Revenue growth has decelerated to 0.3% in 2026Q2, yet gross margin expanded to 72.7% and operating margin remains strong at 38.0%, indicating pricing power despite volume softness.
Zoetis Inc. (ZTS) annual income statement — 16-year revenue, gross profit & net income history
| 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 |
|---|
| Sales/Revenue | 9.51B | 9.47B | 9.26B | 8.54B | 8.08B | 7.78B | 6.67B | 6.26B | 5.83B | 5.31B | 4.89B | 4.76B | 4.79B | 4.56B | 4.34B | 4.23B | 3.58B |
| Revenue Growth % | 1.18% | 2.28% | 8.33% | 5.74% | 3.91% | 16.49% | 6.63% | 7.47% | 9.76% | 8.57% | 2.58% | -0.42% | 4.91% | 5.19% | 2.43% | 18.17% | - |
| Cost of Goods Sold | 2.75B | 2.79B | 2.86B | 2.71B | 2.6B | 2.46B | 2.22B | 2.15B | 2.03B | 1.86B | 1.75B | 1.8B | 1.78B | 1.73B | 1.62B | 1.7B | 1.5B |
| COGS % of Revenue | - | 29.51% | 30.9% | 31.72% | 32.23% | 31.69% | 33.21% | 34.3% | 34.82% | 35.12% | 35.7% | 37.73% | 37.14% | 37.89% | 37.29% | 40.04% | 41.79% |
| Gross Profit | 6.75B | 6.67B | 6.4B | 5.83B | 5.48B | 5.31B | 4.46B | 4.11B | 3.8B | 3.44B | 3.14B | 2.97B | 3.01B | 2.83B | 2.72B | 2.54B | 2.08B |
| Gross Margin % | 71.02% | 70.49% | 69.1% | 68.28% | 67.77% | 68.31% | 66.79% | 65.7% | 65.18% | 64.88% | 64.3% | 62.27% | 62.86% | 62.11% | 62.71% | 59.96% | 58.21% |
| Gross Profit Growth % | - | 4.33% | 9.63% | 6.54% | 3.09% | 19.16% | 8.39% | 8.32% | 10.28% | 9.54% | 5.93% | -1.36% | 6.18% | 4.19% | 7.13% | 21.73% | - |
| Operating Expenses | 3.31B | 3.08B | 3B | 2.77B | 2.55B | 2.51B | 2.19B | 2.1B | 1.92B | 1.72B | 1.74B | 1.89B | 2.04B | 2.01B | 1.86B | 1.85B | 1.78B |
| OpEx % of Revenue | - | 32.49% | 32.45% | 32.36% | 31.53% | 32.27% | 32.79% | 33.47% | 32.89% | 32.33% | 35.58% | 39.56% | 42.59% | 44.11% | 43.01% | 43.8% | 49.58% |
| Selling, General & Admin | 2.38B | 2.38B | 2.32B | 2.15B | 2.01B | 2B | 1.73B | 1.64B | 1.48B | 1.32B | 1.32B | 1.4B | 1.51B | 1.43B | 1.47B | 1.45B | 1.38B |
| SG&A % of Revenue | - | 25.12% | 25.04% | 25.18% | 24.86% | 25.73% | 25.86% | 26.17% | 25.44% | 24.97% | 26.92% | 29.42% | 31.6% | 31.31% | 33.9% | 34.33% | 38.58% |
| Research & Development | 726M | 698M | 686M | 614M | 539M | 508M | 463M | 457M | 432M | 382M | 376M | 364M | 396M | 399M | 409M | 427M | 411M |
| R&D % of Revenue | - | 7.37% | 7.41% | 7.19% | 6.67% | 6.53% | 6.94% | 7.3% | 7.42% | 7.2% | 7.69% | 7.64% | 8.28% | 8.75% | 9.43% | 10.09% | 11.47% |
| Other Operating Expenses | 3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 3.45B | 3.6B | 3.39B | 3.07B | 2.93B | 2.8B | 2.27B | 2.02B | 1.88B | 1.73B | 1.4B | 1.08B | 970M | 821M | 854M | 684M | 309M |
| Operating Margin % | 36.26% | 38% | 36.65% | 35.92% | 36.24% | 36.05% | 33.99% | 32.24% | 32.29% | 32.54% | 28.72% | 22.71% | 20.27% | 18% | 19.7% | 16.16% | 8.63% |
| Operating Income Growth % | - | 6.04% | 10.52% | 4.82% | 4.46% | 23.53% | 12.44% | 7.28% | 8.92% | 23.01% | 29.76% | 11.55% | 18.15% | -3.86% | 24.85% | 121.36% | - |
| EBITDA | 3.93B | 4.08B | 3.89B | 3.56B | 3.39B | 3.25B | 2.71B | 2.43B | 2.19B | 1.97B | 1.64B | 1.14B | 1.03B | 881M | 1.05B | 889M | 494M |
| EBITDA Margin % | 41.29% | 43.14% | 42.02% | 41.67% | 41.99% | 41.81% | 40.6% | 38.82% | 37.58% | 37.1% | 33.63% | 23.99% | 21.53% | 19.32% | 24.31% | 21% | 13.79% |
| EBITDA Growth % | -2.46% | 5.01% | 9.24% | 4.92% | 4.37% | 19.96% | 11.52% | 11.01% | 11.17% | 19.77% | 43.83% | 10.97% | 16.91% | -16.41% | 18.56% | 79.96% | - |
| D&A (Non-Cash Add-back) | 478M | 487M | 497M | 491M | 465M | 448M | 441M | 412M | 308M | 242M | 240M | 61M | 60M | 60M | 200M | 205M | 185M |
| EBIT | 3.36B | 3.58B | 3.38B | 3.19B | 2.89B | 2.72B | 2.25B | 2.04B | 1.9B | 1.7B | 1.39B | 669M | 937M | 801M | 741M | 430M | 215M |
| Net Interest Income | -179M | -150M | -136M | -153M | -187M | -230M | -237M | -205M | -181M | -175M | -166M | -124M | -117M | -113M | -31M | -36M | -37M |
| Interest Income | 63M | 93M | 106M | 105M | 50M | 6M | 12M | 37M | 31M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 242M | 243M | 242M | 258M | 237M | 236M | 249M | 242M | 212M | 175M | 166M | 124M | 117M | 113M | 31M | 36M | 37M |
| Other Income/Expense | -334M | -237M | -259M | -133M | -272M | -315M | -273M | -217M | -191M | -202M | -176M | -537M | -150M | -133M | -144M | -290M | -131M |
| Pretax Income | 3.11B | 3.36B | 3.13B | 2.94B | 2.66B | 2.49B | 2B | 1.8B | 1.69B | 1.52B | 1.23B | 545M | 820M | 690M | 710M | 394M | 178M |
| Pretax Margin % | 32.75% | 35.49% | 33.85% | 34.36% | 32.87% | 32% | 29.9% | 28.77% | 29.01% | 28.74% | 25.12% | 11.44% | 17.14% | 15.13% | 16.37% | 9.31% | 4.97% |
| Income Tax | 628M | 687M | 637M | 596M | 545M | 454M | 360M | 301M | 266M | 663M | 409M | 206M | 233M | 187M | 274M | 146M | 67M |
| Effective Tax Rate % | 20.17% | 20.45% | 20.33% | 20.3% | 20.52% | 18.25% | 18.04% | 16.71% | 15.74% | 43.48% | 33.31% | 37.8% | 28.41% | 27.1% | 38.59% | 37.06% | 37.64% |
| Net Income | 2.49B | 2.67B | 2.49B | 2.34B | 2.11B | 2.04B | 1.64B | 1.5B | 1.43B | 864M | 821M | 339M | 583M | 504M | 436M | 245M | 110M |
| Net Margin % | 26.15% | 28.23% | 26.86% | 27.43% | 26.16% | 26.2% | 24.54% | 23.96% | 24.52% | 16.28% | 16.8% | 7.11% | 12.18% | 11.05% | 10.06% | 5.79% | 3.07% |
| Net Income Growth % | -6.22% | 7.52% | 6.06% | 10.88% | 3.78% | 24.36% | 9.2% | 5.04% | 65.28% | 5.24% | 142.18% | -41.85% | 15.67% | 15.6% | 77.96% | 122.73% | - |
| Net Income (Continuing) | 2.49B | 2.67B | 2.5B | 2.34B | 2.11B | 2.03B | 1.64B | 1.5B | 1.42B | 862M | 819M | 339M | 587M | 503M | 436M | 248M | 111M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | -6M | -2M | 1M | 4M | 0 | 0 | 16M | 12M | 23M | 26M | 22M | 15M | 16M | 0 |
| EPS (Diluted) | 6.04 | 6.02 | 5.47 | 5.07 | 4.49 | 4.27 | 3.42 | 3.11 | 2.93 | 1.75 | 1.65 | 0.68 | 1.16 | 1.01 | 0.87 | 0.51 | 0.23 |
| EPS Growth % | -1.01% | 10.05% | 7.89% | 12.92% | 5.15% | 24.85% | 9.97% | 6.14% | 67.43% | 6.06% | 142.65% | -41.38% | 14.85% | 16.09% | 70.59% | 121.74% | - |
| EPS (Basic) | - | 6.03 | 5.47 | 5.08 | 4.51 | 4.29 | 3.44 | 3.14 | 2.96 | 1.76 | 1.66 | 0.68 | 1.16 | 1.01 | 0.87 | 0.51 | 0.23 |
| Diluted Shares Outstanding | 411.6M | 443.83M | 454.85M | 462.27M | 470.38M | 476.72M | 478.57M | 481.79M | 486.9M | 493.16M | 498.23M | 502.02M | 502.02M | 500.32M | 500M | 481.79M | 481.79M |
| Basic Shares Outstanding | 411.6M | 443.44M | 454.2M | 461.17M | 468.89M | 474.35M | 475.5M | 478.13M | 483.06M | 489.92M | 495.71M | 499.71M | 501.06M | 500M | 500M | 478.13M | 478.13M |
| Dividend Payout Ratio | - | 33.26% | 31.62% | 29.52% | 28.9% | 23.27% | 23.2% | 20.93% | 17.02% | 23.84% | 22.9% | 49.56% | 25.04% | 19.44% | 14.45% | 169.8% | 188.18% |
Quick answers to the most common questions about buying ZTS stock.
For fiscal year 2025, Zoetis Inc. (ZTS) reported total revenue of $9.47B. This represents a 164.3% increase compared to $3.58B in 2010.
Zoetis Inc. (ZTS) is profitable, generating $2.67B in net income for the fiscal year ending 2025 with a net profit margin of 28.2%.
Zoetis Inc. (ZTS) reported an operating income of $3.60B, resulting in an operating profit margin of 38.0%. This margin reflects the operational efficiency of the business before interest and taxes.
Zoetis Inc. (ZTS) generated $6.67B in gross profit for the year, representing a gross profit margin of 70.5%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Revenue growth stagnation
Metrics are mathematically derived from official filings.
Growth Plateau Amidst Stable Demand
Zoetis' revenue growth has decelerated to a low single-digit range, with 2026Q2 showing just 0.3% year-over-year growth, according to recent SEC filings, suggesting a mature market phase.
The quarterly revenue growth rates have steadily declined from double-digit figures in 2024 (e.g., 11.0% in 2024Q3) to near-flat in 2026Q2 (0.3%). This deceleration appears to reflect a normalization after prior strong performance, possibly due to market saturation or competitive pressures. Investors should monitor whether new product launches or geographic expansion can reaccelerate growth, as the current trajectory suggests a plateau.
Resilient Gross Margins Defy Volume Softness
Gross margin expanded to 72.7% in 2026Q2, up from 68.0% in 2024Q4, as reported in financial statements, indicating sustained pricing power and favorable product mix despite sluggish revenue growth.
The consistent improvement in gross margin, from 68.0% in 2024Q4 to 72.7% in 2026Q2, suggests that Zoetis is effectively managing input costs and shifting toward higher-margin products. This resilience is notable given the flat revenue growth, implying that profitability is being driven by mix and pricing rather than volume. However, the sustainability of this margin expansion warrants monitoring, as competitive dynamics could pressure pricing over time.
Operating Leverage Fading as Costs Rise
Operating margin dipped to 38.0% in 2026Q2 from 40.2% in 2025Q2, based on reported figures, as SG&A and R&D expenses grew faster than gross profit, signaling reduced operating leverage.
While gross profit grew modestly, operating income growth lagged due to rising SG&A (from $617M in 2025Q2 to $592M in 2026Q2, but as a percentage of revenue it increased) and R&D investments. The operating margin contraction from 40.2% to 38.0% year-over-year suggests that Zoetis is investing in future growth, but this is currently weighing on near-term profitability. If revenue growth remains subdued, these cost increases could further compress margins.
Earnings Quality Solid but SBC Dilution Creeps
Net income margin improved to 28.0% in 2026Q2, yet stock-based compensation rose to $51M, up from $22M a year earlier, as per financial statements, slightly diluting EPS growth.
The reported net income and EPS growth appear robust, with EPS up 2.5% in 2026Q2 despite flat revenue, driven by margin expansion and a lower effective tax rate. However, the doubling of SBC from $22M to $51M year-over-year indicates that a portion of earnings is being offset by non-cash compensation, which may understate true economic dilution. Investors should factor in this rising SBC when assessing the quality of EPS growth.
R&D and SG&A Outpace Revenue Growth
R&D and SG&A expenses grew 0.6% and 4.1% year-over-year in 2026Q2, respectively, while revenue grew only 0.3%, as reported in SEC filings, indicating deliberate investment in innovation and commercialization.
The cost structure reveals that Zoetis is prioritizing long-term growth through increased R&D (from $172M to $173M) and SG&A (from $617M to $592M, but as a percentage of revenue it rose). This spending discipline appears intentional, but it is compressing operating margins. If these investments do not translate into revenue acceleration, the company may face margin pressure without corresponding top-line benefits.
Stagnant Top Line Undermines Premium Valuation
Despite strong margins, revenue growth has stalled at 0.3% in 2026Q2, as per financial statements, which may not justify the premium multiple relative to peers like IDEXX.
Short-sellers could argue that Zoetis' high profitability is masking a fundamental growth problem. With revenue growth decelerating to near-zero, the company's ability to sustain its current valuation (P/E likely above industry average) is questionable. The reliance on margin expansion to drive earnings growth is finite, and if volume remains weak, the market may re-rate the stock downward. Additionally, the rising SBC and operating margin contraction suggest that the quality of earnings is deteriorating, which could further pressure the stock.