Zoetis (ZTS) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $2.5 billion, flat year-over-year, with adjusted net income of $781 million, down 1% year-over-year, and net income of $691 million, down 5% on a reported basis; adjusted diluted EPS was $1.87, up 4–5% year-over-year.

• U.S. revenue fell 7%, driven by an 11% decline in Companion Animal sales, while Livestock grew 23%; International revenue rose 6–8%, with growth in both Companion Animal and Livestock segments.

• Companion Animal market faced pressure from lower clinic visits, price sensitivity, and increased competition, while Livestock and Diagnostics segments showed strength.

• Leadership changes included the appointment of a new EVP, CFO & COO, and commercial strategy was adapted to accelerate decision-making and focus on innovation.

• Portfolio advanced with new product launches and acquisitions, including VitalRADS, Lenivia, and Portela, and more than 12 potential blockbuster candidates in development.

Financial highlights

• Global Q2 revenue was $2.5 billion, flat reported and down 1% organically; adjusted net income was $781 million, down 1–2% organically.

• Adjusted diluted EPS was $1.87, up 4–5% year-over-year, benefiting from share repurchases exceeding $550 million in the quarter.

• Adjusted gross margin was 72.9%, down 40 bps reported; U.S. gross margin was 83.1%, international 71.0%.

• Adjusted SG&A was $586 million, down 3–4% year-over-year; adjusted R&D was $173 million, up 4–5%.

• Effective tax rate on adjusted income was 20.2–20.5%.

Outlook and guidance

• Full-year 2026 revenue guidance revised to $9.12–$9.32 billion, reflecting a 3%–1% organic decline year-over-year.

• Adjusted net income expected at $2.57–$2.62 billion, down 9%–5% organically; adjusted diluted EPS forecast at $6.15–$6.25.

• Guidance reflects persistent competitive and pricing pressures, especially in U.S. Companion Animal, and assumes no near-term market stabilization.

• Reported diluted EPS expected at $5.55–$5.65.