Cash conversion remains volatile, evidenced by a low OCF/NI ratio of 0.67 in 2026Q1 and a $385 million working capital outflow that highlights liquidity management pressures.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 |
|---|
| Cash from Operations | 2.72B | 2.9B | 2.95B | 2.35B | 1.91B | 2.21B | 2.13B | 1.79B | 1.79B | 1.35B | 713M | 664M | 626M | 681M | 454M | 497M | 254M |
| Operating CF Margin % | - | 30.68% | 31.9% | 27.54% | 23.66% | 28.46% | 31.85% | 28.67% | 30.73% | 25.36% | 14.59% | 13.93% | 13.08% | 14.93% | 10.47% | 11.74% | 7.09% |
| Operating CF Growth % | -37.57% | -1.66% | 25.5% | 23.06% | -13.6% | 4.09% | 18.44% | 0.28% | 32.99% | 88.78% | 7.38% | 6.07% | -8.08% | 50% | -8.65% | 95.67% | - |
| Net Income | 2.64B | 2.67B | 2.5B | 2.34B | 2.11B | 2.03B | 1.64B | 1.5B | 1.42B | 862M | 819M | 339M | 587M | 503M | 436M | 248M | 111M |
| Depreciation & Amortization | 487M | 487M | 497M | 491M | 465M | 448M | 441M | 412M | 308M | 242M | 240M | 199M | 204M | 209M | 200M | 205M | 185M |
| Stock-Based Compensation | 91M | 83M | 74M | 60M | 62M | 58M | 59M | 67M | 53M | 44M | 37M | 43M | 32M | 43M | 28M | 19M | 16M |
| Deferred Taxes | -37M | -52M | -338M | -61M | -286M | -80M | -62M | -79M | -112M | 127M | -55M | -85M | -49M | 23M | -74M | 65M | -68M |
| Other Non-Cash Items | 110M | 121M | 145M | 31M | 259M | 96M | 137M | 46M | 5M | 100M | 111M | 376M | 101M | 7M | 13M | 77M | -90M |
| Working Capital Changes | -576M | -408M | 79M | -512M | -699M | -343M | -85M | -151M | 112M | -29M | -439M | -208M | -157M | -104M | -149M | -117M | 100M |
| Change in Receivables | -289M | -236M | -61M | -102M | -137M | -155M | 74M | -69M | -67M | -50M | 15M | -58M | 69M | -99M | -65M | -85M | 30M |
| Change in Inventory | -228M | -199M | -40M | -361M | -486M | -366M | -346M | -104M | 61M | 19M | -101M | -262M | -16M | -104M | -318M | 40M | 117M |
| Change in Payables | 120M | 46M | 31M | 13M | -29M | -17M | 147M | -10M | 37M | -10M | -28M | 17M | -210M | -82M | 96M | -16M | 25M |
| Cash from Investing | -660M | -748M | -315M | -777M | -883M | -458M | -572M | -504M | -2.26B | -270M | -214M | -1.11B | -187M | -179M | -135M | -449M | -9M |
| Capital Expenditures | -582M | -621M | -655M | -732M | -586M | -477M | -453M | -460M | -338M | -224M | -216M | -224M | -195M | -184M | -126M | -135M | -124M |
| CapEx % of Revenue | 6.12% | 6.56% | 7.08% | 8.57% | 7.25% | 6.13% | 6.79% | 7.35% | 5.8% | 4.22% | 4.42% | 4.7% | 4.08% | 4.03% | 2.91% | 3.19% | 3.46% |
| Acquisitions | -24M | -24M | 285M | -59M | -312M | -14M | -113M | -195M | -2B | -82M | -88M | -883M | 0 | -4M | 0 | -345M | -81M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -84M | -96M | 60M | 6M | 1M | 1M | -432M | -447M | -289M | 36M | 90M | -8M | 8M | 9M | -9M | 31M | 196M |
| Cash from Financing | -2.03B | -1.87B | -2.66B | -3.11B | -904M | -1.86B | 123M | -951M | 533M | -251M | -903M | 755M | -154M | -200M | -78M | -30M | -277M |
| Debt Issued (Net) | 2.27B | 2.27B | -3M | -1.35B | 1.35B | -604M | 744M | -9M | 1.5B | 481M | -405M | 1.11B | 0 | 2.64B | 0 | -143M | 0 |
| Equity Issued (Net) | -3.4B | -3.23B | -1.86B | -1.09B | -1.59B | -743M | -250M | -626M | -698M | -500M | -300M | -203M | 2M | 0 | 0 | 0 | 0 |
| Dividends Paid | -889M | -889M | -786M | -692M | -611M | -474M | -380M | -314M | -243M | -206M | -188M | -168M | -146M | -98M | -63M | -416M | -207M |
| Share Repurchases | -3.4B | -3.23B | -1.86B | -1.09B | -1.59B | -743M | -250M | -626M | -698M | -500M | -300M | -203M | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -14M | -14M | -13M | 24M | -49M | -45M | 9M | -2M | -30M | -26M | -10M | 11M | -10M | -2.74B | -15M | 529M | -70M |
| Net Change in Cash | 82M | 325M | -54M | -1.54B | 96M | -119M | 1.67B | 332M | 38M | 837M | -427M | 272M | 272M | 293M | 238M | 16M | -36M |
| Free Cash Flow | 2.14B | 2.28B | 2.3B | 1.62B | 1.33B | 1.74B | 1.67B | 1.33B | 1.45B | 1.12B | 497M | 440M | 431M | 497M | 328M | 362M | 130M |
| FCF Margin % | 22.46% | 24.12% | 24.83% | 18.97% | 16.41% | 22.33% | 25.06% | 21.33% | 24.93% | 21.14% | 10.17% | 9.23% | 9.01% | 10.9% | 7.56% | 8.55% | 3.63% |
| FCF Growth % | -6.36% | -0.65% | 41.76% | 22.25% | -23.62% | 3.77% | 25.32% | -8.06% | 29.41% | 125.75% | 12.95% | 2.09% | -13.28% | 51.52% | -9.39% | 178.46% | - |
| FCF per Share | 5.06 | 5.14 | 5.05 | 3.51 | 2.82 | 3.64 | 3.50 | 2.77 | 2.98 | 2.28 | 1.00 | 0.88 | 0.86 | 0.99 | 0.66 | 0.75 | 0.27 |
| FCF Conversion (FCF/Net Income) | 0.81x | 1.09x | 1.19x | 1.00x | 0.90x | 1.09x | 1.30x | 1.20x | 1.25x | 1.56x | 0.87x | 1.96x | 1.07x | 1.35x | 1.04x | 2.03x | 2.31x |
| Interest Paid | 193M | 261M | 274M | 295M | 242M | 253M | 257M | 247M | 190M | 167M | 165M | 117M | 118M | 60M | 31M | 37M | 37M |
| Taxes Paid | 668M | 715M | 892M | 754M | 638M | 548M | 418M | 418M | 336M | 455M | 408M | 224M | 278M | 134M | 276M | 142M | 209M |
Working capital volatility
As reported in quarterly financial statements, Zoetis exhibits significant quarterly variance in cash conversion, with the OCF/NI ratio fluctuating from a low of 0.67 in 2026Q1 to a high of 1.71 in 2023Q4, indicating that net income is not always a reliable proxy for immediate cash generation.
The recurring divergence between net income and operating cash flow suggests that non-cash items and working capital swings frequently distort the company's reported earnings quality. Investors should monitor whether this volatility is a structural feature of the company's inventory-heavy business model or a temporary byproduct of seasonal distribution patterns.
Based on the provided cash flow data, Zoetis's free cash flow margins have demonstrated notable instability, ranging from a low of 12.5% in 2025Q2 to a peak of 33.5% in 2025Q3, reflecting the impact of lumpy capital expenditures and working capital requirements on overall cash flow trajectory.
The inconsistent FCF margins suggest that the company's ability to convert revenue into free cash is highly sensitive to the timing of operational outflows. This variability may complicate valuation models that rely on steady-state cash flow assumptions, particularly as the company navigates a period of decelerating top-line growth.
According to recent SEC filings, Zoetis has faced substantial working capital headwinds, evidenced by a significant cash outflow of $385 million in 2026Q1, which highlights the operational burden of managing inventory and receivables within a global, multi-channel distribution network that is currently experiencing shifting demand patterns.
The frequent negative working capital adjustments suggest that the company may be struggling to align its production cycles with actual end-user demand at the clinic level. This pattern warrants further investigation into whether channel loading is occurring, as such practices often precede periods of inventory correction and margin pressure.
As reported in financial statements, Zoetis has maintained a highly aggressive capital return program, with share repurchases totaling $2.1 billion in 2025Q4 alone, a figure that significantly exceeds the company's quarterly free cash flow generation and suggests a reliance on balance sheet capacity to fund shareholder returns.
The decision to prioritize massive buybacks during periods of fluctuating cash flow may indicate management's confidence in long-term earnings durability, yet it also leaves less room for error if operational cash generation continues to soften. Investors should monitor whether this pace of capital return remains sustainable if the current deceleration in revenue growth persists.
Quick answers to the most common questions about buying ZTS stock.
Zoetis Inc. (ZTS) generated $2.90B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Zoetis Inc. (ZTS) generated $2.28B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Zoetis Inc. (ZTS) spent $621.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Zoetis Inc. (ZTS) returned $889.0M to shareholders via cash dividends and spent $3.23B on share repurchases. This shows the company's commitment to returning capital to its equity investors.