Zoetis Inc. Q1 FY2025 earnings call

Key points include: strong 9% organic operational revenue growth and 6% adjusted net income growth. The essential nature of the business remains clear due to secular trends. Growth drivers include companion animal key franchises and livestock. Strategic actions involve expanding medical education, post-launch studies, and DTC engagement for OA pain. The company's global footprint, diverse portfolio, and omni-channel presence contribute to its resilience.

In the first quarter, Zoetis saw 9% organic operational revenue growth. The International segment led with 11% organic operational revenue growth. The US grew 6% excluding the MFA divestiture. The companion animal portfolio grew 9% operationally, with the Simparica franchise at $367 million (19% growth), key dermatology at $387 million (10% growth), and OA pain mAbs at $147 million (15% growth). Livestock grew 7% organically. US revenue was up 2% reported and 6% organic operational, with companion animal up 8% and livestock down 2% organically. International revenue was flat reported but 11% organic operational, with companion animal up 10% and livestock up 12% organically.

Revenue is guided between $9.425 billion and $9.575 billion with organic operational growth of 6% to 8%. Adjusted net income is expected to be in the range of $2.775 billion to $2.825 billion (5% to 7% organic operational growth). Adjusted diluted EPS is expected to be $6.20 to $6.30, and reported diluted EPS is $5.85 to $5.95. Guidance reflects current enacted tariffs but not future tariff impacts.

Macroeconomic, regulatory, and geopolitical uncertainty pose challenges, managed to minimize impact while seizing opportunities. Exposure to tariffs on certain imports, with mitigations in place but a fluid situation.

Q: Erin Wright asked about Librela label change response and tariff impact.

A: Kristin Peck discussed Librela growth and education efforts; Wetteny Joseph talked about tariff exposure and mitigations.

Q: Michael Ryskin inquired about competitive pressure and Librela ramp.

A: Kristin Peck and Wetteny Joseph addressed competitive first mover advantage and Librela's large market opportunity.

Q: Jon Block questioned EPS guidance bridge and Librela brand.

A: Wetteny Joseph explained FX impact; Kristin Peck spoke about Librela investment and brand.

Q: David Westenberg asked about Amazon sales and FDA delays.

A: Kristin Peck discussed retail channel trends and regulatory monitoring.

Q: Brandon Vazquez asked about consumer spending and FDA headcount.

A: Kristin Peck and Wetteny Joseph addressed compliance and FDA impact.

Q: Chris Schott inquired about derm competition and Apoquel chewable.

A: Wetteny Joseph talked about competition consideration and Apoquel chewable conversion.

Q: Navann Ty asked about Librela pivot, FDA impact, and Simparica Trio.

A: Kristin Peck answered on Librela focus, FDA monitoring, and Simparica Trio approval.

Q: Unidentified Analyst asked about tariffs on pet products.

A: Kristin Peck discussed tariff advocacy.

Q: Daniel Clark asked about Librela launch progress.

A: Wetteny Joseph spoke about Librela's strong foundation and market opportunity