Q2 2026 Zoetis Inc Earnings Call Transcript
Key Points
- Zoetis Inc (ZTS) delivered strong 11% organic operational revenue growth in its Livestock segment, driven by broad-based demand in cattle and poultry, including elevated demand for Dectomax related to the New World screwworm incursion.
- The company's diversified portfolio provided resilience, with international revenue growing 6% and emerging markets contributing broad-based strength across Livestock, Companion Animal, and Diagnostics.
- Companion Animal Diagnostics revenue grew 12%, fueled by sustained demand for innovative tools like Vetscan Imagyst and OptiCell, and the acquisition of VitalRADS expands capabilities into teleradiology.
- The OA pain franchise showed encouraging international momentum, with Lenvia and Portela launches in the EU and Canada driving early contributions and supporting category growth, while Feline OA pain mAbs grew 12% globally.
- Zoetis Inc (ZTS) maintained strong P&L discipline, with adjusted operating expenses down 2% operationally and SG&A down 4%, while continuing to invest in R&D and returning over $550 million to shareholders through buybacks.
- Zoetis Inc (ZTS) experienced a 7% decline in US revenue, with US Companion Animal revenue down 11%, reflecting continued pressure from declining veterinary clinic visits and value-conscious pet owner behavior.
- Key Dermatology revenue fell 16% globally, with US Key Dermatology down 18%, due to intensified competitive activity, higher promotional incentives from new entrants, and softer pruritic visits, leading to significant share losses.
- The company revised its full-year 2026 guidance downward, now expecting organic operational revenue to decline 3% to 1% and adjusted net income to decline 9% to 5%, reflecting persistent headwinds and no signs of market stabilization.
- US parasiticides franchise (Simparica) declined 6%, pressured by softer flea, tick, and heartworm visits, a more promotional environment, and growth in alternative channels that was insufficient to offset clinic declines.
- Zoetis Inc (ZTS) faced generic competition on Cerenia and Convenia in the US, leading to targeted price adjustments that weighed on near-term price realization and contributed to flat overall price in the quarter.
Welcome to the second-quarter 2026 financial results conference call and webcast for Zoetis. Hosting the call today is Steve Frank, Vice President of Investor Relations for Zoetis. The presentation materials and additional financial tables are currently posted on the Investor Relations section of zoetis.com.
The presentation slides can be managed by you, the viewer, and will not be forwarded automatically. In addition, a replay of this call will be available approximately two hours after the conclusion of this call via dial-in or on the Investor Relations section of zoetis.com. (Operator Instructions) The floor will be open for you questions following the presentation. (Operator Instructions)
It is now my pleasure to turn the call over to Steve Frank. Steve, you may begin.
Thank you, operator. Good morning, everyone, and welcome to the Zoetis second quarter 2026 earnings call. I am joined today by Kristin Peck, Chief Executive Officer, and Wetteny Joseph, Chief Financial Officer. This morning, we
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