ZOETIS INC., 10-K filed on 2/12/2026
Annual Report
v3.25.4
Cover - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Feb. 06, 2026
Jun. 30, 2025
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2025    
Current Fiscal Year End Date --12-31    
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, $0.01 par value per share    
Trading Symbol ZTS    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
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    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction [Flag] false    
Entity Shell Company false    
Entity Public Float     $ 69,233
Entity Common Stock, Shares Outstanding   422,127,709  
Documents Incorporated by Reference Portions of the registrant’s Proxy Statement for the 2026 Annual Meeting of Shareholders (hereinafter referred to as the “2026 Proxy Statement”) are incorporated into Part III of this Form 10-K.    
Amendment Flag false    
Document Fiscal Year Focus 2025    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001555280    
v3.25.4
Audit Information
12 Months Ended
Dec. 31, 2025
Auditor Information [Abstract]  
Auditor Location Short Hills, NJ
Auditor Name KPMG LLP
Auditor Firm ID 185
v3.25.4
CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Income Statement [Abstract]      
Revenues $ 9,467 $ 9,256 $ 8,544
Costs and expenses:      
Cost of Sales [1] 2,666 2,719 2,561
Selling, general and administrative expenses [1] 2,378 2,318 2,151
Research and development expenses [1] 698 686 614
Amortization of intangible assets 128 141 149
Restructuring charges and certain acquisition and divestiture-related costs 51 53 53
Interest expense, net of capitalized interest 222 225 239
Other (income)/deductions––net (36) (19) (159)
Income before provision for taxes on income [2] 3,360 3,133 2,936
Provision for taxes on income 687 637 596
Net income before allocation to noncontrolling interests 2,673 2,496 2,340
Less: Net income/(loss) attributable to noncontrolling interests 0 10 (4)
Net income attributable to Zoetis Inc. $ 2,673 $ 2,486 $ 2,344
Earnings per share attributable to Zoetis Inc. stockholders:      
Basic (in dollars per share) $ 6.03 $ 5.47 $ 5.08
Diluted (in dollars per share) $ 6.02 $ 5.47 $ 5.07
Weighted-average common shares outstanding:      
Basic (in shares) 443,443 454,200 461,172
Diluted (in shares) 443,835 454,848 462,269
Dividends declared per common share $ 2.030 $ 1.796 $ 1.557
[1] Exclusive of amortization of intangible assets, except as disclosed in Note 3. Significant Accounting Policies—Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets.
[2] Defined as income before provision for taxes on income.
v3.25.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Statement of Comprehensive Income [Abstract]      
Net income before allocation to noncontrolling interests $ 2,673 $ 2,496 $ 2,340
Other comprehensive loss, net of tax(a):      
Unrealized (losses)/gains on derivatives for cash flow hedges, net of tax of $(6), $1 and $(2) for the years ended December 31, 2025, 2024 and 2023, respectively [1] (19) 4 (5)
Unrealized (losses)/gains on derivatives for net investment hedges, net of tax of $(30), $13 and $(7) for the years ended December 31, 2025, 2024 and 2023, respectively [1] (101) 44 (23)
Foreign currency translation adjustments, net [1] 224 (147) 0
Benefit plans: Actuarial gains/(losses), net of tax of $1, $— and $2 for the years ended December 31, 2025, 2024 and 2023, respectively [1] 2 (2) 6
Total other comprehensive loss, net of tax [1] 106 (101) (22)
Comprehensive income before allocation to noncontrolling interests 2,779 2,395 2,318
Less: Comprehensive income/(loss) attributable to noncontrolling interests 0 10 (4)
Comprehensive income attributable to Zoetis Inc. $ 2,779 $ 2,385 $ 2,322
[1] Presented net of reclassification adjustments, which are not material in any period presented. Reclassification adjustments related to benefit plans are generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, general and administrative expenses, and/or Research and development expenses, as appropriate, in the Consolidated Statements of Income.
v3.25.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, Tax $ 1 $ 0 $ 2
Cash Flow Hedging      
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax (6) 1 (2)
Net Investment Hedging      
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax $ (30) $ 13 $ (7)
v3.25.4
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Assets    
Cash and cash equivalents [1] $ 2,312 $ 1,987
Accounts receivable, less allowance for doubtful accounts of $16 in 2025 and $18 in 2024 1,590 1,316
Inventories 2,430 2,306
Other current assets 436 377
Total current assets 6,768 5,986
Property, plant and equipment, less accumulated depreciation of $2,925 in 2025 and $2,635 in 2024 3,681 3,391
Operating lease right-of-use assets 288 219
Goodwill 2,767 2,724
Identifiable intangible assets, less accumulated amortization 998 1,127
Noncurrent deferred tax assets 637 540
Other noncurrent assets 328 250
Total assets 15,467 14,237
Liabilities and Equity    
Current portion of long-term debt 0 1,350
Accounts payable 487 433
Dividends payable 232 224
Accrued expenses 852 746
Accrued compensation and related items 410 441
Income taxes payable 147 93
Other current liabilities 107 125
Total current liabilities 2,235 3,412
Long-term debt, net of discount and issuance costs 9,042 5,220
Noncurrent deferred tax liabilities 139 167
Operating lease liabilities 196 174
Other taxes payable 276 272
Other noncurrent liabilities 248 222
Total liabilities 12,136 9,467
Common stock, $0.01 par value: 6,000,000,000 authorized, 501,891,243 and 501,891,243 shares issued; 424,927,535 and 448,473,073 shares outstanding at December 31, 2025 and 2024, respectively 5 5
Treasury stock, at cost, 76,963,708 and 53,418,170 shares of common stock at December 31, 2025 and 2024, respectively (10,685) (7,445)
Additional paid-in capital 1,101 1,182
Retained earnings 13,744 11,968
Accumulated other comprehensive loss (834) (940)
Total Zoetis Inc. equity 3,331 4,770
Equity attributable to noncontrolling interests 0 0
Total equity 3,331 4,770
Total liabilities and equity $ 15,467 $ 14,237
[1] As of December 31, 2025 and 2024, includes $2 million, of restricted cash.
v3.25.4
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Statement of Financial Position [Abstract]    
Accounts Receivable, Allowance for Credit Loss, Current $ 16 $ 18
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment $ 2,925 $ 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, shares issued 501,891,243 501,891,243
Common stock, shares outstanding 424,927,535 448,473,073
Treasury Stock, Common, Shares 76,963,708 53,418,170
Restricted cash $ 2 $ 2
v3.25.4
CONSOLIDATED STATEMENTS OF EQUITY - USD ($)
$ in Millions
Total
Common Stock
[1]
Treasury Stock
[1]
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Equity Attributable to Noncontrolling Interests
Share Repurchase Program
Beginning Balance (in shares) at Dec. 31, 2022 501,900,000              
Beginning balance at Dec. 31, 2022 $ 4,403 $ 5 $ (4,539) $ 1,088 $ 8,668 $ (817) $ (2)  
Treasury stock, beginning balance (in shares) at Dec. 31, 2022 38,100,000              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income/(loss) $ 2,340       2,344   (4)  
Other comprehensive loss $ (22) [2]         (22)    
Number of shares acquired (in shares) 900,000             6,300,000
Share-based compensation awards [3] $ 88   44 45 (1)      
Treasury stock acquired [4] (1,102)   (1,102)          
Dividends declared $ (716)       (716)      
Ending Balance (in shares) at Dec. 31, 2023 501,900,000              
Ending balance at Dec. 31, 2023 $ 4,991 5 (5,597) 1,133 10,295 (839) (6)  
Treasury stock, ending balance (in shares) at Dec. 31, 2023 43,500,000              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income/(loss) $ 2,496       2,486   10  
Other comprehensive loss $ (101) [2]         (101)    
Number of shares acquired (in shares) 600,000             10,500,000
Deconsolidation of a noncontrolling interest $ (4)           (4)  
Share-based compensation awards [3] 65   17 49 (1)      
Treasury stock acquired [4] (1,865)   (1,865)          
Dividends declared $ (812)       (812)      
Ending Balance (in shares) at Dec. 31, 2024 501,891,243              
Ending balance at Dec. 31, 2024 $ 4,770 5 (7,445) 1,182 11,968 (940) 0  
Treasury stock, ending balance (in shares) at Dec. 31, 2024 53,418,170              
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income/(loss) $ 2,673       2,673      
Other comprehensive loss $ 106 [2]         106    
Number of shares acquired (in shares) 300,000             23,900,000
Share-based compensation awards [3] $ 73   9 64        
Treasury stock acquired [4] (3,249)   (3,249)          
Adjustment to Additional Paid-in Capital, Convertible Debt Instrument Issued at Substantial Premium (145)     (145)        
Dividends declared $ (897)       (897)      
Ending Balance (in shares) at Dec. 31, 2025 501,891,243              
Ending balance at Dec. 31, 2025 $ 3,331 $ 5 $ (10,685) $ 1,101 $ 13,744 $ (834) $ 0  
Treasury stock, ending balance (in shares) at Dec. 31, 2025 76,963,708              
[1] $4,300 
[2] Presented net of reclassification adjustments, which are not material in any period presented. Reclassification adjustments related to benefit plans are generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, general and administrative expenses, and/or Research and development expenses, as appropriate, in the Consolidated Statements of Income.
[3] Includes the issuance of shares of Zoetis Inc. common stock and the reacquisition of shares of treasury stock associated with exercises of employee share-based awards. Also includes the reacquisition of shares of treasury stock associated with the vesting of employee share-based awards to satisfy tax withholding requirements. For additional information, see Note 15. Share-based Payments and Note 16. Stockholders' Equity.
[4] Reflects the acquisition of treasury shares in connection with the share repurchase program and includes excise tax accrued on net share repurchases. For additional information, see Note 16. Stockholders' Equity.
v3.25.4
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Operating Activities      
Net income before allocation to noncontrolling interests $ 2,673 $ 2,496 $ 2,340
Adjustments to reconcile net income before noncontrolling interests to net cash provided by operating activities:      
Depreciation and amortization expense [1],[2] 487 497 491
Share-based compensation expense 83 74 60
Asset write-offs and asset impairments 47 31 46
Net loss/(gain) on sale of businesses, excluding transaction costs 3 23 (118)
Provision for losses on inventory 68 97 115
Deferred taxes (52) (338) (61)
Settlement of derivative contracts 11 0 0
Other non-cash adjustments (8) (6) (8)
Other changes in assets and liabilities, net of acquisitions and divestitures:      
Accounts receivable (236) (61) (102)
Inventories (199) (40) (361)
Other assets (165) 52 (95)
Accounts payable 46 31 13
Other liabilities 85 114 67
Other tax accounts, net 61 (17) (34)
Net cash provided by operating activities 2,904 2,953 2,353
Investing Activities      
Capital expenditures (621) (655) (732)
Acquisitions, net of cash acquired (24) (8) (155)
Purchase of investments (7) (5) (4)
(Payments of)/proceeds from derivative instrument activity, net (93) 62 12
(Payment of)/proceeds from sale of businesses, net of cash sold and working capital adjustments (4) 293 96
Other investing activities 1 (2) 6
Net cash used in investing activities (748) (315) (777)
Financing Activities      
(Decrease)/increase in short-term borrowings, net 0 (3) 1
Principal payments on long-term debt (1,350) 0 (1,350)
Proceeds from issuance of long-term debt—senior notes, net of discount 1,848 0 0
Proceeds from issuance of convertible debt 2,000 0 0
Payment of debt issuance costs (43) 0 0
Payment of premium on capped calls related to convertible debt (187) 0 0
Payment of consideration related to previous acquisitions 0 (5) (3)
Share-based compensation-related proceeds, net of taxes paid on withholding shares (11) (8) 27
Purchases of treasury stock, including excise taxes paid (3,235) (1,858) (1,092)
Cash dividends paid (889) (786) (692)
Other financing activities (3) 0 0
Net cash used in financing activities (1,870) (2,660) (3,109)
Effect of exchange-rate changes on cash and cash equivalents 39 (32) (7)
Net increase/(decrease) in cash and cash equivalents 325 (54) (1,540)
Cash and cash equivalents at beginning of period 2,312 [3] 1,987 [3] 2,041
Cash paid during the period for:      
Income Taxes Paid, Net [4] 715 892 754
Interest, net of capitalized interest 261 274 295
Non-cash transactions:      
Capital expenditures 4 3 2
Dividends payable 232 224 198
Excise tax accrued on net share repurchases, not paid $ 31 $ 17 $ 10
[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.
[3] As of December 31, 2025 and 2024, includes $2 million, of restricted cash.
[4] For 2025, includes $133 million related to the purchase of transferable federal tax credits.
v3.25.4
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)
$ in Millions
12 Months Ended
Dec. 31, 2025
USD ($)
Statement of Cash Flows [Abstract]  
Investment Tax Credit $ 133
v3.25.4
Business Description
12 Months Ended
Dec. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business Description
1. Business Description
Zoetis Inc. (including its subsidiaries, collectively, Zoetis, the company, we, us or our) is a global leader in the animal health industry, focused on the discovery, development, manufacture and commercialization of medicines, vaccines, diagnostic products and services, biodevices, genetic tests and precision animal health. We organize and operate our business in two geographic regions: the United States (U.S.) and International.
We directly market our products in approximately 45 countries across North America, Europe, Africa, Asia, Australia and South America. Our products are sold in more than 100 countries, including developed and emerging markets. We have a diversified business, marketing products across eight core species: dogs, cats and horses (collectively, companion animals) and cattle, swine, poultry, fish and sheep (collectively, livestock); and within seven major product categories: parasiticides, vaccines, dermatology, anti-infectives, pain and sedation, other pharmaceutical and animal health diagnostics. On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets, and, as a result, our major product categories no longer include the category of medicated feed additives. See Note 5. Acquisitions and Divestitures.
We were incorporated in Delaware in July 2012 and prior to that the company was a business unit of Pfizer Inc. (Pfizer).
v3.25.4
Basis of Presentation
12 Months Ended
Dec. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
2. Basis of Presentation
The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). For subsidiaries operating outside the U.S., the consolidated financial information is included as of and for the fiscal year ended November 30 for each year presented. All significant intercompany balances and transactions between the legal entities that comprise Zoetis have been eliminated.
Certain reclassifications of prior year information have been made to conform to the current year's presentation.
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 consolidated financial statements.
v3.25.4
Significant Accounting Policies
12 Months Ended
Dec. 31, 2025
Accounting Policies [Abstract]  
Significant Accounting Policies
3. Significant Accounting Policies
Recently Adopted Accounting Standards
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 guidance requires prospective application and permits retrospective application to prior periods presented. We adopted this guidance prospectively as of January 1, 2025, which resulted in additional disclosures in the notes to our consolidated financial statements. Accordingly, prior periods were not retrospectively adjusted. See Note 8. Tax Matters.
Recently Issued Accounting Standards
In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815), to more closely align financial reporting with the economics of an entity’s risk management activities. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The amendments in this ASU should be applied prospectively with an option to adopt the amendments for hedging relationships existing as of the date of adoption. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The guidance amendments add a new scope exception in ASC 815 for certain contracts and clarifies the accounting for share-based payments to a customer. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). The guidance amendments remove all references to a prescriptive and sequential software development method, also referred to as “project stages” throughout Subtopic 350-40, and specify new requirements for determining when to begin capitalization of capitalizable project costs. The amendments in this update are effective for all entities for annual reporting period beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our notes to the consolidated financial statements.
Estimates and Assumptions
In preparing the consolidated financial statements, we use certain estimates and assumptions that affect reported amounts and disclosures, including amounts recorded in connection with acquisitions. These estimates and underlying assumptions can impact all elements of our consolidated financial
statements. For example, in the Consolidated Statements of Income, estimates are used when accounting for deductions from revenue (such as rebates, sales allowances, product returns and discounts), determining cost of sales, allocating cost in the form of depreciation and amortization, and estimating restructuring charges and the impact of contingencies. On the Consolidated Balance Sheets, estimates are used in determining the valuation and recoverability of assets, such as accounts receivables, inventories, fixed assets, goodwill and other identifiable intangible assets, and estimates are used in determining the reported amounts of liabilities, such as taxes payable, uncertain tax positions, benefit obligations, the impact of contingencies, deductions from revenue and restructuring reserves, all of which also impact the Consolidated Statements of Income.
Our estimates are often based on complex judgments, probabilities and assumptions that we believe to be reasonable but that can be inherently uncertain and unpredictable. If our estimates and assumptions are not representative of actual outcomes, our results could be materially impacted.
As future events and their effects cannot be determined with precision, our estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. We are subject to risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in competition, litigation, legislation and regulations. We regularly evaluate our estimates and assumptions using historical experience and expectations about the future. We adjust our estimates and assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in our consolidated financial statements on a prospective basis unless they are required to be treated retrospectively under relevant accounting standards. It is possible that others, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.
Acquisitions
Our consolidated financial statements include the operations of acquired businesses from the date of acquisition. We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired in-process research and development (IPR&D) be recorded on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When we acquire net assets that do not constitute a business as defined in U.S. GAAP, no goodwill is recognized.
Amounts recorded for acquisitions can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Leases
We determine if a contract contains a lease at inception. Leases are recorded as a right of use asset, as of the lease commencement date, in an amount equal to the present value of future payments over the lease term. A corresponding lease liability is also recorded. We have elected not to recognize right of use assets and lease liabilities for short-term leases of vehicles and equipment with a lease term of twelve months or less.
Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. The present value of future payments is discounted using the rate implicit in the lease, when available. When the implicit rate is not available, as is frequently the case with our lease portfolio, the present value is calculated using our incremental borrowing rate, which is determined on the commencement date. The incremental borrowing rate represents the rate of interest that we would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. As we do not borrow on a collateralized basis, our non-collateralized borrowing rate is used as an input in deriving the incremental borrowing rate.
Our lease portfolio primarily consists of operating leases, in which fixed lease payments are recognized on a straight-line basis over the lease term. Operating lease assets are recorded within Operating lease right of use assets with the corresponding operating lease liabilities recorded within Other current liabilities and Operating lease liabilities on the Consolidated Balance Sheets. Finance lease assets are recorded within Other noncurrent assets with the corresponding finance lease liabilities recorded within Other current liabilities and Other noncurrent liabilities on the Consolidated Balance Sheets. Variable payments are recognized in the period incurred. Variable lease payments include real estate taxes and charges for other non-lease services due to lessors that are not dependent on an index or rate and utilization based charges associated with fleet vehicles.
Our real estate and fleet lease contracts may include fixed consideration attributable to both lease and non-lease components, including non-lease services provided by the vendor, which are accounted for as a single fixed minimum payment. For leases of certain classes of machinery and equipment, contract consideration is allocated to lease and non-lease components on the basis of relative standalone price.
Foreign Currency Translation
For most of our international operations, local currencies have been determined to be the functional currencies. We translate functional currency assets and liabilities to their U.S. dollar equivalents at exchange rates in effect at the balance sheet date and we translate functional currency income and expense amounts to their U.S. dollar equivalents at average exchange rates for the period. The U.S. dollar effects that arise from changing translation rates are recorded in Other comprehensive income/(loss), net of tax. The effects of converting non-functional currency assets and liabilities into the functional currency are recorded in Other (income)/deductions––net. For operations in highly inflationary economies, we translate monetary items at rates in effect at the balance sheet date, with translation adjustments recorded in Other (income)/deductions––net, and we translate non-monetary items at historical rates.
Revenue, Deductions from Revenue and the Allowance for Doubtful Accounts
We recognize revenue from product sales when control of the goods has transferred to the customer, which is typically once the goods have shipped and the customer has assumed title. Revenue reflects the total consideration to which we expect to be entitled (i.e., the transaction price), in exchange for products sold, after considering various types of variable consideration including rebates, sales allowances, product returns and discounts.
Variable consideration is estimated and recorded at the time that related revenue is recognized. Our estimates reflect the amount by which we expect variable consideration to impact revenue recognized and are generally based on contractual terms or historical experience, adjusted as necessary to reflect our expectations about the future. Our customer payment terms generally range from 30 to 90 days.
Estimates of variable consideration utilize a complex series of judgments and assumptions to determine the amount by which we expect revenue to be reduced, for example;
for sales returns, we perform calculations in each market that incorporate the following, as appropriate: local returns policies and practices; historic returns as a percentage of revenue; estimated shelf life by product; an estimate of the amount of time between shipment and return or lag time; and any other factors that could impact the estimate of future returns, product recalls, discontinuation of products or a changing competitive environment; and
for revenue incentives, we use our historical experience with similar incentives programs to estimate the impact of such programs on revenue for the current period.
Although the amounts recorded for these deductions from revenue are dependent on estimates and assumptions, historically our adjustments to actual results have not been material. The sensitivity of our estimates can vary by program, type of customer and geographic location.
Accruals for deductions from revenue are recorded as either a reduction in Accounts receivable or within Accrued expenses, depending on the nature of the contract and method of expected payment. Amounts recorded as a reduction in Accounts receivable as of December 31, 2025 and 2024 are approximately $260 million and $257 million, respectively. As of December 31, 2025, and 2024, accruals for deductions from revenue included in Accrued expenses are approximately $395 million and $344 million, respectively.
A deferral of revenue may be required in the event that we have not satisfied all customer obligations for which we have been compensated. The transaction price is allocated to the individual performance obligations on the basis of relative stand-alone selling price, which is typically based on actual sales prices. Revenue associated with unsatisfied performance obligations are contract liabilities is recorded within Other current liabilities and Other noncurrent liabilities. Recognition of revenue occurs once control of the underlying products has transferred to the customer. Contract liabilities reflected within Other current liabilities as of December 31, 2024 and subsequently recognized as revenue during 2025 were approximately $11 million. Contract liabilities as of December 31, 2025 were approximately $17 million.
We do not disclose the transaction price allocated to unsatisfied performance obligations related to contracts with an original expected duration of one year or less, or for contracts for which we recognize revenue in line with our right to invoice the customer. Estimated future revenue expected to be generated from long-term contracts with unsatisfied performance obligations as of December 31, 2025 is not material.
Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenue. Shipping and handling costs incurred after control of the purchased product has transferred to the customer are accounted for as a fulfillment cost, within Selling, general and administrative expenses.
We also record estimates for bad debts. We periodically assess the adequacy of the allowance for doubtful accounts by evaluating the collectability of outstanding receivables based on factors such as past due history, historical and expected collection patterns, the financial condition of our customers, the robust nature of our credit and collection practices and the economic environment.
Amounts recorded for sales deductions and bad debts can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Cost of Sales and Inventories
Inventories are carried at the lower of cost or net realizable value. The cost of finished goods, work-in-process and raw materials is determined using average actual cost. We regularly review our inventories for impairment and adjustments are recorded when necessary.
Selling, General and Administrative Expenses
Selling, general and administrative costs are expensed as incurred. Among other things, these expenses include the internal and external costs of marketing, advertising, and shipping and handling as well as certain costs related to business technology, facilities, legal, finance, human resources, business development, public affairs and procurement, among others.
Advertising expenses relating to production costs are expensed as incurred, and the costs of space in publications are expensed when the related advertising occurs. Advertising and promotion expenses totaled approximately $308 million in 2025, $302 million in 2024 and $281 million in 2023.
Shipping and handling costs totaled approximately $102 million in 2025, $107 million in 2024 and $101 million in 2023.
Research and Development Expenses
Research and development (R&D) costs are expensed as incurred. Research is the effort associated with the discovery of new knowledge that will be useful in developing a new product or in significantly improving an existing product. Development is the implementation of the research findings. Before a compound receives regulatory approval, we record upfront and milestone payments made by us to third parties under licensing arrangements as expense. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. Once a compound receives regulatory approval in a major market, we record any milestone payments in Identifiable intangible assets, less accumulated amortization and, unless the assets are determined to have an indefinite life, we amortize them on a straight-line basis over the remaining agreement term or the expected product life cycle, whichever is shorter.
Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets
Long-lived assets include:
•    Goodwill—goodwill represents the excess of the consideration transferred for an acquired business over the assigned values of its net assets. Goodwill is not amortized.
•    Identifiable intangible assets, less accumulated amortization—these acquired assets are recorded at our cost. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. Identifiable intangible assets with indefinite lives that are associated with marketed products are not amortized until a useful life can be determined. Identifiable intangible assets associated
with IPR&D projects are not amortized until regulatory approval is obtained. The useful life of an amortizing asset generally is determined by identifying the period in which substantially all of the cash flows are expected to be generated.
•    Property, plant and equipment, less accumulated depreciation––these assets are recorded at our cost and are increased by the cost of any significant improvements after purchase. Property, plant and equipment assets, other than land and construction-in-progress, are depreciated on a straight-line basis over the estimated useful life of the individual assets. Depreciation begins when the asset is ready for its intended use. For tax purposes, accelerated depreciation methods are used as allowed by tax laws.
Amortization expense related to finite-lived identifiable intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property are included in Amortization of intangible assets as they benefit multiple business functions. Amortization expense related to intangible assets that are associated with a single function and depreciation of property, plant and equipment are included in Cost of sales, Selling, general and administrative expenses and Research and development expenses, as appropriate.
We review all of our long-lived assets for impairment indicators throughout the year and we perform detailed testing whenever impairment indicators are present. In addition, we perform impairment testing for goodwill and indefinite-lived assets at least annually. When necessary, we record charges for impairments. Specifically:
•    For finite-lived identifiable intangible assets, such as developed technology rights, and for other long-lived assets, such as property, plant and equipment, whenever impairment indicators are present, we calculate the undiscounted value of the projected cash flows associated with the asset, or asset group, and compare this estimated amount to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate.
•    For indefinite-lived identifiable intangible assets, such as brands and IPR&D assets, we test for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If we conclude it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the indefinite-lived intangible asset with its carrying value is performed. If the fair value is less than the carrying amount, an impairment loss is recognized. We record an impairment loss, if any, for the excess of book value over fair value. In addition, in all cases of an impairment review other than for IPR&D assets, we re-evaluate whether continuing to characterize the asset as indefinite-lived is appropriate.
•    For goodwill, we test for impairment on at least an annual basis, or more frequently if necessary, either by assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or by performing a periodic quantitative assessment. If we choose to perform a qualitative analysis and conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value test is performed. We determine the implied fair value of goodwill by subtracting the fair value of all the identifiable net assets other than goodwill from the fair value of the reporting unit and record an impairment loss for the excess, if any, of book value of goodwill over the implied fair value. In 2025 we performed a periodic qualitative impairment assessment as of September 30, 2025, which did not result in the impairment of goodwill associated with any of our reporting units. In 2024, we performed a quantitative impairment assessment as of September 30, 2024, which did not result in the impairment of goodwill associated with any of our reporting units.
Impairment reviews can involve a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Software Capitalization and Depreciation
We capitalize certain costs incurred in connection with obtaining or developing internal-use software, including payroll and payroll-related costs for employees who are directly associated with the internal-use software project, external direct costs of materials and services and interest costs while developing the software. Capitalized software costs are included in Property, plant and equipment and are amortized using the straight-line method over the estimated useful life of 5 to 10 years. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs incurred during the preliminary project and post-implementation stages, as well as software maintenance and training costs, are expensed in the period in which they are incurred. The company capitalized $18 million of internal-use software for the years ended December 31, 2025 and 2024. Depreciation expense for capitalized software was $46 million in 2025, $61 million in 2024 and $75 million in 2023.
In addition, we capitalize qualifying implementation costs under cloud computing arrangements (“CCA”). The capitalized CCA implementation costs are allocated between Other current assets and Other noncurrent assets on the accompanying Consolidated Balance Sheets based on the expected period that amortization will be recognized. CCA implementation costs are amortized using the straight-line method over the expected term of the related service contract. As of December 31, 2025, the gross capitalized cloud computing implementation costs were $186 million, with accumulated amortization of $10 million, resulting in a net carrying amount of $176 million. As of December 31, 2024, the gross capitalized computing implementation costs were $71 million, with accumulated amortization of $4 million, resulting in a net carrying amount of $67 million. The amortization expense was $6 million, $3 million and $1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Restructuring Charges and Certain Acquisition and Divestiture-Related Costs
We may incur restructuring charges in connection with acquisitions when we implement plans to restructure and integrate the acquired operations or in connection with cost-reduction and productivity initiatives. Included in Restructuring charges and certain acquisition and divestiture-related costs are all restructuring charges and certain costs associated with acquiring and integrating an acquired business and divesting and disintegrating divested businesses. Transaction costs and integration costs are expensed as incurred. Termination costs are a significant component of restructuring charges and are generally recorded when the actions are probable and estimable.
Amounts recorded for restructuring charges and other associated costs can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Earnings per Share
Basic earnings per share is computed by dividing net income attributable to Zoetis by the weighted-average number of common shares outstanding during the period. Diluted earnings per share adjusts the weighted-average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options, restricted stock units, and performance-vesting restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method or shares issuable in connection with our convertible senior notes, calculated using the if-converted method.
Cash Equivalents
Cash equivalents include items almost as liquid as cash, such as money market funds, certificates of deposit and time deposits with maturity periods of three months or less when purchased.
Fair Value
Certain assets and liabilities are required to be measured at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, we use fair value extensively in the initial recognition of net assets acquired in a business combination. Fair value is estimated using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer.
When estimating fair value, depending on the nature and complexity of the asset or liability, we may use one or all of the following approaches:
•    Income approach, which is based on the present value of a future stream of net cash flows.
•    Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.
•    Cost approach, which is based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence.
These fair value methodologies depend on the following types of inputs:
•    Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).
•    Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable (Level 2 inputs).
•    Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).
A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Accounts Receivable
The recorded amounts of accounts receivable approximate fair value because of their relatively short-term nature. As of December 31, 2025 and 2024, Accounts receivable, less allowance for doubtful accounts, of $1,590 million and $1,316 million, respectively, includes approximately $69 million and $79 million, respectively, of other receivables, such as trade notes receivable and royalty receivables, among others.
Deferred Tax Assets and Liabilities and Income Tax Contingencies
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws. We provide a valuation allowance when we believe that our deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax planning strategies.
We account for income tax contingencies using a benefit recognition model. If we consider that a tax position is more likely than not to be sustained upon audit, based solely on the technical merits of the position, we recognize the benefit. We measure the benefit by determining the amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. Under the benefit recognition model, if the initial assessment fails to result in the recognition of a tax benefit, we regularly monitor our position and subsequently recognize the tax benefit: (i) if there are changes in tax law, analogous case law or there is new information that sufficiently raise the likelihood of prevailing on the technical merits of the position to more likely than not; (ii) if the statute of limitations expires; or (iii) if there is a completion of an audit resulting in a favorable settlement of that tax year with the appropriate agency. We regularly re-evaluate our tax positions based on the results of audits of federal, state and foreign income tax filings, statute of limitations expirations, changes in tax law or receipt of new information that would either increase or decrease the technical merits of a position relative to the “more-likely-than-not” standard. Liabilities associated with uncertain tax positions are classified as current only when we expect to pay cash within the next 12 months. Interest and penalties, if any, are recorded in Provision for taxes on income and are classified on our Consolidated Balance Sheets with the related tax liability.
Amounts recorded for valuation allowances and income tax contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Benefit Plans
All dedicated benefit plans are pension plans. For our dedicated benefit plans, we recognize the overfunded or underfunded status of defined benefit plans as an asset or liability on the Consolidated Balance Sheets and the obligations generally are measured at the actuarial present value of all benefits attributable to employee service rendered, as provided by the applicable benefit formula. Pension obligations may include assumptions such as long-term rate of return on plan assets, expected employee turnover, participant mortality, and future compensation levels. Plan assets are measured at fair value. Net periodic benefit costs are recognized, as required, into Cost of sales, Selling, general and administrative expenses and Research and development expenses, as appropriate.
Amounts recorded for benefit plans can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Asset Retirement Obligations
We record accruals for the legal obligations associated with the retirement of tangible long-lived assets, including obligations under the doctrine of promissory estoppel and those that are conditioned upon the occurrence of future events. These obligations generally result from the acquisition, construction, development and/or normal operation of long-lived assets. We recognize the fair value of these obligations in the period in which they are incurred by increasing the carrying amount of the related asset. Over time, we recognize expense for the accretion of the liability and for the amortization of the asset.
As of December 31, 2025 and 2024, accruals for asset retirement obligations are $25 million and $23 million, respectively, and are included in Other noncurrent liabilities.
Amounts recorded for asset retirement obligations can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Legal and Environmental Contingencies
We are subject to numerous contingencies arising in the ordinary course of business, such as product liability and other product-related litigation, commercial litigation, patent litigation, environmental claims and proceedings, government investigations and guarantees and indemnifications. We record accruals for these contingencies to the extent that we conclude that a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, we accrue that amount. Alternatively, when no amount within a range of loss appears to be a better estimate than any other amount, we accrue the lowest amount in the range. We record anticipated recoveries under existing insurance contracts when recovery is assured.
Amounts recorded for contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Share-Based Payments
Our compensation programs can include share-based payment plans. All grants under share-based payment programs are accounted for at fair value and such amounts generally are amortized on a straight-line basis over the vesting term to Cost of sales, Selling, general and administrative expenses, and Research and development expenses, as appropriate. We include the impact of estimated forfeitures when determining share-based compensation expense.
Amounts recorded for share-based compensation can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
v3.25.4
Revenue
12 Months Ended
Dec. 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 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. Acquisitions and 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: hormones, cardiopulmonary, topical and oral hygiene therapeutics, central nervous system drugs, diuretics, antiemetic, euthanasia, hepato-digestive products and other categories; 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
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
United States$5,097 $5,074 $4,555 
Australia329 319 323 
Brazil393 414 393 
Canada290 277 255 
Chile139 123 140 
China227 270 320 
France165 156 142 
Germany236 225 202 
Italy137 129 121 
Japan154 147 158 
Mexico160 169 162 
Spain145 130 122 
United Kingdom325 314 277 
Other developed markets641 564 512 
Other emerging markets913 865 784 
9,351 9,176 8,466 
Contract manufacturing & human health116 80 78 
Total Revenue$9,467 $9,256 $8,544 
Revenue exceeded $100 million in thirteen countries outside the U.S. in 2025 and 2024 and twelve countries outside the U.S. in 2023. The U.S. was the only country to contribute more than 10% of total revenue in each year.
Revenue by major species
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
U.S.
Companion animal$4,220 $4,054 $3,529 
Livestock877 1,020 1,026 
5,097 5,074 4,555 
International
Companion animal2,367 2,224 2,047 
Livestock1,887 1,878 1,864 
4,254 4,102 3,911 
Total
Companion animal6,587 6,278 5,576 
Livestock2,764 2,898 2,890 
Contract manufacturing & human health116 80 78 
Total Revenue$9,467 $9,256 $8,544 
Revenue by species
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Companion Animal:
Dogs and Cats$6,283 $5,993 $5,291 
Horses304 285 285 
6,587 6,278 5,576 
Livestock:
Cattle1,492 1,531 1,503 
Swine466 516 543 
Poultry432 527 524 
Fish286 242 220 
Sheep and other88 82 100 
2,764 2,898 2,890 
Contract manufacturing & human health116 80 78 
Total Revenue$9,467 $9,256 $8,544 
Revenue by product category
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Parasiticides$2,341 $2,153 $1,947 
Vaccines1,959 1,827 1,771 
Dermatology1,754 1,655 1,427 
Anti-infectives1,036 1,100 1,057 
Pain and sedation840 851 602 
Other pharmaceuticals697 658 678 
Animal health diagnostics434 386 376 
Other non-pharmaceuticals263 253 254 
Medicated feed additives27 293 354 
9,351 9,176 8,466 
Contract manufacturing & human health116 80 78 
Total Revenue$9,467 $9,256 $8,544 
B. Other Revenue Information
Significant Customers
We primarily sell our companion animal products to veterinarians or to third-party veterinary distributors that typically then sell our products to veterinarians, and in each case, veterinarians then typically sell our products to pet owners. In certain markets, we also sell certain companion animal products through retail and e-commerce outlets. We sell our livestock products primarily to veterinarians and livestock producers, including beef and dairy farmers as well as pork and poultry operations, in addition to third-party veterinary distributors and retail outlets who then typically sell the products to livestock producers. Sales to our largest customer, a U.S. veterinary distributor, represented approximately 16% of total revenue for 2025, 14% of total revenue for 2024 and 15% of total revenue for 2023.
v3.25.4
Acquisitions and Divestitures
12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions and Divestitures
5. Acquisitions and Divestitures
A. Acquisitions
During 2025, we acquired Veterinary Pathology Group (VPG), a leading veterinary diagnostic laboratory group with multiple locations across the U.K. and Ireland. This transaction did not have a material impact on our consolidated financial statements.
During 2023, we acquired 100% of the issued share capital of PetMedix Ltd (PetMedix), a privately held research and development stage animal health biopharmaceutical company based in the U.K., which develops antibody-based therapeutics for companion animals. The purchase price included upfront cash consideration of $111 million, excluding $19 million of cash acquired, $5 million in cash withheld for customary post-closing adjustments, and contingent consideration up to $100 million based on the achievement of certain milestones. There are additional contingent payments to be made to the seller upon receipt of payments from a third party related to a preexisting collaboration arrangement between PetMedix and the third party. The initial fair value assessment of the contingent consideration and additional contingent payments is not material and the transaction did not have a material impact on our consolidated financial statements. We also completed the acquisition of adivo GmbH (adivo), a privately held research and development stage animal health biopharmaceutical company based in Germany. The transaction did not have a material impact on our consolidated financial statements.
B. Divestitures
On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets to Phibro Animal Health for a net purchase price of $299 million. During 2024, we received $303 million in sales proceeds, less cash sold of $11 million, resulting in $292 million net sales proceeds, and recorded a net pre-tax loss of $25 million within Other (income)/deductions—net, subject to final post-closing adjustments. During the 2025, we paid $4 million, net of proceeds received, and recognized an additional loss of $3 million within Other (income)/deductions—net associated with the final post-closing adjustments.
During 2023, we received net cash proceeds of $93 million ($99 million sales proceeds, net of cash sold of $6 million) for the sale of a majority interest in our pet insurance business, Pumpkin Insurance Services. We recorded a net pre-tax gain of $101 million within Other (income)/deductions—net, which includes $24 million related to the remeasurement of our retained noncontrolling investment to fair value. We also completed the divestiture of Performance Livestock Analytics, part of our precision animal health business. This transaction did not have a material impact on our consolidated financial statements.
v3.25.4
Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures
12 Months Ended
Dec. 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 costs and charges associated with workforce reductions and site closings. In connection with our acquisition and divestiture activities, we typically incur costs and charges 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, divestitures and cost-reduction/productivity initiatives are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Restructuring charges and certain acquisition and divestiture-related costs:
Acquisition-related costs(a)
$2 $$
Divestiture-related costs(b)
 16 — 
Restructuring charges(c)(d):
Employee termination costs20 36 41 
Asset impairment charges22 — 
Exit costs7 — 
Total Restructuring charges and certain acquisition and divestiture-related costs
$51 $53 $53 
(a)    Acquisition-related costs represent external, incremental costs directly related to integrating acquired businesses and primarily include expenditures for consulting and the integration of systems and processes, as well as product transfer costs as well as transaction costs that represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services.
(b)    Divestiture-related costs consisted of costs related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets.
(c)    The restructuring charges for the year ended December 31, 2025 primarily related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, as well as employee termination costs related to organizational structure refinements.
    The restructuring charges for the year ended December 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 restructuring charges for the year ended December 31, 2023 primarily relates to employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.
(d)    The restructuring charges are associated with the following:
For the year ended December 31, 2025, Manufacturing/research/corporate of $42 million, U.S. of $4 million and International of $3 million.
For the year ended December 31, 2024, Manufacturing/research/corporate of $14 million, U.S. of $7 million and International of $15 million.
For the year ended December 31, 2023, Manufacturing/research/corporate of $22 million, U.S. of $3 million and International of $21 million.
The components of, and changes in, our restructuring accruals are as follows:
EmployeeAsset
TerminationImpairmentExit
(MILLIONS OF DOLLARS)CostsChargesCostsAccrual
Balance, December 31, 2022$14 $— $$15 
Provision41 46 
Non-cash activity— (1)— (1)
Utilization and other(a)
(23)— (2)(25)
Balance, December 31, 2023$32 $— $$35 
Provision43 — — 43 
Reserve adjustment(7)— — (7)
Utilization and other(a)
(42)— (1)(43)
Balance, December 31, 2024(b)
$26 $— $$28 
Provision20 22 7 49 
Non-cash activity (22) (22)
Utilization and other(a)
(23) (3)(26)
Balance, December 31, 2025(b)(c)
$23 $ $6 $29 
(a)    Includes adjustments for foreign currency translation.
(b)    At December 31, 2025 and 2024, included in Accrued Expenses ($27 million and $26 million, respectively) and Other noncurrent liabilities ($2 million and $2 million, respectively).
(c)    Includes contractual obligations of $29 million, of which payments are expected to be approximately $27 million in 2026 and $2 million thereafter.
v3.25.4
Other (Income)/Deductions - Net
12 Months Ended
Dec. 31, 2025
Other Income and Expenses [Abstract]  
Other (Income)/Deductions - Net
7. Other (Income)/Deductions—Net
The components of Other (income)/deductions—net follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Royalty-related income(a)
$(2)$(5)$(37)
Interest income(93)(106)(105)
Identifiable intangible asset impairment charges(b)
5 15 35 
Net loss/(gain) on sale of businesses(c)
3 23 (101)
Foreign currency loss(d)
45 50 47 
Other, net6 
Other (income)/deductions—net$(36)$(19)$(159)
(a)    For 2023, primarily associated with a settlement received from a third party for underpayment of royalties related to prior periods.
(b)    For 2025 and 2024, primarily represents asset impairment charges related to our aquaculture product portfolio.
For 2023, primarily represents certain asset impairment charges related to our precision animal health and diagnostics businesses.
(c)    For 2025 and 2024, primarily represents a net loss related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. For additional information, see Note 5. Acquisitions and Divestitures.
    For 2023, primarily relates to the gain on sale of a majority interest in our pet insurance business. For additional information, see Note 5. Acquisitions and Divestitures.
(d)    Primarily driven by costs related to hedging and exposures to certain developed and emerging market currencies.
v3.25.4
Tax Matters
12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Tax Matters
8. Tax Matters
A. Taxes on Income
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain tax provisions that were originally enacted in the 2017 Tax Cuts and Jobs Act and were set to expire on December 31, 2025, modifications to certain international tax provisions and the restoration of tax treatment for certain business provisions, including 100% bonus depreciation for certain qualified property, domestic research and experimental cost expensing, and the business interest expense limitation. The new legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We do not currently expect OBBBA to have a material impact on our financial results, including the effect on our effective tax rate and deferred tax assets and liabilities in 2025 and future periods.
The income tax provision in the Consolidated Statements of Income includes tax costs and benefits, such as uncertain tax positions, repatriation decisions and audit settlements, among others.
The components of Income before provision for taxes on income follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
United States$1,877 $1,867 $1,636 
International1,483 1,266 1,300 
Income before provision for taxes on income$3,360 $3,133 $2,936 
The components of Provision for taxes on income based on the location of the taxing authorities follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
United States:
Current income taxes:
Federal$223 $645 $341 
State and local56 65 35 
Deferred income taxes:
Federal116 (297)(40)
State and local14 (42)25 
Total U.S. tax provision409 371 361 
International:
Current income taxes327 265 281 
Deferred income taxes(49)(46)
Total international tax provision278 266 235 
Provision for taxes on income$687 $637 $596 
Tax Rate Reconciliation
The reconciliation of provision for taxes on income computed at the U.S. statutory income tax rate to our effective tax rate by amount and percent follows:
Year Ended December 31, 2025
(MILLIONS OF DOLLARS)Total%
U.S. statutory income tax rate$706 21.0 %
United States:
   State and local taxes, net of federal benefits(a)
551.6 %
   Effect of cross-border tax laws:
        GILTI1203.6 %
        Foreign exchange gains/(losses)(57)(1.7)%
        Other(11)(0.3)%
   Tax credits:
        Foreign tax credits(112)(3.3)%
        Other(28)(0.8)%
   Changes in valuation allowances49 1.5 %
   Nontaxable or nondeductible items:
        Other11 0.3 %
   Other adjustments:
        Other(34)(1.0)%
Foreign tax effects:
   Ireland:
        Effect of rates different than statutory(88)(2.6)%
        Other250.7 %
Other foreign jurisdictions290.8 %
Changes in unrecognized tax benefits220.6 %
Provision for taxes on income / effective tax rate$687 20.4 %
(a)In 2025, state and local income taxes in California, New Jersey, Minnesota, New York, Oregon, Kentucky, Kansas and Wisconsin comprise the majority (greater than 50%) of the domestic state and local income taxes, net of federal effect category.
The reconciliation of the U.S. statutory income tax rate to our effective tax rate follows:
Year Ended December 31,
20242023
U.S. statutory income tax rate21.0 %21.0 %
State and local taxes, net of federal benefits0.6 1.6 
Unrecognized tax benefits and tax settlements and resolution of certain tax positions(a)
0.4 0.9 
Foreign Derived Intangible Income(1.5)(0.7)
U.S. Research and Development Tax Credit (0.6)(0.7)
Share-based payments(0.2)(0.3)
Non-deductible / non-taxable items0.2 0.2 
Taxation of non-U.S. operations0.2 (0.8)
All other—net0.2 (0.9)
Effective tax rate 20.3 %20.3 %
(a)    For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see C. Tax Contingencies.
Our effective income tax rate was 20.4%, 20.3% and 20.3% in 2025, 2024 and 2023, respectively.
The higher effective tax rate for 2025, as compared to 2024, was primarily attributable to a lower benefit in the U.S. related to foreign-derived intangible income, partially offset by a more favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation activity) and higher net discrete tax benefits.
The effective tax rate for 2024, as compared to 2023, was primarily attributable to the favorable impact of a higher benefit in the U.S. related to foreign-derived intangible income and lower net discrete tax expenses, offset by a less favorable jurisdictional mix of earnings (which includes the impact of the location of earnings, repatriation costs and Pillar Two global minimum tax). 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 2022 and 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, the 2022 income tax benefit was deferred and recognized in 2023 and 2024 and the 2024 income tax benefit was deferred to 2025 and 2026. A portion of the 2024 benefit was recognized during 2025. The remaining deferred benefit is included in Other current assets on our Consolidated Balance Sheets as of December 31, 2025 in the amount of $19 million.
Income tax payments, net of refunds, by jurisdiction follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)2025
United States:
Federal(a)
$433 
State and local25 
International:
Ireland127 
Other130 
Total international257 
Total income tax payments, net of refunds$715 
(a) For 2025, includes $133 million related to the purchase of transferable federal tax credits.
B. Deferred Taxes
Deferred taxes arise as a result of basis differentials between financial statement accounting and tax amounts.
The components of our deferred tax assets and liabilities follow:
As of December 31,
20252024
(MILLIONS OF DOLLARS)Assets (Liabilities)
Prepaid/deferred items$146 $219 
Inventories24 21 
Capitalized research and development for tax410 301 
Foreign exchange (gains)/losses56 — 
Interest expense limitation12 
Original issue discount on convertible debt42 — 
Identifiable intangible assets(78)(103)
Property, plant and equipment(194)(179)
Employee benefits73 74 
Restructuring and other charges11 10 
Legal and product liability reserves13 14 
Net operating loss/credit carryforwards165 139 
Unremitted earnings(4)(3)
All other7 — 
Subtotal683 496 
Valuation allowance(185)(123)
Net deferred tax asset/(liability)(a)(b)
$498 $373 
(a)    The change in the total net deferred tax asset/(liability) from December 31, 2024 to December 31, 2025 is primarily attributable to an increase in deferred tax assets related to (i) the capitalization and amortization of research and development costs for U.S. tax purposes, (ii) foreign exchange (gains)/losses, (iii) original issue discount on convertible debt, and (iv) net operating loss/credit carryforwards, partially offset by a decrease in deferred tax assets related to (i) prepaid/deferred items as a result of a prepayment from a related foreign entity in Belgium, as well as an increase in valuation allowance.
(b)    In 2025, included in Noncurrent deferred tax assets ($637 million) and Noncurrent deferred tax liabilities ($139 million). In 2024, included in Noncurrent deferred tax assets ($540 million) and Noncurrent deferred tax liabilities ($167 million).
We have carryforwards, primarily related to net operating losses, which are available to reduce future foreign, U.S. federal, and U.S. state income taxes payable with either an indefinite life or expiring at various times from 2026 to 2045.
Valuation allowances are provided when we believe that our deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax planning strategies. On the basis of this evaluation, as of December 31, 2025 and 2024, a valuation allowance of $185 million and $123 million, respectively, has been recorded to reflect only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as projections for growth.
In general, it is our practice and intention to permanently reinvest the majority of the earnings of the company’s non-U.S. subsidiaries. As of December 31, 2025, we have not provided U.S. and local income taxes, such as U.S. state income taxes, local withholding taxes, and taxes on currency gains and losses for the cumulative amount of such undistributed earnings. Since these earnings are intended to be indefinitely reinvested overseas as of December 31, 2025, we cannot predict the time or manner of a potential repatriation. As such, other than the deferred tax liability associated with the one-time mandatory deemed repatriation tax on such undistributed earnings imposed by the Tax Cuts and Jobs Act of 2017, it is not practicable to estimate the additional deferred tax liability associated with the potential repatriation of the unremitted earnings.
C. Tax Contingencies
We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statute of limitations expire. We treat these events as discrete items in the period of resolution.
For a description of our accounting policies associated with accounting for income tax contingencies, see Note 3. Significant Accounting Policies: Deferred Tax Assets and Liabilities and Income Tax Contingencies. For a description of the risks associated with estimates and assumptions, see Note 3. Significant Accounting Policies: Estimates and Assumptions.
Uncertain Tax Positions
As tax law is complex and often subject to varied interpretations, it is uncertain whether some of our tax positions will be sustained upon audit. As of December 31, 2025, 2024 and 2023, we had approximately $222 million, $214 million and $209 million, respectively, in net liabilities associated with uncertain tax positions, excluding associated interest and penalties. As of December 31, 2025, 2024 and 2023, we had approximately $1 million,
$1 million and $0 million, respectively, in assets associated with uncertain tax benefits recorded in Noncurrent deferred tax assets and Other noncurrent assets.
Tax liabilities associated with uncertain tax positions represent unrecognized tax benefits, which arise when the estimated benefit recorded in our financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. These unrecognized tax benefits relate primarily to issues common among multinational corporations. Substantially all of these unrecognized tax benefits, if recognized, would impact our effective income tax rate.
The reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:
(MILLIONS OF DOLLARS)202520242023
Balance, January 1$(213)$(209)$(194)
Increases based on tax positions taken during a prior period(a)
 (1)(27)
Decreases based on tax positions taken during a prior period(a)
1 — 20 
Increases based on tax positions taken during the current period(a)
(13)(7)(13)
Settlements — 
Lapse in statute of limitations(a)
4 
Balance, December 31(b)
$(221)$(213)$(209)
(a)    Primarily included in Provision for taxes on income.
(b)    Primarily included in Other taxes payable.
Interest related to our unrecognized tax benefits is recorded in accordance with the laws of each jurisdiction and is recorded in Provision for taxes on income in our Consolidated Statements of Income. We recorded net interest expense of $14 million, $12 million and $10 million in 2025, 2024 and 2023, respectively. Gross accrued interest totaled $51 million, $37 million and $26 million as of December 31, 2025, 2024 and 2023, respectively, and were included in Other taxes payable. As of December 31, 2025, 2024 and 2023, gross accrued penalties totaled $1 million and were included in Other taxes payable.
Status of Tax Audits and Potential Impact on Accruals for Uncertain Tax Positions
We are subject to taxation in the U.S. including various states, and foreign jurisdictions. The U.S. is one of our major tax jurisdictions, and we are currently under income tax audit by the U.S. Internal Revenue Service (IRS) for tax years 2017 through 2018. For U.S. state tax purposes, tax years 2017 through 2024 are open for examination. 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 December 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 the 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.
In addition to the open audit years in the U.S., we have open audit years in other major foreign tax jurisdictions, such as Canada (2022-2025), Asia-Pacific (2015-2025, primarily reflecting Australia, China and Japan), Europe (2013-2025, primarily reflecting France, Germany, Italy, Spain and the U.K.) and Latin America (2016-2025, primarily reflecting Brazil and Mexico).
Any settlements or statute of limitations expirations could result in a significant decrease in our uncertain tax positions. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits 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 change related to our uncertain tax positions, and such changes could be significant.
v3.25.4
Financial Instruments
12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Financial Instruments
9. Financial Instruments
A. Debt
Credit Facilities
In August 2025, we entered into a new revolving credit agreement with a syndicate of banks providing for a multi-year $1.25 billion senior unsecured revolving credit facility (the credit facility), which expires in August 2030. Subject to certain conditions, we have the right to increase the credit facility up to $1.75 billion. The credit facility contains a financial covenant requiring us to not exceed a maximum total leverage ratio (the ratio of consolidated net debt as of the end of the period to consolidated Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) for such period) of 3.50:1. Upon entering into a material acquisition, the maximum total leverage ratio increases to 4.00:1, and extends until the fourth full consecutive fiscal quarter ended immediately following the consummation of a material acquisition. In addition, the credit facility contains other customary covenants.
We were in compliance with all financial covenants as of December 31, 2025 and 2024. There were no amounts drawn under the credit facility as of December 31, 2025 and 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 December 31, 2025, we had access to $51 million of lines of credit which expire at various times and are generally renewed annually. As of December 31, 2025 and December 31, 2024, we had no borrowings outstanding related to these facilities.
Commercial Paper Program
In February 2013, we entered into a commercial paper program with a capacity of up to $1.0 billion. As of December 31, 2025 and 2024, there was no commercial paper outstanding under this program.
Convertible Senior Notes
On December 18, 2025, we completed a private offering (the “offering”) of 0.250% convertible senior notes (the “convertible senior notes”) with a maturity date of June 15, 2029, unless earlier repurchased, redeemed or converted. The aggregate principal amount of the convertible senior notes sold in the offering was $2.0 billion, which includes $250 million in aggregate principal amount of convertible senior notes issued pursuant to the initial purchasers’ option to purchase additional convertible senior notes on the same terms and conditions, which the initial purchasers exercised in full for settlement on December 18, 2025.
The convertible senior notes were issued pursuant to an indenture, dated as of December 18, 2025, between us and Deutsche Bank Trust Company Americas, as trustee. If we call any convertible senior notes for redemption, a "make-whole fundamental change" will occur under the indenture with respect to those convertible senior notes, in which case the conversion rate applicable to the conversion of those convertible senior notes will be increased if they are converted during a specified period of time after they are called for redemption. The convertible senior notes are convertible at an initial conversion price of approximately $148.20 per share of common stock. Prior to March 15, 2029, the convertible senior notes are convertible during certain periods only: (i) if the trading price of our common stock is greater than or equal to 130% of the conversion price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days prior to the end of a calendar quarter, (ii) the trading price per $1,000 principal amount of convertible senior notes for each trading day of the specified measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day, (iii) if we call the notes for redemption and (iv) upon the occurrence of certain corporate events, as set forth in the indenture. On or after March 15, 2029, holders may convert all or any portion of their notes, regardless of the foregoing conditions. Upon any conversion of the convertible senior notes, we will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination thereof, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted.
The net proceeds from the offering were $1,970 million, after deducting the initial purchasers’ discounts and expenses of $30 million. We used the net proceeds from the offering as follows: (i) $187 million to fund the cost of entering into the capped call transactions described below, (ii) $248 million to purchase approximately 2.1 million shares of Zoetis’ common stock, par value $0.01 per share (the “common stock”), in privately negotiated transactions entered into concurrently with the pricing of the offering effected with or through one of the initial purchasers or its affiliate and (iii) the remaining $1,535 million for additional repurchases of common stock following the date of the offering, which repurchases were substantially completed as of December 31, 2025.
In connection with the issuance of the convertible senior notes, we also entered into privately negotiated capped call transactions with certain counterparties (the “capped calls”). The capped calls each have a strike price of approximately $148.20 per share, subject to certain adjustments, which correspond to the initial conversion price of the convertible senior notes. The capped calls have initial cap prices of approximately $211.72 per share, subject to certain adjustments. The capped calls cover, subject to anti-dilution adjustments, approximately 13.5 million shares of our common stock. We have the option to settle the capped calls in either shares, cash or a combination thereof. The capped calls are generally intended to reduce or offset the potential dilution to our common stock upon any conversion of the convertible senior notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. However, if the market price per share of our common stock, as measured under the terms of the capped calls, exceeds the cap prices of the capped calls, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the capped calls. The capped calls are separate transactions, and not part of the terms of the convertible senior notes. We analyzed the transactions under ASC 815, Derivatives and Hedging, and determined that the capped calls met the criteria for classification as an equity transaction with no subsequent remeasurement, as long as they continue to meet the conditions for equity classification. These capped calls are recorded in stockholders’ equity on our balance sheet and are not accounted for as a bifurcated derivative. The cost of the capped calls of $187 million, net of $42 million in deferred tax assets, was recorded as a decrease to Additional paid-in capital on our Consolidated Balance Sheets as of December 31, 2025.
On December 17, 2025, we and the lenders under the credit facility entered into the First Waiver to the Revolving Credit Agreement, dated as of December 17, 2025 (the “waiver”), among us, the lenders party thereto, the issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The waiver removed a technical provision in the credit facility and explicitly permits early conversions of the convertible senior notes pursuant to their terms.
Senior Notes and Other Long-Term Debt
On August 18, 2025, we issued $850 million aggregate principal amount of 4.150% senior notes due 2028 and $1.00 billion aggregate principal amount of 5.000% senior notes due 2035 (collectively, 2025 senior notes), with an original issue discount of $2 million. The net proceeds were used to redeem in full the $600 million aggregate principal amount of our 5.400% 2022 senior notes due 2025 and the $750 million aggregate principal amount of our 4.500% 2015 senior notes due 2025 on August 28, 2025 and September 17, 2025, respectively, and the remainder is being used for general corporate purposes.
Our senior notes are governed by an indenture and supplemental indentures (collectively, the indenture) between us and Deutsche Bank Trust Company Americas, as trustee. The indenture contains certain covenants, including limitations on our and certain of our subsidiaries' ability to incur liens or engage in sale lease-back transactions. The indenture also contains restrictions on our ability to consolidate, merge or sell substantially all of our assets. In addition, the indenture contains other customary terms, including certain events of default, upon the occurrence of which the senior notes may be declared immediately due and payable.
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:
As of December 31,
(MILLIONS OF DOLLARS)20252024
4.500% 2015 senior notes due 2025
$ $750 
5.400% 2022 senior notes due 2025
 600 
3.000% 2017 senior notes due 2027
750 750 
3.900% 2018 senior notes due 2028
500 500 
4.150% 2025 senior notes due 2028
850 — 
0.250% 2025 convertible senior notes due 2029
2,000 — 
2.000% 2020 senior notes due 2030
750 750 
5.600% 2022 senior notes due 2032
750 750 
5.000% 2025 senior notes due 2035
1,000 — 
4.700% 2013 senior notes due 2043
1,150 1,150 
3.950% 2017 senior notes due 2047
500 500 
4.450% 2018 senior notes due 2048
400 400 
3.000% 2020 senior notes due 2050
500 500 
9,150 6,650 
Unamortized debt discount / debt issuance costs(93)(54)
Less current portion of long-term debt 1,350 
Cumulative fair value adjustment for interest rate swap contracts(15)(26)
Long-term debt, net of discount and issuance costs$9,042 $5,220 
The fair value of our long-term debt was $8,842 million and $6,097 million as of December 31, 2025 and 2024, respectively, and has been determined using a third-party model that uses significant inputs derived from, or corroborated by, observable market data and Zoetis’ credit rating (Level 2 inputs). See Note 3. Significant Accounting Policies— Fair Value.
The following table provides the principal amount of debt outstanding as of December 31, 2025 by scheduled maturity date. The table also provides the expected interest payments on these borrowings as of December 31, 2025.
After
(MILLIONS OF DOLLARS)202620272028202920302030Total
Maturities$— $750 $1,350 $2,000 $750 $4,300 $9,150 
Interest payments $296 $296 $273 $216 $206 $1,958 $3,245 
Interest Expense
Interest expense, net of capitalized interest, was $222 million, $225 million and $239 million for 2025, 2024 and 2023, respectively. Capitalized interest expense was $47 million, $39 million and $27 million for 2025, 2024 and 2023, 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 Consolidated Balance Sheets. The derivative financial instruments primarily offset exposures in the Australian dollar, Brazilian real, British pound, 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 two 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 Consolidated Statements of Cash Flows. These contracts have varying maturities of up to three years.
Interest Rate Risk
The company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rates and to reduce its overall cost of borrowing.
In anticipation of issuing fixed-rate debt, we may use forward-starting interest rate swaps that are designated as cash flow hedges to hedge against changes in interest rates that could impact expected future issuances of debt. Unrealized gains or losses on the forward-starting interest rate swaps are reported in Accumulated other comprehensive loss and are recognized in earnings over the life of the future fixed rate notes. When the company discontinues hedge accounting because it is no longer probable that an anticipated transaction will occur within the originally expected period of execution, or within an additional two-month period thereafter, changes to fair value accumulated in other comprehensive income are recognized immediately in earnings.
During the period from 2019 to August 2025, we entered into forward-starting interest rate swaps with an aggregate notional value of
$700 million. We designated these swaps as cash flow hedges against interest rate exposure related principally to the issuance of fixed-rate
debt to refinance our senior notes due in 2025. Upon issuance of our 2025 senior notes, we terminated these contracts and
received $11 million in cash from the counterparties for settlement. The settlement amount, which represented the fair value of the
contracts at the time of termination, was recorded in Accumulated other comprehensive loss, and will be amortized into income (offset to
Interest expense, net of capitalized interest) over the life of the 5.000% 2025 senior notes due 2035.
We may use fixed-to-floating interest rate swaps that are designated as fair value hedges to hedge against changes in the fair value of certain fixed-rate debt attributable to changes in the benchmark 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 December 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 2025 for changes in the fair value of these hedges are not material to our consolidated financial statements.
Outstanding Positions
The aggregate notional amount of derivative instruments are as follows:
Notional
As of December 31,
(MILLIONS)20252024
Derivatives not Designated as Hedging Instruments
     Foreign currency forward-exchange contracts$2,175 $2,070 
Derivatives Designated as Hedging Instruments
     Foreign exchange derivative instruments (in foreign currency):
         Euro925 800 
         Danish krone400 475 
         Swiss franc 25 
     Forward-starting interest rate swaps $ $300 
     Fixed-to-floating interest rate swap contracts$250 $250 
Fair Value of Derivative Instruments
The classification and fair values of derivative instruments are as follows:
Fair Value of Derivatives
As of December 31,
(MILLIONS OF DOLLARS)Balance Sheet Location20252024
Derivatives Not Designated as Hedging Instruments:
   Foreign currency forward-exchange contractsOther current assets$11 $18 
   Foreign currency forward-exchange contractsOther current liabilities(6)(6)
Total derivatives not designated as hedging instruments5 12 
Derivatives Designated as Hedging Instruments:
   Forward-starting interest rate swap contractsOther non-current assets$ $26 
   Foreign exchange derivative instrumentsOther current assets6 55 
   Foreign exchange derivative instrumentsOther non-current assets 
   Foreign exchange derivative instrumentsOther current liabilities(25)— 
   Foreign exchange derivative instrumentsOther non-current liabilities(39)— 
   Fixed-to-floating interest rate swap contractsOther non-current liabilities(16)(26)
Total derivatives designated as hedging instruments(74)59 
Total derivatives$(69)$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 December 31, 2025, there was no collateral received and $70 million posted related to derivative instruments recorded in Other current assets. At December 31, 2024, there was $51 million of collateral received and $20 million of collateral posted related to derivative instruments recorded in Other current liabilities and Other current assets, respectively.
We use a market approach in valuing financial instruments on a recurring basis. Our derivative financial instruments are measured at fair value on a recurring basis using Level 2 inputs in the calculation of fair value. See Note 3. Significant Accounting Policies— Fair Value.
The amounts of net gains/(losses) on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions - net, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20252024
Foreign currency forward-exchange contracts$27 $(11)
These amounts were substantially offset in Other (income)/deductions—net by the effect of changing exchange rates on the underlying foreign currency exposures.
The amounts of unrecognized net (losses)/gains on interest rate swap contracts, recorded, net of tax, in Accumulated other comprehensive loss, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20252024
Forward starting interest rate swap contracts$(20)$11 
Foreign exchange derivative instruments$(101)$44 
Gains on interest rate swap contracts, recognized within Interest expense, net of capitalized interest, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20252024
Foreign exchange derivative instruments$21 $17 
The net amount of deferred losses 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.
v3.25.4
Leases
12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Leases
10. Leases
We have facilities and vehicles under various non-cancellable operating leases with third parties and an equipment finance lease with a third party. The operating leases generally have remaining terms ranging from 1 to 14 years, inclusive of renewal options that are reasonably certain of exercise. The finance lease has a remaining term of 28 years.
Supplemental information for our lease portfolio is as follows:
As of December 31,
(MILLIONS OF DOLLARS, EXCEPT LEASE TERM AND DISCOUNT RATE AMOUNTS)20252024
Supplemental Balance Sheet information:
Operating lease right-of-use assets$288 $219 
Finance lease right of use assets (in Other noncurrent assets)
9 
Total lease assets$297 $228 
Lease liabilities:
Operating lease liabilities - current (in Other current liabilities)
$52 $51 
Finance lease liabilities - current (in Other current liabilities)
1 
Operating lease liabilities - noncurrent196 174 
Finance lease liabilities - noncurrent (in Other noncurrent liabilities)
6 
Total lease liabilities$255 $233 
Weighted-average remaining lease term—operating leases (years)6.876.57
Weighted-average remaining lease term—finance leases (years)27.9029.19
Weighted-average discount rate—operating leases3.91 %3.65 %
Weighted-average discount rate—finance leases4.97 %4.97 %
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Supplemental Income Statement information for operating leases:
Operating lease expense$68 $59 $56 
Variable lease costs28 18 20 
Short-term lease costs not included in the measurement of lease liabilities14 13 11 
Supplemental Income Statement information for finance leases:
Amortization of right-of-use assets1 
Total lease costs$111 $91 $88 
Supplemental Cash Flow information for leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows – operating leases$67 $61 $57 
Financing cash flows – finance leases2 — 
Lease obligations obtained in exchange for right-of-use assets - operating (non-cash)76 46 73 
Lease obligations obtained in exchange for right-of-use assets – finance (non-cash)1 — 
Future minimum lease payments under non-cancellable lease contracts as of December 31, 2025 are as follows:
TotalLess:
AfterLeaseImputed
(MILLIONS OF DOLLARS)202620272028202920302030PaymentsInterestTotal
Operating leases$60 $51 $41 $29 $21 $83 $285 $(37)$248 
Finance leases$$$$$$$10 $(3)$
Leases
10. Leases
We have facilities and vehicles under various non-cancellable operating leases with third parties and an equipment finance lease with a third party. The operating leases generally have remaining terms ranging from 1 to 14 years, inclusive of renewal options that are reasonably certain of exercise. The finance lease has a remaining term of 28 years.
Supplemental information for our lease portfolio is as follows:
As of December 31,
(MILLIONS OF DOLLARS, EXCEPT LEASE TERM AND DISCOUNT RATE AMOUNTS)20252024
Supplemental Balance Sheet information:
Operating lease right-of-use assets$288 $219 
Finance lease right of use assets (in Other noncurrent assets)
9 
Total lease assets$297 $228 
Lease liabilities:
Operating lease liabilities - current (in Other current liabilities)
$52 $51 
Finance lease liabilities - current (in Other current liabilities)
1 
Operating lease liabilities - noncurrent196 174 
Finance lease liabilities - noncurrent (in Other noncurrent liabilities)
6 
Total lease liabilities$255 $233 
Weighted-average remaining lease term—operating leases (years)6.876.57
Weighted-average remaining lease term—finance leases (years)27.9029.19
Weighted-average discount rate—operating leases3.91 %3.65 %
Weighted-average discount rate—finance leases4.97 %4.97 %
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Supplemental Income Statement information for operating leases:
Operating lease expense$68 $59 $56 
Variable lease costs28 18 20 
Short-term lease costs not included in the measurement of lease liabilities14 13 11 
Supplemental Income Statement information for finance leases:
Amortization of right-of-use assets1 
Total lease costs$111 $91 $88 
Supplemental Cash Flow information for leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows – operating leases$67 $61 $57 
Financing cash flows – finance leases2 — 
Lease obligations obtained in exchange for right-of-use assets - operating (non-cash)76 46 73 
Lease obligations obtained in exchange for right-of-use assets – finance (non-cash)1 — 
Future minimum lease payments under non-cancellable lease contracts as of December 31, 2025 are as follows:
TotalLess:
AfterLeaseImputed
(MILLIONS OF DOLLARS)202620272028202920302030PaymentsInterestTotal
Operating leases$60 $51 $41 $29 $21 $83 $285 $(37)$248 
Finance leases$$$$$$$10 $(3)$
v3.25.4
Inventories
12 Months Ended
Dec. 31, 2025
Inventory Disclosure [Abstract]  
Inventories
11. Inventories
The components of inventory follow:
As of December 31,
(MILLIONS OF DOLLARS)20252024
Finished goods$1,106 $996 
Work-in-process962 933 
Raw materials and supplies362 377 
Inventories$2,430 $2,306 
v3.25.4
Property, Plant and Equipment
12 Months Ended
Dec. 31, 2025
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
12. Property, Plant and Equipment
The components of property, plant and equipment follow:
Useful LivesAs of December 31,
(MILLIONS OF DOLLARS)(Years)20252024
Land$33 $28 
Buildings
33
1,549 1,292 
Machinery, equipment and fixtures
3 - 20
3,729 3,353 
Construction-in-progress1,295 1,353 
6,606 6,026 
Less: Accumulated depreciation2,925 2,635 
Property, plant and equipment$3,681 $3,391 
Depreciation expense was $330 million in 2025, $327 million in 2024 and $306 million in 2023.
v3.25.4
Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2025
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets
13. Goodwill and Other Intangible Assets
A. Goodwill
The components of, and changes in, the carrying amount of goodwill follow:
(MILLIONS OF DOLLARS)U.S.InternationalTotal
Balance, December 31, 2023$1,532 $1,227 $2,759 
Other(a)
(17)(18)(35)
Balance, December 31, 2024$1,515 $1,209 $2,724 
Additions(b)
 7 7 
Other(a)
 36 36 
Balance, December 31, 2025$1,515 $1,252 $2,767 
(a)     Includes adjustments for foreign currency translation.
For 2024, also includes adjustments for the derecognition of goodwill of $24 million related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. See Note 5. Acquisitions and Divestitures.
(b)    Relates to the acquisition of Veterinary Pathology Group. See Note 5. Acquisitions and Divestitures.     
The gross goodwill balance was $3,303 million as of December 31, 2025 and $3,260 million as of December 31, 2024. Accumulated goodwill impairment losses were $536 million as of December 31, 2025 and 2024.
B. Other Intangible Assets
The components of identifiable intangible assets follow:
As of December 31, 2025As of December 31, 2024
IdentifiableIdentifiable
GrossIntangible Assets,GrossIntangible Assets,
CarryingAccumulatedLess AccumulatedCarryingAccumulatedLess Accumulated
(MILLIONS OF DOLLARS)AmountAmortizationAmortizationAmountAmortizationAmortization
Finite-lived intangible assets:
Developed technology rights$1,932 $(1,342)$590 $1,891 $(1,175)$716 
Brands and tradenames362 (250)112 367 (246)121 
Other292 (210)82 278 (197)81 
Total finite-lived intangible assets2,586 (1,802)784 2,536 (1,618)918 
Indefinite-lived intangible assets:
Brands and tradenames67  67 66 — 66 
In-process research and development141  141 136 — 136 
Product rights6  6 — 
Total indefinite-lived intangible assets214  214 209 — 209 
Identifiable intangible assets$2,800 $(1,802)$998 $2,745 $(1,618)$1,127 
Developed Technology Rights
Developed technology rights represent the amortized cost associated with developed technology, which has been acquired from third parties and which can include the right to develop, use, market, sell and/or offer for sale the product, compounds and intellectual property that we have acquired with respect to products, compounds and/or processes that have been completed. These assets include technologies related to the care and treatment of dogs, cats, horses, cattle, swine, poultry, fish and sheep.
Brands and Tradenames
Brands and tradenames represent the amortized or unamortized cost associated with product name recognition, as the products themselves do not receive patent protection. The most significant finite-lived brands and tradenames are related to Abaxis, Platinum Performance, and Lutalyse. The most significant indefinite-lived brands and tradenames were acquired from SmithKlineBeecham and the Linco family of products.
In-Process Research and Development
IPR&D assets represent R&D assets that have not yet received regulatory approval in a major market. The majority of these IPR&D assets were acquired in connection with our acquisition of two research and development stage animal health biopharmaceutical companies, PetMedix and adivo.
IPR&D assets are required to be classified as indefinite-lived assets until the successful completion or abandonment of the associated R&D effort. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until approval is obtained in a major market, typically either the U.S., U.K. or the EU, or in a series of other countries, subject to certain specified conditions and management judgment. At that time, we will determine the useful life of the asset, reclassify the asset out of IPR&D and begin amortization. If the associated R&D effort is abandoned, the related IPR&D assets will be written-off and we will record an impairment charge.
There can be no certainty that IPR&D assets ultimately will yield a successful product.
Product Rights
Product rights represent product registration and application rights.
C. Amortization
The weighted average life of our total finite-lived intangible assets is approximately 7.7 years. Total amortization expense for finite-lived intangible assets was $157 million in 2025, $170 million in 2024 and $185 million in 2023.
The annual amortization expense expected for the years 2026 through 2030 is as follows:
(MILLIONS OF DOLLARS)20262027202820292030
Amortization expense$152 $148 $119 $82 $71 
v3.25.4
Benefit Plans
12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Benefit Plans
14. Benefit Plans
Pension expense associated with the U.S. and certain significant international locations totaled $6 million in 2025, $7 million in 2024 and $6 million in 2023.
A.    International Pension Plans
Information about the dedicated pension plans is provided in the tables below.
Obligations and Funded Status––Dedicated Plans
The following table provides an analysis of the changes in the benefit obligations, plan assets and funded status of our dedicated pension plans (including those transferred to us):
As of and for the
Year Ended December 31,
(MILLIONS OF DOLLARS)20252024
Change in benefit obligation:
Projected benefit obligation, beginning$136 $129 
Service cost6 
Interest cost5 
Changes in actuarial assumptions and other(5)
Settlements and curtailments(2)(2)
Benefits paid(5)(4)
Adjustments for foreign currency translation11 (5)
Other––net(1)(1)
Benefit obligation, ending145 136 
Change in plan assets:
Fair value of plan assets, beginning94 86 
Actual return on plan assets4 12 
Company contributions6 
Settlements and curtailments(2)(3)
Benefits paid(5)(4)
Adjustments for foreign currency translation6 (3)
Fair value of plan assets, ending103 94 
Funded status—Projected benefit obligation in excess of plan assets at end of year(a)
$(42)$(42)
(a) Included in Other noncurrent liabilities.
Changes in the benefit obligation resulted in a net gain of $5 million in 2025 and a net loss of $9 million in 2024.
Actuarial gains were $7 million ($4 million, net of tax) at December 31, 2025 and $3 million ($2 million, net of tax) at December 31, 2024. The actuarial gains and losses primarily represent the cumulative difference between the actuarial assumptions and actual return on plan assets, changes in discount rates and changes in other assumptions used in measuring the benefit obligations. These actuarial gains and losses are recognized in Accumulated other comprehensive loss. The actuarial losses will be amortized into net periodic benefit costs over an average period of 10.3 years.
Information related to the funded status of selected plans follows:
As of December 31,
(MILLIONS OF DOLLARS)20252024
Pension plans with an accumulated benefit obligation in excess of plan assets:
Fair value of plan assets$10 $
Accumulated benefit obligation53 50 
Pension plans with a projected benefit obligation in excess of plan assets:
Fair value of plan assets10 
Projected benefit obligation59 55 
Net Periodic Benefit Costs––Dedicated Plans
The following table provides the net periodic benefit cost associated with dedicated pension plans (including those transferred to us):
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Service cost$6 $$
Interest cost5 
Expected return on plan assets(5)(4)(4)
Settlement and curtailments (gains) / losses — 
Net periodic benefit cost$6 $$
Actuarial Assumptions––Dedicated Plans
The following table provides the weighted average actuarial assumptions for the dedicated pension plans (including those transferred to us):
As of December 31,
(PERCENTAGES)202520242023
Weighted average assumptions used to determine benefit obligations:
Discount rate4.1 %3.5 %4.2 %
Rate of compensation increase3.6 %3.5 %3.6 %
Cash balance credit interest rate2.0 %1.7 %1.6 %
Weighted average assumptions used to determine net benefit cost for the year ended December 31:
Discount rate3.5 %4.2 %3.7 %
Expected return on plan assets4.9 %4.6 %4.7 %
Rate of compensation increase3.5 %3.6 %3.5 %
Cash balance credit interest rate1.7 %1.6 %1.7 %
The assumptions above are used to develop the benefit obligations at the end of the year and to develop the net periodic benefit cost for the following year. Therefore, the assumptions used to determine the net periodic benefit cost for each year are established at the end of each previous year, while the assumptions used to determine the benefit obligations are established at each year-end. The net periodic benefit cost and the benefit obligations are based on actuarial assumptions that are reviewed on an annual basis. The assumptions are revised based on an annual evaluation of long-term trends, as well as market conditions that may have an impact on the cost of providing retirement benefits.
Actuarial and other assumptions for pension plans can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For a description of the risks associated with estimates and assumptions, see Note 3. Significant Accounting Policies—Estimates and Assumptions.
Plan Assets—Dedicated Plans
The components of plan assets follow:
As of December 31,
(MILLIONS OF DOLLARS)20252024
Cash and cash equivalents$2 $
Equity securities: Equity commingled funds40 37 
Debt securities: Government bonds49 46 
Other investments12 10 
Total(a)
$103 $94 
(a)    Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 3. Significant Accounting Policies—Fair Value). Investment plan assets are valued using Level 1 or Level 2 inputs.
A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Note 3. Significant Accounting Policies—Estimates and Assumptions.
Specifically, the following methods and assumptions were used to estimate the fair value of our pension assets:
•    Equity commingled funds––observable market prices (Level 1).
•    Government bonds and other investments––principally observable market prices (Level 2).
The long-term target asset allocations and the percentage of the fair value of plans assets for dedicated benefit plans follow:
As of December 31,
Target allocation
percentagePercentage of Plan Assets
(PERCENTAGES)202520252024
Cash and cash equivalents
0-10%
1.9 %1.4 %
Equity securities
0-60%
39.0 %39.2 %
Debt securities
15-100%
47.3 %48.4 %
Other investments
0-100%
11.8 %11.0 %
Total
100%
100 %100 %
Zoetis utilizes long-term asset allocation ranges in the management of our plans’ invested assets. Long-term return expectations are developed with input from outside investment consultants based on the company’s investment strategy, which takes into account historical experience, as well as the impact of portfolio diversification, active portfolio management, and the investment consultant’s view of current and future economic and financial market conditions. As market conditions and other factors change, the targets may be adjusted accordingly and actual asset allocations may vary from the target allocations.
The long-term asset allocation ranges reflect the asset class return expectations and tolerance for investment risk within the context of the respective plans’ long-term benefit obligations. These ranges are supported by an analysis that incorporates historical and expected returns by asset class, as well as volatilities and correlations across asset classes and our liability profile. This analysis, referred to as an asset-liability analysis, also provides an estimate of expected returns on plan assets, as well as a forecast of potential future asset and liability balances.
The investment consultants review investment performance with Zoetis on a quarterly basis in total, as well as by asset class, relative to one or more benchmarks.
Cash Flows—Dedicated Plans
Our plans are generally funded in amounts that are at least sufficient to meet the minimum requirements set forth in applicable employee benefit laws and local tax and other laws.
We expect to contribute approximately $8 million to our dedicated pension plans in 2026. Benefit payments are expected to be approximately $10 million for 2026, $8 million for 2027, $7 million for 2028, $14 million for 2029 and $13 million for 2030. Benefit payments are expected to be approximately $61 million in the aggregate for the five years thereafter. These expected benefit payments reflect the future plan benefits subsequent to 2026 projected to be paid from the plans or from the general assets of Zoetis entities under the current actuarial assumptions used for the calculation of the projected benefit obligation and, therefore, actual benefit payments may differ from projected benefit payments.
B.    Postretirement Plans
Postretirement benefit expense associated with these U.S. retiree medical plans totaled $0 million per year in 2025, 2024, and 2023.
C.    Defined Contribution Plans
Zoetis has a voluntary defined contribution plan, the Zoetis Savings Plan (ZSP) that allows participation by substantially all U.S. employees. Zoetis matches 100% of employee contributions, up to a maximum of 5% of each employee’s eligible compensation. The ZSP also includes a profit-sharing feature that provides for an additional contribution ranging between 0 and 8 percent of each employee’s eligible compensation. All eligible employees receive the profit-sharing contribution regardless of the amount they choose to contribute to the ZSP. The profit-sharing contribution is a discretionary amount provided by Zoetis and is determined on an annual basis. Employees can direct their contributions and the company's matching and profit-sharing contributions into any of the funds offered. These funds provide participants with a cross section of investing options, including the Zoetis stock fund. The matching and profit-sharing contributions are cash funded.
Employees are permitted to diversify all or any portion of their company matching or profit-sharing contribution. Once the contributions have been paid, Zoetis has no further payment obligations. Contribution expense, associated with the ZSP, totaled $77 million in 2025, $79 million in 2024 and $69 million in 2023.
Employees in the U.S. who meet certain eligibility requirements participate in a supplemental (non-qualified) savings plan sponsored by Zoetis. The cost/(benefit) of the supplemental savings plan was $4 million in 2025, $3 million in 2024 and $11 million in 2023. Benefit payments for this plan are expected to be approximately $5 million in 2026 and $42 million thereafter.
v3.25.4
Share-Based Payments
12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Share-Based Payments
15. 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.
Thirty million shares of stock were approved and registered with the Securities and Exchange Commission for grants to participants under the Equity Plan. The shares reserved may be used for any type of award under the Equity Plan. At December 31, 2025, the aggregate number of remaining shares available for future grant under the Equity Plan was approximately 12 million shares.
A. Share-Based Compensation Expense
The components of share-based compensation expense follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Stock options / stock appreciation rights$12 $11 $
RSUs / DSUs52 42 37 
PSUs19 21 15 
Share-based compensation expense—total(a)
$83 $74 $60 
Tax benefit for share-based compensation expense(10)(9)(8)
Share-based compensation expense, net of tax$73 $65 $52 
(a)    For each of the years ended December 31, 2025, 2024 and 2023, we capitalized up to $1 million of share-based compensation expense to inventory.
B. Stock Options
Stock options represent the right to purchase shares of our common stock within a specified period of time at a specified price. The exercise price for a stock option will be not less than 100% of the fair market value of the common stock as of the NYSE market close on the date of grant. Stock options granted may include those intended to be “incentive stock options” within the meaning of Section 422 of the U.S. Internal Revenue Code of 1986 (the Code).
Stock options are accounted for using a fair-value-based method at the date of grant in the Consolidated Statements of Income. The values determined through this fair-value-based method generally are amortized on a straight-line basis over the vesting term.
Eligible employees may receive Zoetis stock option awards. Zoetis stock option awards 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 while stock option awards granted in and after 2023 are subject to graded vesting over three years from the date of grant and have a contractual term of 10 years.
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 noted in the following table, shown at their weighted-average values:
Year Ended December 31,
202520242023
Expected dividend yield(a)
1.27 %0.87 %0.92 %
Risk-free interest rate(b)
4.38 %4.06 %3.84 %
Expected stock price volatility(c)
26.42 %26.99 %28.63 %
Expected term(d) (years)
4.34.14.2
(a)    Determined using a constant dividend yield during the expected term of the Zoetis stock option.
(b)     Determined using the interpolated yield on U.S. Treasury zero-coupon issues.
(c)     Determined using an equal weighting between historical volatility of the Zoetis stock price and implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends.
(d)     Determined using expected exercise and post-vesting termination patterns.
The following table provides an analysis of stock option activity for the year ended December 31, 2025:
Weighted-Average Remaining Contractual Term
(Years)
Aggregate Intrinsic Value(a)
(Millions)
Weighted-Average
Exercise Price
Shares
Outstanding, December 31, 20241,447,949 $143.83 
Granted320,498 156.80 
Exercised(111,374)85.26 
Forfeited(78,289)179.64 
Outstanding, December 31, 20251,578,784 $148.82 5.9$18,853,364 
Exercisable, December 31, 20251,046,676 $138.76 4.6$18,853,364 
(a)    Market price of underlying Zoetis common stock less exercise price.
As of December 31, 2025, there was approximately $10 million of unrecognized compensation costs related to nonvested stock options, which will be recognized over an expected remaining weighted-average period of ten months.
The following table summarizes data related to stock option activity:
Year Ended/As of December 31,
(MILLIONS OF DOLLARS, EXCEPT PER STOCK OPTION AMOUNTS)202520242023
Weighted-average grant date fair value per stock option$40.22 $50.77 $43.56 
Aggregate intrinsic value on exercise8 40 81 
Cash received upon exercise9 20 42 
Tax benefits realized related to exercise 8 17 17 
C. Restricted Stock Units (RSUs)
Restricted stock units represent the right to receive a share of our common stock that is subject to a risk of forfeiture until the restrictions lapse at the end of the vesting period subject to the recipient's continued employment. RSUs accrue dividend equivalent units and are paid in shares of our common stock upon vesting (or cash determined by reference to the value of our common stock).
RSUs are accounted for using a fair-value-based method that utilizes the closing price of Zoetis common stock on the date of grant. Zoetis RSUs granted prior to 2023 generally vest after three years of continuous service from the grant date while RSUs granted in and after 2023 are subject to graded vesting over three years. These values are amortized on a straight-line basis over the vest terms.
The following table provides an analysis of RSU activity for the year ended December 31, 2025:
Weighted-Average
RSUsGrant Date Fair Value
Nonvested, December 31, 2024556,106 $187.61 
Granted594,287 156.29 
Vested(334,042)189.70 
Reinvested dividend equivalents9,929 167.44 
Forfeited(51,599)169.77 
Nonvested, December 31, 2025774,681 $163.56 
As of December 31, 2025, there was approximately $77 million of unrecognized compensation costs related to nonvested RSUs, which will be recognized over an expected remaining weighted-average period of twelve months.
D. Deferred Stock Units (DSUs)
Deferred stock units, which were granted to non-employee compensated Directors in 2013 and 2014, represent the right to receive shares of our common stock at a future date. The DSU awards will be automatically settled and paid in shares within 60 days following the Director’s separation from service on the Board of Directors.
DSUs are accounted for using a fair-value-based method that utilizes the closing price of Zoetis common stock on the date of grant. DSUs vested immediately as of the grant date and the values were expensed at the time of grant into Selling, general and administrative expenses.
For the years ended December 31, 2025 and 2024, there were no DSUs granted. As of December 31, 2025 and 2024, there were 57,100 and 66,318 DSUs outstanding, respectively, including dividend equivalents.
E. Performance-Vesting Restricted Stock Units (PSUs)
Performance-vesting restricted stock units, which are granted to eligible senior management, represent the right to receive a share of our common stock that is subject to a risk of forfeiture until the restrictions lapse, which include continued employment through the end of the vesting period and the attainment of performance goals. PSUs represent the right to receive shares of our common stock in the future (or cash determined by reference to the value of our common stock).
PSUs are accounted for using a Monte Carlo simulation model. Beginning in 2025, the units underlying the PSUs will be earned and vested over a three-year performance period as measured by two metrics, each of which is 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 the company's three-year average annual operational revenue growth ("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, in 2025, and the Monte Carlo weighted-average fair value was estimated based on volatility assumptions of Zoetis common stock and an average of peer companies which were 26.2% and 30.6%, respectively, in 2024. Depending on the company’s Relative TSR performance and the company's revenue growth performance at the end of the performance period, the recipient may earn between 0% and 200% of the target number of units. Vested units, including dividend equivalent units, are paid in shares of the company’s common stock. PSU values are amortized on a straight-line basis over the vesting term.
The following table provides an analysis of PSU activity for the year ended December 31, 2025:
Weighted-Average
PSUsGrant Date Fair Value
Nonvested, December 31, 2024256,567 $248.68 
Granted148,130 171.21 
Vested(79,630)236.20 
Reinvested dividend equivalents4,050 222.23 
Forfeited(26,654)232.41 
Nonvested, December 31, 2025302,463 $215.08 
Shares issued, December 31, 2025
742 $245.07 
As of December 31, 2025, there was approximately $27 million of unrecognized compensation costs related to nonvested PSUs, which will be recognized over an expected remaining weighted-average period of 1.3 years.
F. Other Equity-Based or Cash-Based Awards
Our Compensation Committee is authorized to grant awards in the form of other equity-based awards or other cash-based awards, as deemed to be consistent with the purposes of the Equity Plan.
v3.25.4
Stockholders' Equity
12 Months Ended
Dec. 31, 2025
Equity, Attributable to Parent [Abstract]  
Stockholders' Equity
16. 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 December 31, 2025, there was $2.4 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 interest, follow:
Currency Translation AdjustmentsBenefit PlansAccumulated Other
Cash Flow Net InvestmentOther CurrencyActuarialComprehensive
(MILLIONS OF DOLLARS)HedgesHedgesTranslation Adj(Losses)/GainsLoss
Balance, December 31, 2022$90 $41 $(944)$(4)$(817)
Other comprehensive (loss)/gain, net of tax(5)(23)— 

(22)
Balance, December 31, 202385 18 (944)(839)
Other comprehensive gain/(loss), net of tax44 (147)(2)(101)
Balance, December 31, 202489 62 (1,091)— (940)
Other comprehensive (loss)/gain, net of tax(19)(101)224 2 

106 
Balance, December 31, 2025$70 $(39)$(867)$2 $(834)
v3.25.4
Earnings Per Share
12 Months Ended
Dec. 31, 2025
Earnings Per Share [Abstract]  
Earnings per Share
17. Earnings per Share
The following table presents the calculation of basic and diluted earnings per share:
Year Ended December 31,
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)202520242023
Numerator
Net income before allocation to noncontrolling interests$2,673 $2,496 $2,340 
Less: net income/(loss) attributable to noncontrolling interests 10 (4)
Net income attributable to Zoetis Inc.$2,673 $2,486 $2,344 
Denominator
Weighted-average common shares outstanding443.443 454.200 461.172 
Common stock equivalents: stock options, RSUs, DSUs and PSUs0.392 0.648 1.097 
Weighted-average common and potential dilutive shares outstanding443.835 454.848 462.269 
Earnings per share attributable to Zoetis Inc. stockholders—basic$6.03 $5.47 $5.08 
Earnings per share attributable to Zoetis Inc. stockholders—diluted$6.02 $5.47 $5.07 
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 years ended December 31, 2025, 2024 and 2023.
For the convertible senior notes, we are required to settle the principal amount in cash and any conversion premium in excess of the principal amount in cash, shares of common stock, or a combination of cash and shares of common stock, at our election. As such, the convertible senior notes only have an impact on diluted earnings per share when the average share price of our common stock exceeds the conversion price. See Note 9. Financial Instruments.
v3.25.4
Commitments and Contingencies
12 Months Ended
Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
18. 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. Tax Matters.
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. Currently, the parties, the prosecutor, the Municipality and their respective technical teams are collaborating to develop a plan to evaluate potential options for waste removal from the site and disposal.
B. Guarantees and Indemnifications
In the ordinary course of business and in connection with the sale of assets and businesses, we indemnify our counterparties against certain liabilities that may arise in connection with the transaction or related to activities prior to the transaction. These indemnifications typically pertain to environmental, tax, employee and/or product-related matters and patent-infringement claims. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to reimburse the loss. These indemnifications are generally subject to threshold amounts, specified claim periods and other restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of December 31, 2025, recorded amounts for the estimated fair value of these indemnifications were not material.
C. Purchase Commitments
As of December 31, 2025, we have agreements totaling $427 million to purchase goods and services, as well as commitments for capital expenditures, that are enforceable and legally binding and include amounts relating to contract manufacturing and information technology services deemed reasonably likely to occur. Payments for these obligations are expected to be approximately $243 million in 2026 and $184 million thereafter.
v3.25.4
Segment Information
12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
Segment Information
19. Segment Information
A. Segment Information
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. Acquisitions and Divestitures.
Operating Segments
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 CSS 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 activities, 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, 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. Total assets were approximately $15.5 billion and $14.2 billion at December 31, 2025 and 2024, respectively.
Selected Statement of Income Information                                
Earnings
Depreciation and Amortization(a)
Year Ended December 31,Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023202520242023
U.S.
Revenue$5,097 $5,074 $4,555 
Cost of Sales842 936 900 
Gross Profit4,255 4,138 3,655 
    Gross Margin83.5 %81.6 %80.2 %
Operating expenses(b)
817 805 786 
Other (income)/deductions-net (3)
U.S. Earnings3,438 3,336 2,863 $93 $85 $80 
International
Revenue(c)
4,254 4,102 3,911 
Cost of Sales1,312 1,312 1,234 
Gross Profit2,942 2,790 2,677 
    Gross Margin69.2 %68.0 %68.4 %
Operating expenses(b)
677 671 638 
Other (income)/deductions-net1 
International Earnings2,264 2,118 2,037 100 96 92 
Total operating segments5,702 5,454 4,900 193 181 172 
Other business activities
(562)(562)(496)51 43 33 
Reconciling Items:
Corporate
(1,240)(1,213)(1,042)110 128 128 
Purchase accounting adjustments
(128)(140)(159)128 140 153 
Acquisition and divestiture-related costs
(2)(18)(9) — — 
Certain significant items(d)
(82)(79)33  — — 
Other unallocated
(328)(309)(291)5 
Total Earnings(e)
$3,360 $3,133 $2,936 $487 $497 $491 
(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 $998 million in 2025, $937 million in 2024 and $853 million in 2023.
(d)    For 2025, certain significant items primarily consisted of costs related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, costs related to our multi-year business process transformation program, which includes the implementation of a new enterprise resource planning (ERP) system, related digital technology solutions and other related costs, as well as employee termination costs related to organizational structure refinements.
For 2024, certain significant items primarily consisted of employee termination costs related to organizational structure refinements, a net loss related to the sale
of our medicated feed additive product portfolio, certain water soluble products and related assets, as well as asset impairment charges related to our aquaculture business, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
For 2023, certain significant items primarily consisted of a gain on the sale of a majority interest in our pet insurance business of $101 million, partially offset by employee termination and exit costs related to organizational structure refinements of $43 million and certain asset impairment charges primarily related to our precision animal health and diagnostics businesses of $24 million.
(e)    Defined as income before provision for taxes on income.
B. Geographic Information
Property, plant and equipment, less accumulated depreciation, by geographic region follow:
As of December 31,
(MILLIONS OF DOLLARS)20252024
U.S.$2,456 $2,249 
International1,225 1,142 
Property, plant and equipment, less accumulated depreciation$3,681 $3,391 
v3.25.4
Schedule II - Valuation and Qualifying Accounts
12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Schedule II - Valuation and Qualifying Accounts
Schedule II—Valuation and Qualifying Accounts
Balance,Balance,
Beginning ofEnd of
(MILLIONS OF DOLLARS)PeriodAdditionsDeductionsPeriod
Year Ended December 31, 2025
Allowance for doubtful accounts$18 $ $(2)$16 
Year Ended December 31, 2024
Allowance for doubtful accounts$18 $$(3)$18 
Year Ended December 31, 2023
Allowance for doubtful accounts$19 $— $(1)$18 
v3.25.4
Insider Trading Arrangements
3 Months Ended
Dec. 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
v3.25.4
Insider Trading Policies and Procedures
12 Months Ended
Dec. 31, 2025
Insider Trading Policies and Procedures [Line Items]  
Insider Trading Policies and Procedures Adopted true
v3.25.4
Cybersecurity Risk Management and Strategy Disclosure
12 Months Ended
Dec. 31, 2025
Cybersecurity Risk Management, Strategy, and Governance [Line Items]  
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]
As a global leader in animal health, we are reliant on complex information systems and digital solutions that make us inherently vulnerable to malicious cyber intrusion and attack. In addition, we have expanded our data and digital capabilities including in our diagnostics portfolio, and as a result, there could be an increased likelihood of a cyberattack or breach of security that could negatively impact us or our customers. Despite the presence of these risks, to date, the identified risks of cybersecurity threats (including as a result of any previous cybersecurity incidents) have not materially affected us or our business strategy, results of operations, or financial condition. For a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see our risk factors under Part 1. Item 1A. Risk Factors in this Annual Report on Form 10-K.
Cybersecurity Program
As part of our risk management processes, we have an enterprise-wide cybersecurity program aligned to the NIST Cybersecurity Framework (CSF). Our program is a risk-based program designed to protect our information systems through multiple defenses and layers of security, commonly referred to as a “Defense in Depth” approach. Key elements of our program include:
Independent Third-Party Assessments
We engage an independent third party to conduct comprehensive assessments of our cybersecurity program approximately every 18 months. This independent third-party assessment includes an evaluation of our cybersecurity controls based on the CSF.
Training
We have an information security training program that includes: monthly awareness articles, a phishing training program (with reports reviewed by the Executive Team), and both required and optional training modules for our employees and contractors in our Learning Management System.
Incident Response Procedure
We have a 24/7 managed Security Operations Center (SOC) for escalation of any critical events, including cybersecurity incidents. In the event of an incident, we use an Incident Response procedure leveraging NIST Standard 800-61 standards that we have customized for Zoetis. Additionally, we have in place disaster recovery and business continuity practices designed to provide for continuous business operations for our customers in the event of a cybersecurity incident. While we maintain cybersecurity insurance coverage, the costs related to cybersecurity threats or disruptions may not be fully insured.
Third Party Onboarding
We depend on third parties and applications on virtualized (cloud) infrastructure to operate and support our information systems and have a third-party risk management program and assessment process for onboarding third parties.
Cybersecurity Risk Management Processes Integrated [Flag] true
Cybersecurity Risk Management Processes Integrated [Text Block]
As part of our risk management processes, we have an enterprise-wide cybersecurity program aligned to the NIST Cybersecurity Framework (CSF). Our program is a risk-based program designed to protect our information systems through multiple defenses and layers of security, commonly referred to as a “Defense in Depth” approach. Key elements of our program include:
Independent Third-Party Assessments
We engage an independent third party to conduct comprehensive assessments of our cybersecurity program approximately every 18 months. This independent third-party assessment includes an evaluation of our cybersecurity controls based on the CSF.
Training
We have an information security training program that includes: monthly awareness articles, a phishing training program (with reports reviewed by the Executive Team), and both required and optional training modules for our employees and contractors in our Learning Management System.
Incident Response Procedure
We have a 24/7 managed Security Operations Center (SOC) for escalation of any critical events, including cybersecurity incidents. In the event of an incident, we use an Incident Response procedure leveraging NIST Standard 800-61 standards that we have customized for Zoetis. Additionally, we have in place disaster recovery and business continuity practices designed to provide for continuous business operations for our customers in the event of a cybersecurity incident. While we maintain cybersecurity insurance coverage, the costs related to cybersecurity threats or disruptions may not be fully insured.
Third Party Onboarding
We depend on third parties and applications on virtualized (cloud) infrastructure to operate and support our information systems and have a third-party risk management program and assessment process for onboarding third parties.
Cybersecurity Risk Management Third Party Engaged [Flag] true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] false
Cybersecurity Risk Board of Directors Oversight [Text Block]
Management’s Role in Risk Oversight
Our information security team includes our Executive Vice President, Chief Digital & Technology Officer and our Chief Information Security Officer. Our Executive Vice President, Chief Digital & Technology Officer has over 20 years of information technology experience. Prior to Zoetis, he was the VP, Information Technology at Biogen, overseeing all aspects of Infrastructure, IT Operations, and Enterprise Architecture globally and held various corporate leadership roles at Eli Lilly and Company, including Head of IT Infrastructure and Enabling Functions. He holds a bachelor's degree in information systems and a master of business administration degree. Our Chief Information Security Officer, has over 20 years of experience in Information Security, with a specialized focus on Life Sciences and expertise in aligning cybersecurity strategies with enterprise objectives. He holds a bachelor's degree in electronic commerce and a master's degree in information systems.
We have established a cybersecurity governance program with clear roles for the executive management team as well as oversight by the Board of Directors and the Audit Committee. The Zoetis information security team provides regular cyber threat intelligence briefings to management and provides updates to our senior executives on the status of the Company’s security measures and our efforts to identify and mitigate risks from cybersecurity threats. The Zoetis information security team also works closely with the Zoetis Legal team, including the Chief Compliance Officer, to further enhance incident response procedures. For example, we have a corporate crisis management plan in place to govern our response to corporate crises, which could include cyber incidents, and we conduct periodic simulated programs to ensure readiness. This plan also includes a standard
framework for categorization of incidents based on risk level and severity, and requires escalation to Zoetis senior management and/or the Audit Committee of the Board of Directors if certain severity levels are met.
Role of the Board of Directors and Committees
The Board of Directors maintains an active role in the oversight of material risks. The Board of Directors utilizes its various Committees to oversee certain key risks, and has delegated responsibility to the Audit Committee for oversight of the Company’s enterprise risk management process and information security risk management program. Management, with oversight from the Zoetis Board of Directors, is responsible for the Company’s assessment and management of exposure to risk. The Audit Committee of the Board of Directors is also responsible for oversight of compliance with disclosure requirements under applicable laws and regulations, and would be consulted prior to the disclosure of any material cybersecurity incident.
The Zoetis information security team regularly provides an information security dashboard to the Audit Committee, covering the most active and relevant threats to Zoetis, relevant trends, and any notable events. The Zoetis information security team regularly presents updates to the Audit Committee with respect to the information security program, including the status of our security measures and our efforts to identify and mitigate information security risks. The Audit Committee also regularly reviews certain data privacy and cybersecurity metrics as part of the compliance update presented to the Audit Committee.
In addition, the Chief Information Security Officer presents updates at least annually to the Board of Directors with respect to the information security program, including the results of our independent, third-party assessment. The Board of Directors also participates in periodic table-top exercises involving simulated data security incidents and the Company’s responses to those incidents.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] The Board of Directors utilizes its various Committees to oversee certain key risks, and has delegated responsibility to the Audit Committee for oversight of the Company’s enterprise risk management process and information security risk management program. Management, with oversight from the Zoetis Board of Directors, is responsible for the Company’s assessment and management of exposure to risk. The Audit Committee of the Board of Directors is also responsible for oversight of compliance with disclosure requirements under applicable laws and regulations, and would be consulted prior to the disclosure of any material cybersecurity incident.
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] The Zoetis information security team regularly presents updates to the Audit Committee with respect to the information security program, including the status of our security measures and our efforts to identify and mitigate information security risks. The Audit Committee also regularly reviews certain data privacy and cybersecurity metrics as part of the compliance update presented to the Audit Committee.
In addition, the Chief Information Security Officer presents updates at least annually to the Board of Directors with respect to the information security program, including the results of our independent, third-party assessment. The Board of Directors also participates in periodic table-top exercises involving simulated data security incidents and the Company’s responses to those incidents.
Cybersecurity Risk Role of Management [Text Block]
Our information security team includes our Executive Vice President, Chief Digital & Technology Officer and our Chief Information Security Officer. Our Executive Vice President, Chief Digital & Technology Officer has over 20 years of information technology experience. Prior to Zoetis, he was the VP, Information Technology at Biogen, overseeing all aspects of Infrastructure, IT Operations, and Enterprise Architecture globally and held various corporate leadership roles at Eli Lilly and Company, including Head of IT Infrastructure and Enabling Functions. He holds a bachelor's degree in information systems and a master of business administration degree. Our Chief Information Security Officer, has over 20 years of experience in Information Security, with a specialized focus on Life Sciences and expertise in aligning cybersecurity strategies with enterprise objectives. He holds a bachelor's degree in electronic commerce and a master's degree in information systems.
We have established a cybersecurity governance program with clear roles for the executive management team as well as oversight by the Board of Directors and the Audit Committee. The Zoetis information security team provides regular cyber threat intelligence briefings to management and provides updates to our senior executives on the status of the Company’s security measures and our efforts to identify and mitigate risks from cybersecurity threats. The Zoetis information security team also works closely with the Zoetis Legal team, including the Chief Compliance Officer, to further enhance incident response procedures. For example, we have a corporate crisis management plan in place to govern our response to corporate crises, which could include cyber incidents, and we conduct periodic simulated programs to ensure readiness. This plan also includes a standard
framework for categorization of incidents based on risk level and severity, and requires escalation to Zoetis senior management and/or the Audit Committee of the Board of Directors if certain severity levels are met.
Cybersecurity Risk Management Positions or Committees Responsible [Flag] true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block] Our information security team includes our Executive Vice President, Chief Digital & Technology Officer and our Chief Information Security Officer.We have established a cybersecurity governance program with clear roles for the executive management team as well as oversight by the Board of Directors and the Audit Committee. The Zoetis information security team provides regular cyber threat intelligence briefings to management and provides updates to our senior executives on the status of the Company’s security measures and our efforts to identify and mitigate risks from cybersecurity threats. The Zoetis information security team also works closely with the Zoetis Legal team, including the Chief Compliance Officer, to further enhance incident response procedures.
Cybersecurity Risk Management Expertise of Management Responsible [Text Block] Our Executive Vice President, Chief Digital & Technology Officer has over 20 years of information technology experience. Prior to Zoetis, he was the VP, Information Technology at Biogen, overseeing all aspects of Infrastructure, IT Operations, and Enterprise Architecture globally and held various corporate leadership roles at Eli Lilly and Company, including Head of IT Infrastructure and Enabling Functions. He holds a bachelor's degree in information systems and a master of business administration degree. Our Chief Information Security Officer, has over 20 years of experience in Information Security, with a specialized focus on Life Sciences and expertise in aligning cybersecurity strategies with enterprise objectives. He holds a bachelor's degree in electronic commerce and a master's degree in information systems.
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] This plan also includes a standard
framework for categorization of incidents based on risk level and severity, and requires escalation to Zoetis senior management and/or the Audit Committee of the Board of Directors if certain severity levels are met.
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] true
v3.25.4
Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2025
Accounting Policies [Abstract]  
Recently Adopted Accounting Standards and Recently Issued Accounting Standards
Recently Adopted Accounting Standards
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 guidance requires prospective application and permits retrospective application to prior periods presented. We adopted this guidance prospectively as of January 1, 2025, which resulted in additional disclosures in the notes to our consolidated financial statements. Accordingly, prior periods were not retrospectively adjusted. See Note 8. Tax Matters.
Recently Issued Accounting Standards
In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815), to more closely align financial reporting with the economics of an entity’s risk management activities. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The amendments in this ASU should be applied prospectively with an option to adopt the amendments for hedging relationships existing as of the date of adoption. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606). The guidance amendments add a new scope exception in ASC 815 for certain contracts and clarifies the accounting for share-based payments to a customer. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40). The guidance amendments remove all references to a prescriptive and sequential software development method, also referred to as “project stages” throughout Subtopic 350-40, and specify new requirements for determining when to begin capitalization of capitalizable project costs. The amendments in this update are effective for all entities for annual reporting period beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. We are currently evaluating the impact that the new guidance will have on our consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact that the new guidance will have on our notes to the consolidated financial statements.
Estimates and Assumptions
Estimates and Assumptions
In preparing the consolidated financial statements, we use certain estimates and assumptions that affect reported amounts and disclosures, including amounts recorded in connection with acquisitions. These estimates and underlying assumptions can impact all elements of our consolidated financial
statements. For example, in the Consolidated Statements of Income, estimates are used when accounting for deductions from revenue (such as rebates, sales allowances, product returns and discounts), determining cost of sales, allocating cost in the form of depreciation and amortization, and estimating restructuring charges and the impact of contingencies. On the Consolidated Balance Sheets, estimates are used in determining the valuation and recoverability of assets, such as accounts receivables, inventories, fixed assets, goodwill and other identifiable intangible assets, and estimates are used in determining the reported amounts of liabilities, such as taxes payable, uncertain tax positions, benefit obligations, the impact of contingencies, deductions from revenue and restructuring reserves, all of which also impact the Consolidated Statements of Income.
Our estimates are often based on complex judgments, probabilities and assumptions that we believe to be reasonable but that can be inherently uncertain and unpredictable. If our estimates and assumptions are not representative of actual outcomes, our results could be materially impacted.
As future events and their effects cannot be determined with precision, our estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. We are subject to risks and uncertainties that may cause actual results to differ from estimated amounts, such as changes in competition, litigation, legislation and regulations. We regularly evaluate our estimates and assumptions using historical experience and expectations about the future. We adjust our estimates and assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in our consolidated financial statements on a prospective basis unless they are required to be treated retrospectively under relevant accounting standards. It is possible that others, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.
Acquisitions
Acquisitions
Our consolidated financial statements include the operations of acquired businesses from the date of acquisition. We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of acquired in-process research and development (IPR&D) be recorded on the balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. When we acquire net assets that do not constitute a business as defined in U.S. GAAP, no goodwill is recognized.
Amounts recorded for acquisitions can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Leases
Leases
We determine if a contract contains a lease at inception. Leases are recorded as a right of use asset, as of the lease commencement date, in an amount equal to the present value of future payments over the lease term. A corresponding lease liability is also recorded. We have elected not to recognize right of use assets and lease liabilities for short-term leases of vehicles and equipment with a lease term of twelve months or less.
Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. The present value of future payments is discounted using the rate implicit in the lease, when available. When the implicit rate is not available, as is frequently the case with our lease portfolio, the present value is calculated using our incremental borrowing rate, which is determined on the commencement date. The incremental borrowing rate represents the rate of interest that we would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. As we do not borrow on a collateralized basis, our non-collateralized borrowing rate is used as an input in deriving the incremental borrowing rate.
Our lease portfolio primarily consists of operating leases, in which fixed lease payments are recognized on a straight-line basis over the lease term. Operating lease assets are recorded within Operating lease right of use assets with the corresponding operating lease liabilities recorded within Other current liabilities and Operating lease liabilities on the Consolidated Balance Sheets. Finance lease assets are recorded within Other noncurrent assets with the corresponding finance lease liabilities recorded within Other current liabilities and Other noncurrent liabilities on the Consolidated Balance Sheets. Variable payments are recognized in the period incurred. Variable lease payments include real estate taxes and charges for other non-lease services due to lessors that are not dependent on an index or rate and utilization based charges associated with fleet vehicles.
Our real estate and fleet lease contracts may include fixed consideration attributable to both lease and non-lease components, including non-lease services provided by the vendor, which are accounted for as a single fixed minimum payment. For leases of certain classes of machinery and equipment, contract consideration is allocated to lease and non-lease components on the basis of relative standalone price.
Foreign Currency Translation
Foreign Currency Translation
For most of our international operations, local currencies have been determined to be the functional currencies. We translate functional currency assets and liabilities to their U.S. dollar equivalents at exchange rates in effect at the balance sheet date and we translate functional currency income and expense amounts to their U.S. dollar equivalents at average exchange rates for the period. The U.S. dollar effects that arise from changing translation rates are recorded in Other comprehensive income/(loss), net of tax. The effects of converting non-functional currency assets and liabilities into the functional currency are recorded in Other (income)/deductions––net. For operations in highly inflationary economies, we translate monetary items at rates in effect at the balance sheet date, with translation adjustments recorded in Other (income)/deductions––net, and we translate non-monetary items at historical rates.
Revenue, Deductions form Revenue and the Allowance for Doubtful Accounts
Revenue, Deductions from Revenue and the Allowance for Doubtful Accounts
We recognize revenue from product sales when control of the goods has transferred to the customer, which is typically once the goods have shipped and the customer has assumed title. Revenue reflects the total consideration to which we expect to be entitled (i.e., the transaction price), in exchange for products sold, after considering various types of variable consideration including rebates, sales allowances, product returns and discounts.
Variable consideration is estimated and recorded at the time that related revenue is recognized. Our estimates reflect the amount by which we expect variable consideration to impact revenue recognized and are generally based on contractual terms or historical experience, adjusted as necessary to reflect our expectations about the future. Our customer payment terms generally range from 30 to 90 days.
Estimates of variable consideration utilize a complex series of judgments and assumptions to determine the amount by which we expect revenue to be reduced, for example;
for sales returns, we perform calculations in each market that incorporate the following, as appropriate: local returns policies and practices; historic returns as a percentage of revenue; estimated shelf life by product; an estimate of the amount of time between shipment and return or lag time; and any other factors that could impact the estimate of future returns, product recalls, discontinuation of products or a changing competitive environment; and
for revenue incentives, we use our historical experience with similar incentives programs to estimate the impact of such programs on revenue for the current period.
Although the amounts recorded for these deductions from revenue are dependent on estimates and assumptions, historically our adjustments to actual results have not been material. The sensitivity of our estimates can vary by program, type of customer and geographic location.
Accruals for deductions from revenue are recorded as either a reduction in Accounts receivable or within Accrued expenses, depending on the nature of the contract and method of expected payment. Amounts recorded as a reduction in Accounts receivable as of December 31, 2025 and 2024 are approximately $260 million and $257 million, respectively. As of December 31, 2025, and 2024, accruals for deductions from revenue included in Accrued expenses are approximately $395 million and $344 million, respectively.
A deferral of revenue may be required in the event that we have not satisfied all customer obligations for which we have been compensated. The transaction price is allocated to the individual performance obligations on the basis of relative stand-alone selling price, which is typically based on actual sales prices. Revenue associated with unsatisfied performance obligations are contract liabilities is recorded within Other current liabilities and Other noncurrent liabilities. Recognition of revenue occurs once control of the underlying products has transferred to the customer. Contract liabilities reflected within Other current liabilities as of December 31, 2024 and subsequently recognized as revenue during 2025 were approximately $11 million. Contract liabilities as of December 31, 2025 were approximately $17 million.
We do not disclose the transaction price allocated to unsatisfied performance obligations related to contracts with an original expected duration of one year or less, or for contracts for which we recognize revenue in line with our right to invoice the customer. Estimated future revenue expected to be generated from long-term contracts with unsatisfied performance obligations as of December 31, 2025 is not material.
Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenue. Shipping and handling costs incurred after control of the purchased product has transferred to the customer are accounted for as a fulfillment cost, within Selling, general and administrative expenses.
We also record estimates for bad debts. We periodically assess the adequacy of the allowance for doubtful accounts by evaluating the collectability of outstanding receivables based on factors such as past due history, historical and expected collection patterns, the financial condition of our customers, the robust nature of our credit and collection practices and the economic environment.
Amounts recorded for sales deductions and bad debts can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Cost of Sales and Inventories
Cost of Sales and Inventories
Inventories are carried at the lower of cost or net realizable value. The cost of finished goods, work-in-process and raw materials is determined using average actual cost. We regularly review our inventories for impairment and adjustments are recorded when necessary.
Selling, General and Administrative Expenses
Selling, General and Administrative Expenses
Selling, general and administrative costs are expensed as incurred. Among other things, these expenses include the internal and external costs of marketing, advertising, and shipping and handling as well as certain costs related to business technology, facilities, legal, finance, human resources, business development, public affairs and procurement, among others.
Advertising expenses relating to production costs are expensed as incurred, and the costs of space in publications are expensed when the related advertising occurs. Advertising and promotion expenses totaled approximately $308 million in 2025, $302 million in 2024 and $281 million in 2023.
Shipping and handling costs totaled approximately $102 million in 2025, $107 million in 2024 and $101 million in 2023.
Research and Development Expenses
Research and Development Expenses
Research and development (R&D) costs are expensed as incurred. Research is the effort associated with the discovery of new knowledge that will be useful in developing a new product or in significantly improving an existing product. Development is the implementation of the research findings. Before a compound receives regulatory approval, we record upfront and milestone payments made by us to third parties under licensing arrangements as expense. Upfront payments are recorded when incurred, and milestone payments are recorded when the specific milestone has been achieved. Once a compound receives regulatory approval in a major market, we record any milestone payments in Identifiable intangible assets, less accumulated amortization and, unless the assets are determined to have an indefinite life, we amortize them on a straight-line basis over the remaining agreement term or the expected product life cycle, whichever is shorter.
Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets
Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets
Long-lived assets include:
•    Goodwill—goodwill represents the excess of the consideration transferred for an acquired business over the assigned values of its net assets. Goodwill is not amortized.
•    Identifiable intangible assets, less accumulated amortization—these acquired assets are recorded at our cost. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. Identifiable intangible assets with indefinite lives that are associated with marketed products are not amortized until a useful life can be determined. Identifiable intangible assets associated
with IPR&D projects are not amortized until regulatory approval is obtained. The useful life of an amortizing asset generally is determined by identifying the period in which substantially all of the cash flows are expected to be generated.
•    Property, plant and equipment, less accumulated depreciation––these assets are recorded at our cost and are increased by the cost of any significant improvements after purchase. Property, plant and equipment assets, other than land and construction-in-progress, are depreciated on a straight-line basis over the estimated useful life of the individual assets. Depreciation begins when the asset is ready for its intended use. For tax purposes, accelerated depreciation methods are used as allowed by tax laws.
Amortization expense related to finite-lived identifiable intangible assets that contribute to our ability to sell, manufacture, research, market and distribute products, compounds and intellectual property are included in Amortization of intangible assets as they benefit multiple business functions. Amortization expense related to intangible assets that are associated with a single function and depreciation of property, plant and equipment are included in Cost of sales, Selling, general and administrative expenses and Research and development expenses, as appropriate.
We review all of our long-lived assets for impairment indicators throughout the year and we perform detailed testing whenever impairment indicators are present. In addition, we perform impairment testing for goodwill and indefinite-lived assets at least annually. When necessary, we record charges for impairments. Specifically:
•    For finite-lived identifiable intangible assets, such as developed technology rights, and for other long-lived assets, such as property, plant and equipment, whenever impairment indicators are present, we calculate the undiscounted value of the projected cash flows associated with the asset, or asset group, and compare this estimated amount to the carrying amount. If the carrying amount is found to be greater, we record an impairment loss for the excess of book value over fair value. In addition, in all cases of an impairment review, we re-evaluate the remaining useful lives of the assets and modify them, as appropriate.
•    For indefinite-lived identifiable intangible assets, such as brands and IPR&D assets, we test for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If we conclude it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the indefinite-lived intangible asset with its carrying value is performed. If the fair value is less than the carrying amount, an impairment loss is recognized. We record an impairment loss, if any, for the excess of book value over fair value. In addition, in all cases of an impairment review other than for IPR&D assets, we re-evaluate whether continuing to characterize the asset as indefinite-lived is appropriate.
•    For goodwill, we test for impairment on at least an annual basis, or more frequently if necessary, either by assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or by performing a periodic quantitative assessment. If we choose to perform a qualitative analysis and conclude it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value test is performed. We determine the implied fair value of goodwill by subtracting the fair value of all the identifiable net assets other than goodwill from the fair value of the reporting unit and record an impairment loss for the excess, if any, of book value of goodwill over the implied fair value. In 2025 we performed a periodic qualitative impairment assessment as of September 30, 2025, which did not result in the impairment of goodwill associated with any of our reporting units. In 2024, we performed a quantitative impairment assessment as of September 30, 2024, which did not result in the impairment of goodwill associated with any of our reporting units.
Impairment reviews can involve a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Software Capitalization and Depreciation
Software Capitalization and Depreciation
We capitalize certain costs incurred in connection with obtaining or developing internal-use software, including payroll and payroll-related costs for employees who are directly associated with the internal-use software project, external direct costs of materials and services and interest costs while developing the software. Capitalized software costs are included in Property, plant and equipment and are amortized using the straight-line method over the estimated useful life of 5 to 10 years. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs incurred during the preliminary project and post-implementation stages, as well as software maintenance and training costs, are expensed in the period in which they are incurred. The company capitalized $18 million of internal-use software for the years ended December 31, 2025 and 2024. Depreciation expense for capitalized software was $46 million in 2025, $61 million in 2024 and $75 million in 2023.
In addition, we capitalize qualifying implementation costs under cloud computing arrangements (“CCA”). The capitalized CCA implementation costs are allocated between Other current assets and Other noncurrent assets on the accompanying Consolidated Balance Sheets based on the expected period that amortization will be recognized. CCA implementation costs are amortized using the straight-line method over the expected term of the related service contract. As of December 31, 2025, the gross capitalized cloud computing implementation costs were $186 million, with accumulated amortization of $10 million, resulting in a net carrying amount of $176 million. As of December 31, 2024, the gross capitalized computing implementation costs were $71 million, with accumulated amortization of $4 million, resulting in a net carrying amount of $67 million. The amortization expense was $6 million, $3 million and $1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Restructuring Charges and Certain Acquisition-Related Costs
Restructuring Charges and Certain Acquisition and Divestiture-Related Costs
We may incur restructuring charges in connection with acquisitions when we implement plans to restructure and integrate the acquired operations or in connection with cost-reduction and productivity initiatives. Included in Restructuring charges and certain acquisition and divestiture-related costs are all restructuring charges and certain costs associated with acquiring and integrating an acquired business and divesting and disintegrating divested businesses. Transaction costs and integration costs are expensed as incurred. Termination costs are a significant component of restructuring charges and are generally recorded when the actions are probable and estimable.
Amounts recorded for restructuring charges and other associated costs can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Earnings per Share
Earnings per Share
Basic earnings per share is computed by dividing net income attributable to Zoetis by the weighted-average number of common shares outstanding during the period. Diluted earnings per share adjusts the weighted-average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options, restricted stock units, and performance-vesting restricted stock units) were exercised or converted into common stock, calculated using the treasury stock method or shares issuable in connection with our convertible senior notes, calculated using the if-converted method.
Cash Equivalents
Cash Equivalents
Cash equivalents include items almost as liquid as cash, such as money market funds, certificates of deposit and time deposits with maturity periods of three months or less when purchased.
Fair Value
Fair Value
Certain assets and liabilities are required to be measured at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, we use fair value extensively in the initial recognition of net assets acquired in a business combination. Fair value is estimated using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer.
When estimating fair value, depending on the nature and complexity of the asset or liability, we may use one or all of the following approaches:
•    Income approach, which is based on the present value of a future stream of net cash flows.
•    Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.
•    Cost approach, which is based on the cost to acquire or construct comparable assets less an allowance for functional and/or economic obsolescence.
These fair value methodologies depend on the following types of inputs:
•    Quoted prices for identical assets or liabilities in active markets (Level 1 inputs).
•    Quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable (Level 2 inputs).
•    Unobservable inputs that reflect estimates and assumptions (Level 3 inputs).
A single estimate of fair value can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Accounts Receivable
Accounts Receivable
The recorded amounts of accounts receivable approximate fair value because of their relatively short-term nature. As of December 31, 2025 and 2024, Accounts receivable, less allowance for doubtful accounts, of $1,590 million and $1,316 million, respectively, includes approximately $69 million and $79 million, respectively, of other receivables, such as trade notes receivable and royalty receivables, among others.
Deferred Tax Assets and Liabilities and Income Tax Contingencies
Deferred Tax Assets and Liabilities and Income Tax Contingencies
Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates and laws. We provide a valuation allowance when we believe that our deferred tax assets are not recoverable based on an assessment of estimated future taxable income that incorporates ongoing, prudent and feasible tax planning strategies.
We account for income tax contingencies using a benefit recognition model. If we consider that a tax position is more likely than not to be sustained upon audit, based solely on the technical merits of the position, we recognize the benefit. We measure the benefit by determining the amount that is greater than 50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. Under the benefit recognition model, if the initial assessment fails to result in the recognition of a tax benefit, we regularly monitor our position and subsequently recognize the tax benefit: (i) if there are changes in tax law, analogous case law or there is new information that sufficiently raise the likelihood of prevailing on the technical merits of the position to more likely than not; (ii) if the statute of limitations expires; or (iii) if there is a completion of an audit resulting in a favorable settlement of that tax year with the appropriate agency. We regularly re-evaluate our tax positions based on the results of audits of federal, state and foreign income tax filings, statute of limitations expirations, changes in tax law or receipt of new information that would either increase or decrease the technical merits of a position relative to the “more-likely-than-not” standard. Liabilities associated with uncertain tax positions are classified as current only when we expect to pay cash within the next 12 months. Interest and penalties, if any, are recorded in Provision for taxes on income and are classified on our Consolidated Balance Sheets with the related tax liability.
Amounts recorded for valuation allowances and income tax contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Benefit Plans
Benefit Plans
All dedicated benefit plans are pension plans. For our dedicated benefit plans, we recognize the overfunded or underfunded status of defined benefit plans as an asset or liability on the Consolidated Balance Sheets and the obligations generally are measured at the actuarial present value of all benefits attributable to employee service rendered, as provided by the applicable benefit formula. Pension obligations may include assumptions such as long-term rate of return on plan assets, expected employee turnover, participant mortality, and future compensation levels. Plan assets are measured at fair value. Net periodic benefit costs are recognized, as required, into Cost of sales, Selling, general and administrative expenses and Research and development expenses, as appropriate.
Amounts recorded for benefit plans can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Asset Retirement Obligations
Asset Retirement Obligations
We record accruals for the legal obligations associated with the retirement of tangible long-lived assets, including obligations under the doctrine of promissory estoppel and those that are conditioned upon the occurrence of future events. These obligations generally result from the acquisition, construction, development and/or normal operation of long-lived assets. We recognize the fair value of these obligations in the period in which they are incurred by increasing the carrying amount of the related asset. Over time, we recognize expense for the accretion of the liability and for the amortization of the asset.
As of December 31, 2025 and 2024, accruals for asset retirement obligations are $25 million and $23 million, respectively, and are included in Other noncurrent liabilities.
Amounts recorded for asset retirement obligations can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Legal and Environmental Contingencies
Legal and Environmental Contingencies
We are subject to numerous contingencies arising in the ordinary course of business, such as product liability and other product-related litigation, commercial litigation, patent litigation, environmental claims and proceedings, government investigations and guarantees and indemnifications. We record accruals for these contingencies to the extent that we conclude that a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, we accrue that amount. Alternatively, when no amount within a range of loss appears to be a better estimate than any other amount, we accrue the lowest amount in the range. We record anticipated recoveries under existing insurance contracts when recovery is assured.
Amounts recorded for contingencies can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
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.
Share-Based Payments
Share-Based Payments
Our compensation programs can include share-based payment plans. All grants under share-based payment programs are accounted for at fair value and such amounts generally are amortized on a straight-line basis over the vesting term to Cost of sales, Selling, general and administrative expenses, and Research and development expenses, as appropriate. We include the impact of estimated forfeitures when determining share-based compensation expense.
Amounts recorded for share-based compensation can result from a complex series of judgments about future events and uncertainties and can rely on estimates and assumptions. For information about the risks associated with estimates and assumptions, see Estimates and Assumptions.
Foreign Exchange and Interest Rate 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.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 two years.
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 December 31, 2025, recorded amounts for the estimated fair value of these indemnifications were not material.
Tax Contingencies
We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statute of limitations expire. We treat these events as discrete items in the period of resolution.
For a description of our accounting policies associated with accounting for income tax contingencies, see Note 3. Significant Accounting Policies: Deferred Tax Assets and Liabilities and Income Tax Contingencies. For a description of the risks associated with estimates and assumptions, see Note 3. Significant Accounting Policies: Estimates and Assumptions.
v3.25.4
Revenue (Tables)
12 Months Ended
Dec. 31, 2025
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue from External Customers by Geographic Areas
Revenue by geographic area
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
United States$5,097 $5,074 $4,555 
Australia329 319 323 
Brazil393 414 393 
Canada290 277 255 
Chile139 123 140 
China227 270 320 
France165 156 142 
Germany236 225 202 
Italy137 129 121 
Japan154 147 158 
Mexico160 169 162 
Spain145 130 122 
United Kingdom325 314 277 
Other developed markets641 564 512 
Other emerging markets913 865 784 
9,351 9,176 8,466 
Contract manufacturing & human health116 80 78 
Total Revenue$9,467 $9,256 $8,544 
Revenue from External Customers by Major Species
Revenue by major species
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
U.S.
Companion animal$4,220 $4,054 $3,529 
Livestock877 1,020 1,026 
5,097 5,074 4,555 
International
Companion animal2,367 2,224 2,047 
Livestock1,887 1,878 1,864 
4,254 4,102 3,911 
Total
Companion animal6,587 6,278 5,576 
Livestock2,764 2,898 2,890 
Contract manufacturing & human health116 80 78 
Total Revenue$9,467 $9,256 $8,544 
Revenue from External Customers by Species
Revenue by species
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Companion Animal:
Dogs and Cats$6,283 $5,993 $5,291 
Horses304 285 285 
6,587 6,278 5,576 
Livestock:
Cattle1,492 1,531 1,503 
Swine466 516 543 
Poultry432 527 524 
Fish286 242 220 
Sheep and other88 82 100 
2,764 2,898 2,890 
Contract manufacturing & human health116 80 78 
Total Revenue$9,467 $9,256 $8,544 
Schedule of Significant Product Revenues
Revenue by product category
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Parasiticides$2,341 $2,153 $1,947 
Vaccines1,959 1,827 1,771 
Dermatology1,754 1,655 1,427 
Anti-infectives1,036 1,100 1,057 
Pain and sedation840 851 602 
Other pharmaceuticals697 658 678 
Animal health diagnostics434 386 376 
Other non-pharmaceuticals263 253 254 
Medicated feed additives27 293 354 
9,351 9,176 8,466 
Contract manufacturing & human health116 80 78 
Total Revenue$9,467 $9,256 $8,544 
v3.25.4
Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures (Tables)
12 Months Ended
Dec. 31, 2025
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring and Related Costs
The components of costs incurred in connection with restructuring initiatives, acquisitions, divestitures and cost-reduction/productivity initiatives are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Restructuring charges and certain acquisition and divestiture-related costs:
Acquisition-related costs(a)
$2 $$
Divestiture-related costs(b)
 16 — 
Restructuring charges(c)(d):
Employee termination costs20 36 41 
Asset impairment charges22 — 
Exit costs7 — 
Total Restructuring charges and certain acquisition and divestiture-related costs
$51 $53 $53 
(a)    Acquisition-related costs represent external, incremental costs directly related to integrating acquired businesses and primarily include expenditures for consulting and the integration of systems and processes, as well as product transfer costs as well as transaction costs that represent external costs directly related to acquiring businesses and primarily include expenditures for banking, legal, accounting and other similar services.
(b)    Divestiture-related costs consisted of costs related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets.
(c)    The restructuring charges for the year ended December 31, 2025 primarily related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, as well as employee termination costs related to organizational structure refinements.
    The restructuring charges for the year ended December 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 restructuring charges for the year ended December 31, 2023 primarily relates to employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.
(d)    The restructuring charges are associated with the following:
For the year ended December 31, 2025, Manufacturing/research/corporate of $42 million, U.S. of $4 million and International of $3 million.
For the year ended December 31, 2024, Manufacturing/research/corporate of $14 million, U.S. of $7 million and International of $15 million.
For the year ended December 31, 2023, Manufacturing/research/corporate of $22 million, U.S. of $3 million and International of $21 million.
The components of, and changes in, our restructuring accruals are as follows:
EmployeeAsset
TerminationImpairmentExit
(MILLIONS OF DOLLARS)CostsChargesCostsAccrual
Balance, December 31, 2022$14 $— $$15 
Provision41 46 
Non-cash activity— (1)— (1)
Utilization and other(a)
(23)— (2)(25)
Balance, December 31, 2023$32 $— $$35 
Provision43 — — 43 
Reserve adjustment(7)— — (7)
Utilization and other(a)
(42)— (1)(43)
Balance, December 31, 2024(b)
$26 $— $$28 
Provision20 22 7 49 
Non-cash activity (22) (22)
Utilization and other(a)
(23) (3)(26)
Balance, December 31, 2025(b)(c)
$23 $ $6 $29 
(a)    Includes adjustments for foreign currency translation.
(b)    At December 31, 2025 and 2024, included in Accrued Expenses ($27 million and $26 million, respectively) and Other noncurrent liabilities ($2 million and $2 million, respectively).
(c)    Includes contractual obligations of $29 million, of which payments are expected to be approximately $27 million in 2026 and $2 million thereafter.
v3.25.4
Other (Income)/Deductions - Net Other (Income)/Deductions - Net (Tables)
12 Months Ended
Dec. 31, 2025
Other Income and Expenses [Abstract]  
Components of Other (Income)/Deductions—Net
The components of Other (income)/deductions—net follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Royalty-related income(a)
$(2)$(5)$(37)
Interest income(93)(106)(105)
Identifiable intangible asset impairment charges(b)
5 15 35 
Net loss/(gain) on sale of businesses(c)
3 23 (101)
Foreign currency loss(d)
45 50 47 
Other, net6 
Other (income)/deductions—net$(36)$(19)$(159)
(a)    For 2023, primarily associated with a settlement received from a third party for underpayment of royalties related to prior periods.
(b)    For 2025 and 2024, primarily represents asset impairment charges related to our aquaculture product portfolio.
For 2023, primarily represents certain asset impairment charges related to our precision animal health and diagnostics businesses.
(c)    For 2025 and 2024, primarily represents a net loss related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. For additional information, see Note 5. Acquisitions and Divestitures.
    For 2023, primarily relates to the gain on sale of a majority interest in our pet insurance business. For additional information, see Note 5. Acquisitions and Divestitures.
(d)    Primarily driven by costs related to hedging and exposures to certain developed and emerging market currencies.
v3.25.4
Tax Matters (Tables)
12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign
The components of Income before provision for taxes on income follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
United States$1,877 $1,867 $1,636 
International1,483 1,266 1,300 
Income before provision for taxes on income$3,360 $3,133 $2,936 
Schedule Of Components Of Provision For Income Taxes
The components of Provision for taxes on income based on the location of the taxing authorities follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
United States:
Current income taxes:
Federal$223 $645 $341 
State and local56 65 35 
Deferred income taxes:
Federal116 (297)(40)
State and local14 (42)25 
Total U.S. tax provision409 371 361 
International:
Current income taxes327 265 281 
Deferred income taxes(49)(46)
Total international tax provision278 266 235 
Provision for taxes on income$687 $637 $596 
Schedule of Effective Income Tax Rate Reconciliation
The reconciliation of provision for taxes on income computed at the U.S. statutory income tax rate to our effective tax rate by amount and percent follows:
Year Ended December 31, 2025
(MILLIONS OF DOLLARS)Total%
U.S. statutory income tax rate$706 21.0 %
United States:
   State and local taxes, net of federal benefits(a)
551.6 %
   Effect of cross-border tax laws:
        GILTI1203.6 %
        Foreign exchange gains/(losses)(57)(1.7)%
        Other(11)(0.3)%
   Tax credits:
        Foreign tax credits(112)(3.3)%
        Other(28)(0.8)%
   Changes in valuation allowances49 1.5 %
   Nontaxable or nondeductible items:
        Other11 0.3 %
   Other adjustments:
        Other(34)(1.0)%
Foreign tax effects:
   Ireland:
        Effect of rates different than statutory(88)(2.6)%
        Other250.7 %
Other foreign jurisdictions290.8 %
Changes in unrecognized tax benefits220.6 %
Provision for taxes on income / effective tax rate$687 20.4 %
(a)In 2025, state and local income taxes in California, New Jersey, Minnesota, New York, Oregon, Kentucky, Kansas and Wisconsin comprise the majority (greater than 50%) of the domestic state and local income taxes, net of federal effect category.
The reconciliation of the U.S. statutory income tax rate to our effective tax rate follows:
Year Ended December 31,
20242023
U.S. statutory income tax rate21.0 %21.0 %
State and local taxes, net of federal benefits0.6 1.6 
Unrecognized tax benefits and tax settlements and resolution of certain tax positions(a)
0.4 0.9 
Foreign Derived Intangible Income(1.5)(0.7)
U.S. Research and Development Tax Credit (0.6)(0.7)
Share-based payments(0.2)(0.3)
Non-deductible / non-taxable items0.2 0.2 
Taxation of non-U.S. operations0.2 (0.8)
All other—net0.2 (0.9)
Effective tax rate 20.3 %20.3 %
(a)    For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see C. Tax Contingencies.
Schedule of Cash Flow, Supplemental Disclosures
Income tax payments, net of refunds, by jurisdiction follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)2025
United States:
Federal(a)
$433 
State and local25 
International:
Ireland127 
Other130 
Total international257 
Total income tax payments, net of refunds$715 
(a) For 2025, includes $133 million related to the purchase of transferable federal tax credits.
Schedule of Deferred Tax Assets and Liabilities
The components of our deferred tax assets and liabilities follow:
As of December 31,
20252024
(MILLIONS OF DOLLARS)Assets (Liabilities)
Prepaid/deferred items$146 $219 
Inventories24 21 
Capitalized research and development for tax410 301 
Foreign exchange (gains)/losses56 — 
Interest expense limitation12 
Original issue discount on convertible debt42 — 
Identifiable intangible assets(78)(103)
Property, plant and equipment(194)(179)
Employee benefits73 74 
Restructuring and other charges11 10 
Legal and product liability reserves13 14 
Net operating loss/credit carryforwards165 139 
Unremitted earnings(4)(3)
All other7 — 
Subtotal683 496 
Valuation allowance(185)(123)
Net deferred tax asset/(liability)(a)(b)
$498 $373 
(a)    The change in the total net deferred tax asset/(liability) from December 31, 2024 to December 31, 2025 is primarily attributable to an increase in deferred tax assets related to (i) the capitalization and amortization of research and development costs for U.S. tax purposes, (ii) foreign exchange (gains)/losses, (iii) original issue discount on convertible debt, and (iv) net operating loss/credit carryforwards, partially offset by a decrease in deferred tax assets related to (i) prepaid/deferred items as a result of a prepayment from a related foreign entity in Belgium, as well as an increase in valuation allowance.
(b)    In 2025, included in Noncurrent deferred tax assets ($637 million) and Noncurrent deferred tax liabilities ($139 million). In 2024, included in Noncurrent deferred tax assets ($540 million) and Noncurrent deferred tax liabilities ($167 million).
Schedule of Unrecognized Tax Benefits Roll Forward
The reconciliation of the beginning and ending amounts of gross unrecognized tax benefits follows:
(MILLIONS OF DOLLARS)202520242023
Balance, January 1$(213)$(209)$(194)
Increases based on tax positions taken during a prior period(a)
 (1)(27)
Decreases based on tax positions taken during a prior period(a)
1 — 20 
Increases based on tax positions taken during the current period(a)
(13)(7)(13)
Settlements — 
Lapse in statute of limitations(a)
4 
Balance, December 31(b)
$(221)$(213)$(209)
(a)    Primarily included in Provision for taxes on income.
(b)    Primarily included in Other taxes payable.
v3.25.4
Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments
The components of our long-term debt are as follows:
As of December 31,
(MILLIONS OF DOLLARS)20252024
4.500% 2015 senior notes due 2025
$ $750 
5.400% 2022 senior notes due 2025
 600 
3.000% 2017 senior notes due 2027
750 750 
3.900% 2018 senior notes due 2028
500 500 
4.150% 2025 senior notes due 2028
850 — 
0.250% 2025 convertible senior notes due 2029
2,000 — 
2.000% 2020 senior notes due 2030
750 750 
5.600% 2022 senior notes due 2032
750 750 
5.000% 2025 senior notes due 2035
1,000 — 
4.700% 2013 senior notes due 2043
1,150 1,150 
3.950% 2017 senior notes due 2047
500 500 
4.450% 2018 senior notes due 2048
400 400 
3.000% 2020 senior notes due 2050
500 500 
9,150 6,650 
Unamortized debt discount / debt issuance costs(93)(54)
Less current portion of long-term debt 1,350 
Cumulative fair value adjustment for interest rate swap contracts(15)(26)
Long-term debt, net of discount and issuance costs$9,042 $5,220 
Schedule of Maturities of Long-term Debt
The following table provides the principal amount of debt outstanding as of December 31, 2025 by scheduled maturity date. The table also provides the expected interest payments on these borrowings as of December 31, 2025.
After
(MILLIONS OF DOLLARS)202620272028202920302030Total
Maturities$— $750 $1,350 $2,000 $750 $4,300 $9,150 
Interest payments $296 $296 $273 $216 $206 $1,958 $3,245 
Schedule of Derivative Instruments
The aggregate notional amount of derivative instruments are as follows:
Notional
As of December 31,
(MILLIONS)20252024
Derivatives not Designated as Hedging Instruments
     Foreign currency forward-exchange contracts$2,175 $2,070 
Derivatives Designated as Hedging Instruments
     Foreign exchange derivative instruments (in foreign currency):
         Euro925 800 
         Danish krone400 475 
         Swiss franc 25 
     Forward-starting interest rate swaps $ $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
As of December 31,
(MILLIONS OF DOLLARS)Balance Sheet Location20252024
Derivatives Not Designated as Hedging Instruments:
   Foreign currency forward-exchange contractsOther current assets$11 $18 
   Foreign currency forward-exchange contractsOther current liabilities(6)(6)
Total derivatives not designated as hedging instruments5 12 
Derivatives Designated as Hedging Instruments:
   Forward-starting interest rate swap contractsOther non-current assets$ $26 
   Foreign exchange derivative instrumentsOther current assets6 55 
   Foreign exchange derivative instrumentsOther non-current assets 
   Foreign exchange derivative instrumentsOther current liabilities(25)— 
   Foreign exchange derivative instrumentsOther non-current liabilities(39)— 
   Fixed-to-floating interest rate swap contractsOther non-current liabilities(16)(26)
Total derivatives designated as hedging instruments(74)59 
Total derivatives$(69)$71 
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The amounts of net gains/(losses) on derivative instruments not designated as hedging instruments, recorded in Other (income)/deductions - net, are as follows:
Year Ended December 31,
(MILLIONS OF DOLLARS)20252024
Foreign currency forward-exchange contracts$27 $(11)
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:
Year Ended December 31,
(MILLIONS OF DOLLARS)20252024
Forward starting interest rate swap contracts$(20)$11 
Foreign exchange derivative instruments$(101)$44 
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:
Year Ended December 31,
(MILLIONS OF DOLLARS)20252024
Foreign exchange derivative instruments$21 $17 
v3.25.4
Leases (Tables)
12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Lease, Cost
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Supplemental Income Statement information for operating leases:
Operating lease expense$68 $59 $56 
Variable lease costs28 18 20 
Short-term lease costs not included in the measurement of lease liabilities14 13 11 
Supplemental Income Statement information for finance leases:
Amortization of right-of-use assets1 
Total lease costs$111 $91 $88 
Supplemental Cash Flow information for leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows – operating leases$67 $61 $57 
Financing cash flows – finance leases2 — 
Lease obligations obtained in exchange for right-of-use assets - operating (non-cash)76 46 73 
Lease obligations obtained in exchange for right-of-use assets – finance (non-cash)1 — 
Lessee, Operating Lease, Liability, Maturity
Future minimum lease payments under non-cancellable lease contracts as of December 31, 2025 are as follows:
TotalLess:
AfterLeaseImputed
(MILLIONS OF DOLLARS)202620272028202920302030PaymentsInterestTotal
Operating leases$60 $51 $41 $29 $21 $83 $285 $(37)$248 
Finance leases$$$$$$$10 $(3)$
Finance Lease, Liability, to be Paid, Maturity
Future minimum lease payments under non-cancellable lease contracts as of December 31, 2025 are as follows:
TotalLess:
AfterLeaseImputed
(MILLIONS OF DOLLARS)202620272028202920302030PaymentsInterestTotal
Operating leases$60 $51 $41 $29 $21 $83 $285 $(37)$248 
Finance leases$$$$$$$10 $(3)$
v3.25.4
Inventories (Tables)
12 Months Ended
Dec. 31, 2025
Inventory Disclosure [Abstract]  
Components of Inventory
The components of inventory follow:
As of December 31,
(MILLIONS OF DOLLARS)20252024
Finished goods$1,106 $996 
Work-in-process962 933 
Raw materials and supplies362 377 
Inventories$2,430 $2,306 
v3.25.4
Property, Plant and Equipment (Tables)
12 Months Ended
Dec. 31, 2025
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment The components of property, plant and equipment follow:
Useful LivesAs of December 31,
(MILLIONS OF DOLLARS)(Years)20252024
Land$33 $28 
Buildings
33
1,549 1,292 
Machinery, equipment and fixtures
3 - 20
3,729 3,353 
Construction-in-progress1,295 1,353 
6,606 6,026 
Less: Accumulated depreciation2,925 2,635 
Property, plant and equipment$3,681 $3,391 
v3.25.4
Goodwill and Other Intangible Assets (Tables)
12 Months Ended
Dec. 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 follow:
(MILLIONS OF DOLLARS)U.S.InternationalTotal
Balance, December 31, 2023$1,532 $1,227 $2,759 
Other(a)
(17)(18)(35)
Balance, December 31, 2024$1,515 $1,209 $2,724 
Additions(b)
 7 7 
Other(a)
 36 36 
Balance, December 31, 2025$1,515 $1,252 $2,767 
(a)     Includes adjustments for foreign currency translation.
For 2024, also includes adjustments for the derecognition of goodwill of $24 million related to the sale of our medicated feed additive product portfolio, certain water soluble products and related assets. See Note 5. Acquisitions and Divestitures.
(b)    Relates to the acquisition of Veterinary Pathology Group. See Note 5. Acquisitions and Divestitures.
Components of Identifiable Intangible Assets
The components of identifiable intangible assets follow:
As of December 31, 2025As of December 31, 2024
IdentifiableIdentifiable
GrossIntangible Assets,GrossIntangible Assets,
CarryingAccumulatedLess AccumulatedCarryingAccumulatedLess Accumulated
(MILLIONS OF DOLLARS)AmountAmortizationAmortizationAmountAmortizationAmortization
Finite-lived intangible assets:
Developed technology rights$1,932 $(1,342)$590 $1,891 $(1,175)$716 
Brands and tradenames362 (250)112 367 (246)121 
Other292 (210)82 278 (197)81 
Total finite-lived intangible assets2,586 (1,802)784 2,536 (1,618)918 
Indefinite-lived intangible assets:
Brands and tradenames67  67 66 — 66 
In-process research and development141  141 136 — 136 
Product rights6  6 — 
Total indefinite-lived intangible assets214  214 209 — 209 
Identifiable intangible assets$2,800 $(1,802)$998 $2,745 $(1,618)$1,127 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
The annual amortization expense expected for the years 2026 through 2030 is as follows:
(MILLIONS OF DOLLARS)20262027202820292030
Amortization expense$152 $148 $119 $82 $71 
Schedule of Acquired Finite-Lived Intangible Assets by Major Class
The components of identifiable intangible assets follow:
As of December 31, 2025As of December 31, 2024
IdentifiableIdentifiable
GrossIntangible Assets,GrossIntangible Assets,
CarryingAccumulatedLess AccumulatedCarryingAccumulatedLess Accumulated
(MILLIONS OF DOLLARS)AmountAmortizationAmortizationAmountAmortizationAmortization
Finite-lived intangible assets:
Developed technology rights$1,932 $(1,342)$590 $1,891 $(1,175)$716 
Brands and tradenames362 (250)112 367 (246)121 
Other292 (210)82 278 (197)81 
Total finite-lived intangible assets2,586 (1,802)784 2,536 (1,618)918 
Indefinite-lived intangible assets:
Brands and tradenames67  67 66 — 66 
In-process research and development141  141 136 — 136 
Product rights6  6 — 
Total indefinite-lived intangible assets214  214 209 — 209 
Identifiable intangible assets$2,800 $(1,802)$998 $2,745 $(1,618)$1,127 
v3.25.4
Benefit Plans (Tables)
12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan
The following table provides an analysis of the changes in the benefit obligations, plan assets and funded status of our dedicated pension plans (including those transferred to us):
As of and for the
Year Ended December 31,
(MILLIONS OF DOLLARS)20252024
Change in benefit obligation:
Projected benefit obligation, beginning$136 $129 
Service cost6 
Interest cost5 
Changes in actuarial assumptions and other(5)
Settlements and curtailments(2)(2)
Benefits paid(5)(4)
Adjustments for foreign currency translation11 (5)
Other––net(1)(1)
Benefit obligation, ending145 136 
Change in plan assets:
Fair value of plan assets, beginning94 86 
Actual return on plan assets4 12 
Company contributions6 
Settlements and curtailments(2)(3)
Benefits paid(5)(4)
Adjustments for foreign currency translation6 (3)
Fair value of plan assets, ending103 94 
Funded status—Projected benefit obligation in excess of plan assets at end of year(a)
$(42)$(42)
(a) Included in Other noncurrent liabilities.
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets
Information related to the funded status of selected plans follows:
As of December 31,
(MILLIONS OF DOLLARS)20252024
Pension plans with an accumulated benefit obligation in excess of plan assets:
Fair value of plan assets$10 $
Accumulated benefit obligation53 50 
Pension plans with a projected benefit obligation in excess of plan assets:
Fair value of plan assets10 
Projected benefit obligation59 55 
Schedule of Net Benefit Costs
The following table provides the net periodic benefit cost associated with dedicated pension plans (including those transferred to us):
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Service cost$6 $$
Interest cost5 
Expected return on plan assets(5)(4)(4)
Settlement and curtailments (gains) / losses — 
Net periodic benefit cost$6 $$
Schedule of Assumptions Used
The following table provides the weighted average actuarial assumptions for the dedicated pension plans (including those transferred to us):
As of December 31,
(PERCENTAGES)202520242023
Weighted average assumptions used to determine benefit obligations:
Discount rate4.1 %3.5 %4.2 %
Rate of compensation increase3.6 %3.5 %3.6 %
Cash balance credit interest rate2.0 %1.7 %1.6 %
Weighted average assumptions used to determine net benefit cost for the year ended December 31:
Discount rate3.5 %4.2 %3.7 %
Expected return on plan assets4.9 %4.6 %4.7 %
Rate of compensation increase3.5 %3.6 %3.5 %
Cash balance credit interest rate1.7 %1.6 %1.7 %
Schedule of Allocation of Plan Assets
The components of plan assets follow:
As of December 31,
(MILLIONS OF DOLLARS)20252024
Cash and cash equivalents$2 $
Equity securities: Equity commingled funds40 37 
Debt securities: Government bonds49 46 
Other investments12 10 
Total(a)
$103 $94 
(a)    Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 3. Significant Accounting Policies—Fair Value). Investment plan assets are valued using Level 1 or Level 2 inputs.
Schedule Of Percentage Of Allocation Of Plan Assets
The long-term target asset allocations and the percentage of the fair value of plans assets for dedicated benefit plans follow:
As of December 31,
Target allocation
percentagePercentage of Plan Assets
(PERCENTAGES)202520252024
Cash and cash equivalents
0-10%
1.9 %1.4 %
Equity securities
0-60%
39.0 %39.2 %
Debt securities
15-100%
47.3 %48.4 %
Other investments
0-100%
11.8 %11.0 %
Total
100%
100 %100 %
v3.25.4
Share-Based Payments (Tables)
12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Components of Share-based Compensation Expense
The components of share-based compensation expense follow:
Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023
Stock options / stock appreciation rights$12 $11 $
RSUs / DSUs52 42 37 
PSUs19 21 15 
Share-based compensation expense—total(a)
$83 $74 $60 
Tax benefit for share-based compensation expense(10)(9)(8)
Share-based compensation expense, net of tax$73 $65 $52 
(a)    For each of the years ended December 31, 2025, 2024 and 2023, we capitalized up to $1 million of share-based compensation expense to inventory.
Share-based Payment Awards, Stock Options, Valuation Assumptions
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 noted in the following table, shown at their weighted-average values:
Year Ended December 31,
202520242023
Expected dividend yield(a)
1.27 %0.87 %0.92 %
Risk-free interest rate(b)
4.38 %4.06 %3.84 %
Expected stock price volatility(c)
26.42 %26.99 %28.63 %
Expected term(d) (years)
4.34.14.2
(a)    Determined using a constant dividend yield during the expected term of the Zoetis stock option.
(b)     Determined using the interpolated yield on U.S. Treasury zero-coupon issues.
(c)     Determined using an equal weighting between historical volatility of the Zoetis stock price and implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends.
(d)     Determined using expected exercise and post-vesting termination patterns.
Stock Option Activity
The following table provides an analysis of stock option activity for the year ended December 31, 2025:
Weighted-Average Remaining Contractual Term
(Years)
Aggregate Intrinsic Value(a)
(Millions)
Weighted-Average
Exercise Price
Shares
Outstanding, December 31, 20241,447,949 $143.83 
Granted320,498 156.80 
Exercised(111,374)85.26 
Forfeited(78,289)179.64 
Outstanding, December 31, 20251,578,784 $148.82 5.9$18,853,364 
Exercisable, December 31, 20251,046,676 $138.76 4.6$18,853,364 
(a)    Market price of underlying Zoetis common stock less exercise price.
As of December 31, 2025, there was approximately $10 million of unrecognized compensation costs related to nonvested stock options, which will be recognized over an expected remaining weighted-average period of ten months.
The following table summarizes data related to stock option activity:
Year Ended/As of December 31,
(MILLIONS OF DOLLARS, EXCEPT PER STOCK OPTION AMOUNTS)202520242023
Weighted-average grant date fair value per stock option$40.22 $50.77 $43.56 
Aggregate intrinsic value on exercise8 40 81 
Cash received upon exercise9 20 42 
Tax benefits realized related to exercise 8 17 17 
Restricted Stock Units (RSUs)
The following table provides an analysis of RSU activity for the year ended December 31, 2025:
Weighted-Average
RSUsGrant Date Fair Value
Nonvested, December 31, 2024556,106 $187.61 
Granted594,287 156.29 
Vested(334,042)189.70 
Reinvested dividend equivalents9,929 167.44 
Forfeited(51,599)169.77 
Nonvested, December 31, 2025774,681 $163.56 
Performance-based Units Activity (PSUs)
The following table provides an analysis of PSU activity for the year ended December 31, 2025:
Weighted-Average
PSUsGrant Date Fair Value
Nonvested, December 31, 2024256,567 $248.68 
Granted148,130 171.21 
Vested(79,630)236.20 
Reinvested dividend equivalents4,050 222.23 
Forfeited(26,654)232.41 
Nonvested, December 31, 2025302,463 $215.08 
Shares issued, December 31, 2025
742 $245.07 
v3.25.4
Stockholders' Equity (Tables)
12 Months Ended
Dec. 31, 2025
Equity, Attributable to Parent [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
Changes, net of tax, in accumulated other comprehensive loss, excluding noncontrolling interest, follow:
Currency Translation AdjustmentsBenefit PlansAccumulated Other
Cash Flow Net InvestmentOther CurrencyActuarialComprehensive
(MILLIONS OF DOLLARS)HedgesHedgesTranslation Adj(Losses)/GainsLoss
Balance, December 31, 2022$90 $41 $(944)$(4)$(817)
Other comprehensive (loss)/gain, net of tax(5)(23)— 

(22)
Balance, December 31, 202385 18 (944)(839)
Other comprehensive gain/(loss), net of tax44 (147)(2)(101)
Balance, December 31, 202489 62 (1,091)— (940)
Other comprehensive (loss)/gain, net of tax(19)(101)224 2 

106 
Balance, December 31, 2025$70 $(39)$(867)$2 $(834)
v3.25.4
Earnings Per Share (Tables)
12 Months Ended
Dec. 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:
Year Ended December 31,
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)202520242023
Numerator
Net income before allocation to noncontrolling interests$2,673 $2,496 $2,340 
Less: net income/(loss) attributable to noncontrolling interests 10 (4)
Net income attributable to Zoetis Inc.$2,673 $2,486 $2,344 
Denominator
Weighted-average common shares outstanding443.443 454.200 461.172 
Common stock equivalents: stock options, RSUs, DSUs and PSUs0.392 0.648 1.097 
Weighted-average common and potential dilutive shares outstanding443.835 454.848 462.269 
Earnings per share attributable to Zoetis Inc. stockholders—basic$6.03 $5.47 $5.08 
Earnings per share attributable to Zoetis Inc. stockholders—diluted$6.02 $5.47 $5.07 
v3.25.4
Segment Information (Tables)
12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
Schedule of Selected Income Statement Information by Segment
Selected Statement of Income Information                                
Earnings
Depreciation and Amortization(a)
Year Ended December 31,Year Ended December 31,
(MILLIONS OF DOLLARS)202520242023202520242023
U.S.
Revenue$5,097 $5,074 $4,555 
Cost of Sales842 936 900 
Gross Profit4,255 4,138 3,655 
    Gross Margin83.5 %81.6 %80.2 %
Operating expenses(b)
817 805 786 
Other (income)/deductions-net (3)
U.S. Earnings3,438 3,336 2,863 $93 $85 $80 
International
Revenue(c)
4,254 4,102 3,911 
Cost of Sales1,312 1,312 1,234 
Gross Profit2,942 2,790 2,677 
    Gross Margin69.2 %68.0 %68.4 %
Operating expenses(b)
677 671 638 
Other (income)/deductions-net1 
International Earnings2,264 2,118 2,037 100 96 92 
Total operating segments5,702 5,454 4,900 193 181 172 
Other business activities
(562)(562)(496)51 43 33 
Reconciling Items:
Corporate
(1,240)(1,213)(1,042)110 128 128 
Purchase accounting adjustments
(128)(140)(159)128 140 153 
Acquisition and divestiture-related costs
(2)(18)(9) — — 
Certain significant items(d)
(82)(79)33  — — 
Other unallocated
(328)(309)(291)5 
Total Earnings(e)
$3,360 $3,133 $2,936 $487 $497 $491 
(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 $998 million in 2025, $937 million in 2024 and $853 million in 2023.
(d)    For 2025, certain significant items primarily consisted of costs related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, costs related to our multi-year business process transformation program, which includes the implementation of a new enterprise resource planning (ERP) system, related digital technology solutions and other related costs, as well as employee termination costs related to organizational structure refinements.
For 2024, certain significant items primarily consisted of employee termination costs related to organizational structure refinements, a net loss related to the sale
of our medicated feed additive product portfolio, certain water soluble products and related assets, as well as asset impairment charges related to our aquaculture business, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
For 2023, certain significant items primarily consisted of a gain on the sale of a majority interest in our pet insurance business of $101 million, partially offset by employee termination and exit costs related to organizational structure refinements of $43 million and certain asset impairment charges primarily related to our precision animal health and diagnostics businesses of $24 million.
(e)    Defined as income before provision for taxes on income.
Long-lived Assets by Geographic Areas
Property, plant and equipment, less accumulated depreciation, by geographic region follow:
As of December 31,
(MILLIONS OF DOLLARS)20252024
U.S.$2,456 $2,249 
International1,225 1,142 
Property, plant and equipment, less accumulated depreciation$3,681 $3,391 
v3.25.4
Business Description (Details)
Dec. 31, 2025
specie
country
product_category
geographicRegion
Product Information [Line Items]  
Number of regional segments | geographicRegion 2
Number of countries in which entity markets products 45
Number of core animal species | specie 8
Number of major product categories | product_category 7
Product  
Product Information [Line Items]  
Number of countries in which entity markets products 100
v3.25.4
Significant Accounting Policies (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Significant Accounting Policies [Line Items]      
Revenue recognized during the year $ 11    
Contract liabilities 17    
Advertising and promotion expenses 308 $ 302 $ 281
Cost of sales [1] 2,666 2,719 2,561
Capitalized internal use software 18 18  
Depreciation expense 46 61 75
Gross capitalized cloud computing implementation costs 186 71  
Capitalized cloud computing implementation costs, accumulated amortization 10 4  
Capitalized cloud computing implementation costs, net carrying amount 176 67  
Capitalized cloud computing implementation costs, amortization expense 6 3 1
Accounts receivable, less allowance for doubtful accounts 1,590 1,316  
Other receivables $ 69 79  
Percentage of being realized upon settlement 50.00%    
Accruals for asset retirement obligations, non current $ 25 23  
Accounts Receivable      
Significant Accounting Policies [Line Items]      
Accruals for sales deductions $ 260 257  
Minimum      
Significant Accounting Policies [Line Items]      
Customer payment terms 30 days    
Minimum | Software Development      
Significant Accounting Policies [Line Items]      
Estimated useful life (in years) 5 years    
Maximum      
Significant Accounting Policies [Line Items]      
Customer payment terms 90 days    
Maximum | Software Development      
Significant Accounting Policies [Line Items]      
Estimated useful life (in years) 10 years    
Other current liabilities      
Significant Accounting Policies [Line Items]      
Accruals for sales deductions $ 395 344  
Shipping and Handling      
Significant Accounting Policies [Line Items]      
Cost of sales $ 102 $ 107 $ 101
[1] Exclusive of amortization of intangible assets, except as disclosed in Note 3. Significant Accounting Policies—Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets.
v3.25.4
Revenue - Revenue by Geographic Area (Details)
$ in Millions
12 Months Ended
Dec. 31, 2025
USD ($)
country
Dec. 31, 2024
USD ($)
country
Dec. 31, 2023
USD ($)
country
Revenue from External Customer [Line Items]      
Revenues $ 9,467 $ 9,256 $ 8,544
Revenue by country, exceeded $ 100    
Revenue by country, exceeded, number of countries | country 13 13 12
Contract Manufacturing and Human Health Diagnostics [Member]      
Revenue from External Customer [Line Items]      
Revenues $ 116 $ 80 $ 78
United States      
Revenue from External Customer [Line Items]      
Revenues 5,097 5,074 4,555
AUSTRALIA      
Revenue from External Customer [Line Items]      
Revenues 329 319 323
BRAZIL      
Revenue from External Customer [Line Items]      
Revenues 393 414 393
CANADA      
Revenue from External Customer [Line Items]      
Revenues 290 277 255
CHILE      
Revenue from External Customer [Line Items]      
Revenues 139 123 140
CHINA      
Revenue from External Customer [Line Items]      
Revenues 227 270 320
FRANCE      
Revenue from External Customer [Line Items]      
Revenues 165 156 142
GERMANY      
Revenue from External Customer [Line Items]      
Revenues 236 225 202
ITALY      
Revenue from External Customer [Line Items]      
Revenues 137 129 121
JAPAN      
Revenue from External Customer [Line Items]      
Revenues 154 147 158
MEXICO      
Revenue from External Customer [Line Items]      
Revenues 160 169 162
SPAIN      
Revenue from External Customer [Line Items]      
Revenues 145 130 122
UNITED KINGDOM      
Revenue from External Customer [Line Items]      
Revenues 325 314 277
Other developed markets      
Revenue from External Customer [Line Items]      
Revenues 641 564 512
Other emerging markets      
Revenue from External Customer [Line Items]      
Revenues 913 865 784
Total Geographical Area      
Revenue from External Customer [Line Items]      
Revenues $ 9,351 $ 9,176 $ 8,466
v3.25.4
Revenue - Revenue by Major Species (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Revenue from External Customer [Line Items]      
Revenues $ 9,467 $ 9,256 $ 8,544
Operating Segments | United States Segment      
Revenue from External Customer [Line Items]      
Revenues 5,097 5,074 4,555
Operating Segments | International Segment      
Revenue from External Customer [Line Items]      
Revenues [1] 4,254 4,102 3,911
Livestock      
Revenue from External Customer [Line Items]      
Revenues 2,764 2,898 2,890
Livestock | United States Segment      
Revenue from External Customer [Line Items]      
Revenues 877 1,020 1,026
Livestock | International Segment      
Revenue from External Customer [Line Items]      
Revenues 1,887 1,878 1,864
Companion Animal      
Revenue from External Customer [Line Items]      
Revenues 6,587 6,278 5,576
Companion Animal | United States Segment      
Revenue from External Customer [Line Items]      
Revenues 4,220 4,054 3,529
Companion Animal | International Segment      
Revenue from External Customer [Line Items]      
Revenues 2,367 2,224 2,047
Contract Manufacturing and Human Health Diagnostics [Member]      
Revenue from External Customer [Line Items]      
Revenues $ 116 $ 80 $ 78
[1] Operating expenses primarily consisted of field selling, other marketing expenses, advertising and promotions, and freight and logistics costs.
(c) Revenue denominated in euros was $998 million in 2025, $937 million in 2024 and $853 million in 2023.
v3.25.4
Revenue - Revenue by Species (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Revenue from External Customer [Line Items]      
Revenues $ 9,467 $ 9,256 $ 8,544
Cattle      
Revenue from External Customer [Line Items]      
Revenues 1,492 1,531 1,503
Swine      
Revenue from External Customer [Line Items]      
Revenues 466 516 543
Poultry      
Revenue from External Customer [Line Items]      
Revenues 432 527 524
Fish      
Revenue from External Customer [Line Items]      
Revenues 286 242 220
Other      
Revenue from External Customer [Line Items]      
Revenues 88 82 100
Livestock      
Revenue from External Customer [Line Items]      
Revenues 2,764 2,898 2,890
Dogs and Cats      
Revenue from External Customer [Line Items]      
Revenues 304 285 285
Horses      
Revenue from External Customer [Line Items]      
Revenues 6,283 5,993 5,291
Companion Animal      
Revenue from External Customer [Line Items]      
Revenues 6,587 6,278 5,576
Contract Manufacturing and Human Health Diagnostics [Member]      
Revenue from External Customer [Line Items]      
Revenues $ 116 $ 80 $ 78
v3.25.4
Revenue - Revenue by Product (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Revenue from External Customer [Line Items]      
Revenues $ 9,467 $ 9,256 $ 8,544
Vaccines      
Revenue from External Customer [Line Items]      
Revenues 1,959 1,827 1,771
Other pharmaceuticals      
Revenue from External Customer [Line Items]      
Revenues 697 658 678
Dermatology [Member]      
Revenue from External Customer [Line Items]      
Revenues 1,754 1,655 1,427
Anti-infectives      
Revenue from External Customer [Line Items]      
Revenues 1,036 1,100 1,057
Parasiticides      
Revenue from External Customer [Line Items]      
Revenues 2,341 2,153 1,947
Other non-pharmaceuticals      
Revenue from External Customer [Line Items]      
Revenues 263 253 254
Medicated feed additives      
Revenue from External Customer [Line Items]      
Revenues 27 293 354
Animal health diagnostics      
Revenue from External Customer [Line Items]      
Revenues 434 386 376
Total Products and Services      
Revenue from External Customer [Line Items]      
Revenues 9,351 9,176 8,466
Contract Manufacturing and Human Health Diagnostics [Member]      
Revenue from External Customer [Line Items]      
Revenues 116 80 78
Pain & Sedation      
Revenue from External Customer [Line Items]      
Revenues $ 840 $ 851 $ 602
v3.25.4
Revenue - Other Revenue Information (Details) - product_category
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Concentration Risk [Line Items]      
Number of Comprehensive Product Lines 300    
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Largest Customer [Member]      
Concentration Risk [Line Items]      
Concentration risk, percentage 16.00% 14.00% 15.00%
v3.25.4
Acquisitions and Divestitures (Details) - USD ($)
$ in Millions
12 Months Ended
Oct. 31, 2024
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Business Combination [Line Items]        
(Payment of)/proceeds from sale of businesses, net of cash sold and working capital adjustments   $ (4) $ 293 $ 96
Gain (Loss) on Disposition of Business   (3) (23) 101
Gain (Loss) On Disposition Of Business, Remeasurement Of Retained Noncontrolling Investment       24
Medicated feed additives        
Business Combination [Line Items]        
Divestiture Of Business, Price Of Divestiture, Expected $ 299      
Amount to be received under agreement     303  
Cash Divested from Deconsolidation     11  
(Payment of)/proceeds from sale of businesses, net of cash sold and working capital adjustments     292  
Gain (Loss) on Disposition of Business   (3) $ (25)  
Divestiture Of Business, Contingent Consideration Adjustments   $ 4    
Pumpkin Insurance Services        
Business Combination [Line Items]        
Amount to be received under agreement       99
Cash Divested from Deconsolidation       6
(Payment of)/proceeds from sale of businesses, net of cash sold and working capital adjustments       93
Gain (Loss) on Disposition of Business       $ 101
PetMedix Ltd.        
Business Combination [Line Items]        
Business Combination, Voting Equity Interest Acquired, Percentage       100.00%
Payments to Acquire Businesses, Net of Cash Acquired       $ 111
Cash Acquired from Acquisition       19
Business Combination, Consideration Transferred, Cash Withheld For Post-Closing Adjustments       5
Business Combination, Consideration Transferred       $ 100
v3.25.4
Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Restructuring Cost and Reserve [Line Items]      
Asset write-offs and asset impairments $ 47 $ 31 $ 46
Exit costs [1],[2] 7 0 4
Restructuring And Related Activities, Divestiture Related Cost 0 16 0
Restructuring charges and certain acquisition and divestiture-related costs 51 53 53
Restructuring charges 49 43 46
Manufacturing, Research, Corporate      
Restructuring Cost and Reserve [Line Items]      
Restructuring charges 42 14 22
Manufacturing, Research, Corporate | United States      
Restructuring Cost and Reserve [Line Items]      
Restructuring charges 4 7 3
Manufacturing, Research, Corporate | International      
Restructuring Cost and Reserve [Line Items]      
Restructuring charges 3 15 21
Employee Severance      
Restructuring Cost and Reserve [Line Items]      
Employee termination costs [1],[2] 20 36 41
Restructuring charges 20 43 41
Facility Closing      
Restructuring Cost and Reserve [Line Items]      
Asset write-offs and asset impairments 22 0 1
Restructuring charges 22 0 1
Acquisition-related costs      
Restructuring Cost and Reserve [Line Items]      
Acquisition-related costs $ 2 $ 1 $ 7
[1] The restructuring charges are associated with the following:
For the year ended December 31, 2025, Manufacturing/research/corporate of $42 million, U.S. of $4 million and International of $3 million.
For the year ended December 31, 2024, Manufacturing/research/corporate of $14 million, U.S. of $7 million and International of $15 million.
For the year ended December 31, 2023, Manufacturing/research/corporate of $22 million, U.S. of $3 million and International of $21 million.
[2] The restructuring charges for the year ended December 31, 2025 primarily related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, as well as employee termination costs related to organizational structure refinements.
    The restructuring charges for the year ended December 31, 2024 primarily consisted of employee termination costs related to organizational structure refinements, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
    The restructuring charges for the year ended December 31, 2023 primarily relates to employee termination and exit costs related to organizational structure refinements and other cost-reduction and productivity initiatives.
v3.25.4
Restructuring Charges and Other Costs Associated with Acquisitions and Divestitures (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Restructuring Reserve [Roll Forward]      
Beginning balance $ 28 [1] $ 35 $ 15
Provision/(benefit) 49 43 46
Non-cash activity   (7) (1)
Utilization and other [2] (26) (43) (25)
Non-cash activity (22)    
Ending balance $ 29 [1] 28 [1] 35
Restructuring Incurred Cost Statement Of Income Or Comprehensive Income Extensible Enumeration Not Disclosed Flag Provision    
Other current liabilities      
Restructuring Reserve [Roll Forward]      
Accrued expenses $ 27 26  
Other non-current liabilities      
Restructuring Reserve [Roll Forward]      
Other noncurrent liabilities 2 2  
Employee Severance      
Restructuring Reserve [Roll Forward]      
Beginning balance 26 [1] 32 14
Provision/(benefit) 20 43 41
Non-cash activity   (7) 0
Utilization and other [2] (23) (42) (23)
Non-cash activity 0    
Ending balance 23 [1] 26 [1] 32
Facility Closing      
Restructuring Reserve [Roll Forward]      
Beginning balance 0 0 0
Provision/(benefit) 22 0 1
Non-cash activity   0 (1)
Utilization and other 0 0 0
Non-cash activity (22)    
Ending balance 0 0 0
Exit Costs      
Restructuring Reserve [Roll Forward]      
Beginning balance 2 [1] 3 1
Provision/(benefit) 7 0 4
Non-cash activity   0 0
Utilization and other [2] (3) (1) (2)
Non-cash activity 0    
Ending balance 6 [1] $ 2 [1] $ 3
Employee Severance and Exit Costs      
Restructuring Reserve [Roll Forward]      
Contractual obligation 29    
Payments expected upcoming year 27    
Payments expected thereafter $ 2    
[1] At December 31, 2025 and 2024, included in Accrued Expenses ($27 million and $26 million, respectively) and Other noncurrent liabilities ($2 million and $2 million, respectively).
[2] Includes adjustments for foreign currency translation.
v3.25.4
Other (Income)/Deductions - Net Other (Income)/Deductions - Net (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Other Income and Expenses [Abstract]      
Royalty-related income $ (2) $ (5) $ (37)
Interest income (93) (106) (105)
Identifiable intangible asset impairment charges 5 15 35
Foreign currency loss [1] 45 50 47
Other, net 6 4 2
Other (income)/deductions—net (36) (19) (159)
Gain (Loss) on Disposition of Business $ 3 $ 23 $ (101)
[1] Primarily driven by costs related to hedging and exposures to certain developed and emerging market currencies.
v3.25.4
Tax Matters (Taxes on Income) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Taxes on Income [Line Items]      
Income before provision for taxes on income [1] $ 3,360 $ 3,133 $ 2,936
Current income taxes:      
Federal 223 645 341
State and local 56 65 35
Deferred income taxes:      
Federal 116 (297) (40)
State and local 14 (42) 25
Total U.S. tax provision 409 371 361
International:      
Current income taxes 327 265 281
Deferred income taxes (49) 1 (46)
Total international tax provision 278 266 235
Provision for taxes on income 687 637 596
United States      
Taxes on Income [Line Items]      
Income before provision for taxes on income 1,877 1,867 1,636
International      
Taxes on Income [Line Items]      
Income before provision for taxes on income $ 1,483 $ 1,266 $ 1,300
[1] Defined as income before provision for taxes on income.
v3.25.4
Tax Matters (Tax Rate Reconciliation) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Total      
U.S. statutory income tax rate $ 706    
State and local taxes, net of federal benefits 55    
Effect of cross-border tax laws:      
GILTI 120    
Foreign exchange gains/(losses) (57)    
Other (11)    
Tax credits:      
Foreign tax credits (112)    
Other (28)    
Changes in valuation allowances 49    
Nontaxable or nondeductible items:      
Other 11    
Changes in unrecognized tax benefits 22    
Provision for taxes on income $ 687 $ 637 $ 596
%      
U.S. statutory income tax rate 21.00% 21.00% [1] 21.00% [1]
State and local taxes, net of federal benefits 1.60% 0.60% 1.60%
Effect of cross-border tax laws:      
GILTI 3.60%    
Foreign exchange gains/(losses) (0.017)    
Other (0.30%)    
Tax credits:      
Foreign tax credits (3.30%)    
Other (0.80%)    
Changes in valuation allowances 1.50%    
Nontaxable or nondeductible items:      
Other 0.30%    
All other—net   0.20% (0.90%)
Effect of rates different than statutory   0.20% (0.80%)
Changes in unrecognized tax benefits 0.60%    
Effective tax rate 20.40% 20.30% 20.30%
United States      
Nontaxable or nondeductible items:      
Other adjustments $ (34)    
Nontaxable or nondeductible items:      
All other—net (1.00%)    
Ireland      
Nontaxable or nondeductible items:      
Other adjustments $ 25    
Effect of rates different than statutory $ (88)    
Nontaxable or nondeductible items:      
All other—net 0.70%    
Effect of rates different than statutory (2.60%)    
Other foreign jurisdictions      
Nontaxable or nondeductible items:      
Effect of rates different than statutory $ 29    
Nontaxable or nondeductible items:      
Effect of rates different than statutory 0.80%    
[1] For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see C. Tax Contingencies.
v3.25.4
Tax Matters (Tax Rate Reconciliation Before ASU Adoption) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Income Tax Disclosure [Abstract]      
U.S. statutory income tax rate 21.00% 21.00% [1] 21.00% [1]
State and local taxes, net of federal benefits 1.60% 0.60% 1.60%
Unrecognized tax benefits and tax settlements and resolution of certain tax positions [1]   0.40% 0.90%
Foreign exchange gains/(losses)   (1.50%) (0.70%)
U.S. Research and Development Tax Credit and U.S. Domestic Production Activities deduction   (0.60%) (0.70%)
Stock-based compensation   (0.20%) (0.30%)
Non-deductible / non-taxable items   0.20% 0.20%
Effect of rates different than statutory   0.20% (0.80%)
All other—net   0.20% (0.90%)
Effective tax rate 20.40% 20.30% 20.30%
Deferred tax benefit $ 19    
[1] For a discussion about unrecognized tax benefits and tax settlements and resolution of certain tax positions, see C. Tax Contingencies.
v3.25.4
Tax Matters (Income Tax Payments, Net of Refunds) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Income Tax Paid, by Individual Jurisdiction [Line Items]      
Federal $ 433    
State and local 25    
International 257    
Total income tax payments, net of refunds [1] 715 $ 892 $ 754
Investment Tax Credit 133    
Ireland      
Income Tax Paid, by Individual Jurisdiction [Line Items]      
International 127    
Other foreign jurisdictions      
Income Tax Paid, by Individual Jurisdiction [Line Items]      
International $ 130    
[1] For 2025, includes $133 million related to the purchase of transferable federal tax credits.
v3.25.4
Tax Matters (Deferred Taxes) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Taxes on Income [Line Items]    
Prepaid/deferred items $ 146 $ 219
Inventories 24 21
Capitalized research and development for tax 410 301
Deferred Tax Assets, Derivative Instruments 56 0
Deferred Tax Assets, Hedging Transactions 42 0
Interest expense limitation 12 3
Identifiable intangible assets (78) (103)
Property, plant and equipment (194) (179)
Employee benefits 73 74
Restructuring and other charges 11 10
Legal and product liability reserves 13 14
Net operating loss/credit carryforwards 165 139
Unremitted earnings (4) (3)
All other 7 0
Subtotal 683 496
Valuation allowance (185) (123)
Net deferred tax asset/(liability) [1],[2] 498 373
Noncurrent deferred tax assets 637 540
Noncurrent deferred tax liabilities 139 $ 167
Internal Revenue Service (IRS)    
Taxes on Income [Line Items]    
Income Tax Examination, Estimate of Possible Loss $ 450  
[1] In 2025, included in Noncurrent deferred tax assets ($637 million) and Noncurrent deferred tax liabilities ($139 million). In 2024, included in Noncurrent deferred tax assets ($540 million) and Noncurrent deferred tax liabilities ($167 million).
[2] The change in the total net deferred tax asset/(liability) from December 31, 2024 to December 31, 2025 is primarily attributable to an increase in deferred tax assets related to (i) the capitalization and amortization of research and development costs for U.S. tax purposes, (ii) foreign exchange (gains)/losses, (iii) original issue discount on convertible debt, and (iv) net operating loss/credit carryforwards, partially offset by a decrease in deferred tax assets related to (i) prepaid/deferred items as a result of a prepayment from a related foreign entity in Belgium, as well as an increase in valuation allowance.
v3.25.4
Tax Matters (Tax Contingencies) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Income Tax Contingency [Line Items]      
Net liabilities associated with uncertain tax positions $ 222 $ 214 $ 209
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance, January 1 (213) [1] (209) [1] (194)
Increases based on tax positions taken during a prior period [2] 0 (1) (27)
Decreases based on tax positions taken during a prior period [2] 1 0 20
Increases based on tax positions taken during the current period [2] (13) (7) (13)
Settlements 0 1 0
Lapse in statute of limitations 4 3 5
Balance, December 31 [1] (221) (213) (209)
Net interest expense 14 12 10
Gross accrued interest 51 37 26
Gross accrued penalties 1    
Other Noncurrent Assets      
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]      
Balance, January 1 (1) 0  
Balance, December 31 $ (1) $ (1) $ 0
[1] .
[2] Primarily included in Provision for taxes on income.
v3.25.4
Financial Instruments (Credit Facilities) (Details)
Dec. 31, 2025
USD ($)
Aug. 31, 2025
USD ($)
Dec. 31, 2024
USD ($)
Line of Credit Facility [Line Items]      
Line of credit facility, maximum borrowing capacity $ 51,000,000    
Revolving Credit Facility      
Line of Credit Facility [Line Items]      
Revolving credit facility, current borrowing capacity   $ 1,250,000,000  
Line of credit facility, maximum borrowing capacity   $ 1,750,000,000  
Borrowings outstanding 0   $ 0
Line Of Credit For General Corporate Purpose      
Line of Credit Facility [Line Items]      
Borrowings outstanding $ 0   $ 0
Operational Efficiency      
Line of Credit Facility [Line Items]      
Maximum total leverage ratio   3.50  
Maximum total leverage ratio, next 12 months   4.00  
v3.25.4
Financial Instruments (Commercial Paper Program and Other Short-Term Borrowings) (Details) - USD ($)
Dec. 31, 2025
Dec. 31, 2024
Feb. 28, 2013
Short-term Debt [Line Items]      
Commercial paper issued under program $ 0 $ 0  
Commercial Paper      
Short-term Debt [Line Items]      
Capacity of commercial paper program     $ 1,000,000,000.0
v3.25.4
Financial Instruments - (Convertible Senior Notes) (Details)
$ / shares in Units, shares in Millions, $ in Millions
12 Months Ended
Dec. 31, 2025
USD ($)
$ / shares
Dec. 18, 2025
USD ($)
country
$ / shares
shares
Dec. 31, 2025
USD ($)
$ / shares
shares
Dec. 31, 2024
USD ($)
$ / shares
shares
Dec. 31, 2023
USD ($)
shares
Debt Instrument [Line Items]          
Proceeds from issuance of convertible debt     $ 2,000 $ 0 $ 0
Initial purchasers' discounts and expenses     43 0 0
Cost of entering into capped call transactions   $ 187 187 0 0
Payment to purchase Zoetis' common stock $ 1,535 $ 248 $ 3,235 $ 1,858 $ 1,092
Number of shares acquired (in shares) | shares   2.1 0.3 0.6 0.9
Common stock, par value (in dollars per share) | $ / shares $ 0.01 $ 0.01 $ 0.01 $ 0.01  
Capped call, strike price (in dollars per share) | $ / shares   148.20      
Initial cap price of capped calls (in dollars per share) | $ / shares   $ 211.72      
Capped calls coverage (in shares) | shares   13.5      
Deferred Tax Assets, Hedging Transactions $ 42   $ 42 $ 0  
Convertible Debt | 0.250% 2025 convertible senior notes due 2029          
Debt Instrument [Line Items]          
Debt, stated interest percentage rate   0.25%      
Debt instrument, face amount   $ 2,000      
Debt instrument, conversion price (in dollars per share) | $ / shares   $ 148.20      
Convertible debt, threshold trading days | country   20      
Convertible debt, threshold consecutive trading days | country   30      
Proceeds from issuance of convertible debt   $ 1,970      
Initial purchasers' discounts and expenses   $ 30      
Convertible Debt | 0.250% 2025 convertible senior notes due 2029 | Debt Conversion Terms One          
Debt Instrument [Line Items]          
Convertible debt, trigger price   130.00%      
Convertible Debt | 0.250% 2025 convertible senior notes due 2029 | Debt Conversion Terms Two          
Debt Instrument [Line Items]          
Convertible debt, trigger price   98.00%      
Convertible Debt | Convertible Senior Notes 0.250% Due 2029, Pursuant To Initial Purchasers' Option          
Debt Instrument [Line Items]          
Debt instrument, face amount   $ 250      
v3.25.4
Financial Instruments - (Senior Notes and Other Long-Term Debt) (Details) - Senior Notes - USD ($)
$ in Millions
Aug. 18, 2025
Nov. 08, 2022
Nov. 13, 2015
Jan. 28, 2013
Debt Instrument [Line Items]        
Debt, purchase price percent due to downgrade of investment grade       101.00%
4.150% 2025 senior notes due 2028        
Debt Instrument [Line Items]        
Debt instrument, face amount $ 850      
Debt, stated interest percentage rate 4.15%      
5.000% 2025 senior notes due 2035        
Debt Instrument [Line Items]        
Debt instrument, face amount $ 1,000      
Debt, stated interest percentage rate 5.00%      
Senior Notes Due 2025        
Debt Instrument [Line Items]        
Debt, unamortized discount $ 2      
5.400% Senior Notes Due 2025        
Debt Instrument [Line Items]        
Debt, stated interest percentage rate   5.40%    
Debt Instrument, Repurchased Face Amount 600      
4.500% 2015 senior notes due 2025        
Debt Instrument [Line Items]        
Debt, stated interest percentage rate     4.50%  
Debt Instrument, Repurchased Face Amount $ 750      
v3.25.4
Financial Instruments (Schedule of Long-term Debt) (Details) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 18, 2025
Aug. 18, 2025
Dec. 31, 2024
Nov. 08, 2022
Sep. 12, 2017
Nov. 13, 2015
Jan. 28, 2013
Debt Instrument [Line Items]                
Debt, principal amount $ 9,150     $ 6,650        
Unamortized debt discount / debt issuance costs (93)     (54)        
Less current portion of long-term debt 0     1,350        
Cumulative fair value adjustment for interest rate swap contracts (15)     (26)        
Long-term debt, net of discount and issuance costs 9,042     5,220        
Senior Notes | 4.500% 2015 senior notes due 2025                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate             4.50%  
Debt, principal amount 0     750        
Senior Notes | 5.400% Senior Notes Due 2025                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate         5.40%      
Debt, principal amount 0     600        
Senior Notes | 3.000% 2017 senior notes due 2027                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate           3.00%    
Debt, principal amount 750     750        
Senior Notes | 3.900% 2018 senior notes due 2028                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate           3.90%    
Debt, principal amount 500     500        
Senior Notes | 4.150% 2025 senior notes due 2028                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate     4.15%          
Debt, principal amount 850     0        
Senior Notes | 0.250% 2025 convertible senior notes due 2029                
Debt Instrument [Line Items]                
Debt, principal amount 2,000     0        
Senior Notes | 2.000% 2020 senior notes due 2030                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate           2.00%    
Debt, principal amount 750     750        
Senior Notes | 5.600% 2022 senior notes due 2032                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate         5.60%      
Debt, principal amount 750     750        
Senior Notes | 5.000% 2025 senior notes due 2035                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate     5.00%          
Debt, principal amount 1,000     0        
Senior Notes | 4.700% 2013 senior notes due 2043                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate               4.70%
Debt, principal amount 1,150     1,150        
Senior Notes | 3.950% 2017 senior notes due 2047                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate           3.95%    
Debt, principal amount 500     500        
Senior Notes | 4.450% 2018 senior notes due 2048                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate           4.45%    
Debt, principal amount 400     400        
Senior Notes | 3.000% 2020 senior notes due 2050                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate           3.00%    
Debt, principal amount 500     500        
Convertible Debt | 0.250% 2025 convertible senior notes due 2029                
Debt Instrument [Line Items]                
Debt, stated interest percentage rate   0.25%            
Fair Value, Inputs, Level 2                
Debt Instrument [Line Items]                
Fair value, debt instrument $ 8,842     $ 6,097        
v3.25.4
Financial Instruments (Fair Value of Debt) (Details) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Fair Value, Inputs, Level 2    
Debt Instrument [Line Items]    
Fair value, debt instrument $ 8,842 $ 6,097
v3.25.4
Financial Instruments (Long-term Debt Maturity) (Details) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Maturities    
2026 $ 0  
2027 750  
2028 1,350  
2029 2,000  
2030 750  
After 2029 4,300  
Total 9,150 $ 6,650
Interest payments    
2026 296  
2027 296  
2028 273  
2029 216  
2030 206  
After 2029 1,958  
Total $ 3,245  
v3.25.4
Financial Instruments (Interest Expense) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]      
Interest expense, net of capitalized interest $ 222 $ 225 $ 239
Capitalized interest expense $ 47 $ 39 $ 27
v3.25.4
Financial Instruments (Foreign Exchange Risk) (Details)
€ in Millions, kr in Millions, SFr in Millions, $ in Millions
Dec. 31, 2025
USD ($)
Dec. 31, 2025
EUR (€)
Dec. 31, 2025
DKK (kr)
Dec. 31, 2025
CHF (SFr)
Dec. 31, 2024
USD ($)
Dec. 31, 2024
EUR (€)
Dec. 31, 2024
DKK (kr)
Dec. 31, 2024
CHF (SFr)
Cross-currency interest rate swap contracts                
Derivative [Line Items]                
Aggregate notional amount $ 250 € 925 kr 400 SFr 0 $ 250 € 800 kr 475 SFr 25
Derivatives Not Designated as Hedging Instruments | Foreign Exchange Forward                
Derivative [Line Items]                
Aggregate notional amount $ 2,175       $ 2,070      
v3.25.4
Financial Instruments (Interest Rate Risk) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Aug. 18, 2025
Dec. 31, 2024
Sep. 12, 2017
Nov. 13, 2015
Derivative Instruments and Hedging Activities Disclosures [Line Items]          
Less current portion of long-term debt $ 0   $ 1,350    
Debt, principal amount 9,150   6,650    
Derivative, Cash Received on Hedge 11        
Senior Notes | 4.500% 2015 senior notes due 2025          
Derivative Instruments and Hedging Activities Disclosures [Line Items]          
Debt, stated interest percentage rate         4.50%
Debt, principal amount 0   750    
Senior Notes | 2.000% 2020 senior notes due 2030          
Derivative Instruments and Hedging Activities Disclosures [Line Items]          
Debt, stated interest percentage rate       2.00%  
Debt, principal amount 750   750    
Senior Notes | 3.000% 2020 senior notes due 2050          
Derivative Instruments and Hedging Activities Disclosures [Line Items]          
Debt, stated interest percentage rate       3.00%  
Debt, principal amount 500   500    
Senior Notes | 5.000% 2025 senior notes due 2035          
Derivative Instruments and Hedging Activities Disclosures [Line Items]          
Debt, stated interest percentage rate   5.00%      
Debt, principal amount $ 1,000   $ 0    
v3.25.4
Financial Instruments (Derivative Notional Amounts) (Details)
€ in Millions, kr in Millions, SFr in Millions, $ in Millions
Dec. 31, 2025
USD ($)
Dec. 31, 2025
EUR (€)
Dec. 31, 2025
DKK (kr)
Dec. 31, 2025
CHF (SFr)
Dec. 31, 2024
USD ($)
Dec. 31, 2024
EUR (€)
Dec. 31, 2024
DKK (kr)
Dec. 31, 2024
CHF (SFr)
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments                
Derivative [Line Items]                
Derivative, notional amount $ 2,175       $ 2,070      
Cross-currency interest rate swap contracts                
Derivative [Line Items]                
Derivative, notional amount 250 € 925 kr 400 SFr 0 250 € 800 kr 475 SFr 25
Interest Rate Swap                
Derivative [Line Items]                
Derivative, notional amount 0       $ 300      
Interest Rate Swap | Derivatives Designated as Hedging Instruments                
Derivative [Line Items]                
Derivative, notional amount $ 700              
v3.25.4
Financial Instruments (Fair Value of Derivative Instruments) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Derivatives, Fair Value [Line Items]      
Derivative, Fair Value, Net $ (69) $ 71  
Unrealized (losses)/gains on derivatives for net investment hedges, net of tax of $(30), $13 and $(7) for the years ended December 31, 2025, 2024 and 2023, respectively [1] (101) 44 $ (23)
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments      
Derivatives, Fair Value [Line Items]      
Derivative, Fair Value, Net 5 12  
Gain (loss) on derivative contracts not designated as hedging instruments $ 27 (11)  
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | Maximum      
Derivatives, Fair Value [Line Items]      
Derivative, Term of Contract 2 years    
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | Minimum      
Derivatives, Fair Value [Line Items]      
Derivative, Term of Contract 60 days    
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | Other current assets      
Derivatives, Fair Value [Line Items]      
Derivative Asset, Fair Value, Gross Asset $ 11 18  
Foreign Exchange Forward | Derivatives Not Designated as Hedging Instruments | Other current liabilities      
Derivatives, Fair Value [Line Items]      
Derivative Liability, Subject to Master Netting Arrangement, before Offset (6) (6)  
Forward Starting Interest Rate Swap Contract [Member] | Derivatives Designated as Hedging Instruments | Other Noncurrent Assets      
Derivatives, Fair Value [Line Items]      
Derivative, Fair Value, Net 0 26  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments      
Derivatives, Fair Value [Line Items]      
Unrealized (losses)/gains on derivatives for net investment hedges, net of tax of $(30), $13 and $(7) for the years ended December 31, 2025, 2024 and 2023, respectively (101) 44  
Gains/(losses) on derivative instruments 21 17  
Collateral received 70 20  
Additional Collateral, Aggregate Fair Value $ 0 51  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Maximum      
Derivatives, Fair Value [Line Items]      
Derivative, Term of Contract 3 years    
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Other current assets      
Derivatives, Fair Value [Line Items]      
Derivative Asset, Fair Value, Gross Asset $ 6 55  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Other current liabilities      
Derivatives, Fair Value [Line Items]      
Derivative Liability, Subject to Master Netting Arrangement, before Offset 25 0  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Other Noncurrent Assets      
Derivatives, Fair Value [Line Items]      
Derivative Asset, Fair Value, Gross Asset 0 4  
Cross-currency interest rate swap contracts | Derivatives Designated as Hedging Instruments | Other non-current liabilities      
Derivatives, Fair Value [Line Items]      
Derivative Liability, Subject to Master Netting Arrangement, before Offset 39 0  
Forward starting interest rate swap contracts | Derivatives Designated as Hedging Instruments      
Derivatives, Fair Value [Line Items]      
Derivative Liability, Subject to Master Netting Arrangement, before Offset 74 59  
Unrealized (losses)/gains on derivatives for net investment hedges, net of tax of $(30), $13 and $(7) for the years ended December 31, 2025, 2024 and 2023, respectively (20) 11  
zts_FixedtoFloatInterestRateSwap | Derivatives Designated as Hedging Instruments | Other non-current liabilities      
Derivatives, Fair Value [Line Items]      
Derivative Asset, Fair Value, Gross Asset $ (16) $ (26)  
[1] Presented net of reclassification adjustments, which are not material in any period presented. Reclassification adjustments related to benefit plans are generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, general and administrative expenses, and/or Research and development expenses, as appropriate, in the Consolidated Statements of Income.
v3.25.4
Leases (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Lessee, Lease, Description [Line Items]      
Operating lease right of use assets $ 288 $ 219  
Finance Lease, Right-of-Use Asset, after Accumulated Amortization 9 9  
Lease, Right-Of-Use Asset 297 228  
Operating lease liabilities - current (in Other current liabilities) 52 51  
Operating lease liabilities - noncurrent $ 196 $ 174  
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other noncurrent liabilities Other noncurrent liabilities  
Finance Lease, Liability, Current $ 1 $ 1  
Finance Lease, Liability, Noncurrent 6 7  
Lease, Liability 255 233  
Operating lease expense 68 59 $ 56
Variable lease payments not included in the measurement of lease liabilities 28 18 20
Short-term lease payments not included in the measurement of lease liabilities 14 13 11
Finance Lease, Right-of-Use Asset, Amortization 1 1 1
Cash paid for amounts included in the measurement of lease liabilities:      
Operating cash flows – operating leases 67 61 57
Financing cash flows – finance leases 2 1 0
Lease obligations obtained in exchange for right-of-use assets - operating (non-cash) 76 46 73
Lease obligations obtained in exchange for right-of-use assets – finance (non-cash) $ 1 $ 0 9
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Other noncurrent assets Other noncurrent assets  
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Other current liabilities Other current liabilities  
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Other current liabilities Other current liabilities  
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other noncurrent liabilities Other noncurrent liabilities  
Lease, Cost $ 111 $ 91 $ 88
Total operating lease liabilities $ 248    
Weighted-average remaining lease term—operating leases (years) 6 years 10 months 13 days 6 years 6 months 25 days  
Finance Lease, Weighted Average Remaining Lease Term 27 years 10 months 24 days 29 years 2 months 8 days  
Weighted-average discount rate—operating leases 3.91% 3.65%  
Finance Lease, Weighted Average Discount Rate, Percent 4.97% 4.97%  
2026 $ 60    
2027 51    
2028 41    
2029 29    
2030 21    
After 2025 83    
Total Lease Payments 285    
Less: Imputed Interest (37)    
Less: Imputed Interest (3)    
Finance Lease, Liability 7    
Finance Lease, Liability, to be Paid 10    
Finance Lease, Liability, to be Paid, after Year Five 5    
Finance Lease, Liability, to be Paid, Year Five 1    
Finance Lease, Liability, to be Paid, Year Four 1    
Finance Lease, Liability, to be Paid, Year Three 1    
Finance Lease, Liability, to be Paid, Year Two 1    
Finance Lease, Liability, to be Paid, Year One $ 1    
Minimum      
Lessee, Lease, Description [Line Items]      
Lessee, Operating Lease, Term of Contract 1 year    
Maximum      
Lessee, Lease, Description [Line Items]      
Lessee, Operating Lease, Term of Contract 14 years    
Lessee, Finance Lease, Remaining Lease Term 28 years    
v3.25.4
Inventories (Details) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Inventory Disclosure [Abstract]    
Finished goods $ 1,106 $ 996
Work-in-process 962 933
Raw materials and supplies 362 377
Inventories $ 2,430 $ 2,306
v3.25.4
Property, Plant and Equipment (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Property, Plant and Equipment [Line Items]      
Land $ 33 $ 28  
Buildings 1,549 1,292  
Machinery, equipment and fixtures 3,729 3,353  
Construction-in-progress 1,295 1,353  
Total property, plant and equipment, gross 6,606 6,026  
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment 2,925 2,635  
Property, plant and equipment 3,681 3,391  
Depreciation expense $ 330 $ 327 $ 306
Building | Minimum      
Property, Plant and Equipment [Line Items]      
Estimated useful life (in years) 33 years    
Machinery and Equipment | Minimum      
Property, Plant and Equipment [Line Items]      
Estimated useful life (in years) 3 years    
Machinery and Equipment | Maximum      
Property, Plant and Equipment [Line Items]      
Estimated useful life (in years) 20 years    
v3.25.4
Goodwill and Other Intangible Assets (Goodwill) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Goodwill [Roll Forward]    
Beginning balance $ 2,724 $ 2,759
Other 36 (35)
Additions / Adjustments 7  
Ending balance 2,767 2,724
Adjustments for the derecognition of goodwill related to the sale   24
United States    
Goodwill [Roll Forward]    
Beginning balance 1,515 1,532
Other 0 (17)
Additions / Adjustments 0  
Ending balance 1,515 1,515
International    
Goodwill [Roll Forward]    
Beginning balance 1,209 1,227
Other 36 (18)
Additions / Adjustments 7  
Ending balance $ 1,252 $ 1,209
v3.25.4
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]    
Gross goodwill $ 3,303 $ 3,260
Accumulated goodwill impairment losses $ 536 $ 536
v3.25.4
Goodwill and Other Intangible Assets (Finite-lived and Indefinite-lived Intangible Assets) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Finite-lived intangible assets, Gross Carrying Amount $ 2,586 $ 2,536  
Finite-lived intangible assets, Accumulated Amortization (1,802) (1,618)  
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization 784 918  
Indefinite-lived intangible assets: 214 209  
Intangible Assets, Gross Carrying Amount 2,800 2,745  
Identifiable Intangible Assets, Less Accumulated Amortization $ 998 1,127  
Weighted average life our finite lived intangible assets 7 years 8 months 12 days    
Amortization expense of finite-lived intangible assets $ 157 170 $ 185
2026 152    
2027 148    
2028 119    
2029 82    
2030 71    
Brands and tradenames      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Indefinite-lived intangible assets: 67 66  
In Process Research and Development      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Indefinite-lived intangible assets: 141 136  
Product rights      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
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 1,932 1,891  
Finite-lived intangible assets, Accumulated Amortization (1,342) (1,175)  
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization 590 716  
Brands and tradenames      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Finite-lived intangible assets, Gross Carrying Amount 362 367  
Finite-lived intangible assets, Accumulated Amortization (250) (246)  
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization 112 121  
Other Intangible Assets      
Finite Lived and Indefinite Lived Intangible Assets [Line Items]      
Finite-lived intangible assets, Gross Carrying Amount 292 278  
Finite-lived intangible assets, Accumulated Amortization (210) (197)  
Finite-lived intangible assets, Identifiable Intangible Assets, Less Accumulated Amortization $ 82 $ 81  
v3.25.4
Benefit Plans (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Defined Benefit Plan Disclosure [Line Items]      
Actuarial losses $ 7 $ 3  
Actuarial losses, net of tax 4 2  
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
Service cost 6 5 $ 5
Interest cost 5 5 5
Expected return on plan assets (5) (4) (4)
Settlement and curtailments (gains) / losses 0 1 0
Net periodic benefit cost 6 7 6
Company contributions 6 6  
Contribution expense $ 77 79 69
Matching percentage 100.00%    
Maximum matching percentage 5.00%    
Additional contribution percentage, minimum 0.00%    
Additional contribution percentage, maximum 8.00%    
Pension Plan      
Defined Benefit Plan Disclosure [Line Items]      
Pension and other postretirement benefit expense $ 6 7 6
Other Pension Plan, Postretirement or Supplemental Plans      
Defined Benefit Plan Disclosure [Line Items]      
Pension and other postretirement benefit expense 4 3 11
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
2025 5    
Defined Benefit Plan, Expected Future Benefit Payment, Thereafter 42    
United States      
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
Postretirement benefit expense $ 0 $ 0 $ 0
Foreign Plan      
Defined Benefit Plan Disclosure [Line Items]      
Period of amortization 10 years 3 months 18 days    
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]      
Expected contribution in 2025 $ 8    
2025 10    
2026 8    
2027 7    
2028 14    
2029 13    
Thereafter $ 61    
v3.25.4
Benefit Plans Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]      
Projected benefit obligation, beginning $ 136 $ 129  
Service cost 6 5 $ 5
Interest cost 5 5 5
Changes in actuarial assumptions and other 5 (9)  
Settlements and curtailments (2) (2)  
Benefits paid (5) (4)  
Adjustments for foreign currency translation 11 (5)  
Other––net (1) (1)  
Benefit obligation, ending 145 136 129
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]      
Fair value of plan assets, beginning 94 [1] 86  
Actual return on plan assets 4 12  
Company contributions 6 6  
Settlements and curtailments (2) (3)  
Benefits paid (5) (4)  
Adjustments for foreign currency translation 6 (3)  
Fair value of plan assets, ending 103 [1] 94 [1] $ 86
Funded status—Projected benefit obligation in excess of plan assets at end of year [2] $ (42) $ (42)  
[1] Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 3. Significant Accounting Policies—Fair Value). Investment plan assets are valued using Level 1 or Level 2 inputs.
[2] .
v3.25.4
Benefit Plans Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Pension plans with an accumulated benefit obligation in excess of plan assets:    
Fair value of plan assets $ 10 $ 9
Accumulated benefit obligation 53 50
Pension plans with a projected benefit obligation in excess of plan assets:    
Projected benefit obligation 59 55
Pension Plan    
Pension plans with a projected benefit obligation in excess of plan assets:    
Fair value of plan assets $ 10 $ 9
v3.25.4
Benefit Plans Schedule of Assumptions Used (Details)
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Weighted average assumptions used to determine benefit obligations: [Abstract]      
Discount rate 4.10% 3.50% 4.20%
Rate of compensation increase 3.60% 3.50% 3.60%
Cash balance credit interest rate 2.00% 1.70% 1.60%
Weighted average assumptions used to determine net benefit cost for the year ended December 31:      
Discount rate 3.50% 4.20% 3.70%
Expected return on plan assets 4.90% 4.60% 4.70%
Rate of compensation increase 3.50% 3.60% 3.50%
Cash balance credit interest rate 1.70% 1.60% 1.70%
v3.25.4
Benefit Plans Schedule of Allocation of Plan Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Defined Benefit Plan Disclosure [Line Items]      
Plan assets $ 103 [1] $ 94 [1] $ 86
Cash and cash equivalents      
Defined Benefit Plan Disclosure [Line Items]      
Plan assets 2 1  
Equity securities: Equity commingled funds      
Defined Benefit Plan Disclosure [Line Items]      
Plan assets 40 37  
Debt securities: Government bonds      
Defined Benefit Plan Disclosure [Line Items]      
Plan assets 49 46  
Other investments      
Defined Benefit Plan Disclosure [Line Items]      
Plan assets $ 12 $ 10  
[1] Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 3. Significant Accounting Policies—Fair Value). Investment plan assets are valued using Level 1 or Level 2 inputs.
v3.25.4
Benefit Plans Schedule Of Percentage Of Allocation Of Plan Assets Table (Details)
Dec. 31, 2025
Dec. 31, 2024
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 100.00%  
Cash and cash equivalents, percentage 1.90% 1.40%
Equity securities, percentage 39.00% 39.20%
Debt securities, percentage 47.30% 48.40%
Other investments, percentage 11.80% 11.00%
Total, percentage 100.00% 100.00%
Maximum | Cash and cash equivalents    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 10.00%  
Maximum | Equity securities: Equity commingled funds    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 60.00%  
Maximum | Debt securities: Government bonds    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 100.00%  
Maximum | Other investments    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 100.00%  
Minimum | Cash and cash equivalents    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 0.00%  
Minimum | Equity securities: Equity commingled funds    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 0.00%  
Minimum | Debt securities: Government bonds    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 15.00%  
Minimum | Other investments    
Defined Benefit Plan Disclosure [Line Items]    
Total, percentage 0.00%  
v3.25.4
Share-Based Payments (Narrative) (Details) - USD ($)
$ / shares in Units, $ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Shares of stock approved and registered with the SEC 30,000,000    
Shares available for future grant 12,000,000    
Period following separation service 60 days    
Expected stock price volatility [1] 26.42% 26.99% 28.63%
Stock Options      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Exercise price percentage of the fair market value price at date of grant 100.00%    
Award vesting period (in years) 3 years    
Contractual term (in years) 10 years    
Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax $ 10    
Weighted-average period over which RSU cost is expected to be recognized (in years) 10 months    
Restricted Stock Units (RSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Award vesting period (in years) 3 years    
Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax $ 77    
Weighted-average period over which RSU cost is expected to be recognized (in years) 12 months    
Granted (in shares) 594,287    
Shares outstanding 334,042    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 156.29    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number 774,681 556,106  
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Graded Vesting Period 3 years    
Deferred Stock Units (DSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Granted (in shares) 0 0  
Shares outstanding 57,100 66,318  
PSUs      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Total compensation cost related to nonvested RSU awards not yet recognized, pre-tax $ 27    
Weighted-average period over which RSU cost is expected to be recognized (in years) 1 year 3 months 18 days    
Granted (in shares) 148,130    
Shares outstanding 79,630    
Expected stock price volatility 27.60% 26.20%  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 171.21    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number 302,463 256,567  
PSUs | Peer Companies      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected stock price volatility 29.80% 30.60%  
PSUs | Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Percentage of target units 0.00%    
PSUs | Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Percentage of target units 200.00%    
[1] Determined using an equal weighting between historical volatility of the Zoetis stock price and implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends.
v3.25.4
Share-Based Payments (Components of share-based compensation expense) (Details) - USD ($)
$ / shares in Units, $ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense—total [1] $ 83 $ 74 $ 60
Tax benefit for share-based compensation expense (10) (9) (8)
Share-based compensation expense, net of tax 73 65 52
Share-based compensation expense capitalized (less than) $ 1 $ 1 1
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price $ 156.80    
Deferred Stock Units (DSUs)      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Granted (in shares) 0 0  
Stock options / stock appreciation rights      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense $ 12 $ 11 8
RSUs / DSUs      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation expense [2] $ 52 42 37
PSUs      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Granted (in shares) 148,130    
Share-based compensation expense $ 19 $ 21 $ 15
[1] For each of the years ended December 31, 2025, 2024 and 2023, we capitalized up to $1 million of share-based compensation expense to inventory
[2]
v3.25.4
Share-Based Payments (Stock option valuation assumptions) (Details)
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]      
Expected dividend yield [1] 1.27% 0.87% 0.92%
Risk-free interest rate [2] 4.38% 4.06% 3.84%
Expected stock price volatility [3] 26.42% 26.99% 28.63%
Expected term (in years) [4] 4 years 3 months 18 days 4 years 1 month 6 days 4 years 2 months 12 days
[1] Determined using a constant dividend yield during the expected term of the Zoetis stock option.
[2] Determined using the interpolated yield on U.S. Treasury zero-coupon issues.
[3] Determined using an equal weighting between historical volatility of the Zoetis stock price and implied volatility. The selection of the blended historical and implied volatility approach was based on our assessment that this calculation of expected volatility is more representative of future stock price trends.
[4] Determined using expected exercise and post-vesting termination patterns.
v3.25.4
Share-Based Payments (Stock option activity) (Details) - USD ($)
$ / shares in Units, $ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Shares      
Outstanding, Beginning Balance (in shares) 1,447,949    
Granted (in shares) 320,498    
Exercised (in shares) (111,374)    
Forfeited (in shares) (78,289)    
Outstanding, Ending Balance (in shares) 1,578,784 1,447,949  
Weighted-average Exercise Price Per Share      
Outstanding, Beginning Balance (in dollars per share) $ 143.83    
Granted (in dollars per share) 156.80    
Exercised (in dollars per share) 85.26    
Forfeited (in dollars per share) 179.64    
Outstanding, Ending Balance (in dollars per share) $ 148.82 $ 143.83  
Outstanding, Weighted-average Remaining Contractual Term (in years) 5 years 10 months 24 days    
Outstanding, Aggregate Intrinsic Value [1] $ 18,853,364    
Exercisable, December 31, 2025 1,046,676    
Exercisable, Weighted Average Exercise Price Per Share $ 138.76    
Exercisable, Weighted Average Remaining Contractual Term (in years) 4 years 7 months 6 days    
Vested and expected to vest, Aggregate Intrinsic Value [1] $ 18,853,364    
Weighted-average grant date fair value per stock option $ 40.22 $ 50.77 $ 43.56
Aggregate intrinsic value on exercise $ 8 $ 40 $ 81
Cash received upon exercise 9 20 42
Share-based Payment Arrangement, Exercise of Option, Tax Benefit $ 8 $ 17 $ 17
[1] Market price of underlying Zoetis common stock less exercise price.
v3.25.4
Share-Based Payments (Nonvested restricted stock activity) (Details) - Restricted Stock Units (RSUs)
12 Months Ended
Dec. 31, 2025
$ / shares
shares
RSUs  
Nonvested, Beginning Balance (in shares) | shares 556,106
Granted (in shares) | shares 594,287
Vested (in shares) | shares (334,042)
Reinvested dividend equivalents (in shares) | shares 9,929
Forfeited (in shares) | shares (51,599)
Nonvested, Ending Balance (in shares) | shares 774,681
Weighted Average Grant Date Fair Value Per Share  
Nonvested, Beginning Balance (in dollars per share) | $ / shares $ 187.61
Granted (in dollars per share) | $ / shares 156.29
Vested (in dollars per share) | $ / shares 189.70
Reinvested dividend equivalents (in dollars per share) | $ / shares 167.44
Forfeited (in dollars per share) | $ / shares 169.77
Nonvested, Ending Balance (in dollars per share) | $ / shares $ 163.56
v3.25.4
Share-Based Payments (Performance Share Awards (PSAs) Activity) (Details) - PSUs
12 Months Ended
Dec. 31, 2025
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Shares, Issued | shares 742
RSUs  
Nonvested, Beginning Balance (in shares) | shares 256,567
Granted (in shares) | shares 148,130
Vested (in shares) | shares (79,630)
Reinvested dividend equivalents (in shares) | shares 4,050
Forfeited (in shares) | shares (26,654)
Nonvested, Ending Balance (in shares) | shares 302,463
Weighted Average Grant Date Fair Value Per Share  
Nonvested, Beginning Balance (in dollars per share) | $ / shares $ 248.68
Granted (in dollars per share) | $ / shares 171.21
Vested (in dollars per share) | $ / shares 236.20
Reinvested dividend equivalents (in dollars per share) | $ / shares 222.23
Forfeited (in dollars per share) | $ / shares 232.41
Nonvested, Ending Balance (in dollars per share) | $ / shares 215.08
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ / shares $ 245.07
v3.25.4
Stockholders' Equity - Changes in Common Shares and Treasury Stock (Details) - USD ($)
Dec. 31, 2025
Dec. 31, 2024
Class of Stock [Line Items]    
Common stock, shares authorized 6,000,000,000 6,000,000,000
Preferred stock, authorized (in shares) 1,000,000,000  
August 2024 Share Repurchase Program    
Class of Stock [Line Items]    
Shares authorized under repurchase program $ 6,000,000,000  
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased 2,400,000,000  
v3.25.4
Stockholders' Equity - Accumulated other comprehensive income/ (loss) (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance $ 4,770 $ 4,991 $ 4,403
Other comprehensive (loss)/gain, net of tax [1] 106 (101) (22)
Ending balance 3,331 4,770 4,991
Accumulated Other Comprehensive (Loss)/ Income      
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance (940) (839) (817)
Other comprehensive (loss)/gain, net of tax 106 (101) (22)
Ending balance (834) (940) (839)
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent      
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance 89 85 90
Other comprehensive (loss)/gain, net of tax (19) 4 (5)
Ending balance 70 89 85
Accumulated Other Comprehensive Income (Loss), Derivative Qualifying as Hedge, Excluded Component, Including Portion Attributable to Noncontrolling Interest      
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance 62 18 41
Other comprehensive (loss)/gain, net of tax (101) 44 (23)
Ending balance (39) 62 18
Currency Translation Adjustment, Net Unrealized Losses      
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance (1,091) (944) (944)
Other comprehensive (loss)/gain, net of tax 224 (147) 0
Ending balance (867) (1,091) (944)
Benefit Plans, Actuarial Gains/ (Losses)      
Accumulated Other Comprehensive Income (Loss) [Roll Forward]      
Beginning balance 0 2 (4)
Other comprehensive (loss)/gain, net of tax 2 (2) 6
Ending balance $ 2 $ 0 $ 2
[1] Presented net of reclassification adjustments, which are not material in any period presented. Reclassification adjustments related to benefit plans are generally reclassified, as part of net periodic pension cost, into Cost of sales, Selling, general and administrative expenses, and/or Research and development expenses, as appropriate, in the Consolidated Statements of Income.
v3.25.4
Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Numerator      
Net income before allocation to noncontrolling interests $ 2,673 $ 2,496 $ 2,340
Less: net income/(loss) attributable to noncontrolling interests 0 10 (4)
Net income attributable to Zoetis Inc. $ 2,673 $ 2,486 $ 2,344
Denominator      
Weighted-average common shares outstanding 443,443 454,200 461,172
Common stock equivalents: stock options, RSUs, DSUs and PSUs 392 648 1,097
Weighted-average common and potential dilutive shares outstanding 443,835 454,848 462,269
Earnings per share attributable to Zoetis Inc. stockholders—basic (in dollars per share) $ 6.03 $ 5.47 $ 5.08
Earnings per share attributable to Zoetis stockholders—diluted (in dollars per share) $ 6.02 $ 5.47 $ 5.07
v3.25.4
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
Number of years lawsuit suspended 1 year  
v3.25.4
Commitments and Contingencies - Purchase Commitments (Details)
$ in Millions
Dec. 31, 2025
USD ($)
Loss Contingencies [Line Items]  
Purchase Obligation, to be Paid, Year One $ 243
Purchase Obligation 427
Long Term Purchase Commitment  
Loss Contingencies [Line Items]  
Purchase Obligation $ 184
v3.25.4
Segment Information (Details)
$ in Millions
12 Months Ended
Dec. 31, 2025
USD ($)
segement
Dec. 31, 2024
USD ($)
Segment Reporting Information [Line Items]    
Number of operating segments 2  
Number of reportable segments 2  
Assets | $ $ 15,467 $ 14,237
v3.25.4
Segment Information - Income Statement Narrative (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Segment Reporting Information [Line Items]      
Revenues $ 9,467 $ 9,256 $ 8,544
Gain (Loss) on Disposition of Business (3) (23) 101
Pumpkin Insurance Services      
Segment Reporting Information [Line Items]      
Gain (Loss) on Disposition of Business     101
Impairment Charges      
Segment Reporting Information [Line Items]      
Restructuring and Other Cost Productivity Charges     24
Segment Reconciling Items | Zoetis Initiatives      
Segment Reporting Information [Line Items]      
Restructuring and Other Cost Productivity Charges     43
International Segment | Operating Segments      
Segment Reporting Information [Line Items]      
Revenues [1] 4,254 4,102 3,911
International Segment | Euro Member Countries, Euro | Operating Segments      
Segment Reporting Information [Line Items]      
Revenues $ 998 $ 937 $ 853
[1] Operating expenses primarily consisted of field selling, other marketing expenses, advertising and promotions, and freight and logistics costs.
(c) Revenue denominated in euros was $998 million in 2025, $937 million in 2024 and $853 million in 2023.
v3.25.4
Segment Information - Income Statement (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
Segment Reporting Information [Line Items]      
Revenues $ 9,467 $ 9,256 $ 8,544
Cost of Sales [1] 2,666 2,719 2,561
Other (income)/deductions-net 36 19 159
Earnings [2] 3,360 3,133 2,936
Depreciation and Amortization [2],[3] 487 497 491
Property, plant and equipment, less accumulated depreciation 3,681 3,391  
Gain (Loss) on Disposition of Business (3) (23) 101
Pumpkin Insurance Services      
Segment Reporting Information [Line Items]      
Gain (Loss) on Disposition of Business     101
Other business activities      
Segment Reporting Information [Line Items]      
Earnings (562) (562) (496)
Depreciation and Amortization [3] 51 43 33
United States      
Segment Reporting Information [Line Items]      
Revenues 5,097 5,074 4,555
Property, plant and equipment, less accumulated depreciation 2,456 2,249  
International      
Segment Reporting Information [Line Items]      
Property, plant and equipment, less accumulated depreciation 1,225 1,142  
Operating Segments      
Segment Reporting Information [Line Items]      
Earnings 5,702 5,454 4,900
Depreciation and Amortization [3] 193 181 172
Operating Segments | United States Segment      
Segment Reporting Information [Line Items]      
Revenues 5,097 5,074 4,555
Cost of Sales 842 936 900
Gross Profit $ 4,255 $ 4,138 $ 3,655
Gross Margin 83.50% 81.60% 80.20%
Operating expenses $ 817 $ 805 $ 786
Other (income)/deductions-net 0 (3) 6
Earnings 3,438 3,336 2,863
Depreciation and Amortization [3] 93 85 80
Operating Segments | International Segment      
Segment Reporting Information [Line Items]      
Revenues [4] 4,254 4,102 3,911
Cost of Sales 1,312 1,312 1,234
Gross Profit $ 2,942 $ 2,790 $ 2,677
Gross Margin 69.20% 68.00% 68.40%
Operating expenses $ 677 $ 671 $ 638
Other (income)/deductions-net 1 1 2
Earnings 2,264 2,118 2,037
Depreciation and Amortization [3] 100 96 92
Corporate, Non-Segment      
Segment Reporting Information [Line Items]      
Earnings (1,240) (1,213) (1,042)
Depreciation and Amortization [3] 110 128 128
Segment Reconciling Items      
Segment Reporting Information [Line Items]      
Purchase accounting adjustments, earnings (128) (140) (159)
Purchase accounting adjustments, depreciation and amortization [3] 128 140 153
Certain significant items, earnings [5] (82) (79) 33
Certain significant items, depreciation and amortization [3],[5] 0 0 0
Other unallocated, earnings (328) (309) (291)
Other unallocated, deprecation and amortization [3] 5 5 5
Business Combination, Acquisition And Divesture Related Costs (2) (18) (9)
Acquisition And Divestiture Depreciation, Depletion and Amortization [3] $ 0 $ 0 $ 0
[1] Exclusive of amortization of intangible assets, except as disclosed in Note 3. Significant Accounting Policies—Amortization of Intangible Assets, Depreciation and Certain Long-Lived Assets.
[2] Defined as income before provision for taxes on income.
[3] 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.
[4] Operating expenses primarily consisted of field selling, other marketing expenses, advertising and promotions, and freight and logistics costs.
(c) Revenue denominated in euros was $998 million in 2025, $937 million in 2024 and $853 million in 2023.
[5]
For 2024, certain significant items primarily consisted of employee termination costs related to organizational structure refinements, a net loss related to the sale
of our medicated feed additive product portfolio, certain water soluble products and related assets, as well as asset impairment charges related to our aquaculture business, partially offset by a reversal of certain employee termination costs as a result of a change in strategy from our 2015 operational efficiency initiative.
For 2023, certain significant items primarily consisted of a gain on the sale of a majority interest in our pet insurance business of $101 million, partially offset by employee termination and exit costs related to organizational structure refinements of $43 million and certain asset impairment charges primarily related to our precision animal health and diagnostics businesses of $24 million.
v3.25.4
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2025
Dec. 31, 2024
Dec. 31, 2023
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]      
Balance, Beginning of Period $ 18 $ 18 $ 19
Additions 0 3 0
Deductions (2) (3) (1)
Balance, End of Period $ 16 $ 18 $ 18