ゾエティスの四半期報告

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended
			September 30, 2025
			or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the transition period from __________ to __________


Commission File Number:			001-35797


Zoetis Inc.
(Exact name of registrant as specified in its charter)

Delaware

46-0696167

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

10 Sylvan Way,

Parsippany,

New Jersey

07054

(Address of principal executive offices)

(Zip Code)

(973) 822-7000


(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ZTS

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of October 31, 2025, there were 440,693,214 shares of common stock outstanding.

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TABLE OF CONTENTS

Page

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Statements of Income (Unaudited)

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Condensed Consolidated Balance Sheets (Unaudited)

Condensed Consolidated Statements of Equity (Unaudited)

Condensed Consolidated Statements of Cash Flows (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II — OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

SIGNATURES

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ZOETIS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)	2025		2024		2025		2024
Revenue	$	2,400	$	2,388	$	7,080	$	6,939
Costs and expenses:
Cost of sales	683		701		1,954		2,012
Selling, general and administrative expenses	579		565		1,759		1,693
Research and development expenses	170		167		499		500
Amortization of intangible assets	32		35		97		107
Restructuring charges and certain acquisition and divestiture-related costs	4		5		34		51
Interest expense, net of capitalized interest	58		57		165		174
Other (income)/deductions—net	(13)		(16)		(27)		1
Income before provision for taxes on income	887		874		2,599		2,401
Provision for taxes on income	166		182		529		486
Net income before allocation to noncontrolling interests	721		692		2,070		1,915
Less: Net income/(loss) attributable to noncontrolling interests	—		10		—		10
Net income attributable to Zoetis Inc.	$	721	$	682	$	2,070	$	1,905
Earnings per share attributable to Zoetis Inc. stockholders:
Basic	$	1.63	$	1.51	$	4.65	$	4.18
Diluted	$	1.63	$	1.50	$	4.65	$	4.18
Weighted-average common shares outstanding:
Basic	442.9		452.9		445.2		455.4
Diluted	443.2		453.5		445.6		456.1
Dividends declared per common share	$	—	$	—	$	1.000	$	0.864

See notes to condensed consolidated financial statements.

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ZOETIS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Net income before allocation to noncontrolling interests	$	721	$	692	$	2,070	$	1,915
Other comprehensive income/(loss), net of tax(a):
Unrealized losses on derivatives for cash flow hedges, net of tax of $— and $(1) for the three months ended September 30, 2025 and 2024, respectively, and $(5) and $(1) for the nine months ended September 30, 2025 and 2024, respectively	—		(4)		(17)		(5)
Unrealized gains/(losses) on derivatives for net investment hedges, net of tax of $1 and $(7) for the three months ended September 30, 2025 and 2024, respectively, and $(30) and $(2) for the nine months ended September 30, 2025 and 2024, respectively	6		(23)		(101)		(5)
Foreign currency translation adjustments	53		21		240		(2)

Total other comprehensive income/(loss), net of tax	59		(6)		122		(12)
Comprehensive income before allocation to noncontrolling interests	780		686		2,192		1,903
Less: Comprehensive income/(loss) attributable to noncontrolling interests	—		10		—		10
Comprehensive income attributable to Zoetis Inc.	$	780	$	676	$	2,192	$	1,893

(a) Presented net of reclassification adjustments, which are not material in any period presented.

See notes to condensed consolidated financial statements.

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ZOETIS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,		December 31,
	2025		2024
(MILLIONS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)	(Unaudited)
Assets
Cash and cash equivalents(a)	$	2,084	$	1,987

Accounts receivable, less allowance for doubtful accounts of $18 in 2025 and $18 in 2024	1,541		1,316
Inventories	2,465		2,306


Other current assets	493		377
Total current assets	6,583		5,986
Property, plant and equipment, less accumulated depreciation of $2,872 in 2025 and $2,635 in 2024	3,600		3,391
Operating lease right-of-use assets	292		219
Goodwill	2,764		2,724
Identifiable intangible assets, less accumulated amortization	1,040		1,127
Noncurrent deferred tax assets	587		540
Other noncurrent assets	293		250
Total assets	$	15,159	$	14,237

Liabilities and Equity

Current portion of long-term debt	$	—	$	1,350
Accounts payable	410		433
Dividends payable	—		224
Accrued expenses	809		746
Accrued compensation and related items	337		441
Income taxes payable	152		93

Other current liabilities	99		125
Total current liabilities	1,807		3,412
Long-term debt, net of discount and issuance costs	7,069		5,220
Noncurrent deferred tax liabilities	147		167
Operating lease liabilities	204		174
Other taxes payable	270		272

Other noncurrent liabilities	264		222
Total liabilities	9,761		9,467
Commitments and contingencies (Note 15)
Stockholders’ equity:

Common stock, $0.01 par value: 6,000,000,000 authorized; 501,891,243 and 501,891,243 shares issued; 441,464,339 and 448,743,073 shares outstanding at September 30, 2025, and December 31, 2024, respectively	5		5
Treasury stock, at cost, 60,426,904 and 53,418,170 shares of common stock at September 30, 2025 and December 31, 2024, respectively	(8,606)		(7,445)
Additional paid-in capital	1,224		1,182
Retained earnings	13,593		11,968
Accumulated other comprehensive loss	(818)		(940)
Total Zoetis Inc. equity	5,398		4,770
Equity attributable to noncontrolling interests	—		—
Total equity	5,398		4,770
Total liabilities and equity	$	15,159	$	14,237

(a) As of September 30, 2025 and December 31, 2024, includes $4 million and $2 million of restricted cash, respectively.

See notes to condensed consolidated financial statements.

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ZOETIS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)


Three months ended September 30, 2025
	Zoetis
												Accumulated		Equity
								Additional				Other		Attributable to
		Common Stock			Treasury Stock			Paid-in		Retained		Comprehensive		Noncontrolling		Total
(MILLIONS OF DOLLARS AND SHARES)		Shares	Amount		Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance, June 30, 2025		501.9	$	5	57.9	$	(8,226)	$	1,203	$	12,872	$	(877)	$	—	$	4,977
Net income		—	—		—	—		—		721		—		—		721
Other comprehensive income		—	—		—	—		—		—		59		—		59

Share-based compensation awards (a)		—	—		—	1		21		—		—		—		22
Treasury stock acquired (b)		—	—		2.5	(381)		—		—		—		—		(381)


Balance, September 30, 2025		501.9	$	5	60.4	$	(8,606)	$	1,224	$	13,593	$	(818)	$	—	$	5,398

Three months ended September 30, 2024
	Zoetis
												Accumulated		Equity
								Additional				Other		Attributable to
		Common Stock			Treasury Stock			Paid-in		Retained		Comprehensive		Noncontrolling		Total
(MILLIONS OF DOLLARS AND SHARES)		Shares	Amount		Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance, June 30, 2024		501.9	$	5	48.0	$	(6,464)	$	1,146	$	11,124	$	(845)	$	(6)	$	4,960
Net income		—	—		—	—		—		682		—		10		692
Other comprehensive loss		—	—		—	—		—		—		(6)		—		(6)
Deconsolidation of noncontrolling interests		—	—		—	—		—		—		—		(4)		(4)
Share-based compensation awards (a)		—	—		—	2		17		—		—		—		19
Treasury stock acquired (b)		—	—		2.3	(427)		—		—		—		—		(427)


Balance, September 30, 2024		501.9	$	5	50.3	$	(6,889)	$	1,163	$	11,806	$	(851)	$	—	$	5,234

Shares may not add due to rounding.

(a) Includes the issuance of shares of Zoetis Inc. common stock and the reacquisition of shares of treasury stock associated with exercises of employee share-based awards. Also includes the reacquisition of shares of treasury stock associated with the vesting of employee share-based awards to satisfy tax withholding requirements. For additional information, see Note 12. Share-based Payments and Note 13. Stockholders’ Equity.

(b) Reflects the acquisition of treasury shares in connection with the share repurchase program and includes excise tax accrued on net share repurchases. For additional information, see Note 13. Stockholders’ Equity.

See notes to condensed consolidated financial statements.

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ZOETIS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED) - Continued


Nine months ended September 30, 2025
	Zoetis
												Accumulated		Equity
								Additional				Other		Attributable to
		Common Stock			Treasury Stock			Paid-in		Retained		Comprehensive		Noncontrolling		Total
(MILLIONS OF DOLLARS AND SHARES)		Shares	Amount		Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance, December 31, 2024		501.9	$	5	53.4	$	(7,445)	$	1,182	$	11,968	$	(940)	$	—	$	4,770
Net income		—	—		—	—		—		2,070		—		—		2,070
Other comprehensive income		—	—		—	—		—		—		122		—		122

Share-based compensation awards (a)		—	—		(0.3)	8		42		—		—		—		50
Treasury stock acquired (b)		—	—		7.3	(1,169)		—		—		—		—		(1,169)

Dividends declared		—	—		—	—		—		(445)		—		—		(445)
Balance, September 30, 2025		501.9	$	5	60.4	$	(8,606)	$	1,224	$	13,593	$	(818)	$	—	$	5,398

Nine months ended September 30, 2024
	Zoetis
												Accumulated		Equity
								Additional				Other		Attributable to
		Common Stock			Treasury Stock			Paid-in		Retained		Comprehensive		Noncontrolling		Total
(MILLIONS OF DOLLARS AND SHARES)		Shares	Amount		Shares	Amount		Capital		Earnings		Loss		Interests		Equity
Balance, December 31, 2023		501.9	$	5	43.5	$	(5,597)	$	1,133	$	10,295	$	(839)	$	(6)	$	4,991
Net income		—	—		—	—		—		1,905		—		10		1,915
Other comprehensive loss		—	—		—	—		—		—		(12)		—		(12)
Deconsolidation of noncontrolling interests		—	—		—	—		—		—		—		(4)		(4)
Share-based compensation awards (a)		—	—		(0.5)	15		30		—		—		—		45
Treasury stock acquired (b)		—	—		7.3	(1,307)		—		—		—		—		(1,307)

Dividends declared		—	—		—	—		—		(394)		—		—		(394)
Balance, September 30, 2024		501.9	$	5	50.3	$	(6,889)	$	1,163	$	11,806	$	(851)	$	—	$	5,234

Shares may not add due to rounding.

See notes to condensed consolidated financial statements.

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ZOETIS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine Months Ended
	September 30,
(MILLIONS OF DOLLARS)	2025		2024
Operating Activities
Net income before allocation to noncontrolling interests	$	2,070	$	1,915
Adjustments to reconcile net income before noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization expense	366		374
Share-based compensation expense	61		55
Asset write-offs and asset impairments	39		16
Net loss on sale of business, excluding transaction costs	3		22



Provision for losses on inventory	52		71
Deferred taxes	(4)		(186)

Settlement of derivative contracts	11		—
Other non-cash adjustments	(9)		11
Other changes in assets and liabilities, net of acquisitions and divestitures:
Accounts receivable	(184)		(134)
Inventories	(212)		(113)
Other assets	(175)		(14)
Accounts payable	(30)		5
Other liabilities	(3)		36
Other tax accounts, net	26		(10)
Net cash provided by operating activities	2,011		2,048
Investing Activities
Capital expenditures	(460)		(439)

Acquisitions, net of cash acquired	(10)		(8)

Purchase of investments	(6)		(4)

(Payments of)/proceeds from derivative instrument activity, net	(105)		11
Proceeds from sale of business, net of cash sold and working capital adjustments	(4)		—
Net proceeds from sale of assets	1		1
Other investing activities	2		(2)
Net cash used in investing activities	(582)		(441)
Financing Activities
Decrease in short-term borrowings, net	—		(3)
Proceeds from issuance of long-term debt—senior notes, net of discount	1,848		—
Principal payments on long-term debt	(1,350)		—
Payment of debt issuance costs	(14)		—
Payment of consideration related to previous acquisitions	—		(5)

Share-based compensation-related proceeds, net of taxes paid on withholding shares	(12)		(10)
Purchases of treasury stock, including excise taxes paid	(1,175)		(1,305)
Cash dividends paid	(669)		(592)

Other financing activities	(3)		—
Net cash used in financing activities	(1,375)		(1,915)
Effect of exchange-rate changes on cash and cash equivalents	43		(19)
Net increase/(decrease) in cash and cash equivalents	97		(327)
Cash and cash equivalents at beginning of period	1,987		2,041
Cash and cash equivalents at end of period	$	2,084	$	1,714
Supplemental cash flow information
Cash paid during the period for:
Income taxes(a)	$	582	$	657
Interest, net of capitalized interest	225		205
Amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases	56		46
Financing cash flows - finance leases	2		1
Non-cash transactions:
Capital expenditures	3		4
Excise tax accrued on net share repurchases, not paid	11		12

Lease obligations obtained in exchange for right-of-use assets - operating	61		39
Lease obligations obtained in exchange for right-of-use assets - finance	1		—

(a) For the nine months ended September 30, 2025, includes $133 million related to the purchase of transferable federal tax credits.

See notes to condensed consolidated financial statements.

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ZOETIS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization

Zoetis Inc. (including its subsidiaries, collectively, Zoetis, the company, we, us or our) is a global leader in the animal health industry, focused on the discovery, development, manufacture and commercialization of medicines, vaccines, diagnostic products and services, biodevices, genetic tests and precision animal health. We organize and operate our business in two geographic regions: the United States (U.S.) and International.

We directly market our products in approximately 45 countries across North America, Europe, Africa, Asia, Australia and South America. Our products are sold in more than 100 countries, including developed and emerging markets. We have a diversified business, marketing products across eight core species: dogs, cats and horses (collectively, companion animals) and cattle, swine, poultry, fish and sheep (collectively, livestock); and within seven major product categories: parasiticides, vaccines, dermatology, anti-infectives, pain and sedation, other pharmaceutical and animal health diagnostics. On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets, and, as a result, our major product categories no longer include the category of medicated feed additives. See Note 5. Divestitures.

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared following the requirements of the Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by accounting principles generally accepted in the United States of America (U.S. GAAP) can be condensed or omitted. Balance sheet amounts and operating results for subsidiaries operating outside the U.S. are as of and for the three and nine months ended August 31, 2025 and 2024.

Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year.

Certain reclassifications of prior year information have been made to conform to the current year presentation.

We are responsible for the unaudited condensed consolidated financial statements included in this Form 10-Q. The condensed consolidated financial statements include all normal and recurring adjustments that are considered necessary for the fair presentation of our financial position and operating results. The information included in this interim report should be read in conjunction with the financial statements and accompanying notes included in our 2024 Annual Report on Form 10-K.

In the third quarter of 2024, we concluded that we were no longer the primary beneficiary of a variable interest entity (VIE) that was previously consolidated. The effects of the deconsolidation were not material to the condensed consolidated financial statements.

3. Accounting Standards

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance requires standardized categories for the effective tax rate reconciliation, disaggregation of income taxes paid and other income tax-related disclosures. This update is effective for fiscal years beginning after December 15, 2024. We adopted this guidance as of January 1, 2025, which will result in additional disclosures in the notes to our annual consolidated financial statements.

Recently Issued Accounting Standards

In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The guidance amendments add a new scope exception in ASC 815 for certain contracts and clarifies the accounting for share-based payments to a customer. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). The guidance amendments remove all references to a prescriptive and sequential software development method, also referred to as “project stages” throughout Subtopic 350-40, and specify new requirements for determining when to begin capitalization of capitalizable project costs. The amendments in this update are effective for all entities for annual reporting period beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. We are currently evaluating the impact that the new guidance will have on our notes to the consolidated financial statements.

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4. Revenue

A. Revenue from Product Sales

We offer a diversified portfolio of products which allows us to capitalize on local and regional customer needs. Generally, our products are promoted to veterinarians and livestock producers by our sales organization which includes sales representatives and technical and veterinary operations specialists, and then sold directly by us or through distributors, retailers or e-commerce outlets. The depth of our product portfolio enables us to address the varying needs of customers in different species and geographies. Many of our top-selling product lines are distributed across both of our operating segments, leveraging our research and development (R&D) operations and manufacturing and supply chain network.

Over the course of our history, we have focused on developing a diverse portfolio of animal health products, including medicines, vaccines and diagnostics, complemented by biodevices, genetic tests and a range of services. We refer to all different brands of a particular product, or its dosage forms for all species, as a product line. We have approximately 300 comprehensive product lines, including products for both companion animals and livestock, within each of our major product categories.

On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets, and, as a result, our major product categories no longer include the category of medicated feed additives. See Note 5. Divestitures.

Our major product categories are:

•parasiticides: products that prevent or eliminate external and internal parasites such as fleas, ticks, lice and worms;

•vaccines: biological preparations that help prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response;

•dermatology: products that relieve itch associated with allergic conditions and atopic dermatitis;

•anti-infectives: products that prevent, kill or slow the growth of bacteria, fungi or protozoa;

•pain and sedation: products that alleviate pain, primarily associated with osteoarthritis and postoperative pain;

•other pharmaceutical: antiemetic, reproductive and oncology products; and

•animal health diagnostics: testing and analysis of blood, urine and other animal samples and related products and services, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services and blood glucose monitors.

Our remaining revenue is derived from other non-pharmaceutical product categories, such as nutritionals, as well as products and services in biodevices, genetic tests and precision animal health.

Our companion animal products help extend and improve the quality of life for pets; increase convenience and compliance for pet owners; and help veterinarians improve the quality of their care and the efficiency of their businesses. Growth in the companion animal medicines, vaccines and diagnostics sector is driven by economic development, related increases in disposable income and increases in pet ownership and spending on pet care. Companion animals are also living longer, deepening the human-animal bond, receiving increased medical treatment and benefiting from advances in animal health medicine, vaccines and diagnostics.

Our livestock products primarily help prevent or treat diseases and conditions to allow veterinarians and producers to care for their animals and to enable the cost-effective production of safe, high-quality animal protein. Human population growth and increasing standards of living are important long-term growth drivers for our livestock products in three major ways. First, population growth and increasing standards of living drive demand for improved nutrition, particularly through increased consumption of animal protein. Second, population growth leads to greater natural resource constraints driving a need for enhanced productivity. Finally, as standards of living improve and the global food chain faces increased scrutiny, there is more focus on food quality, safety and reliability of supply.

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The following tables present our revenue disaggregated by geographic area, species and major product category:

Revenue by geographic area


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
United States	$	1,322	$	1,346	$	3,861	$	3,817
Australia	87		83		245		239
Brazil	100		101		281		301
Canada	70		66		210		202
Chile	29		31		99		93
China	45		61		177		205
France	40		36		113		111
Germany	62		57		171		166
Italy	35		31		102		95
Japan	34		33		115		109
Mexico	41		39		116		129
Spain	38		35		108		100
United Kingdom	82		80		236		230
Other developed markets	164		148		459		413
Other emerging markets	228		220		701		670
	2,377		2,367		6,994		6,880
Contract manufacturing & human health	23		21		86		59
Total Revenue	$	2,400	$	2,388	$	7,080	$	6,939

Revenue by major species


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
U.S.
Companion animal	$	1,069	$	1,068	$	3,218	$	3,046
Livestock	253		278		643		771
	1,322		1,346		3,861		3,817
International
Companion animal	583		541		1,768		1,662
Livestock	472		480		1,365		1,401
	1,055		1,021		3,133		3,063
Total
Companion animal	1,652		1,609		4,986		4,708
Livestock	725		758		2,008		2,172
Contract manufacturing & human health	23		21		86		59
Total Revenue	$	2,400	$	2,388	$	7,080	$	6,939

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Revenue by species


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Companion Animal:
Dogs and Cats	$	1,586	$	1,551	$	4,783	$	4,516
Horses	66		58		203		192
	1,652		1,609		4,986		4,708
Livestock:
Cattle	399		391		1,077		1,132
Swine	111		131		341		388
Poultry	106		139		315		410
Fish	78		70		205		177
Sheep and other	31		27		70		65
	725		758		2,008		2,172
Contract manufacturing & human health	23		21		86		59
Total Revenue	$	2,400	$	2,388	$	7,080	$	6,939

Revenue by major product category


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Parasiticides	$	564	$	530	$	1,799	$	1,634
Vaccines	496		468		1,447		1,365
Dermatology	472		453		1,325		1,234
Anti-infectives	284		274		752		819
Pain and sedation	204		219		631		634
Other pharmaceutical	178		169		509		478
Animal health diagnostics	110		101		323		286
Other non-pharmaceutical	64		62		193		188
Medicated feed additives	5		91		15		242
	2,377		2,367		6,994		6,880
Contract manufacturing & human health	23		21		86		59
Total Revenue	$	2,400	$	2,388	$	7,080	$	6,939

B. Revenue from Contracts with Customers

Contract liabilities reflected within Other current liabilities as of December 31, 2024 and 2023, and subsequently recognized as revenue during each of the first nine months of 2025 and 2024 were $12 million and $4 million, respectively. Contract liabilities as of September 30, 2025 and December 31, 2024 were $18 million.

Estimated future revenue expected to be generated from long-term contracts with unsatisfied performance obligations as of September 30, 2025 is not material.

5. Divestitures

On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets to Phibro Animal Health for a net purchase price of $299 million. During 2024, we received $303 million in sales proceeds, less cash sold of $11 million, resulting in $292 million net sales proceeds, and recorded a net pre-tax loss of $25 million within Other (income)/deductions—net, subject to final post-closing adjustments. During the nine months ended September 30, 2025, we paid $4 million, net of proceeds received, and recognized an additional loss of $3 million within Other (income)/deductions—net associated with the final post-closing adjustments.

6. Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures

In connection with our cost-reduction/productivity initiatives, we typically incur restructuring charges associated with workforce reductions and site closings. In connection with our acquisition and divestiture activities, we typically incur costs associated with executing the transactions. Acquisition activity may also include integrating the acquired operations, which may include expenditures for consulting and the integration of systems and processes, product transfers and restructuring the company, which may include charges related to employees, assets and activities that will not continue in the company. Divestiture activity may also include costs to separate the divested operations, which may include expenditures for consulting and the disintegration of systems and processes, transfer costs, and restructuring charges which may include charges related to employees, assets and activities that will not continue in the company's ongoing operations. All operating functions can be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as functions such as business technology, shared services and corporate operations.

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The components of costs incurred in connection with restructuring initiatives, acquisitions and divestitures are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Restructuring charges and certain acquisition and divestiture-related costs:
Acquisition-related costs	$	—	$	—	$	1	$	1


Divestiture-related costs(a)	—		7		—		11
Restructuring charges, net(b):
Employee termination costs, net	(1)		(2)		4		39

Asset impairment charges	—		—		22		—
Exit costs	5		—		7		—
Total Restructuring charges and certain acquisition and divestiture-related costs	$	4	$	5	$	34	$	51

(a) Divestiture-related costs related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets.

(b) Restructuring charges for the three and nine months ended September 30, 2025 primarily related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site.

Restructuring charges for the nine months ended September 30, 2024 primarily related to organizational structure refinements, partially offset by a reversal of costs as a result of a change in strategy from our 2015 operational efficiency initiative.

The change in our restructuring accrual is as follows:



(MILLIONS OF DOLLARS)	Accrual
Balance, December 31, 2024(a)	$	28
Provision	33

Non-cash activity	(22)
Utilization and other(b)	(21)

Balance, September 30, 2025(a)	$	18

(a) At September 30, 2025 and December 31, 2024, included in Accrued expenses ($16 million and $26 million, respectively) and Other noncurrent liabilities ($2 million).

(b) Includes adjustments for foreign currency translation.

7. Other (Income)/Deductions—Net

The components of Other (income)/deductions—net are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024

Interest income	$	(26)	$	(23)	$	(68)	$	(79)
Identifiable intangible asset impairment charges(a)	—		—		5		11




Net loss on sale of business(b)	—		—		3		22
Foreign currency loss(c)	13		5		35		42

Other, net	—		2		(2)		5
Other (income)/deductions—net	$	(13)	$	(16)	$	(27)	$	1

(a) For the nine months ended September 30, 2025 and 2024, represents charges related to our aquaculture product portfolio.

(b) Represents a net loss related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets in 2024. For additional information, see Note 5. Divestitures.

8. Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain provisions that were originally enacted in the 2017 Tax Cuts and Jobs Act and were set to expire on December 31, 2025, modifications to certain international tax provisions and the restoration of tax treatment for certain business provisions, including 100% bonus depreciation for certain qualified property, domestic research and experimental cost expensing, and the business interest expense limitation. The new legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We do not currently expect OBBBA to have a material impact on our financial results, including the effect on our effective tax rate and deferred tax assets and liabilities in 2025 and future periods.

A. Taxes on Income

Our effective tax rate was 18.7% and 20.8% for the three months ended September 30, 2025 and 2024, respectively. The lower effective tax rate for the three months ended September 30, 2025, compared with the three months ended September 30, 2024, was primarily attributable to higher net discrete tax benefits, partially offset by a lower benefit in the U.S. related to foreign-derived intangible income and a less favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation decisions).

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Our effective tax rate was 20.4% and 20.2% for the nine months ended September 30, 2025 and 2024, respectively. The higher effective tax rate for the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, was primarily attributable to a lower benefit in the U.S. related to foreign-derived intangible income, partially offset by higher net discrete tax benefits and a more favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation decisions).

In 2024, the company implemented an initiative to maximize its cash position in the U.S. This initiative resulted in a tax benefit in the U.S. in connection with a prepayment from a related foreign entity in Belgium which qualifies as foreign-derived intangible income; however, this income tax benefit was deferred to 2025 and 2026. A portion of this benefit was recognized during the three and nine months ended September 30, 2025.

B. Deferred Taxes

As of September 30, 2025, the total net deferred income tax asset of $440 million is included in Noncurrent deferred tax assets ($587 million) and Noncurrent deferred tax liabilities ($147 million).

As of December 31, 2024, the total net deferred income tax asset of $373 million is included in Noncurrent deferred tax assets ($540 million) and Noncurrent deferred tax liabilities ($167 million).

C. Tax Contingencies

Uncertain Tax Positions

As of September 30, 2025, the net tax liabilities associated with uncertain tax positions of $220 million (exclusive of interest and penalties related to uncertain tax positions of $49 million) are included in Other taxes payable.

As of December 31, 2024, the net tax liabilities associated with uncertain tax positions of $213 million (exclusive of interest and penalties related to uncertain tax positions of $38 million) are included in Other taxes payable.

Our tax liabilities for uncertain tax positions relate primarily to issues common among multinational corporations. Any settlements or statute of limitations expirations could result in a significant decrease in our uncertain tax positions. Substantially all of these unrecognized tax benefits, if recognized, would impact our effective income tax rate. We do not expect that within the next twelve months any of our uncertain tax positions could significantly change as a result of settlements with taxing authorities or the expiration of the statutes of limitations. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of uncertain tax positions and potential tax benefits may not be representative of actual outcomes, and any variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution. Finalizing audits with the relevant taxing authorities can include formal administrative and legal proceedings, and, as a result, it is difficult to estimate the timing and range of possible changes related to our uncertain tax positions, and such changes could be significant.

Status of Tax Audits and Potential Impact on Accrual for Uncertain Tax Positions

We are currently under income tax audit by the U.S. Internal Revenue Service (IRS) for tax years 2017 and 2018. In July 2024, the IRS issued Notices of Proposed Adjustment (NOPA) related to the one-time mandatory deemed repatriation tax incurred on the 2018 U.S. Federal Income Tax return. In September 2024, the IRS issued a Revenue Agent Report (RAR) for the adjustments identified in the NOPA and a protest was filed with the IRS on November 15, 2024. As of September 30, 2025, the additional tax liability, based on the income adjustment proposed by the IRS under the RAR, is approximately $450 million, excluding interest and penalties.

Based on current facts and circumstances, we disagree with the IRS’ position and will defend our position taken on the 2018 U.S. Federal Income Tax return. We believe the amount previously accrued related to this uncertain tax position remains appropriate, but we will continue to evaluate the adequacy of our tax reserve as the audit progresses. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are not consistent with management’s expectations, we could be required to adjust our provision for income taxes and this amount could be material to our financial statements.

9. Financial Instruments

A. Debt

Credit Facilities

In August 2025, we entered into a revolving credit agreement with a syndicate of banks providing for a multi-year $1.25 billion senior unsecured revolving credit facility (the credit facility), which expires in August 2030. The credit facility replaces the company’s previous revolving credit facility. Subject to certain conditions, we have the right to increase the credit facility to up to $1.75 billion. The credit facility contains a financial covenant requiring us to not exceed a maximum total leverage ratio (the ratio of consolidated net debt as of the end of the period to consolidated Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) for such period) of 3.50:1. Upon entering into a material acquisition, the maximum total leverage ratio increases to 4.00:1, and extends until the fourth full consecutive fiscal quarter ended immediately following the consummation of a material acquisition. In addition, the credit facility contains other customary covenants.

We were in compliance with all financial covenants as of September 30, 2025 and December 31, 2024. There were no amounts drawn under the credit facility as of September 30, 2025 or under the previous revolving credit facility as of December 31, 2024.

We have additional lines of credit and other credit arrangements with a group of banks and other financial intermediaries for general corporate purposes. We maintain cash and cash equivalent balances in excess of our outstanding short-term borrowings. As of September 30, 2025, we had access to $60 million of lines of credit which expire at various times and are generally renewed annually. There were no borrowings outstanding related to these facilities as of September 30, 2025 and December 31, 2024.

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Commercial Paper Program

In February 2013, we entered into a commercial paper program with a capacity of up to $1.0 billion. As of September 30, 2025 and December 31, 2024, there was no commercial paper outstanding under this program.

Senior Notes and Other Long-Term Debt

On August 18, 2025, we issued $850 million aggregate principal amount of 4.150% senior notes due 2028 and $1.00 billion aggregate principal amount of 5.000% senior notes due 2035 (collectively, 2025 senior notes), with an original issue discount of $2 million. The net proceeds were used to redeem in full the $600 million aggregate principal amount of our 5.400% 2022 senior notes due 2025 and the $750 million aggregate principal amount of our 4.500% 2015 senior notes due 2025 on August 28, 2025 and September 17, 2025, respectively, and the remainder is being used for general corporate purposes.

Our senior notes are governed by an indenture and supplemental indentures (collectively, the indenture) between us and Deutsche Bank Trust Company Americas, as trustee. The indenture contains certain covenants, including limitations on our and certain of our subsidiaries’ ability to incur liens or engage in sale-leaseback transactions. The indenture also contains restrictions on our ability to consolidate, merge or sell substantially all of our assets. In addition, the indenture contains other customary terms, including certain events of default, upon the occurrence of which the senior notes may be declared immediately due and payable.

Pursuant to the indenture, we are able to redeem the senior notes of any series, in whole or in part, at any time by paying a “make whole” premium, plus accrued and unpaid interest to, but excluding, the date of redemption. Upon the occurrence of a change of control of us and a downgrade of the senior notes below an investment grade rating by each of Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services, we are, in certain circumstances, required to make an offer to repurchase all of the outstanding senior notes at a price equal to 101% of the aggregate principal amount of the senior notes together with accrued and unpaid interest to, but excluding, the date of repurchase.

The components of our long-term debt are as follows:


	September 30,		December 31,
(MILLIONS OF DOLLARS)	2025		2024
4.500% 2015 senior notes due 2025	$	—	$	750
5.400% 2022 senior notes due 2025	—		600
3.000% 2017 senior notes due 2027	750		750
3.900% 2018 senior notes due 2028	500		500
4.150% 2025 senior notes due 2028	850		—
2.000% 2020 senior notes due 2030	750		750
5.600% 2022 senior notes due 2032	750		750
5.000% 2025 senior notes due 2035	1,000		—
4.700% 2013 senior notes due 2043	1,150		1,150
3.950% 2017 senior notes due 2047	500		500
4.450% 2018 senior notes due 2048	400		400
3.000% 2020 senior notes due 2050	500		500
	7,150		6,650
Unamortized debt discount / debt issuance costs	(64)		(54)
Less current portion of long-term debt	—		1,350
Cumulative fair value adjustment for interest rate swap contracts	(17)		(26)
Long-term debt, net of discount and issuance costs	$	7,069	$	5,220

The fair value of our long-term debt was $6,770 million and $6,097 million as of September 30, 2025 and December 31, 2024, respectively, and has been determined using a third-party model that uses significant inputs derived from, or corroborated by, observable market data, including benchmark security prices and Zoetis’ credit spreads (Level 2 inputs).

The following table provides the principal amount of debt outstanding, as of September 30, 2025, by scheduled maturity date:


											After
(MILLIONS OF DOLLARS)	2025		2026		2027		2028		2029		2029		Total
Maturities	$	—	$	—	$	750	$	1,350	$	—	$	5,050	$	7,150

Interest Expense

Interest expense, net of capitalized interest, was $58 million and $165 million for the three and nine months ended September 30, 2025, respectively, and $57 million and $174 million for the three and nine months ended September 30, 2024, respectively. Capitalized interest expense was $12 million and $34 million for the three and nine months ended September 30, 2025, respectively, and $9 million and $26 million for the three and nine months ended September 30, 2024, respectively.

B. Derivative Financial Instruments

Foreign Exchange Risk

A significant portion of our revenue, earnings and net investment in foreign affiliates is exposed to changes in foreign exchange rates. We seek to manage our foreign exchange risk, in part, through operational means, including managing same-currency revenue in relation to same-currency costs and same-currency assets in relation to same-currency liabilities.

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Depending on market conditions, foreign exchange risk is also managed through the use of various derivative financial instruments. These derivative financial instruments serve to manage the exposure of our net investment in certain foreign operations to changes in foreign exchange rates and protect net income against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.

All derivative financial instruments used to manage foreign currency risk are measured at fair value and are reported as assets or liabilities on the Condensed Consolidated Balance Sheets. The derivative financial instruments primarily offset exposures in the Australian dollar, British pound, Canadian dollar, Chinese renminbi, euro and Norwegian krone. Changes in fair value are reported in earnings or in Accumulated other comprehensive loss, depending on the nature and purpose of the financial instrument, as follows:

•For foreign currency forward-exchange contracts not designated as hedging instruments, we recognize the gains and losses that are used to offset the same foreign currency assets or liabilities immediately into earnings along with the earnings impact of the items they generally offset. These contracts essentially take the opposite currency position of that reflected in the month-end balance sheet to counterbalance the effect of any currency movement. The vast majority of the foreign currency forward-exchange contracts mature within 60 days and all mature within three years.

•For foreign exchange derivative instruments that are designated as hedging instruments against our net investment in foreign operations, changes in the fair value are recorded as a component of cumulative translation adjustment within Accumulated other comprehensive loss and reclassified into earnings when the foreign investment is sold or substantially liquidated. These instruments include cross-currency interest rate swaps and foreign currency forward-exchange contracts. Gains and losses excluded from the assessment of hedge effectiveness are recognized in earnings (Interest expense, net of capitalized interest). The cash flows from these contracts are reflected within the investing section of our Condensed Consolidated Statements of Cash Flows. These contracts have varying maturities of up to three years.

Interest Rate Risk

The company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rates and to reduce its overall cost of borrowing.

•In anticipation of issuing fixed-rate debt, we may use forward-starting interest rate swaps that are designated as cash flow hedges to hedge against changes in interest rates that could impact expected future issuances of debt. Unrealized gains or losses on the forward-starting interest rate swaps are reported in Accumulated other comprehensive loss and are recognized in earnings over the life of the future fixed rate notes. When the company discontinues hedge accounting because it is no longer probable that an anticipated transaction will occur within the originally expected period of execution, or within an additional two-month period thereafter, changes to fair value accumulated in other comprehensive income are recognized immediately in earnings.

•During the period from 2019 to August 2025, we entered into forward-starting interest rate swaps with an aggregate notional value of $700 million. We designated these swaps as cash flow hedges against interest rate exposure related principally to the issuance of fixed-rate debt to refinance our 4.500% 2015 and 5.400% 2022 senior notes due 2025. Upon issuance of our 2025 senior notes, we terminated these contracts and received $11 million in cash from the counterparties for settlement. The settlement amount, which represented the fair value of the contracts at the time of termination, was recorded in Accumulated other comprehensive loss, and will be amortized into income (offset to Interest expense, net of capitalized interest) over the life of the 5.000% 2025 senior notes due 2035.

•We may use fixed-to-floating interest rate swaps that are designated as fair value hedges to hedge against changes in the fair value of certain fixed-rate debt attributable to changes in the benchmark of the Secured Overnight Financing Rate (SOFR). These derivative instruments effectively convert a portion of the company’s long-term debt from fixed-rate to floating-rate debt based on the daily SOFR rate plus a spread. Gains or losses on the fixed-to-floating interest rate swaps due to changes in SOFR are recorded in Interest expense, net of capitalized interest. Changes in the fair value of the fixed-to-floating interest rate swaps are offset by changes in the fair value of the underlying fixed-rate debt. As of September 30, 2025, we had outstanding fixed-to-floating interest rate swaps that correspond to a portion of the 3.900% 2018 senior notes due 2028 and the 2.000% 2020 senior notes due 2030. The amounts recorded during the three and nine months ended September 30, 2025 for changes in the fair value of these hedges are not material to our condensed consolidated financial statements.

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Outstanding Positions

The aggregate notional amount of derivative instruments are as follows:


	Notional
	September 30,		December 31,
(MILLIONS)	2025		2024
Derivatives not Designated as Hedging Instruments:
Foreign currency forward-exchange contracts	$	2,048	$	2,070

Derivatives Designated as Hedging Instruments:
Foreign exchange derivative instruments (in foreign currency):
Euro	925		800
Danish krone	400		475
Swiss franc	25		25


Forward-starting interest rate swaps	$	—	$	300

Fixed-to-floating interest rate swap contracts	$	250	$	250

Fair Value of Derivative Instruments

The classification and fair values of derivative instruments are as follows:


		Fair Value of Derivatives
		September 30,		December 31,
(MILLIONS OF DOLLARS)	Balance Sheet Location	2025		2024
Derivatives Not Designated as Hedging Instruments:
Foreign currency forward-exchange contracts	Other current assets	$	10	$	18
Foreign currency forward-exchange contracts	Other noncurrent assets	1		—
Foreign currency forward-exchange contracts	Other current liabilities	(6)		(6)

Total derivatives not designated as hedging instruments		$	5	$	12

Derivatives Designated as Hedging Instruments:

Forward-starting interest rate swap contracts	Other noncurrent assets	$	—	$	26


Foreign exchange derivative instruments	Other current assets	7		55
Foreign exchange derivative instruments	Other noncurrent assets	—		4
Foreign exchange derivative instruments	Other current liabilities	(15)		—
Foreign exchange derivative instruments	Other noncurrent liabilities	(52)		—



Fixed-to-floating interest rate swap contracts	Other noncurrent liabilities	(17)		(26)
Total derivatives designated as hedging instruments		(77)		59
Total derivatives		$	(72)	$	71

The company’s derivative transactions are subject to master netting agreements that mitigate credit risk by permitting net settlement of transactions with the same counterparty. The company also has collateral security agreements with certain of its counterparties. Under these collateral security agreements each party is required to post cash collateral when the net fair value of derivative instruments covered by the collateral agreement exceeds contractually established thresholds. At September 30, 2025, there was $78 million of collateral posted related to derivative instruments recorded in Other current assets. At December 31, 2024, there was $51 million of collateral received and $20 million of collateral posted related to derivative instruments recorded in Other current liabilities and Other current assets, respectively.

We use a market approach in valuing financial instruments on a recurring basis. Our derivative financial instruments are measured at fair value on a recurring basis using Level 2 inputs in the calculation of fair value.

The amounts of net gains on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions—net, are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Foreign currency forward-exchange contracts	$	5	$	11	$	44	$	12

These amounts were substantially offset in Other (income)/deductions—net by the effect of changing exchange rates on the underlying foreign currency exposures.

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The amounts of unrecognized net (losses)/gains on interest rate swap contracts, recorded, net of tax, in Accumulated other comprehensive loss, are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Forward-starting interest rate swap contracts	$	(7)	$	(3)	$	(20)	$	—
Foreign exchange derivative instruments	$	6	$	(23)	$	(101)	$	(5)

Gains on interest rate swap contracts, recognized within Interest expense, net of capitalized interest, are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Foreign exchange derivative instruments	$	6	$	4	$	16	$	12

The net amount of deferred gains related to derivative instruments designated as cash flow hedges that is expected to be reclassified from Accumulated other comprehensive loss into earnings over the next 12 months is not material.

10. Inventories

The components of inventory are as follows:


	September 30,		December 31,
(MILLIONS OF DOLLARS)	2025		2024
Finished goods	$	1,076	$	996
Work-in-process	1,037		933
Raw materials and supplies	352		377
Inventories	$	2,465	$	2,306

11. Goodwill and Other Intangible Assets

A. Goodwill

The components of, and changes in, the carrying amount of goodwill are as follows:


(MILLIONS OF DOLLARS)	U.S.		International		Total
Balance, December 31, 2024	$	1,515	$	1,209	$	2,724


Other(a)	—		40		40
Balance, September 30, 2025	$	1,515	$	1,249	$	2,764

(a) Includes adjustments for foreign currency translation.

The gross goodwill balance was $3,300 million and $3,260 million as of September 30, 2025 and December 31, 2024, respectively. Accumulated goodwill impairment losses were $536 million as of September 30, 2025 and December 31, 2024.

B. Other Intangible Assets

The components of identifiable intangible assets are as follows:


	As of September 30, 2025						As of December 31, 2024
					Identifiable						Identifiable
	Gross				Intangible Assets		Gross				Intangible Assets
	Carrying		Accumulated		Less Accumulated		Carrying		Accumulated		Less Accumulated
(MILLIONS OF DOLLARS)	Amount		Amortization		Amortization		Amount		Amortization		Amortization
Finite-lived intangible assets:
Developed technology rights	$	1,938	$	(1,312)	$	626	$	1,891	$	(1,175)	$	716
Brands and tradenames	362		(248)		114		367		(246)		121
Other	291		(207)		84		278		(197)		81
Total finite-lived intangible assets	2,591		(1,767)		824		2,536		(1,618)		918
Indefinite-lived intangible assets:
Brands and tradenames	66		—		66		66		—		66
In-process research and development	144		—		144		136		—		136
Product rights	6		—		6		7		—		7
Total indefinite-lived intangible assets	216		—		216		209		—		209
Identifiable intangible assets	$	2,807	$	(1,767)	$	1,040	$	2,745	$	(1,618)	$	1,127

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C. Amortization

Amortization expense related to finite-lived acquired intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property is included in Amortization of intangible assets as it benefits multiple business functions. Amortization expense related to finite-lived acquired intangible assets that are associated with a single function is included in Cost of sales, Selling, general and administrative expenses or Research and development expenses, as appropriate. Total amortization expense for finite-lived intangible assets was $39 million and $119 million for the three and nine months ended September 30, 2025, respectively, and $42 million and $128 million for the three and nine months ended September 30, 2024, respectively.

12. Share-based Payments

The Zoetis 2013 Equity and Incentive Plan, Amended and Restated as of May 19, 2022 (Equity Plan), provides long-term incentives to our employees and non-employee directors. The principal types of share-based awards available under the Equity Plan may include, but are not limited to, stock options, restricted stock and restricted stock units (RSUs), deferred stock units (DSUs), performance-vesting restricted stock units (PSUs) and other equity-based or cash-based awards.

The components of share-based compensation expense are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Stock options / stock appreciation rights	$	3	$	2	$	9	$	8
RSUs / DSUs	14		10		38		31
PSUs	5		6		14		16
Share-based compensation expense—total(a)	$	22	$	18	$	61	$	55

(a) For the three and nine months ended September 30, 2025 and 2024, we capitalized less than $1 million of share-based compensation expense to inventory.

During the nine months ended September 30, 2025, the company granted 320,498 stock options with a weighted-average exercise price of $156.80 per stock option and a weighted-average fair value of $40.22 per stock option. The fair-value based method for valuing each Zoetis stock option grant on the grant date uses the Black-Scholes-Merton option-pricing model, which incorporates a number of valuation assumptions. The weighted-average fair value was estimated based on the following assumptions: risk-free interest rate of 4.38%; expected dividend yield of 1.27%; expected stock price volatility of 26.42%; and expected term of 4.3 years. Stock options granted prior to 2023 generally vest after three years of continuous service from the date of grant and have a contractual term of 10 years. Beginning in 2023, stock options granted are subject to graded vesting over three years from the date of grant and have a contractual term of 10 years. The values determined through this fair-value based method generally are amortized on a straight-line basis over the vesting term into Cost of sales, Selling, general and administrative expenses, or Research and development expenses, as appropriate.

During the nine months ended September 30, 2025, the company granted 581,771 RSUs with a weighted-average grant date fair value of $156.75 per RSU. RSUs are accounted for using a fair-value-based method that utilizes the closing price of Zoetis common stock on the date of grant. RSUs granted prior to 2023 generally vest after three years of continuous service from the date of grant. Beginning in 2023, RSUs granted are subject to graded vesting over three years from the date of grant. The values generally are amortized on a straight-line basis over the vesting term into Cost of sales, Selling, general and administrative expenses, or Research and development expenses, as appropriate.

During the nine months ended September 30, 2025, the company granted 148,130 PSUs with a weighted-average grant date fair value of $171.21 per PSU. Beginning in 2025, the units underlying the PSUs will be earned and vested over a three-year performance period in two tranches, each subject to an independent achievement condition: (1) a market condition comprising the total shareholder return of the company in comparison to the total shareholder return of the companies comprising the S&P 500 Health Care index at the start of the performance period, excluding companies that during the performance period are acquired or no longer publicly traded (Relative TSR); and (2) a performance condition comprising a three-year average annual operational revenue growth metric (average PSU operational revenue growth). PSUs that are earned and vested based upon a market condition are accounted for at fair-value using a Monte Carlo simulation model and PSUs that are earned and vested based upon a performance condition are accounted for at fair-value using the closing price of Zoetis common stock on the date of grant. The Monte Carlo weighted-average fair value was estimated based on volatility assumptions of Zoetis common stock and an average of the S&P 500 Health Care index companies, which were 27.6% and 29.8%, respectively. Depending on the company’s Relative TSR performance and the average PSU operational revenue growth at the end of the performance period, the recipient may earn from 0% to 200% of the target number of units. Vested units are settled in shares of the company’s common stock. PSU values are amortized on a straight-line basis over the vesting term into Cost of sales, Selling, general and administrative expenses, or Research and development expenses, as appropriate. PSU amortization for units that are earned and vested based upon the average PSU operational revenue growth is adjusted for subsequent changes in the expected outcome of the performance-related condition.

13. Stockholders’ Equity

Zoetis is authorized to issue 6 billion shares of common stock and 1 billion shares of preferred stock.

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Accumulated other comprehensive loss

Changes, net of tax, in accumulated other comprehensive loss, excluding noncontrolling interests were as follows:



			Currency Translation Adjustments
					Other Currency		Benefit Plans		Accumulated Other
	Cash Flow		Net Investment		Translation		Actuarial		Comprehensive
(MILLIONS OF DOLLARS)	Hedges		Hedges		Adjustments		Gains		Loss
Balance, December 31, 2024	$	89	$	62	$	(1,091)	$	—	$	(940)
Other comprehensive (loss)/income, net of tax	(17)		(101)		240		—		122

Balance, September 30, 2025	$	72	$	(39)	$	(851)	$	—	$	(818)

Balance, December 31, 2023	$	85	$	18	$	(944)	$	2	$	(839)
Other comprehensive loss, net of tax	(5)		(5)		(2)		—		(12)

Balance, September 30, 2024	$	80	$	13	$	(946)	$	2	$	(851)

14. Earnings per Share

The following table presents the calculation of basic and diluted earnings per share:


	Three Months Ended				Nine Months Ended
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)	September 30,				September 30,
	2025		2024		2025		2024
Numerator
Net income before allocation to noncontrolling interests	$	721	$	692	$	2,070	$	1,915
Less: Net income/(loss) attributable to noncontrolling interests	—		10		—		10
Net income attributable to Zoetis Inc.	$	721	$	682	$	2,070	$	1,905
Denominator
Weighted-average common shares outstanding	442.9		452.9		445.2		455.4
Common stock equivalents: stock options, RSUs, PSUs and DSUs	0.3		0.6		0.4		0.7
Weighted-average common and potential dilutive shares outstanding	443.2		453.5		445.6		456.1
Earnings per share attributable to Zoetis Inc. stockholders—basic	$	1.63	$	1.51	$	4.65	$	4.18
Earnings per share attributable to Zoetis Inc. stockholders—diluted	$	1.63	$	1.50	$	4.65	$	4.18

The number of stock options outstanding under the company’s Equity Plan that were excluded from the computation of diluted earnings per share, as the effect would have been antidilutive, were not material for the three and nine months ended September 30, 2025 and 2024.

15. Commitments and Contingencies

We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business. For a discussion of our tax contingencies, see Note 8. Income Taxes.

A. Legal Proceedings

Our non-tax contingencies include, among others, the following:

• Product liability and other product-related litigation, which can include injury, consumer, off-label promotion, antitrust and breach of contract claims.

• Commercial and other matters, which can include product-pricing claims and environmental claims and proceedings.

• Patent litigation, which typically involves challenges to the coverage and/or validity of our patents or those of third parties on various products or processes.

• Government investigations, which can involve regulation by national, state and local government agencies in the U.S. and in other countries.

Certain of these contingencies could result in losses, including damages, fines and/or civil penalties, and/or criminal charges, which could be substantial.

We believe that we have strong defenses in these types of matters, but litigation is inherently unpredictable and excessive verdicts do occur. We do not believe that any of these matters will have a material adverse effect on our financial position. However, we could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations or cash flows in the period in which the amounts are paid.

We have accrued for losses that are both probable and reasonably estimable. Substantially all of these contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but the assessment process relies on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.

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Amounts recorded for legal and environmental contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions.

The principal matters to which we are a party are discussed below. In determining whether a pending matter is significant for financial reporting and disclosure purposes, we consider both quantitative and qualitative factors in order to assess materiality, such as, among other things, the amount of damages and the nature of any other relief sought in the proceeding, if such damages and other relief are specified; our view of the merits of the claims and of the strength of our defenses; whether the action purports to be a class action and our view of the likelihood that a class will be certified by the court; the jurisdiction in which the proceeding is pending; any experience that we or, to our knowledge, other companies have had in similar proceedings; whether disclosure of the action would be important to a reader of our financial statements, including whether disclosure might change a reader’s judgment about our financial statements in light of all of the information about the company that is available to the reader; the potential impact of the proceeding on our reputation; and the extent of public interest in the matter. In addition, with respect to patent matters, we consider, among other things, the financial significance of the product protected by the patent.

Ulianopolis, Brazil

In February 2012, the Municipality of Ulianopolis (State of Para, Brazil) filed a complaint against Fort Dodge Saúde Animal Ltda. (FDSAL), a Zoetis entity, and five other large companies alleging that waste sent to a local waste incineration facility for destruction, but that was not ultimately destroyed as the facility lost its operating permit, caused environmental impacts requiring cleanup.

The Municipality is seeking recovery of cleanup costs purportedly related to FDSAL’s share of all waste accumulated at the incineration facility awaiting destruction, and compensatory damages to be allocated among the six defendants. We believe we have strong arguments against the claim, including defense strategies against any claim of joint and several liability.

At the request of the Municipal prosecutor, in April 2012, the lawsuit was suspended for one year. Since that time, the prosecutor has initiated investigations into the Municipality's actions in the matter as well as the efforts undertaken by the six defendants to remove and dispose of their individual waste from the incineration facility. On October 3, 2014, the Municipal prosecutor announced that the investigation remained ongoing and outlined the terms of a proposed Term of Reference (a document that establishes the minimum elements to be addressed in the preparation of an Environmental Impact Assessment), under which the companies would be liable to withdraw the waste and remediate the area.

On March 5, 2015, we presented our response to the prosecutor’s proposed Term of Reference, arguing that the proposed terms were overly general in nature and expressing our interest in discussing alternatives to address the matter. The prosecutor agreed to consider our request to engage a technical consultant to conduct an environmental diagnostic of the contaminated area. On May 29, 2015, we, in conjunction with the other defendant companies, submitted a draft cooperation agreement to the prosecutor, which outlined the proposed terms and conditions for the engagement of a technical consultant to conduct the environmental diagnostic. On August 19, 2016, the parties and the prosecutor agreed to engage the services of a third-party consultant to conduct a limited environmental assessment of the site. The site assessment was conducted during June 2017, and a written report summarizing the results of the assessment was provided to the parties and the prosecutor in November 2017. The report noted that waste is still present on the site and that further (Phase II) environmental assessments are needed before a plan to manage that remaining waste can be prepared. On April 1, 2019, the defendants met with the Prosecutor to discuss the conclusions set forth in the written report. Following that discussion, on April 10, 2019, the Prosecutor issued a procedural order requesting that the defendants prepare and submit a technical proposal outlining the steps needed to conduct the additional Phase II environmental assessments. The defendants presented the technical proposal to the Prosecutor on October 21, 2019. On March 3, 2020, the Prosecutor notified the defendants that he submitted the proposal to the Ministry of the Environment for its review and consideration by the Prosecutor. On July 15, 2020, the Prosecutor recommended certain amendments to the proposal for the Phase II testing. On September 28, 2020, the parties and the Prosecutor agreed to the final terms and conditions concerning the cooperation agreement with respect to the Phase II testing. Phase II testing began the week of October 14, 2024. Currently, the parties, the prosecutor, the Municipality and their respective technical teams are collaborating to develop a plan to evaluate potential options for waste removal from the site and disposal.

B. Guarantees and Indemnifications

In the ordinary course of business and in connection with the sale of assets and businesses, we indemnify our counterparties against certain liabilities that may arise in connection with the transaction or related to activities prior to the transaction. These indemnifications typically pertain to environmental, tax, employee and/or product-related matters and patent-infringement claims. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to reimburse the loss. These indemnifications are generally subject to threshold amounts, specified claim periods and other restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of September 30, 2025, recorded amounts for the estimated fair value of these indemnifications were not material.

16. Segment Information

Operating Segments

We manage our operations through two geographic regions. Each operating segment has responsibility for its commercial activities. Within each of these operating segments, we offer a diversified product portfolio, including parasiticides, vaccines, dermatology, anti-infectives, pain and sedation, other pharmaceutical and animal health diagnostics for both companion animal and livestock customers.

Our operating segments are the U.S. and International. The chief operating decision maker (CODM), our Chief Executive Officer and Chief Financial Officer, uses the information provided to compare segment performance with segment resource requests and allocates human and capital resources based on segment’s actual results and expected future results.

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Other Costs and Business Activities

Certain costs are not allocated to our operating segment results, such as costs associated with the following:

• Other business activities, includes our Client Supply Services contract manufacturing results, our human health business, and expenses associated with our dedicated veterinary medicine research and development organization, research alliances, U.S. regulatory affairs and other operations focused on the development of our products. Other R&D-related costs associated with non-U.S. market and regulatory activities are generally included in the international commercial segment.

• Corporate, includes enabling functions such as information technology, facilities, legal, finance, human resources, business development, certain diagnostic costs and communications, among others. These costs also include certain compensation costs, certain procurement costs and other miscellaneous operating expenses not charged to our operating segments, as well as interest income and expense.

•Certain transactions and events such as (i) Purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and property, plant and equipment; (ii) Acquisition and divestiture-related costs, where we incur costs associated with acquiring and integrating newly acquired businesses, such as transaction costs and integration costs, as well as divestiture-related costs; and (iii) Certain significant items, which comprise substantive, unusual items that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis, such as restructuring charges and implementation costs associated with our cost-reduction/productivity initiatives that are not associated with an acquisition or divestiture, certain asset impairment charges, certain legal and commercial settlements and the impact of divestiture-related gains and losses.

•Other unallocated includes (i) certain overhead expenses associated with our global manufacturing operations not charged to our operating segments; (ii) certain costs associated with finance that specifically support our global manufacturing operations; (iii) certain supply chain and global logistics costs; and (iv) certain procurement costs.

Segment Assets

We manage our assets on a total company basis, not by operating segment. Therefore, our CODM does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment.

Selected Statement of Income Information


	Earnings						Depreciation and Amortization(a)
	Three Months Ended						Three Months Ended
	September 30,						September 30,
(MILLIONS OF DOLLARS)	2025			2024			2025		2024
U.S.
Revenue	$	1,322		$	1,346
Cost of sales	222			258
Gross profit	1,100			1,088
Gross margin	83.2		%	80.8		%
Operating expenses(b)	201			199
Other (income)/deductions-net	—			—
U.S. Earnings	899			889			$	25	$	20

International
Revenue(c)	1,055			1,021
Cost of sales	331			321
Gross profit	724			700
Gross margin	68.6		%	68.6		%
Operating expenses(b)	167			157
Other (income)/deductions-net	1			1
International Earnings	556			542			26		25

Total operating segments	1,455			1,431			51		45

Other business activities	(140)			(137)			14		9
Reconciling Items:
Corporate	(306)			(306)			26		31
Purchase accounting adjustments	(32)			(35)			32		35
Acquisition and divestiture-related costs	—			(7)			—		—
Certain significant items	(7)			(1)			—		—
Other unallocated	(83)			(71)			1		1
Total Earnings(d)	$	887		$	874		$	124	$	121

(a) Certain production facilities are shared. Depreciation and amortization is allocated to the reportable operating segments based on estimates of where the benefits of the related assets are realized.

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(b) Operating expenses primarily consisted of field selling, other marketing expenses, advertising and promotions, and freight and logistics costs.

(c) Revenue denominated in euros was $252 million and $234 million for the three months ended September 30, 2025 and 2024, respectively.

(d) Defined as income before provision for taxes on income.


	Earnings						Depreciation and Amortization(a)
	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
(MILLIONS OF DOLLARS)	2025			2024			2025		2024
U.S.
Revenue	$	3,861		$	3,817
Cost of sales	629			707
Gross profit	3,232			3,110
Gross margin	83.7		%	81.5		%
Operating expenses(b)	624			593
Other (income)/deductions-net	—			—
U.S. Earnings	2,608			2,517			$	70	$	65

International
Revenue(c)	3,133			3,063
Cost of sales	947			976
Gross profit	2,186			2,087
Gross margin	69.8		%	68.1		%
Operating expenses(b)	494			491
Other (income)/deductions-net	2			1
International Earnings	1,690			1,595			74		73

Total operating segments	4,298			4,112			144		138

Other business activities	(403)			(411)			38		29
Reconciling Items:
Corporate	(898)			(893)			84		96
Purchase accounting adjustments	(97)			(107)			97		107
Acquisition and divestiture-related costs	(1)			(12)			—		—
Certain significant items	(60)			(77)			—		—
Other unallocated	(240)			(211)			3		4
Total Earnings(d)	$	2,599		$	2,401		$	366	$	374

(b) Operating expenses primarily consisted of field selling, advertising and promotions, other marketing expenses, and freight and logistics costs.

(c) Revenue denominated in euros was $720 million and $694 million for the nine months ended September 30, 2025 and 2024, respectively.

(d) Defined as income before provision for taxes on income.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview of our business

Zoetis is a global leader in the animal health industry, focused on the discovery, development, manufacture and commercialization of medicines, vaccines, diagnostic products and services, biodevices, genetic tests and precision animal health. For over 70 years, we have been innovating ways to predict, prevent, detect, and treat animal illness, and continue to stand by those raising and caring for animals worldwide - from veterinarians and pet owners to livestock producers.

We manage our operations through two geographic operating segments: the United States (U.S.) and International. Within each of these operating segments, we offer a diversified product portfolio for both companion animal and livestock customers in order to capitalize on local and regional trends and customer needs. See Notes to Condensed Consolidated Financial Statements — Note 16. Segment Information.

We directly market our products to veterinarians and livestock producers located in approximately 45 countries across North America, Europe, Africa, Asia, Australia and South America, and are a market leader in nearly all of the major regions in which we operate. Through our efforts to establish an early and direct presence in many emerging markets, such as Brazil, Chile, China and Mexico, we believe we are one of the largest animal health medicines and vaccines businesses as measured by revenue across emerging markets as a whole. In markets where we do not have a direct commercial presence, we generally contract with distributors that provide logistics and sales and marketing support for our products.

Our companion animal and livestock products are primarily available by prescription through a veterinarian. On a more limited basis, in certain markets, we sell certain products through retail and e-commerce outlets. We also market our products by advertising to veterinarians, pet owners and livestock producers.

We believe our investments in one of the industry’s largest sales organizations, including our extensive network of technical and veterinary operations specialists, our high-quality manufacturing and reliability of supply, and our long track record of developing products that meet customer needs, has led to enduring and valued relationships with our customers. Our research and development (R&D) efforts enable us to deliver innovative products to address unmet needs and evolve our product lines so that they remain relevant for our customers.

We have approximately 300 product lines that we sell in over 100 countries for the prediction, prevention, detection and treatment of diseases and conditions that affect various companion animal and livestock species. The diversity of our product portfolio and our global operations provides stability to our overall business.

A summary of our 2025 performance compared with the comparable 2024 periods follows:


					% Change
	Three Months Ended					Related to
	September 30,					Foreign
(MILLIONS OF DOLLARS)	2025		2024		Total	Exchange	Operational(a)
Revenue	$	2,400	$	2,388	1	1	—
Net income attributable to Zoetis	721		682		6	1	5
Adjusted net income(a)	754		716		5	—	5


					% Change
	Nine Months Ended					Related to
	September 30,					Foreign
(MILLIONS OF DOLLARS)	2025		2024		Total	Exchange	Operational(a)
Revenue	$	7,080	$	6,939	2	(1)	3
Net income attributable to Zoetis	2,070		1,905		9	3	6
Adjusted net income(a)	2,199		2,061		7	3	4

(a) Operational results and adjusted net income are non-GAAP financial measures. See the Non-GAAP financial measures section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) for more information.

Our operating environment

For a description of our operating environment, including factors which could materially affect our business, financial condition, or future results, see "Our Operating Environment" in the MD&A of our 2024 Annual Report on Form 10-K. Set forth below are updates to certain of the factors disclosed in our 2024 Annual Report on Form 10-K.

Quarterly Variability of Financial Results

Our quarterly financial results are subject to variability related to a number of factors including, but not limited to: tariffs and other trade protection measures, the decline in global macroeconomic conditions, competitive dynamics, geopolitical tensions with and economic uncertainty in certain markets, inflation, global supply chain disruption, variability in distributor inventory stocking levels as a result of expected demand and promotional activities, weather patterns, herd management decisions, regulatory actions, disease outbreaks, product and geographic mix, timing of price increases and timing of investment decisions.

Tariffs and Trade Protection Measures

Our business is subject to risks related to, among other factors, tariffs and other trade protection measures put in the place by the United States or other countries, as well as U.S. international trade relations, including those with China, Canada and the European Union.

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Starting in early 2025, the United States government announced additional tariffs on certain goods imported into the U.S. from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response. While the final tariffs and other measures to be imposed, and their applicability to our business, remain uncertain, such actions may negatively impact demand and result in an increase in some product costs. We will continue to actively monitor the situation and evaluate actions that can be taken to moderate and/or minimize its effects. For further information regarding the impact of potential additional tariffs and trade protection measures on the Company, see Part II., Item 1A, Risk Factors in this Quarterly Report on Form 10-Q.

Disease Outbreaks

Sales of our livestock products have in the past, and may in the future be, adversely affected by the outbreak of disease carried by animals. Outbreaks of disease may reduce regional or global sales of particular animal-derived food products or result in reduced exports of such products, either due to heightened export restrictions or import prohibitions, which may reduce demand for our products. Also, the outbreak of any highly contagious disease near our main production sites could require us to immediately halt production of our products at such sites or force us to incur substantial expenses in procuring raw materials or products elsewhere. Alternatively, sales of products that treat specific disease outbreaks may increase.

Foreign Exchange Rates

Significant portions of our revenue and costs are exposed to changes in foreign exchange rates. Our products are sold in more than 100 countries and, as a result, our revenue is influenced by changes in foreign exchange rates. For the nine months ended September 30, 2025, approximately 41% of our revenue was denominated in foreign currencies. We seek to manage our foreign exchange risk, in part, through operational means, including managing same-currency revenue in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. As we operate in multiple foreign currencies, including the Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese renminbi, euro and other currencies, changes in those currencies relative to the U.S. dollar will impact our revenue, cost of goods and expenses, and consequently, net income. Exchange rate fluctuations may also have an impact beyond our reported financial results and directly impact operations. These fluctuations may affect the ability to buy and sell our goods and services between markets impacted by significant exchange rate variances. For the nine months ended September 30, 2025, approximately 59% of our total revenue was in U.S. dollars. Our year-over-year total revenue growth was unfavorably impacted by approximately 1% from changes in foreign currency values relative to the U.S. dollar. For operations in highly inflationary economies, we translate monetary items at rates in effect at the balance sheet date, with translation adjustments recorded in Other (income)/deductions––net, and we translate non-monetary items at historical rates.

Non-GAAP financial measures

We report information in accordance with U.S. generally accepted accounting principles (GAAP). Management also measures performance using non-GAAP financial measures that may exclude certain amounts from the most directly comparable GAAP measure. Despite the importance of these measures to management in goal setting and performance measurement, non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors and may not be comparable to the calculation of similar measures of other companies. We present certain identified non-GAAP measures solely to provide investors with useful information to more fully understand how management assesses performance.

Operational Results

We believe that it is important to not only understand overall revenue and earnings results, but also “operational” results. Operational results is a non-GAAP financial measure defined as revenue or earnings results excluding the impact of foreign exchange. This measure provide information on the change in revenue and earnings as if foreign currency exchange rates had not changed between the current and prior periods to facilitate a period-to-period comparison. We believe this non-GAAP measure provides a useful comparison to previous periods for the company and investors, but should not be viewed as a substitute for U.S. GAAP reported results.

Adjusted Net Income and Adjusted Earnings Per Share

Adjusted net income and the corresponding adjusted earnings per share (EPS) are non-GAAP financial measures of performance used by management. We believe these financial measures are useful supplemental information to investors when considered together with our U.S. GAAP financial measures. We report adjusted net income to portray the results of our major operations, and the discovery, development, manufacture and commercialization of our products, prior to considering certain income statement elements. We define adjusted net income and adjusted EPS as net income attributable to Zoetis and EPS before the impact of purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items.

We recognize that, as an internal measure of performance, the adjusted net income and adjusted EPS measures have limitations, and we do not restrict our performance management process solely to these metrics. A limitation of the adjusted net income and adjusted EPS measures is that they provide a view of our operations without including all events during a period, such as the effects of an acquisition, divestiture or amortization of purchased intangibles, and do not provide a comparable view of our performance to other companies. The adjusted net income and adjusted EPS measures are not, and should not be viewed as, a substitute for U.S. GAAP reported net income attributable to Zoetis and reported EPS. See the Adjusted Net Income section below for more information.

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Analysis of the condensed consolidated statements of income

The following discussion and analysis of our statements of income should be read along with our condensed consolidated financial statements and the notes thereto included elsewhere in Part I— Item 1 of this Quarterly Report on Form 10-Q.


	Three Months Ended							Nine Months Ended
	September 30,						%	September 30,						%
(MILLIONS OF DOLLARS)	2025			2024			Change	2025			2024			Change
Revenue	$	2,400		$	2,388		1	$	7,080		$	6,939		2
Costs and expenses:
Cost of sales	683			701			(3)	1,954			2,012			(3)
% of revenue	28.5		%	29.4		%		27.6		%	29.0		%
Selling, general and administrative expenses	579			565			2	1,759			1,693			4
% of revenue	24		%	24		%		25		%	24		%
Research and development expenses	170			167			2	499			500			—
% of revenue	7		%	7		%		7		%	7		%
Amortization of intangible assets	32			35			(9)	97			107			(9)
Restructuring charges and certain acquisition and divestiture-related costs	4			5			(20)	34			51			(33)
Interest expense, net of capitalized interest	58			57			2	165			174			(5)
Other (income)/deductions—net	(13)			(16)			(19)	(27)			1			*
Income before provision for taxes on income	887			874			1	2,599			2,401			8
% of revenue	37		%	37		%		37		%	35		%
Provision for taxes on income	166			182			(9)	529			486			9
Effective tax rate	18.7		%	20.8		%		20.4		%	20.2		%
Net income before allocation to noncontrolling interests	721			692			4	2,070			1,915			8
Less: Net income/(loss) attributable to noncontrolling interests	—			10			*	—			10			*
Net income attributable to Zoetis	$	721		$	682		6	$	2,070		$	1,905		9
% of revenue	30		%	29		%		29		%	27		%

*Calculation not meaningful

Revenue

Three months ended September 30, 2025 vs. three months ended September 30, 2024

Total revenue increased by $12 million, or 1%, in the three months ended September 30, 2025, compared with the three months ended September 30, 2024. Operational revenue was relatively flat primarily due to the following:

•price growth of approximately 4%; and

•volume growth from other in-line products of approximately 1%,

offset by:

•volume decrease related to the impact of the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets (MFA divestiture) of approximately 4%; and

•volume decrease from key franchises of approximately 1%.

Foreign exchange increased reported revenue growth by approximately 1%.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Total revenue increased by $141 million, or 2%, in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, an increase of $206 million, or 3%, on an operational basis. Operational revenue growth was primarily due to the following:

•price growth of approximately 4%;

•volume growth from key franchises of approximately 2%; and

•volume growth from other in-line products of approximately 1%,

partially offset by:

•volume decrease related to the impact of the MFA divestiture of approximately 4%.

Foreign exchange decreased reported revenue growth by approximately 1%.

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Costs and Expenses


Cost of sales
	Three Months Ended							Nine Months Ended
	September 30,						%	September 30,						%
(MILLIONS OF DOLLARS)	2025			2024			Change	2025			2024			Change
Cost of sales	$	683		$	701		(3)	$	1,954		$	2,012		(3)
% of revenue	28.5		%	29.4		%		27.6		%	29.0		%

Three months ended September 30, 2025 vs. three months ended September 30, 2024

Cost of sales as a percentage of revenue was 28.5% in the three months ended September 30, 2025, compared with 29.4% in the three months ended September 30, 2024. The decrease was primarily a result of:

•price increases;

•favorable impact of the MFA divestiture; and

•favorable foreign exchange,

partially offset by:

•unfavorable manufacturing and other costs.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Cost of sales as a percentage of revenue was 27.6% in the nine months ended September 30, 2025, compared with 29.0% in the nine months ended September 30, 2024. The decrease was primarily a result of:

•price increases;

•favorable impact of the MFA divestiture; and

•favorable foreign exchange,

partially offset by:

•unfavorable manufacturing and other costs.


Selling, general and administrative expenses
	Three Months Ended							Nine Months Ended
	September 30,						%	September 30,						%
(MILLIONS OF DOLLARS)	2025			2024			Change	2025			2024			Change
Selling, general and administrative expenses	$	579		$	565		2	$	1,759		$	1,693		4
% of revenue	24		%	24		%		25		%	24		%

Three months ended September 30, 2025 vs. three months ended September 30, 2024

SG&A expenses increased by $14 million, or 2%, in the three months ended September 30, 2025, compared with the three months ended September 30, 2024, primarily as a result of:

•unfavorable foreign exchange;

•an increase in certain significant items;

•an increase in certain compensation-related costs; and

•higher other general and administrative costs,

partially offset by:

•lower depreciation expense; and

•lower advertising and promotion expenses.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

SG&A expenses increased by $66 million, or 4%, in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, primarily as a result of:

•an increase in certain significant items;

•an increase in certain compensation-related costs;

•higher advertising and promotion expenses;

•higher travel and entertainment costs; and

•higher other general and administrative costs,

partially offset by:

•lower depreciation expense;

•favorable foreign exchange; and

•lower logistics and freight costs.

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Research and development expenses
	Three Months Ended							Nine Months Ended
	September 30,						%	September 30,						%
(MILLIONS OF DOLLARS)	2025			2024			Change	2025			2024			Change
Research and development expenses	$	170		$	167		2	$	499		$	500		—
% of revenue	7		%	7		%		7		%	7		%

Three months ended September 30, 2025 vs. three months ended September 30, 2024

R&D expenses increased by $3 million, or 2%, in the three months ended September 30, 2025, compared with the three months ended September 30, 2024, primarily as a result of:

•higher depreciation expense,

partially offset by:

•lower expenses due to timing of spend related to projects and other strategic investments.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

R&D expenses were relatively flat in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, primarily as a result of:

•lower expenses due to timing of spend related to projects and other strategic investments,

partially offset by:

•higher depreciation expense; and

•an increase in certain compensation-related costs to support innovation and portfolio progression.


Amortization of intangible assets
	Three Months Ended					Nine Months Ended
	September 30,				%	September 30,				%
(MILLIONS OF DOLLARS)	2025		2024		Change	2025		2024		Change
Amortization of intangible assets	$	32	$	35	(9)	$	97	$	107	(9)

Amortization of intangible assets decreased in the three and nine months ended September 30, 2025 versus the comparable prior year periods primarily due to assets that became fully amortized in the prior year.


Restructuring charges and certain acquisition and divestiture-related costs
	Three Months Ended					Nine Months Ended
	September 30,				%	September 30,				%
(MILLIONS OF DOLLARS)	2025		2024		Change	2025		2024		Change
Restructuring charges and certain acquisition and divestiture-related costs	$	4	$	5	(20)	$	34	$	51	(33)

Three months ended September 30, 2025 vs. three months ended September 30, 2024

Restructuring charges and certain acquisition and divestiture-related costs in the three months ended September 30, 2025 primarily related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site. Restructuring charges and certain acquisition and divestiture-related costs in the three months ended September 30, 2024 primarily consisted of costs related to the MFA divestiture.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Restructuring charges and certain acquisition and divestiture-related costs in the nine months ended September 30, 2025 primarily related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site. Restructuring charges and certain acquisition and divestiture-related costs in the nine months ended September 30, 2024 primarily related to organizational structure refinements and costs related to the MFA divestiture, partially offset by a reversal of costs as a result of a change in strategy from our 2015 operational efficiency initiative.

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Interest expense, net of capitalized interest
	Three Months Ended					Nine Months Ended
	September 30,				%	September 30,				%
(MILLIONS OF DOLLARS)	2025		2024		Change	2025		2024		Change
Interest expense, net of capitalized interest	$	58	$	57	2	$	165	$	174	(5)

Three months ended September 30, 2025 vs. three months ended September 30, 2024

Interest expense, net of capitalized interest, increased in the three months ended September 30, 2025 versus the comparable prior year period primarily as a result of a higher average debt balance in the current period, partially offset by higher capitalized interest in the current period associated with capital projects to support our future growth.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Interest expense, net of capitalized interest, decreased in the nine months ended September 30, 2025 versus the comparable prior year period primarily as a result of higher capitalized interest in the current period associated with capital projects to support our future growth, partially offset by a higher average debt balance in the current period.


Other (income)/deductions—net
	Three Months Ended					Nine Months Ended
	September 30,				%	September 30,				%
(MILLIONS OF DOLLARS)	2025		2024		Change	2025		2024		Change
Other (income)/deductions—net	$	(13)	$	(16)	(19)	$	(27)	$	1	*

* Calculation not meaningful

Three months ended September 30, 2025 vs. three months ended September 30, 2024

The change in Other (income)/deductions—net in the three months ended September 30, 2025 versus the comparable prior year period was primarily as a result of higher foreign currency losses in the current period, partially offset by higher interest income in the current period.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

The change in Other (income)/deductions—net in the nine months ended September 30, 2025 versus the comparable prior year period was primarily as a result of the net loss on the sale of our medicated feed additive product portfolio, certain water soluble products and related assets in 2024 and lower foreign currency losses in the current period, partially offset by lower interest income in the current period.


Provision for taxes on income
	Three Months Ended							Nine Months Ended
	September 30,						%	September 30,						%
(MILLIONS OF DOLLARS)	2025			2024			Change	2025			2024			Change
Provision for taxes on income	$	166		$	182		(9)	$	529		$	486		9
Effective tax rate	18.7		%	20.8		%		20.4		%	20.2		%

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Operating Segment Results

On a global basis, the mix of revenue between companion animal and livestock products was as follows:


					% Change
	Three Months Ended					Related to
	September 30,					Foreign
(MILLIONS OF DOLLARS)	2025		2024		Total	Exchange	Operational
U.S.
Companion animal	$	1,069	$	1,068	—	—	—
Livestock	253		278		(9)	—	(9)
	1,322		1,346		(2)	—	(2)
International
Companion animal	583		541		8	4	4
Livestock	472		480		(2)	1	(3)
	1,055		1,021		3	2	1
Total
Companion animal	1,652		1,609		3	1	2
Livestock	725		758		(4)	1	(5)
Contract manufacturing & human health	23		21		10	—	10
	$	2,400	$	2,388	1	1	—

					% Change
	Nine Months Ended					Related to
	September 30,					Foreign
(MILLIONS OF DOLLARS)	2025		2024		Total	Exchange	Operational
U.S.
Companion animal	$	3,218	$	3,046	6	—	6
Livestock	643		771		(17)	—	(17)
	3,861		3,817		1	—	1
International
Companion animal	1,768		1,662		6	(1)	7
Livestock	1,365		1,401		(3)	(4)	1
	3,133		3,063		2	(2)	4
Total
Companion animal	4,986		4,708		6	—	6
Livestock	2,008		2,172		(8)	(3)	(5)
Contract manufacturing & human health	86		59		46	(2)	48
	$	7,080	$	6,939	2	(1)	3

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Earnings by segment and the operational and foreign exchange changes versus the comparable prior year period were as follows:


							% Change
	Three Months Ended							Related to
	September 30,							Foreign
(MILLIONS OF DOLLARS)	2025			2024			Total	Exchange	Operational
U.S.
Revenue	$	1,322		$	1,346		(2)	—	(2)
Cost of Sales	222			258			(14)	—	(14)
Gross Profit	1,100			1,088			1	—	1
Gross Margin	83.2		%	80.8		%
Operating Expenses	201			199			1	—	1
Other (income)/deductions-net	—			—			*	*	*
U.S. Earnings	899			889			1	—	1

International
Revenue	1,055			1,021			3	2	1
Cost of Sales	331			321			3	1	2
Gross Profit	724			700			3	2	1
Gross Margin	68.6		%	68.6		%
Operating Expenses	167			157			6	3	3
Other (income)/deductions-net	1			1			*	*	*
International Earnings	556			542			3	3	—

Total operating segments	1,455			1,431			2	1	1

Other business activities	(140)			(137)			2
Reconciling Items:
Corporate	(306)			(306)			—
Purchase accounting adjustments	(32)			(35)			(9)
Acquisition and divestiture-related costs	—			(7)			*
Certain significant items	(7)			(1)			*
Other unallocated	(83)			(71)			17
Total Earnings	$	887		$	874		1

* Calculation not meaningful

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							% Change
	Nine Months Ended							Related to
	September 30,							Foreign
(MILLIONS OF DOLLARS)	2025			2024			Total	Exchange	Operational
U.S.
Revenue	$	3,861		$	3,817		1	—	1
Cost of Sales	629			707			(11)	—	(11)
Gross Profit	3,232			3,110			4	—	4
Gross Margin	83.7		%	81.5		%
Operating Expenses	624			593			5	—	5
Other (income)/deductions-net	—			—			*	*	*
U.S. Earnings	2,608			2,517			4	—	4

International
Revenue	3,133			3,063			2	(2)	4
Cost of Sales	947			976			(3)	(7)	4
Gross Profit	2,186			2,087			5	1	4
Gross Margin	69.8		%	68.1		%
Operating Expenses	494			491			1	(2)	3
Other (income)/deductions-net	2			1			*	*	*
International Earnings	1,690			1,595			6	1	5

Total operating segments	4,298			4,112			5	1	4

Other business activities	(403)			(411)			(2)
Reconciling Items:
Corporate	(898)			(893)			1
Purchase accounting adjustments	(97)			(107)			(9)
Acquisition and divestiture-related costs	(1)			(12)			(92)
Certain significant items	(60)			(77)			(22)
Other unallocated	(240)			(211)			14
Total Earnings	$	2,599		$	2,401		8

* Calculation not meaningful

Three months ended September 30, 2025 vs. three months ended September 30, 2024

U.S. operating segment

U.S. segment revenue decreased by $24 million, or 2%, in the three months ended September 30, 2025, compared with the three months ended September 30, 2024, reflecting a $25 million reduction in livestock products, partially offset by an increase of $1 million in companion animal products.

•Companion animal revenue increased primarily due to increased sales of our parasiticides portfolio, including Simparica® and Revolution® franchises, diagnostics and key dermatology products, partially offset by lower sales of our mAb products for OA pain, Librela® and Solensia®.

•Livestock revenue decreased primarily due to the impact of the MFA divestiture across cattle, swine and poultry products.

U.S. segment earnings increased by $10 million, or 1%, in the three months ended September 30, 2025, compared with the three months ended September 30, 2024, primarily due to higher gross profit, partially offset by the impact of the MFA divestiture.

International operating segment

International segment revenue increased by $34 million in the three months ended September 30, 2025 compared with the three months ended September 30, 2024. Operational revenue increased by $12 million, or 1%, driven by growth of $25 million in companion animal products, partially offset by a decrease of $13 million in livestock products.

•Companion animal operational revenue growth was driven primarily by increased sales of our parasiticide portfolio, including both Simparica and Revolution/Stronghold® franchises, and our key dermatology products.

•Livestock operational revenue decreased primarily due to lower sales of poultry and swine products, partially offset by increased sales in our cattle, fish and sheep products. Excluding the impact of the MFA divestiture, livestock revenue increased across all species. Sales of cattle products grew largely due to price. Sales of poultry products grew due to key account penetration and price.

•Additionally, International segment revenue was favorably impacted by foreign exchange which increased revenue by $22 million, or 2%, primarily driven by the euro and UK pound.

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International segment earnings increased by $14 million, or 3%, in the three months ended September 30, 2025, compared with the three months ended September 30, 2024. Operational earnings growth was primarily due to higher gross profit, partially offset by the impact of the MFA divestiture and higher operating expenses.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

U.S. operating segment

U.S. segment revenue increased by $44 million, or 1%, in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, reflecting an increase of $172 million in companion animal products, partially offset by a $128 million reduction in livestock products.

•Companion animal revenue growth was primarily due to increased sales of Simparica Trio, key dermatology products and small animal diagnostics, partially offset by lower sales of Librela.

•Livestock revenue declined primarily due to the impact of the MFA divestiture across cattle, poultry and swine products.

U.S. segment earnings increased by $91 million, or 4%, in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, primarily due to higher gross profit, partially offset by the impact of the MFA divestiture and higher operating expenses.

International operating segment

International segment revenue increased by $70 million in the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024. Operational revenue increased by $134 million, or 4%, driven by growth of $125 million in companion animal products and $9 million in livestock products.

•Companion animal operational revenue growth was driven primarily by increased sales of our Simparica franchise products, key dermatology products and our mAb products for OA pain, Librela and Solensia.

•Livestock operational revenue growth was due to increased sales in our cattle and fish products, partially offset by lower sales of poultry products. Excluding the impact of the MFA divestiture, livestock revenue increased across all species. Sales of cattle products grew largely due to price and sales of poultry products grew due to higher demand for vaccines in key poultry markets and price. Sales of our fish products grew due to increased vaccine sales in Norway and Chile. Sales of swine products increased due to timing of the expected impact of macroenvironment conditions, primarily in China, and higher demand for vaccines.

•Additionally, International segment revenue was unfavorably impacted by foreign exchange which decreased revenue by $64 million, or 2%, primarily driven by the Brazilian real, Mexican peso, Argentinian peso, Turkish lira, Australian dollar and Canadian dollar.

International segment earnings increased by $95 million, or 6%, in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024. Operational earnings growth was $76 million, or 5%, primarily due to higher gross profit, partially offset by the impact of the MFA divestiture.

Other business activities

Other business activities includes our Client Supply Services contract manufacturing results, our human health business and expenses associated with our dedicated veterinary medicine research and development organization, research alliances, U.S. regulatory affairs and other operations focused on the development of our products. Other R&D-related costs associated with non-U.S. market and regulatory activities are generally included in the International segment.

Three months ended September 30, 2025 vs. three months ended September 30, 2024

Other business activities net loss increased by $3 million in the three months ended September 30, 2025, compared with the three months ended September 30, 2024, reflecting an increase in certain compensation-related costs and depreciation expense, partially offset by a decrease in R&D costs primarily due to timing of spend related to projects and other strategic investments.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Other business activities net loss decreased by $8 million in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, reflecting a decrease in R&D costs primarily due to timing of spend related to projects and other strategic investments, as well as contract manufacturing results, partially offset by an increase in certain compensation-related costs and depreciation expense.

Reconciling items

Reconciling items include certain costs that are not allocated to our operating segments results, such as costs associated with the following:

•Corporate, which includes certain costs associated with information technology, facilities, legal, finance, human resources, business development, certain diagnostic costs and communications, among others. These costs also include certain compensation costs, certain procurement costs, and other miscellaneous operating expenses that are not charged to our operating segments, as well as interest income and expense;

•Certain transactions and events such as Purchase accounting adjustments, Acquisition and divestiture-related costs and Certain significant items, which are defined below; and

•Other unallocated, which includes (i) certain overhead expenses associated with our global manufacturing operations not charged to our operating segments; (ii) certain costs associated with finance that specifically support our global manufacturing operations; (iii) certain supply chain and global logistics costs; and (iv) certain procurement costs.

Three months ended September 30, 2025 vs. three months ended September 30, 2024

Corporate expenses were flat in the three months ended September 30, 2025, compared with the three months ended September 30, 2024, primarily due to lower depreciation expense, offset by unfavorable foreign exchange.

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Other unallocated expenses increased by $12 million, or 17%, in the three months ended September 30, 2025, compared with the three months ended September 30, 2024, primarily due to higher manufacturing costs and other charges, unfavorable foreign exchange and higher freight charges.

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Corporate expenses increased by $5 million, or 1%, in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, primarily due to an increase in compensation-related costs, partially offset by favorable foreign exchange.

Other unallocated expenses increased by $29 million, or 14%, in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024, primarily due to higher manufacturing costs and other charges, partially offset by lower inventory obsolescence, freight charges and favorable foreign exchange.

See Notes to Condensed Consolidated Financial Statements—Note 16. Segment Information for further information.

Adjusted net income

General description of adjusted net income (a non-GAAP financial measure)

Adjusted net income is an alternative view of performance used by management, and we believe that investors’ understanding of our performance is enhanced by disclosing this performance measure. The adjusted net income measure is an important internal measurement for us. Additionally, we measure our overall performance on this basis in conjunction with other performance metrics. The following are examples of how the adjusted net income measure is utilized:

•senior management receives a monthly analysis of our operating results that is prepared on an adjusted net income basis;

•our annual budgets are prepared on an adjusted net income basis; and

•other goal setting and performance measurements.

Purchase accounting adjustments

Adjusted net income is calculated prior to considering certain significant purchase accounting impacts that result from business combinations and net asset acquisitions. These impacts, primarily associated with certain acquisitions, include amortization related to the increase in fair value of the acquired finite-lived intangible assets and depreciation related to the increase/decrease to fair value of the acquired fixed assets. Therefore, the adjusted net income measure includes the revenue earned upon the sale of the acquired products without considering the aforementioned significant charges.

While certain purchase accounting adjustments can occur through 20 or more years, this presentation provides an alternative view of our performance that is used by management to internally assess business performance. We believe the elimination of amortization attributable to acquired intangible assets provides management and investors an alternative view of our business results by providing a degree of parity to internally developed intangible assets for which R&D costs previously have been expensed.

A completely accurate comparison of internally developed intangible assets and acquired intangible assets cannot be achieved through adjusted net income. These components of adjusted net income are derived solely from the impact of the items listed above. We have not factored in the impact of any other differences in experience that might have occurred if we had discovered and developed those intangible assets on our own, and this approach does not intend to be representative of the results that would have occurred in those circumstances. For example, our R&D costs in total, and in the periods presented, may have been different; our speed to commercialization and resulting revenue, if any, may have been different; or our costs to manufacture may have been different. In addition, our marketing efforts may have been received differently by our customers. As such, in total, there can be no assurance that our adjusted net income amounts would have been the same as presented had we discovered and developed the acquired intangible assets.

Acquisition and divestiture-related costs

Adjusted net income is calculated prior to considering transaction, integration and disintegration costs associated with significant business combinations, net asset acquisitions and divestitures. These incremental costs are excluded as they are incurred to acquire and integrate, or dispose and disintegrate, certain businesses as a result of the acquisition or disposal decision and are unique to each transaction. We have made no adjustments for the resulting synergies from these transactions.

We believe that viewing income prior to considering these charges provides investors with a useful additional perspective because the significant costs incurred in a business combination, net asset acquisition or divestiture result primarily from the need to eliminate duplicate assets, activities or employees––a natural result of acquiring or disposing of a fully integrated set of activities. For this reason, we believe that the costs incurred to convert disparate systems, to close duplicative facilities or to eliminate duplicate positions (for example, in the context of a business combination) can be viewed differently from those costs incurred in the ordinary course of business.

The integration and disintegration costs associated with a business combination, asset acquisition or divestiture may occur over several years, with the more significant impacts generally ending within three years of the transaction. Because of the need for certain external approvals for some actions, the span of time needed to achieve certain restructuring, integration or disintegration activities can be lengthy. For example, due to the regulated nature of the animal health medicines, vaccines and diagnostic business, the closure of excess facilities can take several years, as all manufacturing changes are subject to extensive validation and testing and must be approved by the U.S. Food and Drug Administration and/or other regulatory authorities.

Certain significant items

Adjusted net income is calculated excluding certain significant items. Certain significant items represent substantive, unusual items that are evaluated on an individual basis. Such evaluation considers both the quantitative and the qualitative aspect of their unusual nature. Unusual, in this context, may represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis; items that would be nonrecurring; or items that relate to products that we no longer sell.

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While not all-inclusive, examples of items that could be included as certain significant items would be costs related to a major non-acquisition or divestiture-related restructuring charge and associated implementation costs for a program that is specific in nature with a defined term, such as those related to our non-acquisition or divestiture-related cost-reduction and productivity initiatives; costs related to our business process transformation program; amounts related to disposals of products or facilities that do not qualify as discontinued operations as defined by U.S. GAAP; certain asset impairment charges; adjustments related to the resolution of certain tax positions; significant currency devaluation; the impact of adopting certain significant, event-driven tax legislation; or charges related to legal matters. See Notes to Condensed Consolidated Financial Statements—Note 15. Commitments and Contingencies. Our normal, ongoing defense costs or settlements of and accruals on legal matters made in the normal course of our business would not be considered certain significant items.

Reconciliation

A reconciliation of net income attributable to Zoetis, as reported under U.S. GAAP, to adjusted net income follows:


	Three Months Ended					Nine Months Ended
	September 30,				%	September 30,				%
(MILLIONS OF DOLLARS)	2025		2024		Change	2025		2024		Change
GAAP reported net income attributable to Zoetis	$	721	$	682	6	$	2,070	$	1,905	9
Purchase accounting adjustments—net of tax	24		27		(11)	75		83		(10)
Acquisition and divestiture-related costs—net of tax	—		5		*	1		9		(89)
Certain significant items—net of tax	9		2		*	53		64		(17)
Non-GAAP adjusted net income(a)	$	754	$	716	5	$	2,199	$	2,061	7

(a) The effective tax rate on adjusted pre-tax income was 18.6% and 20.8% for the three months ended September 30, 2025 and 2024, respectively, and 20.2% and 20.3% for the nine months ended September 30, 2025 and 2024, respectively.

The lower effective tax rate for the three and nine months ended September 30, 2025, compared with the three and nine months ended September 30, 2024, was primarily attributable to higher net discrete tax benefits, partially offset by a lower benefit in the U.S related to foreign-derived intangible income and a less favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation decisions).

A reconciliation of reported diluted earnings per share (EPS), as reported under U.S. GAAP, to non-GAAP adjusted diluted EPS follows:


	Three Months Ended					Nine Months Ended
	September 30,				%	September 30,				%
	2025		2024		Change	2025		2024		Change
Earnings per share—diluted(a):
GAAP reported EPS attributable to Zoetis—diluted	$	1.63	$	1.50	9	$	4.65	$	4.18	11
Purchase accounting adjustments—net of tax	0.05		0.06		(17)	0.16		0.18		(11)
Acquisition and divestiture-related costs—net of tax	—		0.01		*	—		0.02		*
Certain significant items—net of tax	0.02		0.01		*	0.12		0.14		(14)
Non-GAAP adjusted EPS—diluted	$	1.70	$	1.58	8	$	4.93	$	4.52	9

* Calculation not meaningful

(a) Diluted earnings per share was computed using the weighted-average common shares outstanding during the period plus the common stock equivalents related to stock options, restricted stock units, performance-vesting restricted stock units and deferred stock units.

Adjusted net income includes the following charges for each of the periods presented:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Interest expense, net of capitalized interest	$	58	$	57	$	165	$	174
Interest income	26		23		68		79
Income taxes	172		191		558		526
Depreciation	84		79		244		242
Amortization	8		7		25		25

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Adjusted net income, as shown above, excludes the following items:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Purchase accounting adjustments:
Amortization and depreciation	$	32	$	35	$	97	$	107


Total purchase accounting adjustments—pre-tax	32		35		97		107
Income taxes(a)	8		8		22		24
Total purchase accounting adjustments—net of tax	24		27		75		83
Acquisition and divestiture-related costs:
Acquisition-related costs	—		—		1		1
Divestiture-related costs(b)	—		7		—		11



Total acquisition and divestiture-related costs—pre-tax	—		7		1		12
Income taxes(a)	—		2		—		3
Total acquisition and divestiture-related costs—net of tax	—		5		1		9
Certain significant items:


Other restructuring charges and cost-reduction/productivity initiatives(c)	4		(2)		11		39
Business process transformation program(d)	8		—		26		—

Certain asset impairment charges(e)	—		—		27		11



Net loss on sale of business(f)	—		—		3		22
Other	(5)		3		(7)		5
Total certain significant items—pre-tax	7		1		60		77
Income taxes(a)	(2)		(1)		7		13
Total certain significant items—net of tax	9		2		53		64
Total purchase accounting adjustments, acquisition and divestiture-related costs, and certain significant items—net of tax	$	33	$	34	$	129	$	156

(a) Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate.

(b) Represents costs related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets.

(c) For the three and nine months ended September 30, 2025, primarily related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site.

For the nine months ended September 30, 2024, primarily related to organizational structure refinements, partially offset by a reversal of costs as a result of a change in strategy from our 2015 operational efficiency initiative.

(d) Represents costs related to our multi-year business process transformation program, which includes the implementation of a new enterprise resource planning (ERP) system, related digital technology solutions and other related costs. This comprehensive program is a major global and cross-functional company-wide effort that we believe will transform how we work across our business and contribute to all of our strategic priorities. Due to the nature, scope and magnitude of this investment, these costs are incremental transformational costs that are far in excess of the historical normal level of spending to support operations and are not expected to recur in the foreseeable future.

(e) For the nine months ended September 30, 2025, represents charges related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, as well as charges related to our aquaculture product portfolio.

For the nine months ended September 30, 2024, represents charges related to our aquaculture product portfolio.

(f) Represents a net loss related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets in 2024.

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The classification of the above items excluded from adjusted net income are as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Cost of sales:
Purchase accounting adjustments	$	1	$	1	$	3	$	3




Business process transformation program	1		—		4		—
Other	(1)		1		(2)		1
Total Cost of sales	1		2		5		4

Selling, general and administrative expenses:
Purchase accounting adjustments	2		3		8		9



Business process transformation program	7		—		22		—
Other	—		2		—		2
Total Selling, general and administrative expenses	9		5		30		11

Research and development expenses:
Purchase accounting adjustments	1		1		2		2
Total Research and development expenses	1		1		2		2

Amortization of intangible assets:
Purchase accounting adjustments	28		30		84		93
Total Amortization of intangible assets	28		30		84		93

Restructuring charges and certain acquisition and divestiture-related costs:
Acquisition-related costs	—		—		1		1
Divestiture-related costs	—		7		—		11
Employee termination costs	(1)		(2)		4		39

Asset impairments	—		—		22		—
Exit costs	5		—		7		—
Total Restructuring charges and certain acquisition and divestiture-related costs	4		5		34		51

Other (income)/deductions—net:


Net loss on sale of business	—		—		3		22

Asset impairment charges	—		—		5		11

Other	(4)		—		(5)		2
Total Other (income)/deductions—net	(4)		—		3		35

Provision for taxes on income	6		9		29		40

Total purchase accounting adjustments, acquisition and divestiture-related costs, and certain significant items—net of tax	$	33	$	34	$	129	$	156

Analysis of the condensed consolidated statements of comprehensive income

Changes in other comprehensive income for the periods presented are primarily related to foreign currency translation adjustments and unrealized gains/(losses) on derivative instruments. The foreign currency translation adjustment changes result from the strengthening or weakening of the U.S. dollar as compared to the currencies in the countries in which we do business. Unrealized gains/(losses) on the changes in the fair value of derivative instruments are recorded within Accumulated other comprehensive income/(loss) and reclassified into earnings depending on the nature and purpose of the financial instrument, as described in Note 9. Financial Instruments of the Notes to Condensed Consolidated Financial Statements.

Analysis of the condensed consolidated balance sheets

September 30, 2025 vs. December 31, 2024

For a discussion about the changes in Cash and cash equivalents, Short-term borrowings, Current portion of long-term debt and Long-term debt, net of discount and issuance costs, see “Analysis of financial condition, liquidity and capital resources” below.

Accounts receivable, less allowance for doubtful accounts increased primarily as a result of higher net sales in the period.

Inventories increased as a result of inventory build-up to support production for the forecasted demand of certain products.

Other current assets increased primarily due to the timing of income taxes paid and the jurisdictional netting of income taxes receivable and income taxes payable, as well as an increase in collateral posted related to derivative contracts, partially offset by the mark-to-market adjustments of derivative instruments.

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Property, plant and equipment, less accumulated depreciation increased as a result of capital spending, partially offset by depreciation expense.

The increase in Operating lease right-of-use assets reflects assets acquired through new and amended lease agreements, partially offset by lease amortization, while the increase in Operating lease liabilities primarily reflects an amended lease obligation in the current period, partially offset by lease payments.

Identifiable intangible assets, less accumulated amortization decreased primarily due to amortization expense. See Note 11. Goodwill and Other Intangible Assets of the Notes to Condensed Consolidated Financial Statements.

The net changes in Noncurrent deferred tax assets, Noncurrent deferred tax liabilities, Income taxes payable and Other taxes payable primarily reflect adjustments to the accrual for the income tax provision, the timing of income tax payments and the tax impact of various acquisitions.

Other noncurrent assets increased primarily due to capitalized cloud computing arrangements implementation costs, partially offset by the mark-to-market adjustments of derivative instruments.

Accounts payable decreased as a result of the timing of vendor and value-added tax payments.

Accrued expenses increased primarily as a result of increases in accrued third-party inventory and accrued contract rebates, as well as the timing of payments for other accrued expenses.

Accrued compensation and related items decreased primarily due to the payments of 2024 annual incentive bonuses, savings plan contributions to eligible employees and payments for sales incentive bonuses, partially offset by the accrual of 2025 annual incentive bonuses, sales incentive bonuses and savings plan contributions to eligible employees.

Other current liabilities decreased primarily due to a decrease in collateral received related to derivative contracts, partially offset by the mark-to-market adjustments of derivative instruments.

Other noncurrent liabilities increased primarily due to the mark-to-market adjustments of derivative instruments.

For an analysis of the changes in Total Equity, see the Condensed Consolidated Statements of Equity and Notes to Condensed Consolidated Financial Statements— Note 13. Stockholders’ Equity.

Analysis of the condensed consolidated statements of cash flows


	Nine Months Ended
	September 30,				$
(MILLIONS OF DOLLARS)	2025		2024		Change
Net cash provided by (used in):
Operating activities	$	2,011	$	2,048	$	(37)
Investing activities	(582)		(441)		(141)
Financing activities	(1,375)		(1,915)		540
Effect of exchange-rate changes on cash and cash equivalents	43		(19)		62
Net increase/(decrease) in cash and cash equivalents	$	97	$	(327)	$	424

Operating activities

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Net cash provided by operating activities was $2,011 million for the nine months ended September 30, 2025, compared with $2,048 million for the nine months ended September 30, 2024. The decrease in operating cash flows was primarily attributable to to the timing of income taxes paid, higher inventory build-up of certain products due to increased demand and the timing of receipts and payments in the ordinary course of business, partially offset by higher net income adjusted by non-cash items.

Investing activities

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Our net cash used in investing activities was $582 million for the nine months ended September 30, 2025, compared with $441 million for the nine months ended September 30, 2024. The net cash used in investing activities for the nine months ended September 30, 2025 was primarily due to capital expenditures and net payments of derivative instrument activity. The net cash used in investing activities for the nine months ended September 30, 2024 was primarily due to capital expenditures.

Financing activities

Nine months ended September 30, 2025 vs. nine months ended September 30, 2024

Our net cash used in financing activities was $1,375 million for the nine months ended September 30, 2025, compared with $1,915 million for the nine months ended September 30, 2024. The net cash used in financing activities for the nine months ended September 30, 2025 was primarily attributable to the repayment of the aggregate principal amounts of our 2015 and 2022 senior notes due 2025, the purchase of treasury shares and related excise taxes, the payment of dividends and taxes paid on withholding shares, partially offset by proceeds from the issuance of senior notes in August 2025 and proceeds in connection with the issuance of common stock under our equity incentive plan. The net cash used in financing activities for the nine months ended September 30, 2024 was primarily attributable to the purchase of treasury shares and related payment of excise taxes, the payment of dividends and taxes paid on withholding shares, partially offset by proceeds in connection with the issuance of common stock under our equity incentive plan.

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Analysis of financial condition, liquidity and capital resources

While we believe our cash and cash equivalents on hand, our operating cash flows and our existing financing arrangements will be sufficient to support our cash needs for the next twelve months and beyond, this may be subject to the environment in which we operate. Risks to our meeting future funding requirements are described in Global economic conditions below.

Selected measures of liquidity and capital resources

Certain relevant measures of our liquidity and capital resources follow:


	September 30,		December 31,
(MILLIONS OF DOLLARS)	2025		2024
Cash and cash equivalents	$	2,084	$	1,987
Accounts receivable, net(a)	1,541		1,316

Current portion of long-term debt	—		1,350
Long-term debt	7,069		5,220
Working capital	4,776		2,574
Ratio of current assets to current liabilities	3.64:1		1.75:1

(a) Accounts receivable are usually collected over a period of 45 to 75 days. For the periods ended September 30, 2025 and December 31, 2024, the number of days that accounts receivables were outstanding remained within this range. We regularly monitor our accounts receivable for collectability, particularly in markets where economic conditions remain uncertain. We believe that our allowance for doubtful accounts is appropriate. Our assessment is based on such factors as past due aging, historical and expected collection patterns, the financial condition of our customers, the robust nature of our credit and collection practices and the economic environment.

For additional information about the sources and uses of our funds, see the Analysis of the condensed consolidated balance sheets and Analysis of the condensed consolidated statements of cash flows sections of this MD&A.

Credit facility and other lines of credit

In August 2025, we entered into a new and restated revolving credit agreement with a syndicate of banks providing for a multi-year $1.3 billion senior unsecured revolving credit facility (the credit facility), which expires in December 2027. The credit facility replaced our previous revolving credit facility. Subject to certain conditions, we have the right to increase the credit facility to up to $1.75 billion. The credit facility contains a financial covenant requiring us to not exceed a maximum total leverage ratio (the ratio of consolidated net debt as of the end of the period to consolidated Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) for such period) of 3.50:1. Upon entering into a material acquisition, the maximum total leverage ratio increases to 4.00:1, and extends until the fourth full consecutive fiscal quarter ended immediately following the consummation of a material acquisition. In addition, the credit facility contains other customary covenants.

We were in compliance with all financial covenants as of September 30, 2025 and December 31, 2024. There were no amounts drawn under the credit facility as of September 30, 2025 or December 31, 2024.

Domestic and international short-term funds

Many of our operations are conducted outside the U.S. The amount of funds held in the U.S. will fluctuate due to the timing of receipts and payments in the ordinary course of business and due to other reasons, such as business development activities. As part of our ongoing liquidity assessments, we regularly monitor the mix of U.S. and international cash flows (both inflows and outflows). Actual repatriation of overseas funds can result in additional U.S. and local income taxes, such as U.S. state income taxes, local withholding taxes, and taxes on currency gains and losses.

Global economic conditions

Global financial markets may be impacted by macroeconomic, business and financial volatility. Challenging economic conditions in recent years have not had, nor do we anticipate that it will have, a significant impact on our liquidity. Due to our operating cash flows, financial assets, access to capital markets and available lines of credit and revolving credit agreements, we continue to believe that we have the ability to meet our liquidity needs for the foreseeable future. As markets change, we continue to monitor our liquidity position. There can be no assurance that a challenging economic environment or an economic downturn will not impact our liquidity or our ability to obtain financing in the future.

Debt securities

Our senior notes are governed by an indenture and supplemental indentures (collectively, the indenture) between us and Deutsche Bank Trust Company Americas, as trustee. The indenture contains certain covenants, including limitations on our and certain of our subsidiaries’ ability to incur liens or engage in sale lease-back transactions. The indenture also contains restrictions on our ability to consolidate, merge or sell substantially all of our assets. In addition, the indenture contains other customary terms, including certain events of default, upon the occurrence of which, the senior notes may be declared immediately due and payable.

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Our outstanding debt securities are as follows:


Description	Principal Amount	Interest Rate	Terms
2017 Senior Notes due 2027	$750 million	3.000%	Interest due semi annually, not subject to amortization, aggregate principal due on September 12, 2027
2018 Senior Notes due 2028	$500 million	3.900%	Interest due semi annually, not subject to amortization, aggregate principal due on August 20, 2028
2025 Senior Notes due 2028	$850 million	4.150%	Interest due semi annually, not subject to amortization, aggregate principal due on August 17, 2028
2020 Senior Notes due 2030	$750 million	2.000%	Interest due semi annually, not subject to amortization, aggregate principal due on May 15, 2030
2022 Senior Notes due 2032	$750 million	5.600%	Interest due semi annually, not subject to amortization, aggregate principal due on November 16, 2032
2025 Senior Notes due 2035	$1,000 million	5.000%	Interest due semi annually, not subject to amortization, aggregate principal due on August 17, 2035
2013 Senior Notes due 2043	$1,150 million	4.700%	Interest due semi annually, not subject to amortization, aggregate principal due on February 1, 2043
2017 Senior Notes due 2047	$500 million	3.950%	Interest due semi annually, not subject to amortization, aggregate principal due on September 12, 2047
2018 Senior Notes due 2048	$400 million	4.450%	Interest due semi annually, not subject to amortization, aggregate principal due on August 20, 2048
2020 Senior Notes due 2050	$500 million	3.000%	Interest due semi annually, not subject to amortization, aggregate principal due on May 15, 2050

Credit ratings

Two major corporate debt-rating organizations, Moody’s and S&P, assign ratings to our short-term and long-term debt. A security rating is not a recommendation to buy, sell or hold securities and the rating is subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating.

The following table provides the current ratings assigned by these rating agencies to our commercial paper and senior unsecured non-credit-enhanced long-term debt:

Commercial Paper

Long-term Debt

Date of Last Action

Name of Rating Agency

Rating

Outlook

Moody’s

P-2

Stable

January 2025

S&P

A-2

BBB+

Stable

April 2025

Share repurchase program

In August 2024, our Board of Directors authorized a multi-year share repurchase program of up to $6 billion of our outstanding common stock. As of September 30, 2025, there was $4.5 billion remaining under this authorization. Purchases of Zoetis shares may be made at the discretion of management, depending on market conditions and business needs. Share repurchases may be executed through various means, including open market or privately negotiated transactions. During the first nine months of 2025, 7.3 million shares were repurchased for $1,158 million, which excludes a $11 million accrual for excise tax on net share repurchases.

Off-balance sheet arrangements

In the ordinary course of business and in connection with the sale of assets and businesses, we may indemnify our counterparties against certain liabilities that may arise in connection with a transaction or that are related to activities prior to a transaction. These indemnifications typically pertain to environmental, tax, employee and/or product-related matters, and patent-infringement claims. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to reimburse the loss. These indemnifications are generally subject to threshold amounts, specified claim periods and other restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of September 30, 2025 and December 31, 2024, recorded amounts for the estimated fair value of these indemnifications are not material.

New accounting standards

See Note 3. Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements for discussion of recent accounting pronouncements, including the respective dates of adoption or expected adoption and effects or expected effects on our consolidated financial position, results of operations and cash flows.

Forward-looking statements and factors that may affect future results

This report contains “forward-looking” statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We generally identify forward-looking statements by using words such as “anticipate,” “estimate,” “could,” “expect,” “intend,” “project,” “plan,” “predict,” “believe,” “seek,” “continue,” “outlook,” "forecast,” “objective,” “target,” “may,” “might,” “will,” “should,” “can have,” “likely” or the negative version of these words or comparable words or by using future dates in connection with any discussion of future performance, actions or events.

In particular, forward-looking statements include statements relating to our future actions, business plans or prospects, prospective products, product approvals or products under development, product and supply chain disruption, R&D costs, timing and likelihood of success, future operating or financial performance, future results of current and anticipated products and services, product strategies, sales efforts, expenses, production efficiencies, production margins, anticipated timing of generic market entries, integration of acquired businesses, anticipated impact of timing of divestitures, interest rates, tax rates, tariffs, trade protection measures, changes in tax regimes and laws, disease outbreaks, foreign exchange rates, growth in emerging markets, the outcome of contingencies, such as legal proceedings, plans related to share repurchases and dividends, government regulation, taxes and financial results. These statements are not guarantees of future performance, actions or events. Forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, and are based on assumptions that could prove to be inaccurate.

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Among the factors that could cause actual results to differ materially from past results and future plans and projected future results are the following:

•the possible impact and timing of competing products, including generic alternatives, on our products and our ability to compete against such products;

•unanticipated safety, quality or efficacy concerns or issues about our products;

•the economic, political, legal and business environment of the foreign jurisdictions in which we do business;

•the decline in global economic conditions, economic weakness in China and inflation;

•consolidation of our customers and distributors;

•changes in the distribution channel for companion animal products;

•an outbreak of infectious disease carried by animals;

•disruptive innovations and advances in medical practices and technologies;

•failure to successfully acquire businesses, license rights or products, integrate businesses, form and manage alliances or divest businesses;

•restrictions and bans on the use of and consumer preferences regarding antibacterials in food-producing animals;

•perceived adverse effects linked to the consumption of food derived from animals that utilize our products or animals generally;

•increased regulation or decreased governmental support relating to the raising, processing or consumption of food-producing animals;

•modification of foreign trade policy by the U.S. or other countries, including the imposition of increased tariffs on imported or exported goods;

•adverse weather conditions and the availability of natural resources;

•the impact of climate change on our activities and the activities of our customers and suppliers;

•an inability to hire and retain executive officers and other key personnel;

•product launch delays, inventory shortages, recalls or unanticipated costs caused by manufacturing problems and capacity imbalances;

•availability constraints and price volatility caused by changes in supply conditions, government regulations, tariffs, economic climate and other factors, including with products, materials and services provided to us by third parties;

•failure of our R&D, acquisition and licensing efforts to generate new products and product lifecycle innovations;

•difficulties or delays in the development or commercialization of new products;

•illegal distribution and/or sale of our products or the misuse or off-label use of our products;

•legal factors, including product liability claims, antitrust litigation and governmental investigations, including tax disputes, environmental concerns, laws and regulations regarding data privacy, commercial disputes and patent disputes with branded and generic competitors, any of which could preclude commercialization of products or negatively affect the profitability of existing products;

•fluctuations in foreign exchange rates and potential currency controls;

•a cyberattack, information security breach or other misappropriation of our data;

•governmental laws and regulations affecting domestic and foreign operations, including without limitation, delays in the United States resulting from federal workforce reductions or hiring freezes, federal agency reorganizations or deregulatory efforts, or existing, new and proposed tax laws and regulations affecting the U.S. or foreign taxation of our business activities, including the imposition of, or increase in, taxes based on gross revenues;

•failure to protect our intellectual property rights or to operate our business without infringing the intellectual property rights of others;

•failure to generate sufficient cash to service our substantial indebtedness; and

•the other factors set forth under “Risk Factors” in Item 1A. of Part I of our 2024 Annual Report on Form 10-K and Item 1A. of Part II in this Form 10-Q.

However, there may also be other risks that we are unable to predict at this time. These risks or uncertainties may cause actual results to differ materially from those contemplated by a forward-looking statement. You should not put undue reliance on forward-looking statements. Forward-looking statements speak only as of the date on which they are made. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the SEC. You are advised, however, to consult any further disclosures we make on related subjects in our Form 10-Q and 8-K reports and our other filings with the SEC. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the above to be a complete discussion of all potential risks or uncertainties.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

A significant portion of our revenue and costs are exposed to changes in foreign exchange rates. In addition, our outstanding borrowings may be subject to risk from changes in interest rates and foreign exchange rates. The overall objective of our financial risk management program is to seek to manage the impact of foreign exchange rate movements and interest rate movements on our earnings. We manage these financial exposures through operational means and by using certain financial instruments. These practices may change as economic conditions change.

For a complete discussion of our exposure to interest rate and foreign exchange risk, refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes from the information discussed therein.

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of the company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation as of September 30, 2025, the company’s Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures are effective at a reasonable level of assurance in alerting them in a timely manner to material information required to be disclosed in our periodic reports filed with the SEC.

Changes in Internal Control over Financial Reporting

During our most recent fiscal quarter, there has not been any change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this Item is incorporated herein by reference to Notes to Condensed Consolidated Financial Statements—Note 15. Commitments and Contingencies in Part I— Item 1, of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in the "Our operating environment" and "Forward-looking statements and factors that may affect future results" sections of the MD&A and in Part I, Item 1A. "Risk Factors," of our 2024 Annual Report on Form 10-K, which could materially affect our business, financial condition, or future results and which are incorporated by reference herein. Set forth below are updates to certain of the risk factors disclosed in our 2024 Annual Report on Form 10-K.

Risks related to our business and the animal health industry

Modification of foreign trade policy by the U.S. or other countries or the imposition of tariffs on imported goods may harm our business.

The U.S. and other countries in which our products are sourced or sold, or we or our customers do business, may from time to time modify existing or impose new quotas, duties (including antidumping or countervailing duties), tariffs or other restrictions in a manner that adversely affects us. For example, the recent announcements of substantial new tariffs and other restrictive trade policies have created a dynamic and unpredictable trade landscape.

Current or future tariffs or other restrictive trade measures may raise the costs of raw materials, components or finished goods, which may adversely impact both our product offerings and our operational expenses. Our manufacturers, suppliers and distribution channels are also affected by the current trade environment, and we may experience supply chain disruptions as a result of increased costs and uncertainty. Tariff and other trade-related cost pressures and supply chain disruptions may lead to reputational harm if we are unable to deliver products or services on expected timelines or if any price increases are poorly received by customers or business partners.

Additional tariffs on imports could result in a negative perception and/or an increased cost of goods and higher prices which may reduce customer demand for products, or extended sales cycles as customers assess the impact of evolving trade policies on their operations and face increased costs or decreased revenue due to tariffs and trade restrictions. Additionally, a number of our customers, particularly U.S.-based livestock producers, benefit from free trade agreements, the loss of which could impact their operating results and spending power.

In addition, retaliatory trade policies or anti-U.S. sentiment in certain regions whether driven by trade tensions, political disagreements or regulatory concerns may make customers, governments and investors more hesitant to engage with, purchase from or invest in U.S. companies. This may lead to increased preference for local competitors, changes to government procurement policies or heightened regulatory scrutiny, which may result in heightened operational risks and difficulties for us in attracting and retaining non-U.S. customers, suppliers, partners and investors.

While the scope and duration of any tariffs remains uncertain, tariffs imposed by the U.S. or other governments on our products or the active pharmaceutical ingredients or other components thereof could negatively impact our financial condition and results of operations.

Risks related to manufacturing and supply

We rely on third parties to provide us with products, materials and services, and are subject to increased labor and material costs and potential disruptions in supply.

The materials used to manufacture our products may be subject to availability constraints and price volatility caused by changes in demand, weather conditions, supply conditions, government regulations, tariffs, economic climate and other factors. In addition, labor costs may be subject to volatility caused by the supply of labor, governmental regulations, tariffs, economic climate and other factors. Increases in the demand for, availability or the price of, materials used to manufacture our products and increases in labor costs could increase the costs to manufacture our products, result in product delivery delays or shortages, and impact our ability to launch new products on a timely basis or at all. We may not be able to pass all or a material portion of any higher product, material, transportation or labor costs on to our customers, which could materially adversely affect our operating results and financial condition.

Certain third-party suppliers are the sole or exclusive source of certain products, materials and services necessary for production of our products. We may be unable to meet demand for certain of our products if any of our third-party suppliers cease or interrupt operations due to, among other things, escalating tensions or trade disputes in their region, restrictions on the import/export of goods or services, contract manufacturing or supply chain disruptions due to contract manufacturer or supplier financial distress, our failure to mutually renew contract terms, or some other failure of a contractor or supplier to meet their obligations to us. In such a case, we may be required to renegotiate the terms of our agreement or pursue a strategic transaction or other alternative arrangement with that supplier or others.

Risks related to legal matters and regulation

Our business is subject to substantial regulation.

As a global company, we are subject to various state, federal and international laws and regulations, including regulations relating to the research, development, quality assurance, manufacturing, importation, exportation, distribution, marketing and sale of our products, including our in vitro diagnostic products used in human health. In addition, our manufacturing facilities are subject to periodic inspections by regulatory agencies, such as the FDA, the USDA and foreign equivalents. Our failure, or the failure of third parties we rely on, including CMOs, to comply with these regulatory requirements, allegations of such non-compliance or the discovery of previously unknown problems with a product or manufacturer could result in, among other things, inspectional observation notices, label changes, untitled or warning letters or other public regulatory communications or correspondence, fines, a partial or total shutdown of production in one or more of our facilities while an alleged violation is remediated, withdrawals or suspensions of current products from the market, product seizures, injunctions and civil or criminal prosecution, as well as decreased sales as a result of negative publicity and product liability claims.

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Any one of these consequences could materially adversely affect our operating results and financial condition.

In addition, we will not be able to market new products unless and until we have obtained all required regulatory approvals in each jurisdiction where we propose to market those products. Even after a product reaches market, it may be subject to re-review and may lose its approvals. We have changed, and may in the future change, the locations of where certain of our products are manufactured and, because of these changes, we may be required to obtain new regulatory approvals. Our failure to obtain approvals, delays in the approval process, including any delays in the United States resulting from federal workforce reductions or hiring freezes, federal agency reorganizations or deregulatory efforts, or any prolonged shutdown of the U.S. government, or our failure to maintain approvals in any jurisdiction, may prevent us from selling products in that jurisdiction until approval or reapproval is obtained, if ever.

The OFAC at the U.S. Treasury Department and the Bureau of Industry and Security at the U.S. Department of Commerce (BIS), and similar agencies in other countries and territories outside the U.S., administer certain laws and regulations that restrict its persons and, in some instances, extraterritorial persons, in conducting activities, transacting business with or making investments in certain countries, governments, entities and individuals subject to economic sanctions. Our international operations subject us to these laws and regulations, which are complex, restrict our business dealings with certain countries, governments, entities, and individuals, and are constantly changing. For example, we sell limited humanitarian animal health products, including medicines, diagnostics and vaccines, to Russia and Iran, in compliance with economic sanctions affecting these countries. Violations of sanctions regulations may be punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment, which could adversely affect our reputation, business, financial condition, results of operations and cash flows. In addition, our internal control policies and procedures may not protect us from reckless or criminal acts committed by our employees and agents. For example, in December 2020, we submitted a final voluntary disclosure to OFAC and the U.S. Department of Justice regarding certain transactions involving sales of food, medicine or devices to individuals or entities who may have been resident in or had ties to Iran potentially in violation of the ITSR administered by OFAC. The sales were made by our Platinum Performance business, which we acquired in August 2019. In July 2023, OFAC provided a No Action letter confirming a final determination that no further action would be taken in the matter. We do not anticipate further communication from the Department of Justice as the statutory response period has lapsed without a response.

A failure to comply with the environmental, health and safety laws and regulations to which we are subject, including any permits issued thereunder, may result in environmental remediation costs, loss of permits, public regulatory communications or announcements, fines, penalties or other adverse governmental or private actions, including regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures, installation of pollution control equipment or remedial measures. We cannot assure you that our costs of complying with current and future environmental, health and safety laws, and our liabilities arising from past or future releases of, or exposure to, hazardous materials will not materially adversely affect our business, results of operations or financial condition.

There has been a broad range of proposed and promulgated state, national and international regulation aimed at reducing the effects of climate change. Such regulations apply or could apply in countries where we have interests or could have interests in the future. The EU adopted the European Sustainability Reporting Standards (ESRS) and the Corporate Sustainability Reporting Directive (CSRD) that will require disclosure by EU entities, including certain EU subsidiaries of non-EU entities, regarding the risks and opportunities arising from environmental, social and corporate governance issues, and on the impact of companies' activities on people and the environment. Similarly, the State of California passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that imposes broad climate-related disclosure obligations on certain companies doing business in California, including us. Any new regulation could take several forms that could result in additional costs in the form of investments of capital to maintain compliance with laws and regulations and taxes. Climate change regulation continues to evolve, and it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation.

We are also subject to chemical regulation in the United States and internationally. For example, governmental authorities in the EU and the United States are increasingly focused on preventing environmental contamination from per- and polyfluoroalkyl substances (PFAS), which may be contained in certain of our products or product packaging. Federal and state governments and regulatory agencies, like the European Chemicals Agency, are in various stages of considering and/or implementing laws and regulations requiring the reporting, restriction and/or phase-out of PFAS-containing products (subject to applicable product exceptions).

Furthermore, we cannot predict the nature of future laws, regulations, or changes in tax laws and tariffs, nor can we determine the effect that additional laws or regulations or changes in existing laws or regulations could have on our business when and if promulgated. Changes in applicable federal, state, local and foreign laws and regulations could have a material adverse effect on our operating results and financial condition.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to the shares of the company’s common stock repurchased during the three months ended

September 30, 2025:


	Issuer Purchases of Equity Securities(a)
	Total Number of Shares Purchased(b)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under Plans or Programs
July 1 - July 31, 2025	709,538	$153.69	708,949	$4,757,495,505
August 1 - August 31, 2025	967,711	$151.24	967,582	$4,611,151,815
September 1 - September 30, 2025	813,872	$149.64	813,231	$4,489,222,124
	2,491,121	$151.42	2,489,762	$4,489,222,124

(a) Amounts exclude the impact of excise tax on net share repurchases.

(b) The company repurchased 1,359 shares during the three-month period ended September 30, 2025 that were not part of the publicly announced multi-year share repurchase authorization. These shares were reacquired from employees to satisfy tax withholding requirements on the vesting of restricted shares from equity-based awards.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

(a) Rule 10b5-1 Trading Arrangements

Kristin Peck, Chief Executive Officer, adopted a pre-arranged trading plan on September 12, 2025, that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended. Ms. Peck's plan provides for: (i) the sale of up to 20,000 shares of Zoetis common stock between January 2, 2026 and February 18, 2026, upon the exercise of certain vested stock options that have an expiration date of February 18, 2026, (ii) the sale of up to 22,500 shares of Zoetis common stock between March 17, 2026 and December 31, 2026, and (iii) the gifting of up to $300,000 worth of Zoetis common stock to a charitable fund between January 2, 2026 and December 31, 2026.

(b) Departure of Executive Officer

We are reporting the following information in lieu of reporting on a Current Report on Form 8-K under Item 5.02 Departure of Directors or Certain Officers.

On October 29, 2025, Dr. Robert J. Polzer, Executive Vice President and President, Research and Development, informed Zoetis Inc. (the “Company”) of his intention to retire from the Company. The Company has appointed Dr. Kevin Esch to succeed Dr. Polzer in this role, effective January 1, 2026.

In connection with Dr. Polzer’s retirement, the Company entered into a Letter Agreement (the “Letter Agreement”) with Dr. Polzer. The Letter Agreement provides that Dr. Polzer will continue in his role as Executive Vice President, and President, Research and Development through December 31, 2025. Effective as of January 1, 2026, Dr. Polzer will remain employed by the Company as a non-executive officer of the Company through February 28, 2026 (the “Retirement Date”), during which time he will assist in the proper transition of his duties and responsibilities to his successor and will continue receiving his current annual base salary and employment benefits. For calendar year 2026, Dr. Polzer will also be eligible to receive an annual incentive award equal to his 2025 target annual bonus percentage, pro-rated based on his days of employment through the Retirement Date. In connection with his retirement, Dr. Polzer’s outstanding equity awards will receive retirement treatment under the existing terms and conditions of such awards. Dr. Polzer will not be entitled to any severance benefits pursuant to the Company’s Executive Severance Plan.

Following the Retirement Date, Dr. Polzer will serve as a non-employee consultant to the Company through December 31, 2026, during which time he will be available to continue the orderly transition of his duties and responsibilities and will provide scientific advisory services to the Company. Subject to compliance with the terms of the Letter Agreement and the execution of a release agreement, Dr. Polzer will receive a monthly consulting fee of $80,000.

The foregoing description of the Letter Agreement is qualified in its entirety by reference to the full text of the Letter Agreement, which is filed herewith as Exhibit 10.2.

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Item 6. Exhibits


Exhibit 4.1						Seventh Supplemental Indenture, dated August 18, 2025, between the Company and Deutsche Bank
						Trust Company (incorporated by reference to Exhibit 4.2 to Zoetis Inc.’s Current Report on Form 8-K
						filed on August 18, 2025 (File No. 001-35797)
Exhibit 4.2						Form of 4.150% Senior Notes due 2028 (incorporated by reference to Exhibit 4.3 to Zoetis Inc.’s
						Current Report on Form 8-K filed on August 18, 2025 (File No. 001-35797)
Exhibit 4.3						Form of 5.000% Senior Notes due 2035 (incorporated by reference to Exhibit 4.4 to Zoetis Inc.’s
						Current Report on Form 8-K filed on August 18, 2025 (File No. 001-35797)
Exhibit 10.1						Revolving Credit Agreement dated as of August 27, 2025, among Zoetis Inc., the lender party thereto,
						the issuing banks party thereto and JPMorgan Chase Bank N.A., as administrative agent (incorporated
						by reference to Exhibit 10.1 to Zoetis Inc.’s Current Report on Form 8-K filed on August 27, 2025
						(File No. 001-35797)
Exhibit 10.2						Letter Agreement by and between Zoetis Inc. and Dr. Robert J. Polzer, dated October 29, 2025
Exhibit 31.1						Chief Executive Officer–Certification pursuant to Sarbanes-Oxley Act of 2002 Section 302
Exhibit 31.2						Chief Financial Officer–Certification pursuant to Sarbanes-Oxley Act of 2002 Section 302
Exhibit 32.1						Chief Executive Officer–Certification pursuant to Sarbanes-Oxley Act of 2002 Section 906
Exhibit 32.2						Chief Financial Officer–Certification pursuant to Sarbanes-Oxley Act of 2002 Section 906
EX-101.INS						Inline XBRL INSTANCE DOCUMENT
EX-101.SCH						Inline XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL						Inline XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT
EX-101.LAB						Inline XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT
EX-101.PRE						Inline XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT
EX-101.DEF						Inline XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT
EX-104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Zoetis Inc.

November 4, 2025	By:	/S/ KRISTIN C. PECK
		Kristin C. Peck
		Chief Executive Officer and Director

November 4, 2025	By:	/S/ WETTENY JOSEPH
		Wetteny Joseph
		Executive Vice President and Chief Financial Officer

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EX-10.2 2 rpletteragreement_102925ex.htm EX-10.2 Document

Exhibit 10.2

10 Sylvan Way

Parsippany, NJ 07054

October 29, 2025

RE: Robert J Polzer Letter Agreement

Dear Rob:

On behalf of Zoetis Inc. (the “Company”) and its Board of Directors, I want to thank you for your years of service to the Company, during which you have made many meaningful contributions. This letter agreement (this “Letter Agreement”) sets forth the terms of your retirement from the Company.

1.Retirement Date and Transition Period

Effective as of the close of business on December 31, 2025, your service as Executive Vice President and President of Research and Development of the Company and in any other positions you may hold with the Company or any of its affiliates will cease, regardless of whether a successor to your role(s) is named prior to such date; provided, however, that, during the period commencing on January 1, 2026 and ending on February 28, 2026 (the “Retirement Date” and, such period, the “Transition Period”), the Company shall continue your employment as a non-executive officer employee of the Company, reporting to the Company’s Chief Executive Officer. During the Transition Period, you will have such duties and responsibilities as delegated by the Company’s Chief Executive Officer, including the proper transition of the duties and responsibilities of the Executive Vice President and President of Research and Development role to your successor, and as a scientific advisor to the Chief Executive Officer and the Zoetis Executive Team. During the Transition Period, you shall continue to (a) receive your annual base salary at the rate in effect as of the date hereof in accordance with the Company’s regular payroll practices, (b) participate in the health, welfare and retirement plans of the Company and its affiliates in which you are currently eligible to participate, and (c) maintain your current primary work location in Kalamazoo, Michigan, subject to business travel as needed. Effective as of the Retirement Date, your employment with the Company and its affiliates shall terminate and you shall cease participation in any Company employee benefit plans. You shall not be entitled to any severance payments or benefits under the Company’s Executive Severance Plan due to your retirement. Notwithstanding anything herein to the contrary, the Company reserves the right to terminate your employment for Cause (as such term is defined in the Company’s Executive Severance Plan) prior to the Retirement Date.

With respect to calendar year 2025, you will remain eligible to receive an annual incentive award based on actual performance, payable in calendar year 2026 when annual incentive awards are otherwise paid to the Zoetis Executive Team.

With respect to calendar year 2026, subject to your continued employment with the Company through the Retirement Date, you will be eligible to receive an annual incentive award equal to your 2025 target bonus percentage and pro-rated based on the number of days worked as an employee in 2026, payable in calendar year 2027 when annual incentive awards are otherwise paid to the Zoetis Executive Team. You will not be eligible for a grant of annual long-term incentive awards in respect of calendar year 2026 or thereafter.

With respect to your outstanding equity awards, all such awards will remain outstanding and eligible to vest in accordance with their existing terms and conditions until the Retirement Date. For the avoidance of doubt, no further equity grants will be awarded to you. Subject to your continued employment with the Company through the Retirement Date, you will be eligible for the special retirement treatment contemplated under the existing terms and conditions of your outstanding equity awards, as follows (it being understood and agreed that in the event of any conflict between the terms and conditions of your outstanding equity awards and the terms and conditions of this Letter Agreement, the terms and conditions of your outstanding equity awards shall govern):

Restricted Stock Units (RSUs): A pro-rata portion of the outstanding and unvested RSUs held by you as of the Retirement Date will immediately vest upon the Retirement Date. The number of pro-rated RSUs to vest will be based upon the number of days in the full (three-year) vesting period worked as an employee through the Retirement Date, less shares already vested. Shares shall be delivered as soon as reasonably practicable following the Retirement Date.

Performance Restricted Stock Units (PRSUs): A pro-rata portion of the outstanding and unvested PRSUs held by you as of the Retirement Date and that are scheduled to vest on the three-year anniversary of the date of grant will remain eligible to vest and settle on the applicable settlement date, subject to actual performance, but disregarding for this purpose any requirement to continue employment or service for the duration of the performance period. For this purpose, the pro-rata portion of the PRSUs that vests will be determined based on the number of days that you were an active employee from the grant date of such PRSUs through your Retirement Date as compared to the total number of days from the grant date of such PRSUs to the third anniversary of such grant date. Any PRSUs that vest pursuant to the foregoing shall be delivered as soon as reasonably practicable following the settlement date.

Stock Options: Any stock options outstanding and unvested as of the Retirement Date will continue to vest, become exercisable, and expire in accordance with the vesting schedule and expiration date set forth in the applicable Stock Option Award Agreement, notwithstanding your retirement. Any vested stock option will remain exercisable and expire in accordance with the expiration date set forth in the applicable Stock Option Award Agreement.

2.Advisory Period

Provided that you (i) remain employed with the Company through the Retirement Date and (ii) execute a release agreement substantially in the form attached hereto as Exhibit A within twenty-one (21) days of the Retirement Date and do not revoke such release agreement prior to its becoming effective and irrevocable within thirty (30) days following the Retirement Date, during the period commencing on March 1, 2026, and ending on December 31, 2026 (the “Advisory Period”), you will provide advisory support as a non-employee Scientific Advisor to the Chief Executive Officer and the Zoetis Executive Team.

As Scientific Advisor, you shall have such duties and responsibilities that are commensurate with such a role, including the continued transition of the duties and responsibilities of the Executive Vice President and President of Research and Development role to your successor and such other duties and responsibilities as may be assigned from time to time by the Chief Executive Officer. In consideration for your advisory services, you will receive a consulting fee of $80,000 per month (the “Consulting Fee”), payable monthly in arrears. During the Advisory Period, you shall perform all services as an “independent contractor” and not as an employee or agent of the Company. Except as otherwise required by applicable law, during the Advisory Period, the Company will not make any withholdings or deductions, and will issue you an IRS Form 1099, with respect to any Consulting Fee and you will be responsible for all taxes with respect to the Consulting Fee. You shall be permitted to engage in other advisory or consulting services and other employment during the Advisory Period so long as such service or employment does not violate any other terms of this Letter Agreement.

The term of the Advisory Period may be extended upon a mutual decision between you and the Company. The Advisory Period will terminate immediately upon your death and may only otherwise be terminated by the Company prior to December 31, 2026 for Cause or as a result of your disability. Upon termination of the Advisory Period for Cause or due to your death or disability prior to the scheduled expiration of the Advisory Period, you shall be entitled only to the earned but unpaid portion of the Consulting Fee, prorated for any partial month. During the Advisory Period, you shall not be entitled to participate in any Company employee benefit plans, including severance plans, but shall be eligible for COBRA coverage, at your sole cost, in accordance with applicable law. During the Advisory Period, you will not be eligible for any short-term or long-term incentive awards from the Company.

3.Restrictive Covenants

As consideration for your continued employment until the Retirement Date, your continued engagement during the Advisory Period, and the other compensation and benefits contemplated herein, you will be subject to the following additional restrictive covenants. The Company shall provide you with written notice of any alleged failure by you to comply with the Letter Agreement or the restrictive covenants and not less than thirty (30) days to cure, if curable. Notwithstanding any other provision of this Letter Agreement, the restrictive covenants set forth herein shall not prohibit you from soliciting, working with, or providing services solely within the human health services field, and only to or on behalf of businesses that are exclusively engaged in the human health services field, provided that such activities do not violate the nondisclosure or nondisparagement provisions of this Letter Agreement.

a.Nondisclosure of Confidential Information

During the course of your employment and engagement with the Company and its affiliates, you have had and may continue to have access to, and have gained and may continue to gain knowledge with respect to, “Confidential Information” (as defined below).

You agree that you shall not, without the prior written consent of the Company, during the periods of your employment and engagement with the Company and its affiliates and thereafter for so long as it remains Confidential Information, use or disclose, or knowingly permit any unauthorized “Person” (as defined in Section 13(d) of the Securities Exchange Act of 1934) to use, disclose or gain access to, any Confidential Information; provided, however, that you may disclose Confidential Information as required by law or as ordered by a court, or as required in the course of the performance of your duties to the Company and its affiliates, or as set forth in Section 3(h) below; provided, further, that, in any event described in the preceding proviso, (x) to the extent permitted by applicable law, you shall promptly notify the Company in writing, and consult with and assist the Company in seeking a protective order or request for another appropriate remedy (except with respect to disclosures permitted by Section 3(h)), (y) in the event that such protective order or remedy is not obtained, or if the Company waives compliance with the terms of the preceding clause (x), you shall disclose only that portion of the Confidential Information that is legally required to be disclosed and shall exercise reasonable best efforts to assure that confidential treatment shall be accorded to such Confidential Information by the receiving Person, and (z) to the extent permitted by applicable law, the Company shall, except with respect to disclosures permitted by Section 3(h),be given an opportunity to review the Confidential Information prior to disclosure thereof. Without limiting the foregoing, you agree to keep confidential the existence of, and any information concerning, any dispute between you and the Company or any of its affiliates, except that you may disclose information concerning such dispute to the Governmental Authority (as defined in Section 3(h)) that is considering such dispute and to your legal counsel; provided that such counsel agrees not to disclose any such information other than as necessary to the prosecution or defense of such dispute.

For purposes of this Letter Agreement, “Confidential Information” means information, observations and data concerning the business and affairs of the Company or any of its affiliates, including all business information (whether or not in written form) that relates to the Company or any of its affiliates, or their directors, officers, employees, customers, suppliers or contractors or any other third parties with respect to which the Company or any of its affiliates has a business relationship or owes a duty of confidentiality, or their respective businesses or products, and that is not known to the public generally other than as a result of your breach of this Letter Agreement, including technical information or reports; trade secrets; unwritten knowledge and “know-how”; operating instructions; training manuals; customer lists; customer buying records and habits; product sales records and documents; product research and development, marketing and sales strategies; market surveys; marketing plans; profitability analyses; product cost; long-range plans; information relating to pricing, competitive strategies and new product development, including processes, formulas, designs, drawings, engineering and technology; information relating to any forms of compensation or other personnel-related information; contracts; and supplier lists. Confidential Information shall not include such information known to you prior to your involvement with the Company or any of its affiliates or information rightfully obtained from a third party (other than pursuant to your breach of this Letter Agreement or any other duty of confidentiality).

For the avoidance of doubt, you shall be permitted to disclose the restrictive covenants contained in this Letter Agreement (and any other agreement between you and the Company or an affiliate) to any potential subsequent employer or business partner.

b.Noncompetition.

During your employment with the Company and its affiliates, during the Advisory Period, and for the 12-month period immediately following the end of the Advisory Period (such period, the “Restricted Period”), you shall not, anywhere in the world, without the prior written consent of the Company: (i) directly or indirectly, alone or in association with any other Person, engage in or invest as an owner, partner, stockholder, licensor, director, officer, agent or consultant in a Competitive Entity (as defined below); or (ii) accept employment or an engagement for the provision of services in any capacity, including as an employee, director, consultant or advisor, directly or indirectly, with any Competitive Entity. Notwithstanding the foregoing, nothing in this provision shall prevent you from passively investing as a less than two percent stockholder in the securities of any company listed on a national securities exchange or quoted on an automated quotation system. For purposes hereof, “Competitive Entity” shall mean any entity engaged in the animal health field, including, without limitation, Elanco, Merck AH, Ceva, Boehringer Ingelheim, Dechra, Virbac, Idexx, and/or Mars Petcare, or any respective affiliate thereof.

c.Non-interference with Business Relations.

During the Restricted Period, you shall not, directly or indirectly, alone or in association with any other Person, without the prior written consent of the Company, (i) induce or attempt to induce any client, customer (whether former or current), supplier, licensee, franchisee, joint venture partner or other business relation of the Company or any of its affiliates (collectively, “Business Relations”) to cease doing business with the Company or any such affiliate, (ii) divert all or any portion of a Business Relation’s business with the Company or any of its affiliates to any competitor of the Company or any such affiliate, or (iii) in any way interfere with the relationship between any Business Relation, on the one hand, and the Company or any such affiliate, on the other hand.

d.Nonsolicitation of Service Providers.

During the Restricted Period, you shall not, directly or indirectly, alone or in association with any other Person, without the prior written consent of the Company, (i) actively solicit, recruit or hire any Person who is at such time, or who at any time during the 12-month period prior to such solicitation or hiring had been, an employee, individual contractor or exclusive consultant of the Company or any of its affiliates, (ii) solicit or encourage any employee of the Company or any of its affiliates to leave the employment of the Company or any of its affiliates, or (iii) interfere with the relationship of the Company or any of its affiliates with any employee, individual contractor or exclusive consultant who is or was employed by or otherwise engaged to perform services for the Company or any of its affiliates. Nothing in this provision shall prohibit you from placing general advertisements not targeted at employees of the Company or any of its affiliates, or from providing a personal reference to any person upon request.

e.Nondisparagement.

Except with respect to disclosures permitted by Section 3(h), you shall not make, directly or indirectly, alone or in association with any other Person, any defamatory or maliciously disparaging oral or written statements about the Company or its affiliates or their respective products, personnel, directors, services, reputation or financial status. The Company and its subsidiaries shall not make or release any official statement that is defamatory or maliciously disparaging towards you.

f.Return of Property.

You acknowledge that all documents, records, files, lists, equipment, computer, software or other property (including intellectual property) relating to the businesses of the Company or any of its affiliates, in whatever form (including electronic), and all copies thereof, that have been or are received or created by you while an employee or service provider of the Company or any of its affiliates (including Confidential Information) are and shall remain the property of the Company and its affiliates, and you shall immediately return such property to the Company upon the Retirement Date and, in any event, at the Company’s request. You further agree that any property situated on the premises of, and owned by, the Company or any of its affiliates, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by the Company’s personnel at any time with or without notice. Notwithstanding the foregoing, you shall be permitted to retain your personal correspondence and any of your personal compensation information or documentation, and the Company agrees that, to the extent you have not done so prior to signing this Letter Agreement, you may work with the Company’s Chief Information Security Officer or his designee to identify and retain any of your personal contacts and/or personal calendar appointments.

g.Cooperation.

You agree that upon the reasonable request of the Company or any of its affiliates following your retirement, you shall use reasonable efforts to assist and cooperate with the Company or any of its affiliates in connection with the defense or prosecution of any claim that may be made against or by the Company or any of its affiliates, or in connection with any ongoing or future investigation or dispute or claim of any kind involving the Company or any of its affiliates, including testifying in any proceedings before any arbitral, administrative, regulatory, judicial, legislative or other body or agency. Such cooperation shall be on reasonable notice and, to the extent practicable, take into account your business and personal commitments. The Company shall reimburse you for reasonable out of pocket expenses incurred in connection with your cooperation requested pursuant to this paragraph, including reasonable travel expenses. Further, the Company shall reimburse you in an amount up to $5,000 of legal fees incurred by you if you reasonably and in good faith determine that you need to consult independent legal counsel in connection with such cooperation.

h.Trade Secrets; Whistleblower Rights.

The Company hereby informs you that, notwithstanding any provision of this Letter Agreement to the contrary, an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law, or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the employer’s trade secrets to the attorney and use the trade secret information in the court proceeding if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. In addition, notwithstanding anything in this Letter Agreement to the contrary, nothing in this Letter Agreement shall impair your ability to comply with a court order or subpoena or to communicate with any federal, state or local governmental or law enforcement branch, agency or entity (each, a “Governmental Authority”), voluntarily provide to a Governmental Authority information you believe indicates possible or actual violations of the law, or participate in or fully cooperate with any investigation or proceeding that may be conducted by any Governmental Authority, including providing documents or other information, without notice to or approval from the Company, without risk of being held liable by the Company for financial penalties, or any other of your rights under the whistleblower provisions of any applicable federal law or regulation or, for the avoidance of doubt, limit your right to receive an award for information provided to any Governmental Authority.

i.Remedies and Injunctive Relief.

You acknowledge that your violation of any of the covenants contained in this Section 3 would cause irreparable damage to the Company and its affiliates in an amount that would be material but not readily ascertainable, and that any remedy at law (including the payment of damages) would be inadequate. Accordingly, you agree that, notwithstanding any provision of this Letter Agreement to the contrary, in addition to any other damages it is able to show, in the event of your violation in any material respect of any of the covenants contained in this Section 3, the Company and its affiliates shall be entitled (without the necessity of showing economic loss or other actual damage) to (i) cease payment or provision of the Consulting Fee to the extent not previously paid or provided, (ii) the prompt return by you of any portion of, or the value of, the Consulting Fee previously paid or provided, and (iii) injunctive relief (including temporary restraining orders, preliminary injunctions and permanent injunctions), without posting a bond, in any court of competent jurisdiction for any actual or threatened breach of any of the covenants set forth in this Section 3 in addition to any other legal or equitable remedies it may have. The preceding sentence shall not be construed as a waiver of the rights that the Company and its affiliates may have for damages under this Letter Agreement or otherwise, and all such rights shall be unrestricted. The Restricted Period contemplated by Section 3(b), (c) or (d), as applicable, shall be tolled during (and shall be deemed automatically extended by) any period during which you are in violation of the provisions of such section, as applicable. In the event that a court of competent jurisdiction determines that any provision of this Section 3 is invalid or more restrictive than permitted under the governing law of such jurisdiction, then, only as to enforcement of this Section 3 within the jurisdiction of such court, such provision shall be interpreted and enforced as if it provided for the maximum restriction permitted under such governing law.

j.Acknowledgments.

You acknowledge that the Company and its affiliates (i) have expended and will continue to expend substantial amounts of time, money and effort to develop business strategies, employee, customer and other relationships and goodwill to build an effective organization, (ii) have a legitimate business interest in and right to protect their Confidential Information, goodwill and employee, customer and other relationships, and that the Company and its affiliates would be seriously damaged by the disclosure of Confidential Information and the loss or deterioration of its employee, customer and other relationships, and (iii) are entitled to protect and preserve the going concern value of the Company and its affiliates to the extent permitted by law. You further acknowledge that, although your compliance with the covenants contained in this Letter Agreement may prevent you from earning a livelihood in a business similar to the business of the Company and its affiliates, your experience and capabilities are such that you have other opportunities to earn a livelihood and adequate means of support for you and your dependents. In light of the foregoing acknowledgments, you agree (x) that the covenants contained in this Letter Agreement are reasonable and properly required for the adequate protection of the businesses and goodwill of the Company and its affiliates and (y) not to challenge or contest the reasonableness, validity or enforceability of any limitations on, and obligations of, you contained in this Letter Agreement.

4.Waiver and Release of Claims

a. In consideration for your continued employment through the Retirement Date and the other compensation and benefits provided by the Company until such date and for other good and valuable consideration, the sufficiency of which you hereby acknowledge and agree to, by signing this Letter Agreement, on behalf of you, your heirs, administrators, executors, representatives, agents, successors and assigns, you hereby waive and release and forever discharge to the maximum extent permitted by applicable law any and all claims or causes of action, whether or not now known and whether present or future, against the Company or any of its predecessors, successors, or past or present subsidiaries, affiliates, parents, branches or related entities (collectively, including the Company, the “Released Parties”) or, in their respective capacities as such, the Released Parties’ former, current or future employees, consultants, agents, representatives, stockholders, managers, members, equity holders, officers, directors, attorneys, employee benefit plans or assigns, with respect to any matter through and including the date on which this Letter Agreement is executed, including, without limitation, any matter related to your employment with the Company or the termination of that employment relationship upon your retirement.

You understand and agree that you are releasing the Released Parties from any and all claims that may legally be waived by private agreement, including, but not limited to, any and all claims for breach of contract, breach of the covenant of good faith and fair dealing, personal injury, wages, benefits, defamation, wrongful discharge, discrimination, harassment, retaliation, impairment of economic opportunity, emotional distress, invasion of privacy, negligence or other tort; claims for attorneys’ fees or costs; and any and all other claims, whether arising under statute (including, but not limited to, claims arising under the Civil Rights Act of 1866, the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the Americans With Disabilities Act of 1990, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act, the National Labor Relations Act, the New Jersey Conscientious Employee Protection Act, the District of Columbia Human Rights Act, the Massachusetts Fair Employment Practices Act - M.G.L.

c. 151 B, the Massachusetts Wage Payment Statute, G.L. c. 149, §§ 148, 148A, 148B, 149, 150, 150A-150C, 151, 152, 152A, et seq., the Massachusetts Wage and Hour laws, G.L. c. 151 § 1A et seq., the Minnesota Human Rights Act, the West Virginia Human Rights Act , and/or any and all other federal, state, local or foreign statutes, executive orders or regulations), contract (express or implied), constitutional provision, common law, public policy or otherwise, from the beginning of time through the date you have executed this Letter Agreement. Further, if any claim is not subject to release, to the extent permitted by applicable law: (a) you promise not to consent to become a member of any class or collective in a class, collective or multiparty action or proceeding in which claims are asserted against any Released Party that are related in any way to your employment or engagement or the termination of your employment upon your retirement from the Company; (b) if, without your prior knowledge and consent, you are made a member of a class in any such proceeding, you agree to opt out of the class at the first opportunity; and (c) you waive any right or ability to be a class or collective action representative in such a proceeding.

Further, you expressly waive and release any and all rights and benefits that you may have under any state or local statute, executive order, regulation, common law and/or public policy relating to unknown claims, including, but not limited to, South Dakota Codified Laws Section 20-7-11, North Dakota Century Code Section 9-13-02, and California Civil Code Section 1542 (or any analogous law of any other state), the latter of which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

You understand and agree that claims or facts in addition to or different from those that are now known or believed by you to exist may hereafter be discovered, but it is your intention to release all claims you have or may have against the parties set forth in this Letter Agreement, whether known or unknown, suspected or unsuspected.

b. You understand that nothing in this Letter Agreement shall be construed to (a) prohibit you from filing a charge with, or participating in any investigation or proceeding conducted by, the Equal Employment Opportunity Commission, National Labor Relations Board and/or any similar federal, state or local agency, (b) extend to any rights you may have to file claims for workers’ compensation and/or unemployment insurance benefits under any applicable state laws, (c) waive, release or impair your rights or claims to enforce the terms of the Letter Agreement, or (d) limit any obligation of the Company or its affiliates (or their respective successors in interest) to indemnify or hold you harmless or to advance expenses to you in connection therewith or any benefit or right of yours under any insurance policy to which the Company is a party.

You also understand that nothing in this Letter Agreement limits your ability to communicate with any federal, state or local governmental or law enforcement branch, agency or entity (each, a “Governmental Authority”), voluntarily provide to a Governmental Authority information you believe indicates possible or actual violations of the law, or participate in or fully cooperate with any investigation or proceeding that may be conducted by any Governmental Authority, including providing documents or other information, without notice to or approval from the Company, without risk of being held liable by the Company for financial penalties. This Letter Agreement also does not limit your right to receive an award for information provided to any Governmental Authority.

c. Except as otherwise stated herein, your release of claims as contained in this Letter Agreement extends to any claims that you may have with respect to any separation plans or programs that have been offered by the Company currently and/or in the past, including, without limitation, the Zoetis Executive Severance Plan, but your release of claims as contained in this Letter Agreement does not extend to any vested or other rights to which you may be entitled under any other Company employee benefit or compensation plan by reason of your employment with the Company that cannot legally be waived.

d. You agree and acknowledge that this Letter Agreement may be introduced as evidence in a subsequent proceeding in which either you or the Company alleges a breach of this Letter Agreement, or by the Company in the event that you assert any claim or commence any legal proceeding against the Company.

e. You understand that in response to third-party requests, the Company will comply with its existing policy on employee information by verifying dates of employment, last position held and, if authorized, salary information. You further understand that the Company is obligated to produce information and records in response to lawful requests from Governmental Authorities and in connection with litigation and regulatory proceedings.

f. It is understood and agreed that this Letter Agreement is not to be construed as an admission by you or the Company of any wrongdoing, liability or violation of law.

5.Miscellaneous

a.Company Policies

At all times prior to the Retirement Date and, to the extent applicable according to their terms, during the Advisory Period, you will be obligated to comply with the policies and procedures of the Company as may be in effect from time to time, including any clawback, forfeiture, or recoupment policies and the Company’s Insider Trading and Protection of Material Nonpublic Information Policy (it being understood that you will remain a Restricted Person (as defined in such policy) for purposes of such policy for at least 90 days following the Retirement Date and, accordingly, shall abide by the Company’s trading windows).

b.Notices

All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party, by registered or certified mail, return receipt requested, postage prepaid, or by email, addressed as follows:

If to you:

At the most recent address on file at the Company.

If to the Company:

Zoetis Inc.
10 Sylvan Way
Parsippany, NJ 07054
Attn: General Counsel
roxanne.lagano@zoetis.com
CC: legalnotices@zoetis.com

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when received by the addressee.

c.Governing Law; Dispute Resolution.

This Letter Agreement shall be governed by the laws of the State of New Jersey, without reference to the choice of law rules that would cause the application of the law of any other jurisdiction. You and the Company irrevocably submit to the jurisdiction of any state or federal court sitting in or for the State of New Jersey with respect to any dispute arising out of or relating to this Letter Agreement, and you and the Company irrevocably agree that all claims in respect of such dispute or proceeding shall be heard and determined in such courts. You and the Company hereby irrevocably waive, to the fullest extent permitted by law, any objection that you or the Company may now or hereafter have to the venue of any dispute arising out of or relating to this Letter Agreement or the transactions contemplated hereby brought in such court or any defense of inconvenient forum for the maintenance of such dispute or proceeding. You and the Company agree that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. You and the Company hereby irrevocably and unconditionally waive, to the fullest extent permitted by law, any right you or the Company may have to a trial by jury in respect of any litigation as between you and the Company directly or indirectly arising out of, under or in connection with this Letter Agreement or the transactions contemplated hereby or disputes relating hereto. Each of you and the Company certify that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waivers.

d.Entire Agreement.

This Letter Agreement contains the entire agreement between you and the Company with respect to your retirement from the Company and supersedes any and all prior understandings or agreements, whether written or oral, with respect to such service.

For the avoidance of doubt, the covenants set forth in Section 3 of this Letter Agreement shall be in addition to, and shall not replace, any covenants concerning the protection of confidential or proprietary information, assignment of inventions and patent rights, protection of Company property, noncompetition, nonsolicitation of or non-interference with business relations or service providers, nondisparagement or other restrictive covenants set forth in any other agreement between you and the Company or its affiliates.

e.Amendments.

No provision of this Letter Agreement shall be modified or amended except by an instrument in writing duly executed by the parties hereto. No custom, act, payment, favor or indulgence shall grant any additional right to you or be deemed a waiver by the Company of any of your obligations hereunder or release you therefrom or impose any additional obligation upon the Company. No waiver by any party of any breach by the other party of any term or provision hereof shall be deemed to be an assent or waiver by any party to or of any succeeding breach of the same or any other term or provision.

f.Successors.

This Letter Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you otherwise than by will or the laws of descent and distribution. The Company shall consider in good faith any request to assign your rights under this Letter Agreement to your personal services corporation. This Letter Agreement shall inure to the benefit of and be enforceable by your legal representatives. This Letter Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. As used in this Letter Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Letter Agreement by operation of law, or otherwise.

g.Invalidity.

If any term or provision of this Letter Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Letter Agreement or the application of such term or provision to persons or circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term and provision of this Letter Agreement shall be valid and be enforced to the fullest extent permitted by law.

h.Survivability.

The provisions of this Letter Agreement that by their terms call for performance subsequent to your retirement from the Company or your engagement pursuant to this Letter Agreement (including the terms of Section 3) shall so survive such termination.

i.Section Headings; Construction.

The section headings used in this Letter Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation hereof. For purposes of this Letter Agreement, the term “including” shall mean “including, without limitation” and the term “affiliate” shall mean, with respect to any Person, an entity controlled by, controlling or under common control with such Person.

j.Taxes.

The Company and its affiliates may withhold from any amounts payable under this Letter Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

k.Counterparts.

This Letter Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

l.Consideration Period and Revocation

Your signature below indicates that you:

i.have carefully read and reviewed this Letter Agreement;

ii.fully understand all of its terms and conditions;

iii.fully understand that this Letter Agreement, including the release provisions contained herein, is legally binding and that by signing it you are giving up certain rights;

iv.have not relied on any other representations by the Company or its employees or agents, whether written or oral, concerning the terms of this Letter Agreement;

v.have been provided at least twenty-one (21) days to consider this Letter Agreement, and agree that changes to this Letter Agreement, whether material or immaterial, do not restart the running of the twenty-one (21)-day consideration period;

vi.will have seven (7) days to revoke your acceptance after signing this Letter Agreement;

vii.are waiving any rights or claims you may have under the Age Discrimination in Employment Act of 1967;

viii.have been advised, and have had the opportunity, to consult with an attorney prior to executing this Letter Agreement; and

ix.execute and deliver this Letter Agreement freely and voluntarily.

To revoke this Letter Agreement, you must submit written notice, such that it is received no later than the eighth (8th) day after you originally sign this Letter Agreement. You also understand that you must return the signed Letter Agreement to the Company, according to the directions and instructions provided by the Company and on the date designated by the Company. This Letter Agreement will not become effective and enforceable until the seven (7)-day revocation period has expired.

[Signature Page Follows]

To confirm the foregoing terms are acceptable to you, please execute and return the copy of this Letter Agreement, which is enclosed for your convenience.

Very truly yours,

Zoetis Inc.

By:

Name: Roxanne Lagano
Title: Executive Vice President, General Counsel and Corporate Secretary

Acknowledged and agreed:

By: Robert J. Polzer, October 29, 2025 Name: Robert J. Polzer This Waiver and Release Agreement (this “Release”) is executed by [NAME] (“Executive”) on [DATE].

Title: Executive Vice President, President Research and Development

Exhibit A

WAIVER AND RELEASE OF CLAIMS

Reference is made herein to the Letter Agreement (the “Letter Agreement”), dated as of [DATE], between Executive and Zoetis Inc., a Delaware corporation (the “Company”).

1. In consideration for Executive’s continued engagement through December 31, 2026 and the compensation provided by the Company until such date and for other good and valuable consideration, the sufficiency of which Executive hereby acknowledges and agrees to, by signing this Release, on behalf of Executive, Executive’s heirs, administrators, executors, representatives, agents, successors and assigns, Executive hereby waives and releases and forever discharges to the maximum extent permitted by applicable law any and all claims or causes of action, whether or not now known and whether present or future, against the Company or any of its predecessors, successors, or past or present subsidiaries, affiliates, parents, branches or related entities (collectively, including the Company, the “Released Parties”) or, in their respective capacities as such, the Released Parties’ former, current or future employees, consultants, agents, representatives, stockholders, managers, members, equity holders, officers, directors, attorneys, employee benefit plans or assigns, with respect to any matter through and including the date on which this Release is executed, including, without limitation, any matter related to Executive’s employment or engagement with the Company or Executive’s retirement from the Company.

Executive understands and agrees that Executive is releasing the Released Parties from any and all claims that may legally be waived by private agreement, including, but not limited to, any and all claims for breach of contract, breach of the covenant of good faith and fair dealing, personal injury, wages, benefits, defamation, wrongful discharge, discrimination, harassment, retaliation, impairment of economic opportunity, emotional distress, invasion of privacy, negligence or other tort; claims for attorneys’ fees or costs; and any and all other claims, whether arising under statute (including, but not limited to, claims arising under the Civil Rights Act of 1866, the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act of 1990, the Americans With Disabilities Act of 1990, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act, the National Labor Relations Act, the New Jersey Conscientious Employee Protection Act, the District of Columbia Human Rights Act, the Massachusetts Fair Employment Practices Act - M.G.L. c. 151 B, the Massachusetts Wage Payment Statute, G.L. c. 149, §§ 148, 148A, 148B, 149, 150, 150A-150C, 151, 152, 152A, et seq., the Massachusetts Wage and Hour laws, G.L. c. 151 § 1A et seq., the Minnesota Human Rights Act, the West Virginia Human Rights Act1, and/or any and all other federal, state, local or foreign statutes, executive orders or regulations), contract (express or implied), constitutional provision, common law, public policy or otherwise, from the beginning of time through the date Executive has executed this Release. Further, if any claim is not subject to release, to the extent permitted by applicable law: (a) Executive promises not to

1 Executive acknowledges that Executive has been provided the toll-free number of the West Virginia State Bar Association 1-800-944-9822.

consent to become a member of any class or collective in a class, collective or multiparty action or proceeding in which claims are asserted against any Released Party that are related in any way to Executive’s employment or engagement or Executive’s retirement from the Company; (b) if, without Executive’s prior knowledge and consent, Executive is made a member of a class in any such proceeding, Executive agrees to opt out of the class at the first opportunity; and (c) Executive waives any right or ability to be a class or collective action representative in such a proceeding.

Further, Executive expressly waives and releases any and all rights and benefits that Executive may have under any state or local statute, executive order, regulation, common law and/or public policy relating to unknown claims, including, but not limited to, South Dakota Codified Laws Section 20-7-11, North Dakota Century Code Section 9-13-02, and California Civil Code Section 1542 (or any analogous law of any other state), the latter of which provides:

Executive understands and agrees that claims or facts in addition to or different from those that are now known or believed by Executive to exist may hereafter be discovered, but it is Executive’s intention to release all claims Executive has or may have against the parties set forth in this Release, whether known or unknown, suspected or unsuspected.

2. Executive understands that nothing in this Release shall be construed to (a) prohibit Executive from filing a charge with, or participating in any investigation or proceeding conducted by, the Equal Employment Opportunity Commission, National Labor Relations Board and/or any similar federal, state or local agency, (b) extend to any rights Executive may have to file claims for workers’ compensation and/or unemployment insurance benefits under any applicable state laws, (c) waive, release or impair Executive’s rights or claims to enforce the terms of the Letter Agreement, or (d) limit any obligation of the Company or its affiliates (or their respective successors in interest) to indemnify or hold harmless Executive or to advance expenses to Executive in connection therewith or any benefit or right of the Executive under any insurance policy to which the Company is a party. Executive also understands that nothing in this Release limits Executive’s ability to communicate with any federal, state or local governmental or law enforcement branch, agency or entity (each, a “Governmental Authority”), voluntarily provide to a Governmental Authority information Executive believes indicates possible or actual violations of the law, or participate in or fully cooperate with any investigation or proceeding that may be conducted by any Governmental Authority, including providing documents or other information, without notice to or approval from the Company, without risk of being held liable by the Company for financial penalties. This Release also does not limit Executive’s right to receive an award for information provided to any Governmental Authority.

3. Except as otherwise stated herein, Executive’s release of claims as contained in this Release extends to any claims that Executive may have with respect to any separation plans or programs that have been offered by the Company currently and/or in the past, including, without limitation, the Zoetis Executive Severance Plan, but Executive’s release of claims as contained in this Release does not extend to any vested or other rights to which Executive may be entitled under any other Company employee benefit or compensation plan by reason of Executive’s employment with the Company that cannot legally be waived.

4. Executive agrees and acknowledges that this Release may be introduced as evidence in a subsequent proceeding in which either the Company or Executive alleges a breach of this Release, or by the Company in the event that Executive asserts any claim or commences any legal proceeding against the Company.

5. Executive understands that in response to third-party requests, the Company will comply with its existing policy on employee information by verifying dates of employment, last position held and, if authorized, salary information. Executive further understands that the Company is obligated to produce information and records in response to lawful requests from Governmental Authorities and in connection with litigation and regulatory proceedings.

6. It is understood and agreed that this Release is not to be construed as an admission by the Company or Executive of any wrongdoing, liability or violation of law.

7. Executive understands that Executive will have a period of seven (7) days following the execution of this Release in which to revoke this Release. To revoke this Release, Executive must submit written notice, such that it is received no later than the eighth day after Executive originally signs this Release, to:

Zoetis Inc.
10 Sylvan Way
Parsippany, NJ 07054
Attn: General Counsel
roxanne.lagano@zoetis.com
CC: legalnotices@zoetis.com

Executive also understands that Executive must return the signed Release to the Company, according to the directions and instructions provided by the Company and on the date designated by the Company.

This Release will not become effective and enforceable until the seven (7)-day revocation period has expired. Executive understands that the Company will not be required to engage Executive as an advisor or pay Executive the Consulting Fee (as defined in the Letter Agreement) unless this Release becomes effective.

8. This Release will be governed by and construed and enforced in accordance with the laws of the State of New Jersey.

9. Executive further acknowledges and agrees that if Executive breaches the provisions of this Release, then, to the fullest extent permitted by law, (a) the Company shall be entitled to apply for and receive an injunction to restrain any violation of the Release, (b) the Company shall not be obligated to pay or provide the Consulting Fee to Executive, (c) Executive shall be obligated to pay to the Company its costs and expenses in enforcing this Release and the Letter Agreement and defending against such lawsuit (including court costs, expenses and reasonable legal fees), and (d) Executive shall be obligated upon demand to repay to the Company all of the Consulting Fee.

10. This Release and the Letter Agreement contain the entire agreement between Executive and the Company and replace any prior or contemporaneous agreements or understandings between Executive and the Company regarding the subject matter of this Release, whether written or oral, except for any agreements Executive may have signed in connection with or during Executive’s employment governing the protection of confidential or proprietary information, assignment of inventions and patent rights, protection of Company property, noncompetition, nonsolicitation of or non-interference with business relations or service providers, nondisparagement or other restrictive covenants, all of which shall remain in full force and effect.

11. This Release may not be changed unless the changes are in writing and signed by Executive and an authorized representative of the Company.

12. The provisions of this Release are severable. If any provision of this Release is held invalid or unenforceable, such provision shall be deemed to be removed from this Release and such invalidity or unenforceability shall not affect any other provision of this Release, the balance of which will remain in and have its intended full force and effect and binding upon both parties; provided, however, that, if such invalid or unenforceable provision may be modified so as to be valid and enforceable as a matter of law, such provision shall be deemed to have been modified so as to be valid and enforceable to the maximum extent permitted by law.

13. Executive’s signature below indicates that Executive:

a. has carefully read and reviewed this Release;

b. fully understands all of its terms and conditions;

c. fully understands that this Release is legally binding and that by signing it Executive is giving up certain rights;

d. has not relied on any other representations by the Company or its employees or agents, whether written or oral, concerning the terms of this Release;

e. has been provided at least 21 days to consider this Release, and agrees that changes to this Release (or to the Letter Agreement), whether material or immaterial, do not restart the running of the 21-day consideration period;

f. will have seven (7) days to revoke Executive’s acceptance after signing it;

g. is waiving any rights or claims Executive may have under the Age Discrimination in Employment Act of 1967;

h. has been advised, and has had the opportunity, to consult with an attorney prior to executing this Release; and

i. executes and delivers this Release freely and voluntarily.

[Signature Page Follows]

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS READ THIS RELEASE AND THAT EXECUTIVE FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT EXECUTIVE HEREBY EXECUTES THE SAME AND MAKES THIS RELEASE AND THE RELEASE PROVIDED FOR HEREIN VOLUNTARILY AND OF EXECUTIVE’S OWN FREE WILL.

EXECUTED this 29th day of October, 2025

By: Robert J. Polzer
Name: Robert J. Polzer

Title: Executive Vice President, President Research and Development

EX-31.1 3 a10qex311q32025.htm EX-31.1 Document

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kristin C. Peck, certify that:

1. I have reviewed this Quarterly Report of Zoetis Inc. on Form 10-Q for the period ending September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


November 4, 2025	By:	/s/ KRISTIN C. PECK
		Kristin C. Peck
		Chief Executive Officer

EX-31.2 4 a10qex312q32025.htm EX-31.2 Document

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Wetteny Joseph, certify that:

1. I have reviewed this Quarterly Report of Zoetis Inc. on Form 10-Q for the period ending September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


November 4, 2025	By:	/s/ WETTENY JOSEPH
		Wetteny Joseph
		Executive Vice President and Chief Financial Officer

EX-32.1 5 a10qex321q32025.htm EX-32.1 Document

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350, I, Kristin C. Peck, Chief Executive Officer, hereby certify that, to the best of my knowledge, the Quarterly Report on Form 10-Q of Zoetis Inc. for the period ended September 30, 2025 (the "Report") (1) fully complies with Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Zoetis Inc.


November 4, 2025	By:	/s/ KRISTIN C. PECK
		Kristin C. Peck
		Chief Executive Officer

EX-32.2 6 a10qex322q32025.htm EX-32.2 Document

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. §1350, I, Wetteny Joseph, Executive Vice President and Chief Financial Officer, hereby certify that, to the best of my knowledge, the Quarterly Report on Form 10-Q of Zoetis Inc. for the period ended September 30, 2025 (the “Report”) (1) fully complies with Section 13(a) or 15(d) of the Securities and Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Zoetis Inc.


November 4, 2025	By:	/s/ WETTENY JOSEPH
		Wetteny Joseph
		Executive Vice President and Chief Financial Officer