Revenue growth has slowed to 1.9% in 2026Q1, while operating margins have compressed from a 40.2% peak in 2025Q2 to 36.3% due to rising expense scaling.
| 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 % | 2.4% | 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 | 2.78B | 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 | 6.73B | 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 % | 70.75% | 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 | 3.15B | 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 | 2.4B | 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 | 721M | 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 | 1000K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 3.57B | 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 % | 37.57% | 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 | 4.06B | 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 % | 42.7% | 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 % | 3.39% | 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) | 487M | 487M | 497M | 491M | 465M | 448M | 441M | 412M | 308M | 242M | 240M | 61M | 60M | 60M | 200M | 205M | 185M |
| EBIT | 3.55B | 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 | -150M | -150M | -136M | -153M | -187M | -230M | -237M | -205M | -181M | -175M | -166M | -124M | -117M | -113M | -31M | -36M | -37M |
| Interest Income | 91M | 93M | 106M | 105M | 50M | 6M | 12M | 37M | 31M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 241M | 243M | 242M | 258M | 237M | 236M | 249M | 242M | 212M | 175M | 166M | 124M | 117M | 113M | 31M | 36M | 37M |
| Other Income/Expense | -265M | -237M | -259M | -133M | -272M | -315M | -273M | -217M | -191M | -202M | -176M | -537M | -150M | -133M | -144M | -290M | -131M |
| Pretax Income | 3.31B | 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 % | 34.79% | 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 | 665M | 687M | 637M | 596M | 545M | 454M | 360M | 301M | 266M | 663M | 409M | 206M | 233M | 187M | 274M | 146M | 67M |
| Effective Tax Rate % | 20.1% | 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 | 2.64B | 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 % | 27.79% | 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 % | 4.96% | 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) | 2.64B | 2.67B | 2.5B | 2.34B | 2.11B | 2.03B | 1.64B | 1.5B | 1.42B | 862M | 819M | 339M | 587M | 503M | 436M | 248M | 111M |
| 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) | 6.26 | 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 % | 8.26% | 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 | 422.4M | 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 | 422.1M | 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% |
Top-line growth deceleration
As reported in recent financial filings, Zoetis has experienced a notable deceleration in revenue growth, with the year-over-year increase falling to 1.9% in 2026Q1 from double-digit peaks, suggesting that the post-pandemic volume tailwinds have largely dissipated across the company's core veterinary therapeutic segments.
The transition from volume-driven growth to a reliance on price and product mix appears to be challenging the company's ability to maintain historical expansion rates. Investors should monitor whether the current growth trajectory reflects a permanent shift in market saturation or merely a temporary lull in the medicalization rate of companion animals.
Based on the provided income statement data, Zoetis maintains a robust gross margin profile, consistently hovering around 70% despite periodic fluctuations, which underscores the company's significant pricing power and the high-value nature of its specialized biological portfolio compared to broader industry peers.
The ability to sustain these margins suggests that the company's monoclonal antibody therapies are successfully insulating the firm from the commoditization pressures typically seen in animal health. This structural advantage appears to be a key differentiator that allows for consistent profitability even when top-line growth moderates.
According to the quarterly income statement data, operating income has shown volatility, with margins compressing from a 40.2% peak in 2025Q2 to 36.3% in 2026Q1, indicating that SG&A and R&D expenses are currently scaling at a rate that outpaces gross profit growth.
This trend suggests that the company is aggressively reinvesting in its sales force and clinical development to defend its market position. While this may be necessary for long-term innovation, the current lack of operating leverage warrants further investigation into whether these expenditures will yield commensurate returns in future periods.
As evidenced by the consistent net income figures, Zoetis demonstrates high earnings quality, with stock-based compensation remaining a relatively small, controlled portion of the cost structure, which suggests that management is not relying on aggressive accounting adjustments to inflate reported bottom-line performance metrics.
The stability of net margins, which have remained in the mid-to-high 20% range, implies that the company's core operations are generating reliable cash-backed profits. This consistency provides a degree of comfort regarding the sustainability of the company's dividend and capital allocation strategy despite the recent slowdown in revenue growth.
Based on the recent income statement trends, short-sellers may focus on the clear deceleration in revenue growth and the recent compression in operating margins, which could challenge the premium valuation multiples typically assigned to Zoetis relative to its more commoditized animal health competitors.
The market's current pricing appears to assume a level of growth durability that may be at risk if the company cannot successfully offset volume declines with price increases. If the medicalization rate fails to accelerate, the company may face a valuation re-rating as investors adjust their expectations for long-term earnings growth.
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.