[0001555280-24-000332_zts-20240930.htm:18]** | 2018 Senior Notes | 3.900 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 7.5% = (500 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2030 | $750 **[0001555280-24-000332_zts-20240930.htm:18]** | 2020 Senior Notes | 2.000 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 11.3% = (750 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2032 | $750 **[0001555280-24-000332_zts-20240930.htm:18]** | 2022 Senior Notes | 5.600 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 11.3% = (750 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2043 | $1,150 **[0001555280-24-000332_zts-20240930.htm:18]** | 2013 Senior Notes | 4.700 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 17.3% = (1,150 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2047 | $500 **[0001555280-24-000332_zts-20240930.htm:18]** | 2017 Senior Notes | 3.950 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 7.5% = (500 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2048 | $400 **[0001555280-24-000332_zts-20240930.htm:18]** | 2018 Senior Notes | 4.450 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 6.0% = (400 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |
| 2050 | $500 **[0001555280-24-000332_zts-20240930.htm:18]** | 2020 Senior Notes | 3.000 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** | 7.5% = (500 / 6,650) * 100 **[0001555280-24-000332_zts-20240930.htm:18]** **[0001555280-24-000332_zts-20240930.htm:50]** |

61f3ab0a8f2f4104d2854b0fe0626bab4cadbca659cf26a6aa72e0bb5ca4a247

1. **Guidance Increase Details**  
   **Q:** What's included in the increased guidance for top and bottom line?  
   **A:** Zoetis raised the midpoint of guidance by about **50 basis points** on both top and bottom lines. While committed to driving operational growth with about **450 basis points** separation between top and bottom line growth, they plan to invest in areas that will drive future growth, impacting operational leverage in Q3. The back half of the year is expected to see about **9%** top-line growth, with leverage more weighted toward Q4.  **[ZTS_3396569_12]** 

2. **Dermatology Growth Outlook**  
   **Q:** Is there an updated view on derm growth given strong results?  
   **A:** Given an **18% growth** in Q2, Zoetis has raised expectations for its key dermatology franchise from high single digits to **double-digit growth** for 2025. The competitor’s product facing a black box warning positions Zoetis’s APOQUEL favorably, having treated over **23 million** pets with satisfaction levels around **90%** on safety and efficacy.  **[ZTS_3396569_17]** 

3. **Librela Sales Ramp and Outlook**  
   **Q:** Will Librela's U.S. sales continue to ramp up?  
   **A:** Librela experienced **142%** growth this quarter, with **80%** U.S. penetration and an **86%** reorder rate. Zoetis expects significant quarter-over-quarter growth for the rest of the year. Potential label changes are not a concern, as similar changes in the EU and UK did not impact positive growth trends.  **[ZTS_3396569_10]** 

4. **Pricing vs. Volume Contribution**  
   **Q:** What's the split between price and volume growth?  
   **A:** In Q2, growth comprised about **8% price** and **3% volume**, with **2 points** of price from Argentina, resulting in **6% price** and **3% volume** excluding Argentina. Year-to-date growth is balanced at **5% price** and **5% volume**, a trend expected to continue for the full year.  **[ZTS_3396569_9]** 

5. **Impact of Economic Trends on Business**  
   **Q:** How do consumer and vet visit trends affect guidance?  
   **A:** Despite lower pet discretionary spending and declining clinic visits, Zoetis saw **4%** growth in clinic revenue and **13%** growth in U.S. companion animal business. Pet owners view pet health as essential, with **86%** willing to spend "whatever it takes," making Zoetis optimistic and confident in its guidance.  **[ZTS_3396569_16]** 

6. **Competitive Positioning in Derm and Parasiticides**  
   **Q:** How does competitive positioning affect guidance and outlook?  
   **A:** Zoetis is raising guidance based on strong core business momentum. In dermatology, expectations have increased to double-digit growth due to strong performance and competitor challenges. In parasiticides, anticipated late-year competitive launches are not expected to have a meaningful impact on guidance.  **[ZTS_3396569_10]** 

7. **APOQUEL Chewable's Impact and Patent Life**  
   **Q:** How is APOQUEL Chewable impacting sales and patent life?  
   **A:** APOQUEL Chewable is primarily converting existing APOQUEL users and is important for future strategy but isn't significantly contributing to overall growth yet. The dermatology franchise has patents extending to **2031**, covering active ingredients, formulations, and dosing regimens.  **[ZTS_3396569_11]** **[ZTS_3396569_13]** 

8. **Derm Market Expansion Strategies**  
   **Q:** Why is there still a sizable unaddressed derm market?  
   **A:** Zoetis sees significant opportunities in improving compliance and expanding the market. There's potential to convert **3 million** dogs currently on steroids and reach **8 million** dogs not receiving adequate treatment. Strategies include enhancing compliance through retail and auto-ship and targeting undertreated segments.  **[ZTS_3396569_11]** 

9. **Antitrust Investigation in Europe**  
   **Q:** Any updates on the European antitrust investigation?  
   **A:** The investigation involves an experimental compound from the Nexvet acquisition **7 years ago**. Zoetis believes its decision to halt the compound was sound and expects concerns to be unfounded once the investigation concludes.  **[ZTS_3396569_18]** 

10. **Livestock Market Outlook**  
    **Q:** Is livestock market growth sustainable at current rates?  
    **A:** The livestock portfolio grew **9%** this quarter. While the livestock market typically grows **2% to 4%**, increased pricing in hyperinflationary markets like Argentina may push growth toward the higher end of that range. Zoetis expects to align with or slightly exceed market growth under current conditions.  **[ZTS_3396569_19]** 

d22eda27a7e2f9b602d3e848470a5aa417121cd796e2b9c6329b8cc3beddef7a

2d0a6cafef6b3645cf030066c80faf518c39fb3f6023cd14dcb4254edb533201

- *• Strong Performance of Key Products:** Zoetis reported that **Librela** exceeded expectations with **$44 million in U.S. sales** in Q4 2023  **[ZTS_3373042_17]** , while **Simparica Trio** achieved **21% growth in the quarter** and continued to gain patient share despite competition.  **[ZTS_3373042_16]**  The company expects **mid- to high single-digit growth** for Simparica Trio in 2024.  **[ZTS_3373042_16]**
- *• Confidence in Dermatology Franchise Growth:** The company is confident in defending and growing its **dermatology franchise**, which saw **8% growth** in Q4 2023.  **[ZTS_3373042_11]**  Zoetis anticipates **mid- to high single-digit growth** in this segment for 2024, even with expected competitive entries.  **[ZTS_3373042_11]**  Innovations like **Apoquel chewable** and investments in **long-acting formulations** are enhancing their product offerings.  **[ZTS_3373042_11]**
- *• Positive Financial Outlook and Margin Expansion:** Zoetis expects to achieve **100 basis points of margin expansion in 2024**, despite previous FX headwinds.  **[ZTS_3373042_9]**  The company has provided strong guidance with **7% to 9% operational revenue growth** and **9% to 11% adjusted net income growth** for 2024  **[ZTS_3373042_9]** , reflecting confidence in their ability to expand margins and deliver shareholder value.

d8f6c35b70d57a08dbd76907bb941d0ac7e2c54a1dd7f82983228732b7d27a9e

- **Zoetis expects continued economic weakness in China to impact their business in 2024**, with headwinds affecting both the companion animal and livestock segments, particularly in the first half of the year.  **[ZTS_3373042_17]**
- **Anticipated competitive entries may challenge Zoetis's key product franchises**, including potential competition against Apoquel in dermatology and Elanco's Quattro in the parasiticide space, which could impact market share and growth.  **[ZTS_3373042_11]** **[ZTS_3373042_17]**
- **Veterinary capacity constraints in the U.S. could pose a headwind to the growth of Librela**, affecting longer-term treatment compliance since monthly clinic visits are essential for this injectable osteoarthritis pain medication.  **[ZTS_3373042_13]**

fed758851ecdd26fc71422e1d458ae9b29ecf209db562e5ce3316fd779502312

- **Zoetis has a strong history of outperforming the market by 3 percentage points on average over a decade and is very confident in continuing to outperform the industry due to its robust existing portfolio and continuous investment in innovation.**  **[ZTS_3405576_16]**
- **Key products like APOQUEL demonstrate impressive growth, with 16% growth in the quarter, driven by 11 years of safety, 90% satisfaction rates, and significant market opportunity with millions of untreated or undertreated dogs.**  **[ZTS_3405576_15]**
- **Alternative channels are significant growth drivers for Zoetis, up 34% year-over-year in the quarter, reducing dependency on clinic visits and driving higher compliance.**  **[ZTS_3405576_12]**

feb081d866e7b6648f797b2b12e10716a20154e04beef23b6dbb82ca304bac2b

- **Zoetis's new OA pain medication, Librela, is experiencing strong market adoption with **$100 million** in Q1 revenue (**189% growth**), including **$40 million** in U.S. sales with minimal stocking, indicating significant potential for continued growth.**  **[ZTS_3382120_11]**
- **Zoetis is confident in continuing to grow its key franchises, including **Simparica Trio** and dermatology products, despite competition, demonstrating ability to gain market share and maintain pricing power; **Simparica Trio** grew **61%** in Q1.**  **[ZTS_3382120_17]**
- **The company is not seeing signs of consumer weakness; pet owners continue to invest in pet healthcare, with **spend per visit up 6%**, supporting ongoing growth in their companion animal portfolio.**  **[ZTS_3382120_14]**

97e0dcee54380bb49aa9f9feebbb55171c57d74586d5f3e4a301ac19fa0c63bc

- *1. Anticipated increased competition in dermatology and parasiticide segments may impact Zoetis' market share and pricing power, as competitors like BI and Elanco are expected to launch products in the second half of the year.**  **[ZTS_3382120_15]** **[ZTS_3382120_12]** **[ZTS_3382120_17]**
- *2. A significant portion (up to half) of Zoetis' revenue growth guidance relies on price increases in hyperinflationary markets like Argentina, which are volatile and unpredictable, posing risks to sustained growth.**  **[ZTS_3382120_15]** **[ZTS_3382120_10]**
- *3. Elevated R&D and SG&A expenses, including over **$600 million** in R&D spending and increased advertising costs for products like Librela, coupled with limited near-term pipeline updates, may pressure margins and growth prospects.**  **[ZTS_3382120_13]** **[ZTS_3382120_12]**

96c07dcba37183642753099994394442a53261968fa5978196d7bfdafde51781

- **Librela**, Zoetis' osteoarthritis pain therapy for dogs, is showing strong growth with **80% U.S. clinic penetration** and an **86% reorder rate**, indicating high satisfaction and expected continued quarter-over-quarter growth.  **[ZTS_3396569_19]**
- Zoetis is **raising expectations for its key dermatology franchise to double-digit growth in 2025**, driven by the success of **APOQUEL**, which has treated over **23 million dogs** with around **90% satisfaction** in safety and efficacy, and is well-positioned against competitors with products carrying black box warnings.  **[ZTS_3396569_19]**
- Despite concerns about consumer spending, Zoetis' **U.S. companion animal business grew 13%** in the quarter, outperforming the overall market due to strong demand from young, affluent pet owners who consider pet healthcare essential.  **[ZTS_3396569_19]**

e95b8f6da8e679fcce4c917d775f1701c143e3a8097a6ae77d113a7516e77dd2

1. **Margin Outlook**  
   **Q:** What is the margin outlook for 2024 and beyond?  
   **A:** Management expects about **100 basis points of margin expansion in 2024**.  **[ZTS_3373042_9]**  Factors like FX and the ramp-up of Librela affected margins in 2023, but they anticipate margins will expand as Librela becomes accretive, especially beyond 2024 when it aligns with innovative companion animal products.  **[ZTS_3373042_8]** **[ZTS_3373042_9]** 

2. **Librela Performance**  
   **Q:** What are expectations for Librela's performance in 2024?  
   **A:** Librela achieved **$44 million in U.S. sales in Q4**, with **one-quarter to one-third attributed to initial stocking**.  **[ZTS_3373042_9]**  While no specific 2024 revenue target was given, management is pleased with the early launch and expects contributions from Librela to accelerate throughout the year, particularly in Q2 and Q3.  **[ZTS_3373042_9]** **[ZTS_3373042_10]** 

3. **Currency Impact**  
   **Q:** How is currency affecting revenue and earnings?  
   **A:** Currency fluctuations are causing significant headwinds, with about **100 basis points impact on revenue** and **150 basis points on EPS**.  **[ZTS_3373042_13]**  Strengthening of the U.S. dollar against currencies like the Argentine peso, Brazilian real, and Turkish lira has a disproportionate effect due to high inflation in those markets.  **[ZTS_3373042_13]** 

4. **China Headwinds**  
   **Q:** What impact is expected from China in 2024?  
   **A:** Continued economic challenges in China are expected, particularly in the first half of 2024.  **[ZTS_3373042_12]**  Low consumer confidence, depressed swine prices, and reduced consumption are factors. Management does not expect China to contribute to growth in the near term and anticipates potential declines in the first half.  **[ZTS_3373042_12]** 

5. **Competitive Dynamics**  
   **Q:** How are competitive dynamics affecting key products?  
   **A:** For the Derm franchise, management anticipates **mid- to high single-digit growth** in 2024, accounting for potential competition against Apoquel.  **[ZTS_3373042_12]**  They plan to defend market share through product innovations like Apoquel chewable and ongoing investments.  **[ZTS_3373042_12]**  Regarding Simparica Trio, they are confident in continued growth despite upcoming competition from Elanco's Quattro, citing strong relationships and product differentiation.  **[ZTS_3373042_11]** 

6. **R&D Investment**  
   **Q:** What can you share about R&D spending and the pipeline?  
   **A:** Management is confident in their pipeline and continues to invest heavily in R&D across short, medium, and long-term horizons.  **[ZTS_3373042_14]**  They are working on life cycle enhancements like Apoquel chewable and innovative treatments in areas such as renal disease, cardiology, oncology, and diabetes.  **[ZTS_3373042_14]**  Investments also extend to diagnostics and livestock vaccines.  **[ZTS_3373042_14]** 

7. **Vet Visit Dynamics**  
   **Q:** What are expectations for vet visit growth?  
   **A:** They expect vet visits to return to normal historical levels at **0% to 1% growth**.  **[ZTS_3373042_15]**  Despite flat visits, revenue per visit increased by **7.5%**.  **[ZTS_3373042_15]**  Strong end-market demand persists, and they are more correlated with revenue growth due to their robust portfolio.  **[ZTS_3373042_15]** 

bf35f26f17b2b53615efef17e4ae18959a2ab1fe9c3a7a159f4b2021a80c76d8

1. **2025 Growth Outlook**  
   **Q:** What are the growth drivers and headwinds for 2025?  
   **A:** Management is confident in continuing to outperform the animal health market in 2025, with several sources of growth, including strong demand across key franchises like dermatology and Simparica Trio. Despite anticipating more normalized pricing, they expect pricing contributions slightly above their historical rate of **2–3%**. They also foresee China becoming more normalized, reducing this year's headwinds. The removal of MFAs will impact comparisons, as they will be cycling three and a half quarters of MFA revenue in 2024.  **[ZTS_3405576_11]** **[ZTS_3405576_13]** 

2. **Impact of MFA Divestiture**  
   **Q:** How will the MFA divestiture affect 2025 financials?  
   **A:** The MFA business, which generated approximately **$400 million** in revenue last year with about **30% margins**, is being divested. This will affect 2025 financials as the company will be comping against three and a half quarters of MFA revenue from 2024. Management provided seasonality details, noting it's roughly linear, and advised that the impact can be calculated based on the provided figures.  **[ZTS_3405576_9]** 

3. **Pricing Strategy Confidence**  
   **Q:** Can you maintain above-average price increases next year?  
   **A:** Management is confident in their ability to continue taking price increases, focusing on product-by-product differentiation and the value their innovations bring. Excluding Argentina, they have achieved price growth of **4.5% to 5%** across their portfolio this year, contributing to significant volume growth. They believe this approach, along with their diverse and innovative portfolio, supports ongoing pricing power despite competitive and macroeconomic factors.  **[ZTS_3405576_14]** **[ZTS_3405576_12]** 

4. **Competition Impact on Apoquel**  
   **Q:** How will new competition affect Apoquel's growth?  
   **A:** Management remains very confident in Apoquel's continued growth despite new competition like Zynrelia. They highlight Apoquel's **11 years of safety**, high satisfaction rates around **90%**, and strong efficacy. The focus will be on growing the category, addressing under-treated dogs, and maintaining current promotional strategies without significant changes due to competition.  **[ZTS_3405576_15]** **[ZTS_3405576_8]** 

5. **Simparica Trio Performance**  
   **Q:** Why is Simparica Trio outperforming amid competition?  
   **A:** Simparica Trio continues to excel, being the **#1 prescribed parasiticide** and used in over **13 million dogs**. Its global growth of **27%** is attributed to its first-mover advantage, comprehensive coverage, convenience as a chewable, and effective commercial execution, including leveraging alternative channels, which now account for about **20%** of sales. Management expects strong momentum to continue into 2025, with the market expanding as new entrants promote the oral flea, tick, and heartworm segment.  **[ZTS_3405576_10]** **[ZTS_3405576_13]** 

6. **Sustaining Above-Industry Growth**  
   **Q:** Can you maintain growth without new pipeline contributions?  
   **A:** Management is confident in sustaining above-industry growth based on their existing portfolio and continued lifecycle innovation. They emphasize their history of outperforming the market by **3 percentage points** on average over a decade. Building and expanding markets through innovation and defending established standards of care contribute to the resilience of their growth strategy.  **[ZTS_3405576_16]** 

7. **Librela's Growth Prospects**  
   **Q:** What are the expectations for Librela's sales progression?  
   **A:** Librela is the company's most successful launch, achieving **123%** global growth and reaching **1 million** patients in the first 12 months. With an **85% penetration rate** in the U.S. and over **90%** globally, there's significant runway for growth, considering **8 million** dogs are still on NSAIDs. Management expects continued strong growth into next year, although they note seasonal trends with peaks in Q2 and variations in subsequent quarters.  **[ZTS_3405576_8]** **[ZTS_3405576_11]** **[ZTS_3405576_15]** 

d2efdda05d14cbc1a6448cb7243c5f97364d4458952d6fc3996175ba02b8d0e6

- **Concerns about Zoetis' ability to maintain above-industry average sales growth based solely on current on-market products without contributions from the pipeline or business development, which could impact long-term growth sustainability.**  **[ZTS_3405576_16]**
- **Increased competition in key product areas, such as new entrants challenging Apoquel (e.g., Zynrelia), could slow down growth or require additional promotional activities, impacting profitability.**  **[ZTS_3405576_15]**
- **Declining veterinary clinic visits may affect prescription growth for Zoetis' products, as initial prescriptions often occur during visits, possibly necessitating increased promotional efforts in alternative channels that could affect margins.**  **[ZTS_3405576_12]**

a4d4392f0b8b7aaa4fe5214cb81839f5a33721db560b6d75b1e419338b0c09be

1. **Guidance Increase and Argentina Impact**  
   **Q:** What drove the guidance increase and how much did Argentina contribute?  
   **A:** Management raised the operational revenue guidance by **150 basis points** due to strong performance in key products like Librela and Simparica Trio, as well as contributions from Argentina's hyperinflationary market. Argentina added about **200 basis points** to year-over-year growth in the quarter, contributing roughly **one-third to half** of the guidance increase, while the rest came from underlying business strength. ( **[ZTS_3382120_10]** ,  **[ZTS_3382120_15]** )

2. **Librela Safety and Market Uptake**  
   **Q:** Are there safety concerns with Librela affecting its uptake?  
   **A:** Management has utmost confidence in Librela's safety and efficacy, with over **14 million dogs** treated and adverse event rates at **0.18%** globally. No single adverse event is classified as more than rare (1 to 10 per 10,000). Despite social media attention, veterinarians continue prescribing Librela, and orders are increasing steadily. ( **[ZTS_3382120_10]** ,  **[ZTS_3382120_16]** ,  **[ZTS_3382120_19]** )

3. **Simparica Trio Growth Amid Competition**  
   **Q:** How is Simparica Trio performing amid competition?  
   **A:** Simparica Trio delivered **61%** growth globally, reaching **$243 million** in revenue, with the U.S. also growing **61%**. Despite head-to-head competition, it continues to gain market share, supported by effective promotion and strong demand. ( **[ZTS_3382120_9]** ,  **[ZTS_3382120_17]** )

4. **Margins and Argentina's Impact**  
   **Q:** Why aren't margins improving despite strong revenue?  
   **A:** Gross margins declined by **10 basis points** due to nearly **200 basis points** of foreign exchange headwinds, notably from Argentina's devaluation affecting cost of goods sold. Operationally, gross margins expanded by **200 basis points**, contributing to **15%** operational growth in adjusted net income. ( **[ZTS_3382120_9]** )

5. **Librela Sales Progression and Market Expansion**  
   **Q:** What is the sales outlook for Librela moving forward?  
   **A:** Librela delivered **$100 million** in Q1 revenue, up **189%**, with the U.S. contributing **$40 million**. Management expects sequential growth throughout the year, driven by increasing uptake in both severe and moderate osteoarthritis cases and extended therapy duration from **6–7 months** to **7–8 months**. ( **[ZTS_3382120_11]** ,  **[ZTS_3382120_13]** ,  **[ZTS_3382120_16]** )

6. **Product Pipeline and R&D Investment**  
   **Q:** Are there updates on the product pipeline and R&D efforts?  
   **A:** The company is investing over **$600 million** in R&D, focusing on long-lasting monoclonal antibodies, renal, oncology, cardiovascular, and diagnostics. Near-term launches include life-cycle innovations like long-acting monoclonal antibodies, with no specific announcements at this time. ( **[ZTS_3382120_13]** )

7. **Livestock Business and Portfolio Pruning**  
   **Q:** Are there plans to further prune the livestock portfolio?  
   **A:** Following the sale of the feed additives business, management continues to assess the portfolio. The focus is on investing in higher-growth, higher-margin areas like preventatives, antibiotic alternatives, vaccines, and genetics. Livestock is expected to grow at the higher end of the historical **2–4%** range. ( **[ZTS_3382120_11]** )

8. **Dermatology Franchise and Competition**  
   **Q:** How will upcoming competition affect the dermatology franchise?  
   **A:** Management remains confident in growing the dermatology franchise despite anticipated competition. They launched Apoquel Chewable to meet market preferences and as a defense strategy. In Europe, **40%** of Apoquel sales have converted to chewables, and they aim to accelerate this in the U.S. High single-digit growth is expected for key dermatology products. ( **[ZTS_3382120_12]** ,  **[ZTS_3382120_15]** ,  **[ZTS_3382120_17]** )

9. **Consumer Spending and Pet Adoption Trends**  
   **Q:** Are economic factors affecting consumer pet spending?  
   **A:** Management is not seeing a weakening consumer. Spend per veterinary visit in the U.S. is up **6%**, and essential pet healthcare remains resilient. There has been no significant increase in pet abandonment or returns to shelters. ( **[ZTS_3382120_14]** )

10. **Librela Education Efforts and FDA Dialogue**  
    **Q:** What is the effect of vet education sessions on Librela usage?  
    **A:** Thousands of veterinarians have participated in webinars and education sessions, increasing confidence in prescribing Librela appropriately. Regular dialogue with the FDA is ongoing as part of normal business practices to support product understanding and safety monitoring. ( **[ZTS_3382120_19]** )

a09cd06c2603349aad4493fa2642f3d827c54f89f78cd221f83a1d238d19160a

- **Revenue growth is heavily reliant on price increases**, particularly in hyperinflationary markets like Argentina, contributing about **2 percentage points** to price growth in the quarter. This raises concerns about the **sustainability of growth**, as such price increases may not continue, and volume growth remains lower.  **[ZTS_3396569_9]**
- **Decline in overall veterinary clinic visits** may impact future sales of companion animal products. While management acknowledges a decline in clinic visits, there is uncertainty whether consumers will maintain spending on pet healthcare amidst a weakening consumer environment.  **[ZTS_3396569_16]**
- **Potential label changes to Librela due to ongoing FDA reviews** could negatively impact its adoption and sales growth in the U.S. market. The company is in discussions with the FDA about possible changes, and similar label changes in other markets have occurred.  **[ZTS_3396569_10]**

61b6607694d62f611d9665e698c97c88b75c53f3f47ccc501172db67059c2b52

Zoetis Inc (ZTS)

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