ZOETIS INC., 10-Q filed on 5/6/2025
Quarterly Report
v3.25.1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2025
May 02, 2025
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2025  
Document Transition Report false  
Entity File Number 001-35797  
Entity Registrant Name Zoetis Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 46-0696167  
Entity Address, Address Line One 10 Sylvan Way,  
Entity Address, City or Town Parsippany,  
Entity Address, State or Province NJ  
Entity Address, Postal Zip Code 07054  
City Area Code 973  
Local Phone Number 822-7000  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Trading Symbol ZTS  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   445,208,053
Amendment Flag false  
Document Fiscal Year Focus 2025  
Document Fiscal Period Focus Q1  
Entity Central Index Key 0001555280  
Current Fiscal Year End Date --12-31  
v3.25.1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Income Statement [Abstract]    
Revenue $ 2,220 $ 2,190
Costs and expenses:    
Cost of sales 622 643
Selling, general and administrative expenses 563 547
Research and development expenses 157 162
Amortization of intangible assets 32 37
Restructuring charges and certain acquisition and divestiture-related costs 0 4
Interest expense, net of capitalized interest 54 58
Other (income)/deductions—net (18) (8)
Income before provision for taxes on income [1] 810 747
Provision for taxes on income 179 148
Net income before allocation to noncontrolling interests 631 599
Less: Net income/(loss) attributable to noncontrolling interests 0 0
Net income attributable to Zoetis Inc. $ 631 $ 599
Earnings per share attributable to Zoetis Inc. stockholders:    
Basic (in dollars per share) $ 1.41 $ 1.31
Diluted (in dollars per share) $ 1.41 $ 1.31
Weighted-average common shares outstanding:    
Basic (in shares) 447.6 458.0
Diluted (in shares) 448.0 458.8
Dividends paid per common share (in dollars per share) $ 0.500 $ 0.432
[1] Defined as income before provision for taxes on income.
v3.25.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Net income before allocation to noncontrolling interests $ 631 $ 599
Other comprehensive loss, net of tax(a):    
Foreign currency translation adjustments [1] (31) (18)
Other comprehensive loss, net of tax (77) (2)
Comprehensive income before allocation to noncontrolling interests 554 597
Less: Comprehensive income/(loss) attributable to noncontrolling interests 0 0
Comprehensive income attributable to Zoetis Inc. 554 597
Cash Flow Hedging    
Other comprehensive loss, net of tax(a):    
Unrealized gains (losses) on derivatives for cash flow hedges, net and net investment hedges [1] (13) 0
Net Investment Hedging    
Other comprehensive loss, net of tax(a):    
Unrealized gains (losses) on derivatives for cash flow hedges, net and net investment hedges [1] $ (33) $ 16
[1] Presented net of reclassification adjustments, which are not material in any period presented.
v3.25.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Cash Flow Hedging    
Unrealized (losses)/gains on derivatives $ (4) $ 0
Net Investment Hedging    
Unrealized (losses)/gains on derivatives $ (10) $ 5
v3.25.1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Millions
Mar. 31, 2025
Dec. 31, 2024
Assets    
Cash and cash equivalents [1] $ 1,721 $ 1,987
Accounts receivable, less allowance for doubtful accounts of $19 in 2025 and $18 in 2024 1,361 1,316
Inventories 2,365 2,306
Other current assets 430 377
Total current assets 5,877 5,986
Property, plant and equipment, less accumulated depreciation of $2,697 in 2025 and $2,635 in 2024 3,441 3,391
Operating lease right-of-use assets 220 219
Goodwill 2,716 2,724
Identifiable intangible assets, less accumulated amortization 1,082 1,127
Noncurrent deferred tax assets 530 540
Other noncurrent assets 232 250
Total assets 14,098 14,237
Liabilities and Equity    
Current portion of long-term debt 1,350 1,350
Accounts payable 420 433
Dividends payable 224 224
Accrued expenses 772 746
Accrued compensation and related items 291 441
Income taxes payable 211 93
Other current liabilities 117 125
Total current liabilities 3,385 3,412
Long-term debt, net of discount and issuance costs 5,227 5,220
Noncurrent deferred tax liabilities 161 167
Operating lease liabilities 173 174
Other taxes payable 277 272
Other noncurrent liabilities 220 222
Total liabilities 9,443 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; 446,040,205 and 448,743,073 shares outstanding at March 31, 2025, and December 31, 2024, respectively 5 5
Treasury stock, at cost, 55,851,038 and 53,418,170 shares of common stock at March 31, 2025 and December 31, 2024, respectively (7,888) (7,445)
Additional paid-in capital 1,180 1,182
Retained earnings 12,375 11,968
Accumulated other comprehensive loss (1,017) (940)
Total Zoetis Inc. equity 4,655 4,770
Equity attributable to noncontrolling interests 0 0
Total equity 4,655 4,770
Total liabilities and equity $ 14,098 $ 14,237
Common Stock, Shares Authorized 6,000,000,000 6,000,000,000
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
[1] As of March 31, 2025 and December 31, 2024, includes $1 million and $2 million of restricted cash, respectively.
v3.25.1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICAL) - USD ($)
$ in Millions
Mar. 31, 2025
Dec. 31, 2024
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts $ 19 $ 18
Accumulated depreciation $ 2,697 $ 2,635
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 6,000,000,000 6,000,000,000
Common stock issued, shares 501,891,243 501,891,243
Common stock, shares outstanding 446,040,205 448,743,073
Treasury stock, shares 55,851,038 53,418,170
Restricted cash $ 1 $ 2
v3.25.1
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) - USD ($)
$ in Millions
Total
Common Stock
Treasury Stock
Treasury Stock
Share Repurchase Program
 [3]
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Equity Attributable to Noncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2023 [1]   501,900,000            
Beginning balance at Dec. 31, 2023 $ 4,991 $ 5 $ (5,597)   $ 1,133 $ 10,295 $ (839) $ (6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest 599         599   0
Other comprehensive loss, net of tax (2)           (2)  
Treasury stock, beginning balance (in shares) at Dec. 31, 2023 [1]     43,500,000          
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Treasury stock acquired, shares [1]     1,800,000 [2] 400,000        
Share-based compensation awards [3] 4   $ 11   (7) 0    
Treasury stock acquired [2] (342)   (342)          
Dividends, Common Stock (198)         (198)    
Ending balance (in shares) at Mar. 31, 2024 [1]   501,900,000            
Ending balance at Mar. 31, 2024 $ 5,052 $ 5 $ (5,928)   1,126 10,696 (841) (6)
Treasury stock, ending balance (in shares) at Mar. 31, 2024 [1]     44,900,000          
Beginning balance (in shares) at Dec. 31, 2024 501,891,243 501,900,000 [1]            
Beginning balance at Dec. 31, 2024 $ 4,770 $ 5 $ (7,445)   1,182 11,968 (940) 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest 631         631   0
Other comprehensive loss, net of tax $ (77)           (77)  
Treasury stock, beginning balance (in shares) at Dec. 31, 2024 53,418,170   53,400,000 [1]          
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Treasury stock acquired, shares [1]     2,700,000 [2] 300,000        
Share-based compensation awards [3] $ 2   $ 4   (2) 0    
Treasury stock acquired [2] (447)   (447)          
Dividends, Common Stock $ (224)         (224)    
Ending balance (in shares) at Mar. 31, 2025 501,891,243 501,900,000 [1]            
Ending balance at Mar. 31, 2025 $ 4,655 $ 5 $ (7,888)   $ 1,180 $ 12,375 $ (1,017) $ 0
Treasury stock, ending balance (in shares) at Mar. 31, 2025 55,851,038   55,800,000 [1]          
[1]
Shares may not add due to rounding.
[2] 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.
[3] 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.
v3.25.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Dec. 31, 2024
Operating Activities      
Net income before allocation to noncontrolling interests $ 631 $ 599  
Adjustments to reconcile net income before noncontrolling interests to net cash provided by operating activities:      
Depreciation and amortization expense [1],[2] 119 126  
Share-based compensation expense 17 18  
Asset write-offs and asset impairments 2 2  
Provision for losses on inventory 18 17  
Deferred taxes 19 (43)  
Other non-cash adjustments (2) (3)  
Other changes in assets and liabilities, net of acquisitions and divestitures:      
Accounts receivable (53) (12)  
Inventories (85) (98)  
Other assets (50) (9)  
Accounts payable (12) (3)  
Other liabilities (140) (125)  
Other tax accounts, net 123 126  
Net cash provided by operating activities 587 595  
Investing Activities      
Capital expenditures (149) (140)  
Purchase of investments (3) (1)  
(Payments of)/proceeds from derivative instrument activity, net (24) 10  
Net proceeds from sale of assets 0 1  
Other investing activities 1 (1)  
Net cash used in investing activities (175) (131)  
Financing Activities      
Increase in short-term borrowings, net 0 21  
Share-based compensation-related proceeds, net of taxes paid on withholding shares (9) (8)  
Purchases of treasury stock, including excise taxes paid (443) (339)  
Cash dividends paid (224) (198)  
Other financing activities (1) 0  
Net cash used in financing activities (677) (524)  
Effect of exchange-rate changes on cash and cash equivalents (1) (6)  
Net decrease in cash and cash equivalents (266) (66)  
Cash and cash equivalents at beginning of period 1,987 2,041  
Cash and cash equivalents at end of period 1,721 1,975  
Cash paid during the period for:      
Income taxes 47 59  
Interest, net of capitalized interest 68 68  
Amounts included in the measurement of lease liabilities:      
Operating cash flows - operating leases 16 15  
Financing cash flows - finance leases 2 0  
Non-cash transactions:      
Capital expenditures 3 3  
Excise tax accrued on net share repurchases, not paid 4 3  
Lease obligations obtained in exchange for right-of-use assets - operating 7 8  
Lease obligations obtained in exchange for right-of-use assets - finance 1 $ 0  
Dividends declared, not paid $ 224   $ 198
[1] 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.
[2] Defined as income before provision for taxes on income.
v3.25.1
Organization
 3 Months Ended
Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization
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, poultry, swine, 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.
v3.25.1
Basis of Presentation
 3 Months Ended
Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
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 months ended February 28, 2025 and February 29, 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.
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.
v3.25.1
Accounting Standards
 3 Months Ended
Mar. 31, 2025
Accounting Policies [Abstract]  
Accounting Standards
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 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. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our notes to the condensed consolidated financial statements.
v3.25.1
Revenue
 3 Months Ended
Mar. 31, 2025
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue
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.
The following tables present our revenue disaggregated by geographic area, species and major product category:
Revenue by geographic area
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
United States$1,183 $1,163 
Australia75 73 
Brazil88 101 
Canada67 61 
Chile34 31 
China60 76 
France40 41 
Germany51 51 
Italy29 28 
Japan36 37 
Mexico37 44 
Spain33 32 
United Kingdom77 77 
Other developed markets133 127 
Other emerging markets248 228 
2,191 2,170 
Contract manufacturing & human health29 20 
Total Revenue$2,220 $2,190 
Revenue by major species
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
U.S.
Companion animal$973 $898 
Livestock210 265 
1,183 1,163 
International
Companion animal573 552 
Livestock435 455 
1,008 1,007 
Total
Companion animal1,546 1,450 
Livestock645 720 
Contract manufacturing & human health29 20 
Total Revenue$2,220 $2,190 
Revenue by species
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Companion Animal:
Dogs and Cats$1,481 $1,384 
Horses65 66 
1,546 1,450 
Livestock:
Cattle358 391 
Swine111 127 
Poultry106 139 
Fish53 45 
Sheep and other17 18 
645 720 
Contract manufacturing & human health29 20 
Total Revenue$2,220 $2,190 
Revenue by major product category
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Parasiticides$562 $504 
Vaccines447 452 
Dermatology390 363 
Anti-infectives249 281 
Pain and sedation210 194 
Other pharmaceutical159 156 
Animal health diagnostics103 82 
Other non-pharmaceutical66 61 
Medicated feed additives5 77 
2,191 2,170 
Contract manufacturing & human health29 20 
Total Revenue$2,220 $2,190 
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 three months of 2025 and 2024 were $4 million and $2 million, respectively. Contract liabilities as of March 31, 2025 and December 31, 2024 were $17 million and $18 million, respectively.
Estimated future revenue expected to be generated from long-term contracts with unsatisfied performance obligations as of March 31, 2025 is not material.
v3.25.1
Divestitures
 3 Months Ended
Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Divestitures
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 an estimated net purchase price of $309 million, including $6 million of estimated post-closing adjustments subject to finalization.
v3.25.1
Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures
 3 Months Ended
Mar. 31, 2025
Restructuring and Related Activities [Abstract]  
Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures
6. Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures
In connection with our cost-reduction/productivity initiatives, we typically incur restructuring charges associated with workforce reductions and site closings. In connection with our acquisition and divestiture activities, we typically incur costs associated with executing the transactions. Acquisition activity may also include integrating the acquired operations, which may include expenditures for consulting and the integration of systems and processes, product transfers and restructuring the company, which may include charges related to employees, assets and activities that will not continue in the company. Divestiture activity may also include costs to separate the divested operations, which may include expenditures for consulting and the disintegration of systems and processes, transfer costs, and restructuring charges which may include charges related to employees, assets and activities that will not continue in the company's ongoing operations. All operating functions can be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as functions such as business technology, shared services and corporate operations.
The components of costs incurred in connection with restructuring initiatives, acquisitions and divestitures are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Restructuring charges and certain acquisition and divestiture-related costs:
Restructuring charges, net(a):
Employee termination costs, net$— $4 
Total Restructuring charges and certain acquisition and divestiture-related costs
$— $4 
(a) The restructuring charges for the three months ended March 31, 2024 primarily consisted of employee termination costs related to organizational structure refinements, partially offset by a reversal of certain employee termination 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 
Utilization and other(b)
(8)
Balance, March 31, 2025(a)
$20 
(a)     At March 31, 2025 and December 31, 2024, included in Accrued expenses ($18 million and $26 million, respectively) and Other noncurrent liabilities ($2 million).
(b)     Includes adjustments for foreign currency translation.
v3.25.1
Other (Income)/Deductions - Net
 3 Months Ended
Mar. 31, 2025
Other Income and Expenses [Abstract]  
Other (Income)/Deductions - Net
7. Other (Income)/Deductions—Net
The components of Other (income)/deductions—net are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Interest income$(23)$(32)
Foreign currency loss(a)
8 19 
Other, net(3)5 
Other (income)/deductions—net$(18)$(8)
(a) Primarily driven by costs related to hedging and exposures to certain emerging and developed market currencies.
v3.25.1
Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
8. Income Taxes
A. Taxes on Income
Our effective tax rate was 22.1% and 19.8% for the three months ended March 31, 2025 and 2024, respectively. The higher effective tax rate for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, was primarily attributable to higher net discrete tax expenses, less favorable jurisdictional mix of earnings (which includes the impact of the location of earnings and repatriation costs) and a lower benefit in the U.S. related to foreign-derived intangible income. Jurisdictional mix of earnings can vary depending on repatriation decisions, operating fluctuations in the normal course of business and the impact of non-deductible items and non-taxable items.
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 months ended March 31, 2025.
B. Deferred Taxes
As of March 31, 2025, the total net deferred income tax asset of $369 million is included in Noncurrent deferred tax assets ($530 million) and Noncurrent deferred tax liabilities ($161 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 March 31, 2025, the net tax liabilities associated with uncertain tax positions of $215 million (exclusive of interest and penalties related to uncertain tax positions of $41 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 decrease 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 March 31, 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.
v3.25.1
Financial Instruments
 3 Months Ended
Mar. 31, 2025
Financial Instruments [Abstract]  
Financial Instruments
9. Financial Instruments
A. Debt
Credit Facilities
In December 2022, we entered into an amended and restated revolving credit agreement with a syndicate of banks providing for a multi-year $1.0 billion senior unsecured revolving credit facility (the credit facility), which expires in December 2027. Subject to certain conditions, we have the right to increase the credit facility to up to $1.5 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 March 31, 2025 and December 31, 2024. There were no amounts drawn under the credit facility as of March 31, 2025 or 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 March 31, 2025, we had access to $51 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 March 31, 2025 and December 31, 2024.
Commercial Paper Program
In February 2013, we entered into a commercial paper program with a capacity of up to $1.0 billion. As of March 31, 2025 and December 31, 2024, there was no commercial paper outstanding under this program.
Senior Notes and Other Long-Term Debt
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:
March 31,December 31,
(MILLIONS OF DOLLARS)20252024
4.500% 2015 senior notes due 2025
$750 $750 
5.400% 2022 senior notes due 2025
600 600 
3.000% 2017 senior notes due 2027
750 750 
3.900% 2018 senior notes due 2028
500 500 
2.000% 2020 senior notes due 2030
750 750 
5.600% 2022 senior notes due 2032
750 750 
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 
6,650 6,650 
Unamortized debt discount / debt issuance costs(52)(54)
Less current portion of long-term debt1,350 1,350 
Cumulative fair value adjustment for interest rate swap contracts(21)(26)
Long-term debt, net of discount and issuance costs$5,227 $5,220 
The fair value of our long-term debt was $6,186 million and $6,097 million as of March 31, 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 March 31, 2025, by scheduled maturity date:
After
(MILLIONS OF DOLLARS)202520262027202820292029Total
Maturities$1,350 $— $750 $500 $— $4,050 $6,650 
Interest Expense
Interest expense, net of capitalized interest, was $54 million and $58 million for the three months ended March 31, 2025 and 2024 respectively. Capitalized interest expense was $11 million and $8 million for the three months ended March 31, 2025, and 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. 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 2022, we entered into forward-starting interest rate swaps with an aggregate notional value of $650 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 3.250% 2013 senior notes due 2023. Upon issuance of our 2022 senior notes, we terminated these contracts and received $114 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 5.600% 2022 senior notes due 2032.
•As of March 31, 2025, we had outstanding forward-starting interest rate swaps, having an effective date and mandatory termination date in March 2026, to hedge against interest rate exposure related principally to the anticipated future issuance of fixed-rate debt to be used primarily to refinance our 4.500% 2015 senior notes due 2025.
•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 March 31, 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 months ended March 31, 2025 for changes in the fair value of these hedges are not material to our condensed consolidated financial statements.
Outstanding Positions
The aggregate notional amount of derivative instruments are as follows:
Notional
March 31,December 31,
(MILLIONS)20252024
Derivatives not Designated as Hedging Instruments:
     Foreign currency forward-exchange contracts $1,929 $2,070 
Derivatives Designated as Hedging Instruments:
     Foreign exchange derivative instruments (in foreign currency):
          Euro 925 800 
          Danish krone475 475 
          Swiss franc25 25 
     Forward-starting interest rate swaps $600 $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
March 31,December 31,
(MILLIONS OF DOLLARS)Balance Sheet Location20252024
Derivatives Not Designated as Hedging Instruments:
   Foreign currency forward-exchange contractsOther current assets$9 $18 
   Foreign currency forward-exchange contracts
Other current liabilities
(11)(6)
Total derivatives not designated as hedging instruments$(2)$12 
Derivatives Designated as Hedging Instruments:
   Forward-starting interest rate swap contractsOther current assets$20 $— 
   Forward-starting interest rate swap contractsOther noncurrent assets— 26 
   Forward-starting interest rate swap contracts Other current liabilities(8)— 
   Foreign exchange derivative instruments Other current assets24 55 
   Foreign exchange derivative instruments Other noncurrent assets— 4 
   Foreign exchange derivative instruments Other current liabilities(3)— 
   Foreign exchange derivative instruments Other noncurrent liabilities(9)— 
   Fixed-to-floating interest rate swap contractsOther noncurrent liabilities(21)(26)
Total derivatives designated as hedging instruments3 59 
Total derivatives$1 $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 March 31, 2025, there was $23 million of collateral received and $26 million of collateral posted related to derivative instruments recorded in Other current liabilities and Other current assets, respectively. At December 31, 2024, there was $51 million of collateral received and $20 million of collateral posted related to derivative instruments recorded in Other current liabilities and Other current assets, respectively.
We use a market approach in valuing financial instruments on a recurring basis. Our derivative financial instruments are measured at fair value on a recurring basis using Level 2 inputs in the calculation of fair value.
The amounts of net losses on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions—net, are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Foreign currency forward-exchange contracts$(16)$(1)
These amounts were substantially offset in Other (income)/deductions—net by the effect of changing exchange rates on the underlying foreign currency exposures.
The amounts of unrecognized net (losses)/gains on interest rate swap contracts, recorded, net of tax, in Accumulated other comprehensive loss, are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Forward-starting interest rate swap contracts$(11)$2 
Foreign exchange derivative instruments$(33)$16 
Gains on interest rate swap contracts, recognized within Interest expense, net of capitalized interest, are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Foreign exchange derivative instruments$5 $4 
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.
v3.25.1
Inventories
 3 Months Ended
Mar. 31, 2025
Inventory Disclosure [Abstract]  
Inventories
10. Inventories
The components of inventory are as follows:
March 31,December 31,
(MILLIONS OF DOLLARS)20252024
Finished goods$983 $996 
Work-in-process1,008 933 
Raw materials and supplies374 377 
Inventories$2,365 $2,306 
v3.25.1
Goodwill and Other Intangible Assets
 3 Months Ended
Mar. 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
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.InternationalTotal
Balance, December 31, 2024$1,515 $1,209 $2,724 
Other(a)
— (8)(8)
Balance, March 31, 2025$1,515 $1,201 $2,716 
(a)     Includes adjustments for foreign currency translation.
The gross goodwill balance was $3,252 million and $3,260 million as of March 31, 2025 and December 31, 2024, respectively. Accumulated goodwill impairment losses were $536 million as of March 31, 2025 and December 31, 2024.
B. Other Intangible Assets
The components of identifiable intangible assets are as follows:
As of March 31, 2025As of December 31, 2024
IdentifiableIdentifiable
GrossIntangible AssetsGrossIntangible Assets
CarryingAccumulatedLess AccumulatedCarryingAccumulatedLess Accumulated
(MILLIONS OF DOLLARS)AmountAmortizationAmortizationAmountAmortizationAmortization
Finite-lived intangible assets:
Developed technology rights$1,881 $(1,203)$678 $1,891 $(1,175)$716 
Brands and tradenames368 (249)119 367 (246)121 
Other277 (199)78 278 (197)81 
Total finite-lived intangible assets2,526 (1,651)875 2,536 (1,618)918 
Indefinite-lived intangible assets:
Brands and tradenames66 — 66 66 — 66 
In-process research and development135 — 135 136 — 136 
Product rights6 — 6 7 — 7 
Total indefinite-lived intangible assets207 — 207 209 — 209 
Identifiable intangible assets$2,733 $(1,651)$1,082 $2,745 $(1,618)$1,127 
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 $44 million for the three months ended March 31, 2025 and 2024, respectively.
v3.25.1
Share-Based Payments
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Share-Based Payments
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
March 31,
(MILLIONS OF DOLLARS)20252024
Stock options / stock appreciation rights$3 $3 
RSUs / DSUs11 10 
PSUs3 5 
Share-based compensation expense—total(a)
$17 $18 
(a) For the three months ended March 31, 2025 and 2024, we capitalized less than $1 million of share-based compensation expense to inventory.
During the three months ended March 31, 2025, the company granted 313,915 stock options with a weighted-average exercise price of $156.64 per stock option and a weighted-average fair value of $40.21 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 4.39%; expected dividend yield of 1.27%; expected stock price volatility of 26.43%; 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 three months ended March 31, 2025, the company granted 549,712 RSUs with a weighted-average grant date fair value of $156.67 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 three months ended March 31, 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.
v3.25.1
Stockholders' Equity
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
Stockholders' Equity
13. Stockholders’ Equity
Zoetis is authorized to issue 6 billion shares of common stock and 1 billion shares of preferred stock.
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 March 31, 2025, there was $5.2 billion remaining under this authorization. Purchases of Zoetis shares may be made at the discretion of management, depending on market conditions and business needs.
Accumulated other comprehensive loss
Changes, net of tax, in accumulated other comprehensive loss, excluding noncontrolling interests were as follows:
Currency Translation Adjustments
Other CurrencyBenefit PlansAccumulated Other
Cash FlowNet InvestmentTranslationActuarialComprehensive
(MILLIONS OF DOLLARS)HedgesHedgesAdjustmentsGainsLoss
Balance, December 31, 2024$89 $62 $(1,091)$— $(940)
Other comprehensive loss, net of tax(13)(33)(31)— 

(77)
Balance, March 31, 2025$76 $29 $(1,122)$— $(1,017)
Balance, December 31, 2023$85 $18 $(944)$2 $(839)
Other comprehensive income/(loss), net of tax— 16 (18)— (2)
Balance, March 31, 2024$85 $34 $(962)$2 $(841)
v3.25.1
Earnings per Share
 3 Months Ended
Mar. 31, 2025
Earnings Per Share [Abstract]  
Earnings per Share
14. Earnings per Share
The following table presents the calculation of basic and diluted earnings per share:
Three Months Ended
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)March 31,
20252024
Numerator
Net income before allocation to noncontrolling interests$631 $599 
Less: Net income/(loss) attributable to noncontrolling interests— — 
Net income attributable to Zoetis Inc.$631 $599 
Denominator
Weighted-average common shares outstanding447.6 458.0 
Common stock equivalents: stock options, RSUs, PSUs and DSUs0.4 0.8 
Weighted-average common and potential dilutive shares outstanding448.0 458.8 
Earnings per share attributable to Zoetis Inc. stockholders—basic$1.41 $1.31 
Earnings per share attributable to Zoetis Inc. stockholders—diluted$1.41 $1.31 
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 months ended March 31, 2025 and 2024.
v3.25.1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
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.
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. To date, the work has yet to be competed. We expect a report to be issued by the consultant upon conclusion of the testing.
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 March 31, 2025, recorded amounts for the estimated fair value of these indemnifications were not material.
v3.25.1
Segment Information
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Segment Information
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.
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 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.
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 EndedThree Months Ended
March 31,March 31,
(MILLIONS OF DOLLARS)2025202420252024
U.S.
Revenue$1,183 $1,163 
Cost of sales199 217 
Gross profit984 946 
    Gross margin83.2 %81.3 %
Operating expenses(b)
205 190 
Other (income)/deductions-net— — 
U.S. Earnings779 756 $23 $24 
International
Revenue(c)
1,008 1,007 
Cost of sales302 313 
Gross profit706 694 
    Gross margin70.0 %68.9 %
Operating expenses(b)
154 159 
Other (income)/deductions-net1 — 
International Earnings551 535 23 23 
Total operating segments1,330 1,291 46 47 
Other business activities
(129)(132)11 9 
Reconciling Items:
Corporate
(271)(288)29 32 
Purchase accounting adjustments
(32)(37)32 37 
Certain significant items
(6)(6)— — 
Other unallocated
(82)(81)1 1 
Total Earnings(d)
$810 $747 $119 $126 
(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.
(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 $227 million and $223 million for the three months ended March 31, 2025 and 2024, respectively.
(d)    Defined as income before provision for taxes on income.
v3.25.1
Pay vs Performance Disclosure - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Pay vs Performance Disclosure    
Net Income (Loss) Attributable to Parent $ 631 $ 599
v3.25.1
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2025
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.25.1
Accounting Standards (Policies)
 3 Months Ended
Mar. 31, 2025
Accounting Policies [Abstract]  
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 months ended February 28, 2025 and February 29, 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.
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.
Recently Adopted Accounting Standards and Recently Issued 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 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. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our notes to the condensed consolidated financial statements.
Tax Contingencies
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 decrease 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 March 31, 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.
Legal Proceedings
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.
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.
Guarantees and Indemnifications
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 March 31, 2025, recorded amounts for the estimated fair value of these indemnifications were not material.
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.
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 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.
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.
v3.25.1
Revenue Revenue Recognition and Deferred Revenue (Tables)
 3 Months Ended
Mar. 31, 2025
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue from External Customers by Geographic Areas
The following tables present our revenue disaggregated by geographic area, species and major product category:
Revenue by geographic area
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
United States$1,183 $1,163 
Australia75 73 
Brazil88 101 
Canada67 61 
Chile34 31 
China60 76 
France40 41 
Germany51 51 
Italy29 28 
Japan36 37 
Mexico37 44 
Spain33 32 
United Kingdom77 77 
Other developed markets133 127 
Other emerging markets248 228 
2,191 2,170 
Contract manufacturing & human health29 20 
Total Revenue$2,220 $2,190 
Revenue from External Customers by Major Species
Revenue by major species
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
U.S.
Companion animal$973 $898 
Livestock210 265 
1,183 1,163 
International
Companion animal573 552 
Livestock435 455 
1,008 1,007 
Total
Companion animal1,546 1,450 
Livestock645 720 
Contract manufacturing & human health29 20 
Total Revenue$2,220 $2,190 
Revenue from External Customers by Species
Revenue by species
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Companion Animal:
Dogs and Cats$1,481 $1,384 
Horses65 66 
1,546 1,450 
Livestock:
Cattle358 391 
Swine111 127 
Poultry106 139 
Fish53 45 
Sheep and other17 18 
645 720 
Contract manufacturing & human health29 20 
Total Revenue$2,220 $2,190 
Schedule of Significant Product Revenues
Revenue by major product category
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Parasiticides$562 $504 
Vaccines447 452 
Dermatology390 363 
Anti-infectives249 281 
Pain and sedation210 194 
Other pharmaceutical159 156 
Animal health diagnostics103 82 
Other non-pharmaceutical66 61 
Medicated feed additives5 77 
2,191 2,170 
Contract manufacturing & human health29 20 
Total Revenue$2,220 $2,190 
v3.25.1
Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures (Tables)
 3 Months Ended
Mar. 31, 2025
Restructuring and Related Activities [Abstract]  
Restructuring and Related Costs
The components of costs incurred in connection with restructuring initiatives, acquisitions and divestitures are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Restructuring charges and certain acquisition and divestiture-related costs:
Restructuring charges, net(a):
Employee termination costs, net$— $4 
Total Restructuring charges and certain acquisition and divestiture-related costs
$— $4 
(a) The restructuring charges for the three months ended March 31, 2024 primarily consisted of employee termination costs related to organizational structure refinements, partially offset by a reversal of certain employee termination 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 
Utilization and other(b)
(8)
Balance, March 31, 2025(a)
$20 
(a)     At March 31, 2025 and December 31, 2024, included in Accrued expenses ($18 million and $26 million, respectively) and Other noncurrent liabilities ($2 million).
(b)     Includes adjustments for foreign currency translation.
v3.25.1
Other (Income)/Deductions - Net (Tables)
 3 Months Ended
Mar. 31, 2025
Other Income and Expenses [Abstract]  
Components of Other (Income)/Deductions—Net
The components of Other (income)/deductions—net are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Interest income$(23)$(32)
Foreign currency loss(a)
8 19 
Other, net(3)5 
Other (income)/deductions—net$(18)$(8)
(a) Primarily driven by costs related to hedging and exposures to certain emerging and developed market currencies.
v3.25.1
Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2025
Financial Instruments [Abstract]  
Schedule of Long-term Debt Instruments
The components of our long-term debt are as follows:
March 31,December 31,
(MILLIONS OF DOLLARS)20252024
4.500% 2015 senior notes due 2025
$750 $750 
5.400% 2022 senior notes due 2025
600 600 
3.000% 2017 senior notes due 2027
750 750 
3.900% 2018 senior notes due 2028
500 500 
2.000% 2020 senior notes due 2030
750 750 
5.600% 2022 senior notes due 2032
750 750 
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 
6,650 6,650 
Unamortized debt discount / debt issuance costs(52)(54)
Less current portion of long-term debt1,350 1,350 
Cumulative fair value adjustment for interest rate swap contracts(21)(26)
Long-term debt, net of discount and issuance costs$5,227 $5,220 
Schedule of Maturities of Long-term Debt
The following table provides the principal amount of debt outstanding, as of March 31, 2025, by scheduled maturity date:
After
(MILLIONS OF DOLLARS)202520262027202820292029Total
Maturities$1,350 $— $750 $500 $— $4,050 $6,650 
Schedule of Derivative Instruments
The aggregate notional amount of derivative instruments are as follows:
Notional
March 31,December 31,
(MILLIONS)20252024
Derivatives not Designated as Hedging Instruments:
     Foreign currency forward-exchange contracts $1,929 $2,070 
Derivatives Designated as Hedging Instruments:
     Foreign exchange derivative instruments (in foreign currency):
          Euro 925 800 
          Danish krone475 475 
          Swiss franc25 25 
     Forward-starting interest rate swaps $600 $300 
     Fixed-to-floating interest rate swap contracts$250 $250 
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The classification and fair values of derivative instruments are as follows:
Fair Value of Derivatives
March 31,December 31,
(MILLIONS OF DOLLARS)Balance Sheet Location20252024
Derivatives Not Designated as Hedging Instruments:
   Foreign currency forward-exchange contractsOther current assets$9 $18 
   Foreign currency forward-exchange contracts
Other current liabilities
(11)(6)
Total derivatives not designated as hedging instruments$(2)$12 
Derivatives Designated as Hedging Instruments:
   Forward-starting interest rate swap contractsOther current assets$20 $— 
   Forward-starting interest rate swap contractsOther noncurrent assets— 26 
   Forward-starting interest rate swap contracts Other current liabilities(8)— 
   Foreign exchange derivative instruments Other current assets24 55 
   Foreign exchange derivative instruments Other noncurrent assets— 4 
   Foreign exchange derivative instruments Other current liabilities(3)— 
   Foreign exchange derivative instruments Other noncurrent liabilities(9)— 
   Fixed-to-floating interest rate swap contractsOther noncurrent liabilities(21)(26)
Total derivatives designated as hedging instruments3 59 
Total derivatives$1 $71 
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The amounts of net losses on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions—net, are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Foreign currency forward-exchange contracts$(16)$(1)
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss)
The amounts of unrecognized net (losses)/gains on interest rate swap contracts, recorded, net of tax, in Accumulated other comprehensive loss, are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Forward-starting interest rate swap contracts$(11)$2 
Foreign exchange derivative instruments$(33)$16 
Schedule of Net Investment Hedges, Statements of Financial Performance and Financial Position, Location
Gains on interest rate swap contracts, recognized within Interest expense, net of capitalized interest, are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Foreign exchange derivative instruments$5 $4 
v3.25.1
Inventories (Tables)
 3 Months Ended
Mar. 31, 2025
Inventory Disclosure [Abstract]  
Components of Inventory
The components of inventory are as follows:
March 31,December 31,
(MILLIONS OF DOLLARS)20252024
Finished goods$983 $996 
Work-in-process1,008 933 
Raw materials and supplies374 377 
Inventories$2,365 $2,306 
v3.25.1
Goodwill and Other Intangible Assets (Tables)
 3 Months Ended
Mar. 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract]  
Changes in the Carrying Amount of Goodwill
The components of, and changes in, the carrying amount of goodwill are as follows:
(MILLIONS OF DOLLARS)U.S.InternationalTotal
Balance, December 31, 2024$1,515 $1,209 $2,724 
Other(a)
— (8)(8)
Balance, March 31, 2025$1,515 $1,201 $2,716 
(a)     Includes adjustments for foreign currency translation.
Components of Identifiable Intangible Assets
The components of identifiable intangible assets are as follows:
As of March 31, 2025As of December 31, 2024
IdentifiableIdentifiable
GrossIntangible AssetsGrossIntangible Assets
CarryingAccumulatedLess AccumulatedCarryingAccumulatedLess Accumulated
(MILLIONS OF DOLLARS)AmountAmortizationAmortizationAmountAmortizationAmortization
Finite-lived intangible assets:
Developed technology rights$1,881 $(1,203)$678 $1,891 $(1,175)$716 
Brands and tradenames368 (249)119 367 (246)121 
Other277 (199)78 278 (197)81 
Total finite-lived intangible assets2,526 (1,651)875 2,536 (1,618)918 
Indefinite-lived intangible assets:
Brands and tradenames66 — 66 66 — 66 
In-process research and development135 — 135 136 — 136 
Product rights6 — 6 7 — 7 
Total indefinite-lived intangible assets207 — 207 209 — 209 
Identifiable intangible assets$2,733 $(1,651)$1,082 $2,745 $(1,618)$1,127 
v3.25.1
Share-Based Payments (Tables)
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Components of Share-based Compensation Expense
The components of share-based compensation expense are as follows:
Three Months Ended
March 31,
(MILLIONS OF DOLLARS)20252024
Stock options / stock appreciation rights$3 $3 
RSUs / DSUs11 10 
PSUs3 5 
Share-based compensation expense—total(a)
$17 $18 
(a) For the three months ended March 31, 2025 and 2024, we capitalized less than $1 million of share-based compensation expense to inventory.
v3.25.1
Stockholders' Equity (Tables)
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
Changes, Net of Tax, in Accumulated Other Comprehensive Loss
Changes, net of tax, in accumulated other comprehensive loss, excluding noncontrolling interests were as follows:
Currency Translation Adjustments
Other CurrencyBenefit PlansAccumulated Other
Cash FlowNet InvestmentTranslationActuarialComprehensive
(MILLIONS OF DOLLARS)HedgesHedgesAdjustmentsGainsLoss
Balance, December 31, 2024$89 $62 $(1,091)$— $(940)
Other comprehensive loss, net of tax(13)(33)(31)— 

(77)
Balance, March 31, 2025$76 $29 $(1,122)$— $(1,017)
Balance, December 31, 2023$85 $18 $(944)$2 $(839)
Other comprehensive income/(loss), net of tax— 16 (18)— (2)
Balance, March 31, 2024$85 $34 $(962)$2 $(841)
v3.25.1
Earnings per Share (Tables)
 3 Months Ended
Mar. 31, 2025
Earnings Per Share [Abstract]  
Basic and Diluted Earnings Per Share
The following table presents the calculation of basic and diluted earnings per share:
Three Months Ended
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)March 31,
20252024
Numerator
Net income before allocation to noncontrolling interests$631 $599 
Less: Net income/(loss) attributable to noncontrolling interests— — 
Net income attributable to Zoetis Inc.$631 $599 
Denominator
Weighted-average common shares outstanding447.6 458.0 
Common stock equivalents: stock options, RSUs, PSUs and DSUs0.4 0.8 
Weighted-average common and potential dilutive shares outstanding448.0 458.8 
Earnings per share attributable to Zoetis Inc. stockholders—basic$1.41 $1.31 
Earnings per share attributable to Zoetis Inc. stockholders—diluted$1.41 $1.31 
v3.25.1
Segment Information (Tables)
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Schedule of Selected Income Statement Information by Segment
Earnings
Depreciation and Amortization(a)
Three Months EndedThree Months Ended
March 31,March 31,
(MILLIONS OF DOLLARS)2025202420252024
U.S.
Revenue$1,183 $1,163 
Cost of sales199 217 
Gross profit984 946 
    Gross margin83.2 %81.3 %
Operating expenses(b)
205 190 
Other (income)/deductions-net— — 
U.S. Earnings779 756 $23 $24 
International
Revenue(c)
1,008 1,007 
Cost of sales302 313 
Gross profit706 694 
    Gross margin70.0 %68.9 %
Operating expenses(b)
154 159 
Other (income)/deductions-net1 — 
International Earnings551 535 23 23 
Total operating segments1,330 1,291 46 47 
Other business activities
(129)(132)11 9 
Reconciling Items:
Corporate
(271)(288)29 32 
Purchase accounting adjustments
(32)(37)32 37 
Certain significant items
(6)(6)— — 
Other unallocated
(82)(81)1 1 
Total Earnings(d)
$810 $747 $119 $126 
(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.
(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 $227 million and $223 million for the three months ended March 31, 2025 and 2024, respectively.
(d)    Defined as income before provision for taxes on income.
v3.25.1
Organization (Details)
Mar. 31, 2025
productCategory
country
geographicRegion
specie
Product Information [Line Items]  
Number of regional segments | geographicRegion 2
Number of countries in which entity markets products 45
Number of core animal species | specie 8
Number of major product categories | productCategory 7
Product  
Product Information [Line Items]  
Number of countries in which entity markets products 100
v3.25.1
Revenue - Narrative (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2025
USD ($)
product_category
Mar. 31, 2024
USD ($)
Dec. 31, 2024
USD ($)
Revenue Recognition and Deferred Revenue [Abstract]      
Number of major product lines | product_category 300    
Contract liabilities, revenue recognized $ 4 $ 2  
Contract liabilities $ 17   $ 18
v3.25.1
Revenue - Revenue by Geographic Area (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Revenue from External Customer [Line Items]    
Revenue $ 2,220 $ 2,190
Contract manufacturing & human health    
Revenue from External Customer [Line Items]    
Revenue 29 20
United States    
Revenue from External Customer [Line Items]    
Revenue 1,183 1,163
Australia    
Revenue from External Customer [Line Items]    
Revenue 75 73
Brazil    
Revenue from External Customer [Line Items]    
Revenue 88 101
Canada    
Revenue from External Customer [Line Items]    
Revenue 67 61
Chile    
Revenue from External Customer [Line Items]    
Revenue 34 31
China    
Revenue from External Customer [Line Items]    
Revenue 60 76
France    
Revenue from External Customer [Line Items]    
Revenue 40 41
Germany    
Revenue from External Customer [Line Items]    
Revenue 51 51
Italy    
Revenue from External Customer [Line Items]    
Revenue 29 28
Japan    
Revenue from External Customer [Line Items]    
Revenue 36 37
Mexico    
Revenue from External Customer [Line Items]    
Revenue 37 44
Spain    
Revenue from External Customer [Line Items]    
Revenue 33 32
United Kingdom    
Revenue from External Customer [Line Items]    
Revenue 77 77
Other developed markets    
Revenue from External Customer [Line Items]    
Revenue 133 127
Other emerging markets    
Revenue from External Customer [Line Items]    
Revenue 248 228
Total geographical area    
Revenue from External Customer [Line Items]    
Revenue $ 2,191 $ 2,170
v3.25.1
Revenue - Revenue by Major Species (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Revenue from External Customer [Line Items]    
Revenue $ 2,220 $ 2,190
Companion animal    
Revenue from External Customer [Line Items]    
Revenue 1,546 1,450
Companion animal | U.S.    
Revenue from External Customer [Line Items]    
Revenue 973 898
Companion animal | International    
Revenue from External Customer [Line Items]    
Revenue 573 552
Livestock    
Revenue from External Customer [Line Items]    
Revenue 645 720
Livestock | U.S.    
Revenue from External Customer [Line Items]    
Revenue 210 265
Livestock | International    
Revenue from External Customer [Line Items]    
Revenue 435 455
Contract manufacturing & human health    
Revenue from External Customer [Line Items]    
Revenue 29 20
Operating Segments | U.S.    
Revenue from External Customer [Line Items]    
Revenue 1,183 1,163
Operating Segments | International    
Revenue from External Customer [Line Items]    
Revenue [1] $ 1,008 $ 1,007
[1] Revenue denominated in euros was $227 million and $223 million for the three months ended March 31, 2025 and 2024, respectively.
v3.25.1
Revenue - Revenue by Species (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Revenue from External Customer [Line Items]    
Revenue $ 2,220 $ 2,190
Companion animal    
Revenue from External Customer [Line Items]    
Revenue 1,546 1,450
Dogs and Cats    
Revenue from External Customer [Line Items]    
Revenue 1,481 1,384
Horses    
Revenue from External Customer [Line Items]    
Revenue 65 66
Livestock    
Revenue from External Customer [Line Items]    
Revenue 645 720
Cattle    
Revenue from External Customer [Line Items]    
Revenue 358 391
Swine    
Revenue from External Customer [Line Items]    
Revenue 111 127
Poultry    
Revenue from External Customer [Line Items]    
Revenue 106 139
Fish    
Revenue from External Customer [Line Items]    
Revenue 53 45
Sheep and other    
Revenue from External Customer [Line Items]    
Revenue 17 18
Contract manufacturing & human health    
Revenue from External Customer [Line Items]    
Revenue $ 29 $ 20
v3.25.1
Revenue - Revenue by Product (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Revenue from External Customer [Line Items]    
Revenue $ 2,220 $ 2,190
Total products and services    
Revenue from External Customer [Line Items]    
Revenue 2,191 2,170
Parasiticides    
Revenue from External Customer [Line Items]    
Revenue 562 504
Vaccines    
Revenue from External Customer [Line Items]    
Revenue 447 452
Dermatology    
Revenue from External Customer [Line Items]    
Revenue 390 363
Anti-infectives    
Revenue from External Customer [Line Items]    
Revenue 249 281
Pain and sedation    
Revenue from External Customer [Line Items]    
Revenue 210 194
Other pharmaceutical    
Revenue from External Customer [Line Items]    
Revenue 159 156
Animal health diagnostics    
Revenue from External Customer [Line Items]    
Revenue 103 82
Other non-pharmaceutical    
Revenue from External Customer [Line Items]    
Revenue 66 61
Medicated feed additives    
Revenue from External Customer [Line Items]    
Revenue 5 77
Contract manufacturing & human health    
Revenue from External Customer [Line Items]    
Revenue $ 29 $ 20
v3.25.1
Divestitures (Details) - Medicated Feed Additives
$ in Millions
Oct. 31, 2024
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Estimated purchase price $ 309
Estimated post-closing adjustments subject to finalization $ 6
v3.25.1
Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Dec. 31, 2024
Restructuring Cost and Reserve [Line Items]      
Total Restructuring charges and certain acquisition and divestiture-related costs $ 0 $ 4  
Restructuring Reserve [Roll Forward]      
Restructuring accrual balance [1],[2] 28    
Utilization and other [1],[3] (8)    
Restructuring accrual balance [1],[2] 20    
Other current liabilities      
Restructuring Reserve [Roll Forward]      
Accrued expenses 18   $ 26
Other noncurrent liabilities      
Restructuring Reserve [Roll Forward]      
Other noncurrent liabilities 2    
Employee Termination Costs      
Restructuring Cost and Reserve [Line Items]      
Employee termination costs, net $ 0 $ 4  
[1] — 
[2] At March 31, 2025 and December 31, 2024, included in Accrued expenses ($18 million and $26 million, respectively) and Other noncurrent liabilities ($2 million).
[3] Includes adjustments for foreign currency translation.
v3.25.1
Other (Income)/Deductions - Net (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Other Income and Expenses [Abstract]    
Interest income $ (23) $ (32)
Foreign currency loss 8 19
Other, net (3) 5
Other (income)/deductions—net $ (18) $ (8)
v3.25.1
Income Taxes - Taxes on Income (Details)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Income Tax Disclosure [Abstract]    
Effective tax rate for income from continuing operations 22.10% 19.80%
v3.25.1
Income Taxes - Deferred Taxes (Details) - USD ($)
$ in Millions
Mar. 31, 2025
Dec. 31, 2024
Income Tax Disclosure [Abstract]    
Noncurrent deferred tax liabilities $ 369 $ 373
Noncurrent deferred tax assets 530 540
Noncurrent deferred tax liabilities $ 161 $ 167
v3.25.1
Income Taxes - Tax Contingencies (Details) - USD ($)
$ in Millions
 1 Months Ended
Jul. 31, 2024
Mar. 31, 2025
Dec. 31, 2024
Income Tax Contingency [Line Items]      
Liabilities associated with uncertain tax positions   $ 215 $ 213
Unrecognized tax benefits, income tax penalties and interest accrued   $ 41 $ 38
Internal Revenue Service (IRS)      
Income Tax Contingency [Line Items]      
Estimated additional tax liability $ 450    
v3.25.1
Financial Instruments - Credit Facilities (Details)
Mar. 31, 2025
USD ($)
Dec. 31, 2024
USD ($)
Line of Credit Facility [Line Items]    
Line of credit facility, maximum borrowing capacity $ 51,000,000  
Line Of Credit For General Corporate Purpose    
Line of Credit Facility [Line Items]    
Line of credit facility 0  
Foreign exchange derivative instruments | Derivatives Designated as Hedging Instruments:    
Line of Credit Facility [Line Items]    
Collateral posted $ 26,000,000 $ 20,000,000
Operational Efficiency    
Line of Credit Facility [Line Items]    
Maximum total leverage ratio 3.50  
Maximum total leverage ratio, next 12 months 4.00  
Revolving Credit Facility    
Line of Credit Facility [Line Items]    
Revolving credit facility, current borrowing capacity $ 1,000,000,000.0  
Line of credit facility, maximum borrowing capacity 1,500,000,000  
Line of credit facility $ 0 $ 0
v3.25.1
Financial Instruments - Commercial Paper Program (Details) - USD ($)
Mar. 31, 2025
Dec. 31, 2024
Feb. 28, 2013
Short-term Debt [Line Items]      
Commercial Paper $ 0 $ 0  
Commercial Paper      
Short-term Debt [Line Items]      
Capacity of commercial paper program     $ 1,000,000,000.0
v3.25.1
Financial Instruments - Senior Notes Offering and Other Long-Term Debt (Details)
Jan. 28, 2013
Senior Notes  
Debt Instrument [Line Items]  
Debt, purchase price percent due to downgrade of investment grade 101.00%
v3.25.1
Financial Instruments - Schedule of Long-term Debt (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Dec. 31, 2024
Nov. 08, 2022
Debt Instrument [Line Items]        
Debt, principal amount $ 6,650   $ 6,650  
Unamortized debt discount / debt issuance costs (52)   (54)  
Current portion of long-term debt 1,350   1,350  
Cumulative fair value adjustment for interest rate swap contracts (21)   (26)  
Long-term debt, net of discount and issuance costs 5,227   5,220  
Capitalized interest $ 11 $ 8    
Senior Notes | Senior Notes Due 2023        
Debt Instrument [Line Items]        
Interest rate percentage 3.25%      
Senior Notes | 4.500% 2015 senior notes due 2025        
Debt Instrument [Line Items]        
Interest rate percentage 4.50%      
Debt, principal amount $ 750   750  
Senior Notes | 5.400% 2022 senior notes due 2025        
Debt Instrument [Line Items]        
Interest rate percentage       5.40%
Debt, principal amount $ 600   600  
Senior Notes | 3.000% 2017 senior notes due 2027        
Debt Instrument [Line Items]        
Interest rate percentage 3.00%      
Debt, principal amount $ 750   750  
Senior Notes | 3.900% 2018 senior notes due 2028        
Debt Instrument [Line Items]        
Interest rate percentage 3.90%      
Debt, principal amount $ 500   500  
Senior Notes | 2.000% 2020 senior notes due 2030        
Debt Instrument [Line Items]        
Interest rate percentage 2.00%      
Debt, principal amount $ 750   750  
Senior Notes | 5.600% 2022 senior notes due 2032        
Debt Instrument [Line Items]        
Interest rate percentage       5.60%
Debt, principal amount $ 750   750  
Senior Notes | 4.700% 2013 senior notes due 2043        
Debt Instrument [Line Items]        
Interest rate percentage 4.70%      
Debt, principal amount $ 1,150   1,150  
Senior Notes | 3.950% 2017 senior notes due 2047        
Debt Instrument [Line Items]        
Interest rate percentage 3.95%      
Debt, principal amount $ 500   500  
Senior Notes | 4.450% 2018 senior notes due 2048        
Debt Instrument [Line Items]        
Interest rate percentage 4.45%      
Debt, principal amount $ 400   400  
Senior Notes | 3.000% 2020 senior notes due 2050        
Debt Instrument [Line Items]        
Interest rate percentage 3.00%      
Debt, principal amount $ 500   $ 500  
v3.25.1
Financial Instruments - Fair Value of Debt (Details) - USD ($)
$ in Millions
Mar. 31, 2025
Dec. 31, 2024
Senior Notes | Fair Value, Inputs, Level 2    
Debt Instrument [Line Items]    
Fair value, debt instrument $ 6,186 $ 6,097
v3.25.1
Financial Instruments - Long-term Debt Maturity (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Dec. 31, 2024
Financial Instruments [Abstract]      
2025 $ 1,350    
2026 0    
2027 750    
2028 500    
2029 0    
After 2029 4,050    
Total long-term debt 6,650   $ 6,650
Interest expense, net of capitalized interest 54 $ 58  
Capitalized interest $ 11 $ 8  
v3.25.1
Financial Instruments - Foreign Exchange Risk (Details)
 3 Months Ended
Mar. 31, 2025
Derivatives Not Designated as Hedging Instruments | Foreign currency forward-exchange contracts  
Derivative [Line Items]  
Maturity period (in years) 60 days
Derivatives Not Designated as Hedging Instruments | Maximum | Foreign currency forward-exchange contracts  
Derivative [Line Items]  
Maturity period (in years) 3 years
Derivatives Designated as Hedging Instruments: | Maximum | Foreign exchange derivative instruments  
Derivative [Line Items]  
Maturity period (in years) 3 years
v3.25.1
Financial Instruments - Interest Rate Risk (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Dec. 31, 2024
Nov. 08, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative, cash received on hedge $ 114    
Forward-starting interest rate swaps | Derivatives Designated as Hedging Instruments:      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative notional amount $ 600 $ 300  
Senior Notes | Forward-starting interest rate swaps | Derivatives Designated as Hedging Instruments:      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Derivative notional amount   $ 650  
Senior Notes | Senior Notes Due 2023      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Interest rate percentage 3.25%    
Senior Notes | 4.500% 2015 senior notes due 2025      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Interest rate percentage 4.50%    
Senior Notes | 5.600% 2022 senior notes due 2032      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Interest rate percentage     5.60%
Senior Notes | 3.900% 2018 senior notes due 2028      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Interest rate percentage 3.90%    
Senior Notes | 2.000% 2020 senior notes due 2030      
Derivative Instruments and Hedging Activities Disclosures [Line Items]      
Interest rate percentage 2.00%    
v3.25.1
Financial Instruments Derivative Notional Amounts (Details)
€ in Millions, kr in Millions, SFr in Millions, $ in Millions
Mar. 31, 2025
USD ($)
Mar. 31, 2025
EUR (€)
Mar. 31, 2025
DKK (kr)
Mar. 31, 2025
CHF (SFr)
Dec. 31, 2024
USD ($)
Dec. 31, 2024
EUR (€)
Dec. 31, 2024
DKK (kr)
Dec. 31, 2024
CHF (SFr)
Foreign exchange derivative instruments                
Derivative [Line Items]                
Derivative notional amount $ 250 € 925 kr 475 SFr 25 $ 250 € 800 kr 475 SFr 25
Derivatives Not Designated as Hedging Instruments: | Foreign currency forward-exchange contracts                
Derivative [Line Items]                
Derivative notional amount 1,929       2,070      
Derivatives Designated as Hedging Instruments: | Forward-starting interest rate swaps                
Derivative [Line Items]                
Derivative notional amount $ 600       $ 300      
v3.25.1
Financial Instruments - Fair Value of Derivative Instruments (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Dec. 31, 2024
Derivatives, Fair Value [Line Items]      
Total derivatives $ 1   $ 71
Derivatives Designated as Hedging Instruments:      
Derivatives, Fair Value [Line Items]      
Total derivatives 3   59
Foreign currency forward-exchange contracts | Derivatives Not Designated as Hedging Instruments:      
Derivatives, Fair Value [Line Items]      
Total derivatives (2)   12
Foreign currency forward-exchange contracts (16) $ (1)  
Foreign currency forward-exchange contracts | Derivatives Not Designated as Hedging Instruments: | Other current assets      
Derivatives, Fair Value [Line Items]      
Derivative assets 9   18
Foreign currency forward-exchange contracts | Derivatives Not Designated as Hedging Instruments: | Other current liabilities      
Derivatives, Fair Value [Line Items]      
Derivative liabilities (11)   (6)
Forward-starting interest rate swap contracts | Derivatives Designated as Hedging Instruments: | Other current assets      
Derivatives, Fair Value [Line Items]      
Derivative assets 20   0
Forward-starting interest rate swap contracts | Derivatives Designated as Hedging Instruments: | Other current liabilities      
Derivatives, Fair Value [Line Items]      
Derivative liabilities (8)   0
Forward-starting interest rate swap contracts | Derivatives Designated as Hedging Instruments: | Other noncurrent assets      
Derivatives, Fair Value [Line Items]      
Derivative assets 0   26
Foreign exchange derivative instruments | Derivatives Designated as Hedging Instruments:      
Derivatives, Fair Value [Line Items]      
Collateral received 23    
Collateral posted 26   20
Additional Collateral, Aggregate Fair Value     51
Foreign exchange derivative instruments | Derivatives Designated as Hedging Instruments: | Other current assets      
Derivatives, Fair Value [Line Items]      
Derivative assets 24   55
Foreign exchange derivative instruments | Derivatives Designated as Hedging Instruments: | Other current liabilities      
Derivatives, Fair Value [Line Items]      
Derivative liabilities (3)   0
Foreign exchange derivative instruments | Derivatives Designated as Hedging Instruments: | Other noncurrent assets      
Derivatives, Fair Value [Line Items]      
Derivative assets 0   4
Foreign exchange derivative instruments | Derivatives Designated as Hedging Instruments: | Other noncurrent liabilities      
Derivatives, Fair Value [Line Items]      
Derivative liabilities (9)   0
Fixed-to-floating interest rate swap contracts | Derivatives Designated as Hedging Instruments: | Other noncurrent liabilities      
Derivatives, Fair Value [Line Items]      
Derivative liabilities $ (21)   $ (26)
v3.25.1
Financial Instruments Cross-currency forward-exchange contracts (Details) - Derivatives Designated as Hedging Instruments: - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Forward-starting interest rate swap contracts    
Foreign Currency Fair Value Hedge Derivative [Line Items]    
Unrecognized net (losses)/gains on interest swap contracts, net of tax $ (11) $ 2
Foreign exchange derivative instruments    
Foreign Currency Fair Value Hedge Derivative [Line Items]    
Unrecognized net (losses)/gains on interest swap contracts, net of tax $ (33) $ 16
v3.25.1
Financial Instruments Cross-currency interest rate swap contracts (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Foreign exchange derivative instruments | Derivatives Designated as Hedging Instruments:    
Foreign Currency Fair Value Hedge Derivative [Line Items]    
Foreign exchange derivative instruments $ 5 $ 4
v3.25.1
Inventories (Details) - USD ($)
$ in Millions
Mar. 31, 2025
Dec. 31, 2024
Inventory Disclosure [Abstract]    
Finished goods $ 983 $ 996
Work-in-process 1,008 933
Raw materials and supplies 374 377
Inventories $ 2,365 $ 2,306
v3.25.1
Goodwill and Other Intangible Assets - Goodwill (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2025
USD ($)
Goodwill [Roll Forward]  
Beginning Balance $ 2,724
Other (8) [1]
Ending Balance 2,716
United States (U.S.)  
Goodwill [Roll Forward]  
Beginning Balance 1,515
Other 0 [1]
Ending Balance 1,515
International  
Goodwill [Roll Forward]  
Beginning Balance 1,209
Other (8) [1]
Ending Balance $ 1,201
[1] Includes adjustments for foreign currency translation.
v3.25.1
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]      
Gross goodwill $ 3,252   $ 3,260
Accumulated goodwill impairment losses 536   $ 536
Amortization of intangible assets $ 39 $ 44  
v3.25.1
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($)
$ in Millions
Mar. 31, 2025
Dec. 31, 2024
Finite Lived and Indefinite Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, gross carrying amount $ 2,526 $ 2,536
Finite-lived intangible assets, accumulated amortization (1,651) (1,618)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization 875 918
Total indefinite-lived intangible assets 207 209
Intangible Assets, gross carrying amount 2,733 2,745
Identifiable intangible assets, less accumulated amortization 1,082 1,127
Brands and tradenames    
Finite Lived and Indefinite Lived Intangible Assets [Line Items]    
Total indefinite-lived intangible assets 66 66
In-process research and development    
Finite Lived and Indefinite Lived Intangible Assets [Line Items]    
Total indefinite-lived intangible assets 135 136
Product rights    
Finite Lived and Indefinite Lived Intangible Assets [Line Items]    
Total indefinite-lived intangible assets 6 7
Developed technology rights    
Finite Lived and Indefinite Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, gross carrying amount 1,881 1,891
Finite-lived intangible assets, accumulated amortization (1,203) (1,175)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization 678 716
Brands and tradenames    
Finite Lived and Indefinite Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, gross carrying amount 368 367
Finite-lived intangible assets, accumulated amortization (249) (246)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization 119 121
Other    
Finite Lived and Indefinite Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, gross carrying amount 277 278
Finite-lived intangible assets, accumulated amortization (199) (197)
Finite-lived intangible assets, identifiable intangible assets, less accumulated amortization $ 78 $ 81
v3.25.1
Share-Based Payments - Components of Share-Based Compensation Expense (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation expense—direct [1] $ 17 $ 18
Share-based compensation expense capitalized to inventory, less than 1 1
Stock options / stock appreciation rights    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation expense—direct 3 3
RSUs / DSUs    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation expense—direct 11 10
PSUs    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation expense—direct $ 3 $ 5
[1] For the three months ended March 31, 2025 and 2024, we capitalized less than $1 million of share-based compensation expense to inventory
v3.25.1
Share-Based Payments - Narrative (Details) - $ / shares
 3 Months Ended 6 Months Ended
Mar. 31, 2025
Jun. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation, options granted, shares 313,915  
Share-based compensation, weighted average exercise price (in dollars per share) $ 156.64  
Share-based compensation, Options, weighted average grant date fair value (in dollars per share) $ 40.21  
Share-based compensation, risk free interest rate 4.39%  
Share-based compensation, expected dividend rate 1.27%  
Share-based compensation, expected volatility rate 26.43%  
Share-based compensation, expected term 4 years 3 months 18 days  
Stock options    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation, award vesting period 3 years  
Share-based compensation, award expiration period 10 years  
Restricted Stock Units (RSUs)    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation, award vesting period   3 years
Share-based compensation, award graded vesting period 3 years  
Share-based compensation, granted, shares 549,712  
Share-based compensation, weighted average grant date fair value (in dollars per share) $ 156.67  
Performance Shares    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation, expected volatility rate 27.60%  
Share-based compensation, award vesting period 3 years  
Share-based compensation, granted, shares 148,130  
Share-based compensation, weighted average grant date fair value (in dollars per share) $ 171.21  
Performance Shares | PeerCompanies    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation, expected volatility rate 29.80%  
Performance Shares | Minimum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation, target number of units percentage 0.00%  
Performance Shares | Maximum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Share-based compensation, target number of units percentage 200.00%  
v3.25.1
Stockholders' Equity - Changes in Common Shares and Treasury Stock (Details) - USD ($)
Mar. 31, 2025
Dec. 31, 2024
Class of Stock [Line Items]    
Common stock, shares authorized 6,000,000,000 6,000,000,000
Preferred stock, shares authorized 1,000,000,000  
August 2024 Share Repurchase Program    
Class of Stock [Line Items]    
Stock repurchase program, authorized amount $ 6,000,000,000  
Stock repurchase program, remaining number of shares authorized to be repurchased 5,200,000,000  
v3.25.1
Stockholders' Equity - Changes in Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Beginning balance $ 4,770 $ 4,991
Other comprehensive loss, net of tax (77) (2)
Ending balance 4,655 5,052
Accumulated Other Comprehensive Loss    
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Beginning balance (940) (839)
Other comprehensive loss, net of tax (77) (2)
Ending balance (1,017) (841)
Derivatives Net Unrealized Gains/ (Losses)    
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Beginning balance 89 85
Other comprehensive loss, net of tax (13) 0
Ending balance 76 85
Net Investment Hedges    
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Beginning balance 62 18
Other comprehensive loss, net of tax (33) 16
Ending balance 29 34
Currency Translation Adjustment Net Unrealized Gain/(Losses)    
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Beginning balance (1,091) (944)
Other comprehensive loss, net of tax (31) (18)
Ending balance (1,122) (962)
Benefit Plans Actuarial Gains/(Losses)    
Accumulated Other Comprehensive Income (Loss) [Roll Forward]    
Beginning balance 0 2
Other comprehensive loss, net of tax 0 0
Ending balance $ 0 $ 2
v3.25.1
Earnings per Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Numerator    
Net income before allocation to noncontrolling interests $ 631 $ 599
Less: Net income/(loss) attributable to noncontrolling interests 0 0
Net income attributable to Zoetis Inc. $ 631 $ 599
Denominator    
Weighted-average common shares outstanding 447.6 458.0
Common stock equivalents: stock options, RSUs, PSUs and DSUs 0.4 0.8
Weighted-average common and potential dilutive shares outstanding 448.0 458.8
Earnings per share attributable to Zoetis stockholders—basic (in dollars per share) $ 1.41 $ 1.31
Earnings per share attributable to Zoetis stockholders—diluted (in dollars per share) $ 1.41 $ 1.31
v3.25.1
Commitments and Contingencies (Details) - Ulianopolis, Brazil - defendant
 1 Months Ended
Apr. 30, 2012
Feb. 29, 2012
Loss Contingencies [Line Items]    
Number of additional defendants   5
Number of claims seeking damages   6
Duration of suspension of lawsuit 1 year  
v3.25.1
Segment Information (Details)
 3 Months Ended
Mar. 31, 2025
segment
Segment Reporting [Abstract]  
Number of operating segments 2
v3.25.1
Segment Information Selected Statement of Income (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Segment Reporting Information [Line Items]    
Revenue $ 2,220 $ 2,190
Cost of sales 622 643
Other (income)/deductions—net (18) (8)
Income before provision for taxes on income [1] 810 747
Depreciation and amortization [1],[2] 119 126
Other business activities    
Segment Reporting Information [Line Items]    
Income before provision for taxes on income (129) (132)
Depreciation and amortization [2] 11 9
Operating Segments    
Segment Reporting Information [Line Items]    
Income before provision for taxes on income 1,330 1,291
Depreciation and amortization [2] 46 47
Operating Segments | U.S.    
Segment Reporting Information [Line Items]    
Revenue 1,183 1,163
Cost of sales 199 217
Gross profit $ 984 $ 946
Gross margin, percentage 83.20% 81.30%
Operating expenses [3] $ 205 $ 190
Other (income)/deductions—net 0 0
Income before provision for taxes on income 779 756
Depreciation and amortization [2] 23 24
Operating Segments | International    
Segment Reporting Information [Line Items]    
Revenue [4] 1,008 1,007
Cost of sales 302 313
Gross profit $ 706 $ 694
Gross margin, percentage 70.00% 68.90%
Operating expenses [3] $ 154 $ 159
Other (income)/deductions—net 1 0
Income before provision for taxes on income 551 535
Depreciation and amortization [2] 23 23
Corporate    
Segment Reporting Information [Line Items]    
Income before provision for taxes on income (271) (288)
Depreciation and amortization [2] 29 32
Reconciling Items    
Segment Reporting Information [Line Items]    
Purchase accounting adjustments (32) (37)
Purchase accounting adjustments, Depreciation and Amortization [2] 32 37
Certain significant items, Earnings (6) (6)
Certain significant items, Depreciation and Amortization [2] 0 0
Other unallocated (82) (81)
Other unallocated, Depreciation and Amortization [2] $ 1 $ 1
[1] Defined as income before provision for taxes on income.
[2] 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.
[3] Operating expenses primarily consisted of field selling, other marketing expenses, advertising and promotions, and freight and logistics costs.
[4] Revenue denominated in euros was $227 million and $223 million for the three months ended March 31, 2025 and 2024, respectively.
v3.25.1
Segment Information Selected Statement of Income Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Segment Reporting Information [Line Items]    
Revenue $ 2,220 $ 2,190
International | Operating Segments    
Segment Reporting Information [Line Items]    
Revenue [1] 1,008 1,007
International | Operating Segments | Euro Member Countries, Euro    
Segment Reporting Information [Line Items]    
Revenue $ 227 $ 223
[1] Revenue denominated in euros was $227 million and $223 million for the three months ended March 31, 2025 and 2024, respectively.