Zoetis Inc. — Call Transcript 2026

Hi, everyone. Thank you for joining us this afternoon. I am Brandon Vazquez, for those of you who haven't met. I have to read off this real quick. I'm the research analyst here at William Blair, covering medical devices and animal health. For a complete list of research disclosures and potential conflicts of interest, please go to our website at williamblair.com. I'm excited to have here Zoetis' CFO, Wetteny Joseph. He is going to go through a couple minutes of intro, and then we'll host a little bit of a fireside chat. As we typically do in this, because we try to keep these presentations in the presentation session a little higher level. I'll keep the fireside chat a little bit higher level, but a little topical on what's going on. Then after that, we'll go to a breakout room. Breakout, I have it here, breakout Meyer. Then we'll go into a little bit more detail. I'll let Wetteny go first. Then we'll chat a little bit. Thank you, Brandon. Good afternoon, everyone. Given I'm sure we have a fair amount of ground to cover with the fireside chat, I will keep my opening comments relatively brief, particularly for those who may be new to the Zoetis name. We are the leader in animal health. Our purpose is really centered on nurturing our world and humankind by advancing animal care. We advance animal care via innovation. We'll spend a little bit of time talking about here, as well as how we scale our solutions globally and drive a customer-centric delivery approach in terms of how we execute. We have more than 75 years as track record and truly underpinned by both scientific and commercial expertise across the business, which yielded to about $9.5 billion of revenue last year across really strong long-term end markets for us. We have broad diversification across the business, as you can see on the page, across diagnostics, medicines, vaccines, including biodevices and genetic testing, et cetera. That diversity extends to who we serve as well, in terms of the core species that we cover across eight core species. Of course, companion animal representing about 70% of the business with a balance of 30% driven across livestock. So we get to benefit from the long-term trends related to companion animal, but certainly have livestock participation, which we have seen really strong growth on over the last few years as well. Our existing portfolio is the broadest in our industry and the deepest as well. It happens to also have 18 blockbusters, and in animal health, that's roughly $100 million of revenue in a given year. We continue to drive differentiation through our innovation. Our innovation engine also has the promise of the future with an approximate or potential 12 additional blockbusters stemming from key areas of the greatest unmet need across animal health with renal, with chronic kidney disease focus in particular, oncology, cardiology, obesity, as well as anxiety. If you look at our capital allocation priorities, it is relatively straightforward. Given where the industry is and the amount of unmet need that remains and the innovation engine that we have built over the years, we see tremendous opportunity to invest in the business first and foremost. That comes by way of what we do in our R&D as well as capital we deploy within our manufacturing to scale the innovation that we work on and that we bring to market. Of course, we pursue business development that accelerate the strategies that we have in mind. Lastly, and very consistently, we return capital back to shareholders via a balance between dividends and share buybacks, given the tremendous opportunity we have and ability to generate free cash flow on a consistent basis. With that, I'm going to turn it over to Brandon, who will go through the Q&A. Great. Okay, Wetteny, thank you for the intro there. I think as you had mentioned, there's plenty of topics to discuss here. I want to talk about the animal health market overall. Let's start in the companion animal side, in part because I want to compare it to what it has historically been. You guys have talked about this before. It's a pretty good, I think, like a mid-single, maybe 5% growth market. Lately, we've been talking about, and you're not the only one, and many of my consumer-exposed healthcare companies have been talking about a little bit of consumer weakness, little pockets here and there. First, just level set us on what is historically this market? What is the growth within this market in the companion animal side? Then what are you seeing recently? Where might you be seeing some pockets of weakness, if there are any? Sure. Look, across the last decade or so, we have seen animal health deliver somewhere between 4%-6% of growth globally. Zoetis has a proven track record of leading the way with that, largely driven by innovation. It's not just in a one or two-year period where you bring out new products. It's how we have, through expansion of those markets and continuing lifecycle innovation, extend sort of the growth tailwind that we get from our innovation. What we are seeing now, we've seen over the last couple quarters, is some more adverse picture when we look at the macro. It's showing up in terms of how the consumer pet owners are extending dosage intervals, for example, or delaying visits to the clinic is how it is showing up, and it's compounded. You see it also more in the therapeutic categories, which are more important to us versus overall visits. You also see it more concentrated around the large corporate clinics given the cumulative effect of price increases that we've seen over the years. That happens to also be happening at the same time that we see more competition in some categories. I would say this, competition is not foreign to Zoetis. We operate in markets within animal health that have always been highly competitive. If you think about parasiticides, for example, the largest market in animal health, it is intensely competitive. It has always been, and we clearly have shown an ability to grow in that market and gain share over the years, similarly in vaccines and livestock, et cetera. We're seeing this sort of adverse macro condition play out at the same time that we're seeing more competition in categories like derm, where we haven't seen as much competition, clearly, given our position here, other than we're competing against steroid use for dermatological issues or over-the-counter or non-treatment at all. That's been our competition. Now you have others that are launching products in this space. We remain very much differentiated, but in the window as they're launching and are being more aggressive in terms of their promotional pricing, that are lasting longer, you see that compounding with the macro piece that we talked about. Okay. Let's stick with the macro first, and we'll follow up on the competition comments as well. Are there, as you think of where you might be seeing pockets of macro, you mentioned you have a broad portfolio, right? You have parasiticides, maybe $300-$500 annually if you look at online how much a Trio might cost, and then you might have an injectable like Librela or Cytopoint. I think there's a combination. It's hard to bifurcate the two pieces. Certainly, they both are having an impact. It might vary a little bit from one category to another. Clearly, based on comments I just made around dermatology, with the onset of new competition, it might be a little bit more competition impacting than macro, but there's a little bit of macro there as well, which is demonstrated by the fact that you saw visits in, now we're talking U.S.-specific. Obviously, we run a global business, visits in the quarter for pruritic in the clinic were down about 2% on the quarter. Clearly that has some effect across from an overall demand and macro standpoint before you get into what happens then within competition, right? In the case of parasiticides, which as I said, has always been highly competitive, there it's a little bit more of the macro than it is of the competition that's playing out in terms of what we're seeing right now. We saw the height of launch promotions happen last year, about the second half of last year. Since then, we've seen some sequential improvement in terms of our overall share, which was only modestly affected before that anyway. We've seen sequential improvement. It's been very stable for us overall, particularly when you think about puppy share, which is very much a leading indicator. It remains above our overall share and has been very consistent as well for us. That's how I would bifurcate just to pick on those two. Clearly, the macro environment has implications beyond just these two therapeutic categories, but these are the ones I know that are top of mind for everyone. Has macro gotten worse as we've gone into 2026? We've been talking about vet visit declines for several years now. Is there something about 2026 macro only that has gotten worse this year, or is it just that it's compounding with other headwinds like competition? It's a little bit of both, Brandon. Look, we've been talking about the fact that overall visits aren't as determinative for us for years, and you've seen us post really strong growth despite overall visits being down anywhere from 1%-3% since 2022, following 2021 and the peaks there. A combination of things have enabled that. It's been innovation as we launch products that were ramping, for example, Trio ramping, et cetera, after the 2020 launch. Launching OA pain for a period of time, that was really driving a tailwind for us. By the way, really strong growth that was outpacing what's happening in the clinic and to some extent, making up for some of the clinic headwinds in what's happening outside of the clinic in terms of alternative channels that were growing at much higher rates. They're still growing faster than the clinic, but not at the rate that they were two or three years ago. When you combine those in terms of the overall macro picture, it starts to compound with the competitive launches. Okay. Maybe the last one on macro, and we'll move on to some other topics. Because again, we want to keep this high picture, and I think one of the big questions I keep getting for all of animal health right now is, I think people can appreciate this is a resilient market, but it's not an immune market to macro as we're seeing. If this is historically a 4%-6% growth market, what are we talking about now, right? What do you think the market is going to grow at through 2026? What are you implying within your guidance at this point? Look, I think it's important to talk about what don't we see changing. We spent a lot of time so far in this conversation just covering some of the cyclical things that we're seeing across the business. What we are seeing long term is the secular tailwinds that drive these major market areas continuing to be strong long term. The human animal bond driving pet spend across the world, not just in the U.S., continues to be a really strong feature. The consumer is actually spending more. It's just that the cumulative effect of price that has been taken, particularly in the larger clinics in the U.S., is having an effect on volume versus price. In the last quarter, for example, overall revenue for clinics actually were up about 3% with visits being down about 3%. About 6% of price is putting some of that additional pressure on volume. You see strength in terms of pet owners spending. If anything goes wrong with the animal, they're spending it on diagnostics and they're spending on emergency care, which continue to really do really well in this environment as well. I do think it's important to think about where is the pet owner. In fact, they're even more engaged in the care of their pets than they ever were, and so that is a strength, I would say, long term, that's going to carry this industry in addition to innovation. On the livestock side, of course, you've seen continued strength in terms of animal protein consumption. You saw strength in diagnostics, et cetera. Those are the things that have not been as impacted. In the long term, we continue to see that being the feature for the business overall that we will continue to lead. As we think about Q1 results, this is a little bit tricky because you guys don't guide on a quarterly basis, I'll acknowledge that upfront. This may be a helpful question for us to understand, though, the trajectory of how the business is going into the year. When we're talking about macro, we're talking about competition. These are the two things that are headwinds to the business right now. I think the street, Oops, sorry. You can see obviously by the stock, the street was a little surprised by the Q1 results. Were either of those dynamics surprising to you in Q1, or did Q1 unfold the way that you thought it would? When we look at each of these components, there are elements that we certainly saw, and that started late last year. For example, the competitive launches. The timing of those may vary, we've known competition's coming for some time. We know what the effect of what some of the tactics that are used are. It's the combination of these things plus the impact they had in terms of distributors and retailers replenishing their inventories that impacted the quarter more meaningfully than expected. It's the combination, not individual item, if you will, is what happened with the quarter and the impact that we saw. Now we've reflected those in the guidance for the rest of the year. To your point, we won't give guidance by quarter, a few things that I would remind everyone of. Number one, we came into 2026 expecting to see a first half versus second half dynamic. Is it more pronounced now with the results of the first quarter? Sure. Are we expecting an uptick in terms of significant improvement in vet clinic visits for the rest of the year? No. Are we expecting the macro to be significantly better? No. The competition intensity to reduce significantly? No. However, if you look at sequential execution across a number of our products in key categories, you see improvement as we go through the year. You see an easier comp on the back half of the year stemming from last year, by the way. We had a 9% growth first half last year. We ended the year at 6%, you saw the deceleration in the back half of the year. There's an easier comp we have there. You haven't asked about Librela, but let's talk about OA pain and what we saw in the first quarter. We've been saying how that's going to stabilize over time. You saw that stabilization play out, including sequential, albeit modest, growth in Librela. As we go to the back half of the year, the comps get a lot easier for that as well. There's a combination there. One last point I will make is we're not anticipating an uptick in terms of pull-through as we see the back half. It's really the comps that create a dynamic where you see a higher growth rate at the back end versus the front end. Okay. Let's pivot a little bit, and talk more about the innovation pipeline. This is, of course, an innovation-driven story and I think a sector that's heavily new product cycle driven. You touched on Librela, so maybe we'll segue into there, because that's probably the nearest term new market for you guys that is developing. What is it about as you went into Q1 that is finally stabilizing this business? Because I think that'll help us set the base for then to talk about what is it that's giving you confidence that this can actually return to growth in the back half of 2026. Sure. When you have a multi-pronged strategy that we've been executing now, we've been talking about it for the better part of a year, it's hard to pinpoint one element to say this is the piece that's having the greatest impact versus the other. I'll start high level. The OA pain opportunity remained very, very significant. You can see in the U.S., for example, it's somewhere between 25 million and 27 million dogs that suffer from OA pain, with about 9 million being treated and being treated largely with NSAIDs, which tells you that both clinicians and pet owners want to treat this. We're doing a lot to help educate more and more to the pet owners, in particular around the fact that this is a progressive disease that has other downstream implications as well if it's not treated. That is resonating with pet owners as well as with veterinarians in terms of sharing data with them, what we're seeing across the world, real world data, et cetera, in terms of how the product is. You continue to see positive opinions around the risk-benefit profile of the product. All those are contributing to driving this. As we look ahead, we also have the approvals of the long-acting components with LENIVIA and PORTELA that are starting to launch in markets in Canada and parts of Europe. We anticipate additional approvals in other markets as we get into next year in the U.S., et cetera, that will continue to help drive and access this market because the convenience factor, for example, of having a three-month injection versus a one-month, particularly for more moderate cases that are more chronic, that for years are going to require a monthly injection, that's a tall ask for a pet owner, and we believe firmly that will be additive in terms of the picture, but give flexibility to both pet owners and veterinarians in terms of how to treat in this category. We remain very much looking forward to continuing to drive the expansion in this market, both in terms of driving that for the existing products and then the contributions from the new products that will come out as well. Okay. Talk to us a little bit also, this is probably the nearest term. We have long-acting Cytopoint coming soon, and then there's renal, others. Talk to us a little bit about the pipeline, especially for those who are newer to the story in the next several years. What's the pipeline of the next kind of three or four biggest drugs that we should be thinking about? Yeah. Clearly the OA pain launch and how that has transpired over the last couple of years has created a bit of a challenge for us in terms of the additive element in terms of growth across the horizon. As we look ahead, we have a number of launches and approvals in terms of life cycle innovation that's going to contribute to our growth, then we're anticipating the net new big areas to start to get approvals towards the back half of next year to start a new innovation cycle, if you will, for the company. Meanwhile, to your point, in terms of the areas that are going to continue to drive value for us, you mentioned Cytopoint, a product that has very high satisfaction levels. We're very excited about the anticipated approval for long-acting Cytopoint towards the end of this year with launch early next year that will drive that. We have seen approval in Canada for Convenia RTU, for example, and we anticipate over the next few years to see approvals in other markets for that product, one that has some generic competition against it currently. We've seen label improvements and geo expansion of products even like Trio with the launch in Brazil recently. We've seen label expansion to include flea-induced tapeworm, so prevention of that on the label for Trio. Lots and lots of things that our R&D function and our manufacturing teams, et cetera, have been working on, and you're seeing the impact that those will have over time before we start to get into the renal chronic kidney disease, oncology, and so on that we can talk about. Okay. As we think about a Cytopoint later this year, we think about a renal later in 2027. How do we think, especially now in the context of Librela, that I think you guys have had some learnings, is maybe the way I'd phrase it, in how to launch that and how to make sure it's a durable trajectory. How do we think of the launch of new products like this? You've given us a guidance for late 2026 Cytopoint, I think a late 2027 renal. Correct me if those are wrong. What does that mean for when they will ramp and be more meaningful to the P&L? As we've been talking about for some time now, one of the observations coming through the Librela experience has been the need to make sure that we spend time and invest in that time with specialists to get their hands on the product and get really familiar with it and using it so that they can be part of the voice, if you will, to the general practitioners that get their hands on a molecule or antibody. That approach, particularly when you consider we're getting into more and more therapeutic categories where you're treating sick animals, that's going to be increasingly important. We're preparing for that evolution in terms of how we approach launching products in a number of ways. Number one, you saw us talk about some changes we made to our go-to-market in the U.S. in terms of the field force. While we look to optimize that and get even better reach and frequency across the field force, where we saw opportunities to reduce some of the headcount in that area, we reinvested components of that into professional service vets, veterinarians who are actually calling on vets, which is an important piece when you think about the pipeline that's coming in terms of how we might leverage those conversations and the input from vet-to-vet conversations that can happen. That's one example. In terms of how we go about the launches, we're going about them in a very deliberate manner where we will do early experience and exposure with specialists first, get feedback and input from them to factor into the rest of the rollout as we launch in other markets, which means you have a slightly slower beginning to help you accelerate later on as we continue in terms of the launch across those products. Certainly that's the approach we're taking with the long-acting OA pain product in LENIVIA as well as what we are contemplating with respect to chronic kidney disease, oncology, and other components that will come. Okay. Remind me, the long-acting LENIVIA, just to make sure we have this right, is that coming to the U.S. in 2026 as well, approval in 2026? We have said that's a 2027 approval expectation. Okay. Got it. In the general presentation here, I want to make sure we touch on, I don't give it enough love, the livestock side of the business especially because the position we're in right now especially around the world, cattle prices are high. It feels like a really attractive market. Tell us about the durability of growth on that side. What should that be through 2026+? What are kind of the tailwinds helping that business? Sure. Thank you for asking a livestock question because it's an important growth driver for the business. If you've seen over the last three years coming into 2026, you've seen us deliver mid-single-digit growth somewhere between 6% and 7% over the last three years. We came into this year very strong with the first quarter performance, double-digit growth there, and we're continuing to expect mid-single-digit to high single-digit growth in livestock for the year. To your point, what we're seeing sustaining the growth that we're seeing across livestock right now are a number of factors. Number one, you see a long-term, by the way, population growth, another 2 billion people will be on this planet as you look out over the next 30 or so years. The incremental protein production that's going to be necessary to feed that population is going to be a secular tailwind here. We're also seeing increased income levels across emerging markets where they're looking for more quality animal proteins to consume. That's certainly a part of the tailwind. We see in markets like the U.S. particularly driven by GLP-1s and so on, increased animal protein consumption that's driving some tailwind here as well. The fastest-growing animal protein categories are poultry and fish. We are number one in fish. We have some very effective vaccines that have been driving our growth in that globally. We continue to be the market leader in that spectrum. In poultry, we have opportunity to continue to expand. We're getting more and more approvals. You may have seen for vector vaccines that are delivered via the biodevices that we actually have a leading market share in globally as well. We see continued opportunity to continue to increase our presence across protein around the world. Clearly, we have a very broad spectrum in terms of species that we cover in livestock, which also drive diversification across the business and help us capitalize on the growth wherever it might be around the world. Okay. How do we think about innovation in that product, in that side? This is predominantly vaccines. Are there any other big areas that you are investing in the livestock side? You certainly see prevention being the leading pathway to drive growth here. This is where the demand is around the world. Vaccines, first and foremost. Other elements, genetics, right? We talk about Zoetis. We happen to play across prevention, genetics, and so forth, as we see vaccines being a key component when it comes to livestock. This is why I use the example in the poultry and vector vaccines and how those are delivered in overall in eggs as well. Again, having the leading share of the devices that do that. Similarly, in the aqua fish business across cattle, et cetera, around the world, this is the leading area. There are parasiticide prevention in livestock that's also driving areas. There have been disease burden in certain areas that we continue to pursue solutions for. Livestock is, again, an attractive end market for us, and we continue to drive innovation in that space, although it's not talked about as much because the size of individual markets don't get to the sizes that we talk about in terms of derm, et cetera, but they're very meaningful. Yep. Maybe the last minute or two here on the P&L and the financial side. Your stock right now is trading at the lowest multiple, I think, since you guys have gone public. How do you think about using your free cash flow, your balance sheet to get aggressive on share buybacks? I mean, you guys have used the balance sheet a little bit already for that. Level set us where you are with that and thoughts on a go-forward basis to use that. Sure. Look, both dividends and share buybacks are important pillars within our overall capital allocation priorities. The type of products and unmet need that still exists in animal health means that our primary focus has been and will continue to be in investing in the business to pursue driving solutions that are meaningful in terms of advancing animal care, which I mentioned earlier as being our primary purpose. Having said that, we do generate significant cash at Zoetis, and you've seen us deploy that via acquisitions. But even after CapEx and everything else, we delivered last year $2.3 billion of free cash flow. That gives us opportunities to both pay a dividend that has increased over the years, as well as pursue share buybacks. We, in December, also tap into the balance sheet to do more of that. Where the stock is trading right now, by the way, we still have $1.8 billion remaining from the last authorization that we received from the Board. As of the end of Q1, we still have $1.8 billion. Clearly that gives us plenty of firepower to continue to execute on, and we do take into consideration current market conditions and share price into that equation. Consistently buying back shares is something that we have demonstrated over the years, and we'll continue to do that. Okay, great. We'll end here for the presentation, and we'll go out to Meyer for the breakout session. We'll start there in 10 minutes. Thanks, everybody. Thanks. Thanks, Buddy.

Speaker 1: Hi, everyone. Thank you for joining us this afternoon. I am Brandon Vazquez, for those of you who haven't met. I have to read off this real quick. I'm the research analyst here at William Blair, covering medical devices and animal health. For a complete list of research disclosures and potential conflicts of interest, please go to our website at williamblair.com. I'm excited to have here Zoetis' CFO, Wetteny Joseph. He is going to go through a couple minutes of intro, and then we'll host a little bit of a fireside chat. As we typically do in this, because we try to keep these presentations in the presentation session a little higher level. I'll keep the fireside chat a little bit higher level, but a little topical on what's going on. Then after that, we'll go to a breakout room. Hi, everyone. hi everyone Thank you for joining us this afternoon. thank you for joining us this afternoon I am Brandon Vazquez, for those of you who haven't met. i am brandon vazquez for those of you who haven't met I have to read off this real quick. i have to read off this real quick I'm the research analyst here at William Blair, covering medical devices and animal health. i'm the research analyst here at william blair covering medical devices and animal health For a complete list of research disclosures and potential conflicts of interest, please go to our website at williamblair.com. for a complete list of research disclosures and potential conflicts of interest please go to our website at williamblair.com I'm excited to have here Zoetis' CFO, Wetteny Joseph. i'm excited to have here zoetis' cfo wetteny joseph He is going to go through a couple minutes of intro, and then we'll host a little bit of a fireside chat. he is going to go through a couple minutes of intro and then we'll host a little bit of a fireside chat As we typically do in this, because we try to keep these presentations in the presentation session a little higher level. as we typically do in this because we try to keep these presentations in the presentation session a little higher level I'll keep the fireside chat a little bit higher level, but a little topical on what's going on. i'll keep the fireside chat a little bit higher level but a little topical on what's going on Then after that, we'll go to a breakout room. then after that we'll go to a breakout room Breakout, I have it here, breakout Meyer. Then we'll go into a little bit more detail. I'll let Wetteny go first. Then we'll chat a little bit. Breakout, I have it here, breakout Meyer. breakout i have it here breakout meyer Then we'll go into a little bit more detail. then we'll go into a little bit more detail I'll let Wetteny go first. i'll let wetteny go first Then we'll chat a little bit. then we'll chat a little bit

Speaker 2: Thank you, Brandon. Thank you, Brandon. thank you brandon Good afternoon, everyone. Given I'm sure we have a fair amount of ground to cover with the fireside chat, I will keep my opening comments relatively brief, particularly for those who may be new to the Zoetis name. We are the leader in animal health. Our purpose is really centered on nurturing our world and humankind by advancing animal care. We advance animal care via innovation. We'll spend a little bit of time talking about here, as well as how we scale our solutions globally and drive a customer-centric delivery approach in terms of how we execute. We have more than 75 years as track record and truly underpinned by both scientific and commercial expertise across the business, which yielded to about $9.5 billion of revenue last year across really strong long-term end markets for us. Good afternoon, everyone. good afternoon everyone Given I'm sure we have a fair amount of ground to cover with the fireside chat, I will keep my opening comments relatively brief, particularly for those who may be new to the Zoetis name. given i'm sure we have a fair amount of ground to cover with the fireside chat i will keep my opening comments relatively brief particularly for those who may be new to the zoetis name We are the leader in animal health. we are the leader in animal health Our purpose is really centered on nurturing our world and humankind by advancing animal care. our purpose is really centered on nurturing our world and humankind by advancing animal care We advance animal care via innovation. we advance animal care via innovation We'll spend a little bit of time talking about here, as well as how we scale our solutions globally and drive a customer-centric delivery approach in terms of how we execute. we'll spend a little bit of time talking about here as well as how we scale our solutions globally and drive a customer-centric delivery approach in terms of how we execute We have more than 75 years as track record and truly underpinned by both scientific and commercial expertise across the business, which yielded to about $9.5 billion of revenue last year across really strong long-term end markets for us. we have more than 75 years as track record and truly underpinned by both scientific and commercial expertise across the business which yielded to about $9.5 billion of revenue last year across really strong long-term end markets for us We have broad diversification across the business, as you can see on the page, across diagnostics, medicines, vaccines, including biodevices and genetic testing, et cetera. That diversity extends to who we serve as well, in terms of the core species that we cover across eight core species. Of course, companion animal representing about 70% of the business with a balance of 30% driven across livestock. So we get to benefit from the long-term trends related to companion animal, but certainly have livestock participation, which we have seen really strong growth on over the last few years as well. Our existing portfolio is the broadest in our industry and the deepest as well. It happens to also have 18 blockbusters, and in animal health, that's roughly $100 million of revenue in a given year. We continue to drive differentiation through our innovation. We have broad diversification across the business, as you can see on the page, across diagnostics, medicines, vaccines, including biodevices and genetic testing, et cetera. we have broad diversification across the business as you can see on the page across diagnostics medicines vaccines including biodevices and genetic testing et cetera That diversity extends to who we serve as well, in terms of the core species that we cover across eight core species. that diversity extends to who we serve as well in terms of the core species that we cover across eight core species Of course, companion animal representing about 70% of the business with a balance of 30% driven across livestock. of course companion animal representing about 70% of the business with a balance of 30% driven across livestock So we get to benefit from the long-term trends related to companion animal, but certainly have livestock participation, which we have seen really strong growth on over the last few years as well. so we get to benefit from the long-term trends related to companion animal but certainly have livestock participation which we have seen really strong growth on over the last few years as well Our existing portfolio is the broadest in our industry and the deepest as well. our existing portfolio is the broadest in our industry and the deepest as well It happens to also have 18 blockbusters, and in animal health, that's roughly $100 million of revenue in a given year. it happens to also have 18 blockbusters and in animal health that's roughly $100 million of revenue in a given year We continue to drive differentiation through our innovation. we continue to drive differentiation through our innovation Our innovation engine also has the promise of the future with an approximate or potential 12 additional blockbusters stemming from key areas of the greatest unmet need across animal health with renal, with chronic kidney disease focus in particular, oncology, cardiology, obesity, as well as anxiety. If you look at our capital allocation priorities, it is relatively straightforward. Given where the industry is and the amount of unmet need that remains and the innovation engine that we have built over the years, we see tremendous opportunity to invest in the business first and foremost. That comes by way of what we do in our R&D as well as capital we deploy within our manufacturing to scale the innovation that we work on and that we bring to market. Of course, we pursue business development that accelerate the strategies that we have in mind. Our innovation engine also has the promise of the future with an approximate or potential 12 additional blockbusters stemming from key areas of the greatest unmet need across animal health with renal, with chronic kidney disease focus in particular, oncology, cardiology, obesity, as well as anxiety. our innovation engine also has the promise of the future with an approximate or potential 12 additional blockbusters stemming from key areas of the greatest unmet need across animal health with renal with chronic kidney disease focus in particular oncology cardiology obesity as well as anxiety If you look at our capital allocation priorities, it is relatively straightforward. if you look at our capital allocation priorities it is relatively straightforward Given where the industry is and the amount of unmet need that remains and the innovation engine that we have built over the years, we see tremendous opportunity to invest in the business first and foremost. given where the industry is and the amount of unmet need that remains and the innovation engine that we have built over the years we see tremendous opportunity to invest in the business first and foremost That comes by way of what we do in our R&D as well as capital we deploy within our manufacturing to scale the innovation that we work on and that we bring to market. that comes by way of what we do in our r&d as well as capital we deploy within our manufacturing to scale the innovation that we work on and that we bring to market Of course, we pursue business development that accelerate the strategies that we have in mind. of course we pursue business development that accelerate the strategies that we have in mind Lastly, and very consistently, we return capital back to shareholders via a balance between dividends and share buybacks, given the tremendous opportunity we have and ability to generate free cash flow on a consistent basis. With that, I'm going to turn it over to Brandon, who will go through the Q&A. Lastly, and very consistently, we return capital back to shareholders via a balance between dividends and share buybacks, given the tremendous opportunity we have and ability to generate free cash flow on a consistent basis. lastly and very consistently we return capital back to shareholders via a balance between dividends and share buybacks given the tremendous opportunity we have and ability to generate free cash flow on a consistent basis With that, I'm going to turn it over to Brandon, who will go through the Q&A. with that i'm going to turn it over to brandon who will go through the q&a

Speaker 1: Great. Okay, Wetteny, thank you for the intro there. I think as you had mentioned, there's plenty of topics to discuss here. I want to talk about the animal health market overall. Let's start in the companion animal side, in part because I want to compare it to what it has historically been. You guys have talked about this before. It's a pretty good, I think, like a mid-single, maybe 5% growth market. Lately, we've been talking about, and you're not the only one, and many of my consumer-exposed healthcare companies have been talking about a little bit of consumer weakness, little pockets here and there. First, just level set us on what is historically this market? What is the growth within this market in the companion animal side? Then what are you seeing recently? Where might you be seeing some pockets of weakness, if there are any? Great. great Okay, Wetteny, thank you for the intro there. okay wetteny thank you for the intro there I think as you had mentioned, there's plenty of topics to discuss here. i think as you had mentioned there's plenty of topics to discuss here I want to talk about the animal health market overall. i want to talk about the animal health market overall Let's start in the companion animal side, in part because I want to compare it to what it has historically been. let's start in the companion animal side in part because i want to compare it to what it has historically been You guys have talked about this before. you guys have talked about this before It's a pretty good, I think, like a mid-single, maybe 5% growth market. it's a pretty good i think like a mid-single maybe 5% growth market Lately, we've been talking about, and you're not the only one, and many of my consumer-exposed healthcare companies have been talking about a little bit of consumer weakness, little pockets here and there. lately we've been talking about and you're not the only one and many of my consumer-exposed healthcare companies have been talking about a little bit of consumer weakness little pockets here and there First, just level set us on what is historically this market? first just level set us on what is historically this market What is the growth within this market in the companion animal side? what is the growth within this market in the companion animal side Then what are you seeing recently? then what are you seeing recently Where might you be seeing some pockets of weakness, if there are any? where might you be seeing some pockets of weakness if there are any

Speaker 2: Sure. Look, across the last decade or so, we have seen animal health deliver somewhere between 4%-6% of growth globally. Zoetis has a proven track record of leading the way with that, largely driven by innovation. It's not just in a one or two-year period where you bring out new products. It's how we have, through expansion of those markets and continuing lifecycle innovation, extend sort of the growth tailwind that we get from our innovation. What we are seeing now, we've seen over the last couple quarters, is some more adverse picture when we look at the macro. It's showing up in terms of how the consumer pet owners are extending dosage intervals, for example, or delaying visits to the clinic is how it is showing up, and it's compounded. Sure. sure Look, across the last decade or so, we have seen animal health deliver somewhere between 4%- 6% of growth globally. look across the last decade or so we have seen animal health deliver somewhere between 4%- 6% of growth globally Zoetis has a proven track record of leading the way with that, largely driven by innovation. zoetis has a proven track record of leading the way with that largely driven by innovation It's not just in a one or two-year period where you bring out new products. it's not just in a one or two-year period where you bring out new products It's how we have, through expansion of those markets and continuing lifecycle innovation, extend sort of the growth tailwind that we get from our innovation. it's how we have through expansion of those markets and continuing lifecycle innovation extend sort of the growth tailwind that we get from our innovation What we are seeing now, we've seen over the last couple quarters, is some more adverse picture when we look at the macro. what we are seeing now we've seen over the last couple quarters is some more adverse picture when we look at the macro It's showing up in terms of how the consumer pet owners are extending dosage intervals, for example, or delaying visits to the clinic is how it is showing up, and it's compounded. it's showing up in terms of how the consumer pet owners are extending dosage intervals for example or delaying visits to the clinic is how it is showing up and it's compounded You see it also more in the therapeutic categories, which are more important to us versus overall visits. You also see it more concentrated around the large corporate clinics given the cumulative effect of price increases that we've seen over the years. That happens to also be happening at the same time that we see more competition in some categories. I would say this, competition is not foreign to Zoetis. We operate in markets within animal health that have always been highly competitive. If you think about parasiticides, for example, the largest market in animal health, it is intensely competitive. It has always been, and we clearly have shown an ability to grow in that market and gain share over the years, similarly in vaccines and livestock, et cetera. You see it also more in the therapeutic categories, which are more important to us versus overall visits. you see it also more in the therapeutic categories which are more important to us versus overall visits You also see it more concentrated around the large corporate clinics given the cumulative effect of price increases that we've seen over the years. you also see it more concentrated around the large corporate clinics given the cumulative effect of price increases that we've seen over the years That happens to also be happening at the same time that we see more competition in some categories. that happens to also be happening at the same time that we see more competition in some categories I would say this, competition is not foreign to Zoetis. i would say this competition is not foreign to zoetis We operate in markets within animal health that have always been highly competitive. we operate in markets within animal health that have always been highly competitive If you think about parasiticides, for example, the largest market in animal health, it is intensely competitive. if you think about parasiticides for example the largest market in animal health it is intensely competitive It has always been, and we clearly have shown an ability to grow in that market and gain share over the years, similarly in vaccines and livestock, et cetera. it has always been and we clearly have shown an ability to grow in that market and gain share over the years similarly in vaccines and livestock et cetera We're seeing this sort of adverse macro condition play out at the same time that we're seeing more competition in categories like derm, where we haven't seen as much competition, clearly, given our position here, other than we're competing against steroid use for dermatological issues or over-the-counter or non-treatment at all. That's been our competition. Now you have others that are launching products in this space. We remain very much differentiated, but in the window as they're launching and are being more aggressive in terms of their promotional pricing, that are lasting longer, you see that compounding with the macro piece that we talked about. We're seeing this sort of adverse macro condition play out at the same time that we're seeing more competition in categories like derm, where we haven't seen as much competition, clearly, given our position here, other than we're competing against steroid use for dermatological issues or over-the-counter or non-treatment at all. we're seeing this sort of adverse macro condition play out at the same time that we're seeing more competition in categories like derm where we haven't seen as much competition clearly given our position here other than we're competing against steroid use for dermatological issues or over-the-counter or non-treatment at all That's been our competition. that's been our competition Now you have others that are launching products in this space. now you have others that are launching products in this space We remain very much differentiated, but in the window as they're launching and are being more aggressive in terms of their promotional pricing, that are lasting longer, you see that compounding with the macro piece that we talked about. we remain very much differentiated but in the window as they're launching and are being more aggressive in terms of their promotional pricing that are lasting longer you see that compounding with the macro piece that we talked about

Speaker 1: Okay. Let's stick with the macro first, and we'll follow up on the competition comments as well. Are there, as you think of where you might be seeing pockets of macro, you mentioned you have a broad portfolio, right? You have parasiticides, maybe $300-$500 annually if you look at online how much a Trio might cost, and then you might have an injectable like Librela or Cytopoint. Okay. okay Let's stick with the macro first, and we'll follow up on the competition comments as well. let's stick with the macro first and we'll follow up on the competition comments as well Are there, as you think of where you might be seeing pockets of macro, you mentioned you have a broad portfolio, right? are there as you think of where you might be seeing pockets of macro you mentioned you have a broad portfolio right You have parasiticides, maybe $300-$500 annually if you look at online how much a Trio might cost, and then you might have an injectable like Librela or Cytopoint. you have parasiticides maybe $300-$500 annually if you look at online how much a trio might cost and then you might have an injectable like librela or cytopoint

Speaker 2: I think there's a combination. It's hard to bifurcate the two pieces. Certainly, they both are having an impact. It might vary a little bit from one category to another. Clearly, based on comments I just made around dermatology, with the onset of new competition, it might be a little bit more competition impacting than macro, but there's a little bit of macro there as well, which is demonstrated by the fact that you saw visits in, now we're talking U.S.-specific. Obviously, we run a global business, visits in the quarter for pruritic in the clinic were down about 2% on the quarter. Clearly that has some effect across from an overall demand and macro standpoint before you get into what happens then within competition, right? I think there's a combination. i think there's a combination It's hard to bifurcate the two pieces. it's hard to bifurcate the two pieces Certainly, they both are having an impact. certainly they both are having an impact It might vary a little bit from one category to another. it might vary a little bit from one category to another Clearly, based on comments I just made around dermatology, with the onset of new competition, it might be a little bit more competition impacting than macro, but there's a little bit of macro there as well, which is demonstrated by the fact that you saw visits in, now we're talking U.S.-specific. clearly based on comments i just made around dermatology with the onset of new competition it might be a little bit more competition impacting than macro but there's a little bit of macro there as well which is demonstrated by the fact that you saw visits in now we're talking u.s.-specific Obviously, we run a global business, visits in the quarter for pruritic in the clinic were down about 2% on the quarter. obviously we run a global business visits in the quarter for pruritic in the clinic were down about 2% on the quarter Clearly that has some effect across from an overall demand and macro standpoint before you get into what happens then within competition, right? clearly that has some effect across from an overall demand and macro standpoint before you get into what happens then within competition right In the case of parasiticides, which as I said, has always been highly competitive, there it's a little bit more of the macro than it is of the competition that's playing out in terms of what we're seeing right now. We saw the height of launch promotions happen last year, about the second half of last year. Since then, we've seen some sequential improvement in terms of our overall share, which was only modestly affected before that anyway. We've seen sequential improvement. It's been very stable for us overall, particularly when you think about puppy share, which is very much a leading indicator. It remains above our overall share and has been very consistent as well for us. That's how I would bifurcate just to pick on those two. In the case of parasiticides, which as I said, has always been highly competitive, there it's a little bit more of the macro than it is of the competition that's playing out in terms of what we're seeing right now. in the case of parasiticides which as i said has always been highly competitive there it's a little bit more of the macro than it is of the competition that's playing out in terms of what we're seeing right now We saw the height of launch promotions happen last year, about the second half of last year. we saw the height of launch promotions happen last year about the second half of last year Since then, we've seen some sequential improvement in terms of our overall share, which was only modestly affected before that anyway. since then we've seen some sequential improvement in terms of our overall share which was only modestly affected before that anyway We've seen sequential improvement. we've seen sequential improvement It's been very stable for us overall, particularly when you think about puppy share, which is very much a leading indicator. it's been very stable for us overall particularly when you think about puppy share which is very much a leading indicator It remains above our overall share and has been very consistent as well for us. it remains above our overall share and has been very consistent as well for us That's how I would bifurcate just to pick on those two. that's how i would bifurcate just to pick on those two Clearly, the macro environment has implications beyond just these two therapeutic categories, but these are the ones I know that are top of mind for everyone. Clearly, the macro environment has implications beyond just these two therapeutic categories, but these are the ones I know that are top of mind for everyone. clearly the macro environment has implications beyond just these two therapeutic categories but these are the ones i know that are top of mind for everyone

Speaker 1: Has macro gotten worse as we've gone into 2026? We've been talking about vet visit declines for several years now. Is there something about 2026 macro only that has gotten worse this year, or is it just that it's compounding with other headwinds like competition? Has macro gotten worse as we've gone into 2026? has macro gotten worse as we've gone into 2026 We've been talking about vet visit declines for several years now. we've been talking about vet visit declines for several years now Is there something about 2026 macro only that has gotten worse this year, or is it just that it's compounding with other headwinds like competition? is there something about 2026 macro only that has gotten worse this year or is it just that it's compounding with other headwinds like competition

Speaker 2: It's a little bit of both, Brandon. Look, we've been talking about the fact that overall visits aren't as determinative for us for years, and you've seen us post really strong growth despite overall visits being down anywhere from 1%-3% since 2022, following 2021 and the peaks there. A combination of things have enabled that. It's been innovation as we launch products that were ramping, for example, Trio ramping, et cetera, after the 2020 launch. Launching OA pain for a period of time, that was really driving a tailwind for us. By the way, really strong growth that was outpacing what's happening in the clinic and to some extent, making up for some of the clinic headwinds in what's happening outside of the clinic in terms of alternative channels that were growing at much higher rates. It's a little bit of both, Brandon. it's a little bit of both brandon Look, we've been talking about the fact that overall visits aren't as determinative for us for years, and you've seen us post really strong growth despite overall visits being down anywhere from 1%- 3% since 2022, following 2021 and the peaks there. look we've been talking about the fact that overall visits aren't as determinative for us for years and you've seen us post really strong growth despite overall visits being down anywhere from 1%- 3% since 2022 following 2021 and the peaks there A combination of things have enabled that. a combination of things have enabled that It's been innovation as we launch products that were ramping, for example, Trio ramping, et cetera, after the 2020 launch. it's been innovation as we launch products that were ramping for example trio ramping et cetera after the 2020 launch Launching OA pain for a period of time, that was really driving a tailwind for us. launching oa pain for a period of time that was really driving a tailwind for us By the way, really strong growth that was outpacing what's happening in the clinic and to some extent, making up for some of the clinic headwinds in what's happening outside of the clinic in terms of alternative channels that were growing at much higher rates. by the way really strong growth that was outpacing what's happening in the clinic and to some extent making up for some of the clinic headwinds in what's happening outside of the clinic in terms of alternative channels that were growing at much higher rates They're still growing faster than the clinic, but not at the rate that they were two or three years ago. When you combine those in terms of the overall macro picture, it starts to compound with the competitive launches. They're still growing faster than the clinic, but not at the rate that they were two or three years ago. they're still growing faster than the clinic but not at the rate that they were two or three years ago When you combine those in terms of the overall macro picture, it starts to compound with the competitive launches. when you combine those in terms of the overall macro picture it starts to compound with the competitive launches

Speaker 1: Okay. Maybe the last one on macro, and we'll move on to some other topics. Because again, we want to keep this high picture, and I think one of the big questions I keep getting for all of animal health right now is, I think people can appreciate this is a resilient market, but it's not an immune market to macro as we're seeing. If this is historically a 4%-6% growth market, what are we talking about now, right? What do you think the market is going to grow at through 2026? What are you implying within your guidance at this point? Okay. okay Maybe the last one on macro, and we'll move on to some other topics. maybe the last one on macro and we'll move on to some other topics Because again, we want to keep this high picture, and I think one of the big questions I keep getting for all of animal health right now is, I think people can appreciate this is a resilient market, but it's not an immune market to macro as we're seeing. because again we want to keep this high picture and i think one of the big questions i keep getting for all of animal health right now is i think people can appreciate this is a resilient market but it's not an immune market to macro as we're seeing If this is historically a 4%- 6% growth market, what are we talking about now, right? if this is historically a 4%- 6% growth market what are we talking about now right What do you think the market is going to grow at through 2026? what do you think the market is going to grow at through 2026 What are you implying within your guidance at this point? what are you implying within your guidance at this point

Speaker 2: Look, I think it's important to talk about what don't we see changing. We spent a lot of time so far in this conversation just covering some of the cyclical things that we're seeing across the business. What we are seeing long term is the secular tailwinds that drive these major market areas continuing to be strong long term. The human animal bond driving pet spend across the world, not just in the U.S., continues to be a really strong feature. The consumer is actually spending more. It's just that the cumulative effect of price that has been taken, particularly in the larger clinics in the U.S., is having an effect on volume versus price. In the last quarter, for example, overall revenue for clinics actually were up about 3% with visits being down about 3%. Look, I think it's important to talk about what don't we see changing. look i think it's important to talk about what don't we see changing We spent a lot of time so far in this conversation just covering some of the cyclical things that we're seeing across the business. we spent a lot of time so far in this conversation just covering some of the cyclical things that we're seeing across the business What we are seeing long term is the secular tailwinds that drive these major market areas continuing to be strong long term. what we are seeing long term is the secular tailwinds that drive these major market areas continuing to be strong long term The human animal bond driving pet spend across the world, not just in the U.S., continues to be a really strong feature. the human animal bond driving pet spend across the world not just in the u.s continues to be a really strong feature The consumer is actually spending more. the consumer is actually spending more It's just that the cumulative effect of price that has been taken, particularly in the larger clinics in the U.S., is having an effect on volume versus price. it's just that the cumulative effect of price that has been taken particularly in the larger clinics in the u.s is having an effect on volume versus price In the last quarter, for example, overall revenue for clinics actually were up about 3% with visits being down about 3%. in the last quarter for example overall revenue for clinics actually were up about 3% with visits being down about 3% About 6% of price is putting some of that additional pressure on volume. You see strength in terms of pet owners spending. If anything goes wrong with the animal, they're spending it on diagnostics and they're spending on emergency care, which continue to really do really well in this environment as well. I do think it's important to think about where is the pet owner. In fact, they're even more engaged in the care of their pets than they ever were, and so that is a strength, I would say, long term, that's going to carry this industry in addition to innovation. On the livestock side, of course, you've seen continued strength in terms of animal protein consumption. You saw strength in diagnostics, et cetera. Those are the things that have not been as impacted. About 6% of price is putting some of that additional pressure on volume. about 6% of price is putting some of that additional pressure on volume You see strength in terms of pet owners spending. you see strength in terms of pet owners spending If anything goes wrong with the animal, they're spending it on diagnostics and they're spending on emergency care, which continue to really do really well in this environment as well. if anything goes wrong with the animal they're spending it on diagnostics and they're spending on emergency care which continue to really do really well in this environment as well I do think it's important to think about where is the pet owner. i do think it's important to think about where is the pet owner In fact, they're even more engaged in the care of their pets than they ever were, and so that is a strength, I would say, long term, that's going to carry this industry in addition to innovation. in fact they're even more engaged in the care of their pets than they ever were and so that is a strength i would say long term that's going to carry this industry in addition to innovation On the livestock side, of course, you've seen continued strength in terms of animal protein consumption. on the livestock side of course you've seen continued strength in terms of animal protein consumption You saw strength in diagnostics, et cetera. you saw strength in diagnostics et cetera Those are the things that have not been as impacted. those are the things that have not been as impacted In the long term, we continue to see that being the feature for the business overall that we will continue to lead. In the long term, we continue to see that being the feature for the business overall that we will continue to lead. in the long term we continue to see that being the feature for the business overall that we will continue to lead

Speaker 1: As we think about Q1 results, this is a little bit tricky because you guys don't guide on a quarterly basis, I'll acknowledge that upfront. This may be a helpful question for us to understand, though, the trajectory of how the business is going into the year. When we're talking about macro, we're talking about competition. These are the two things that are headwinds to the business right now. I think the street, Oops, sorry. You can see obviously by the stock, the street was a little surprised by the Q1 results. Were either of those dynamics surprising to you in Q1, or did Q1 unfold the way that you thought it would? As we think about Q1 results, this is a little bit tricky because you guys don't guide on a quarterly basis, I'll acknowledge that upfront. as we think about q1 results this is a little bit tricky because you guys don't guide on a quarterly basis i'll acknowledge that upfront This may be a helpful question for us to understand, though, the trajectory of how the business is going into the year. this may be a helpful question for us to understand though the trajectory of how the business is going into the year When we're talking about macro, we're talking about competition. when we're talking about macro we're talking about competition These are the two things that are headwinds to the business right now. these are the two things that are headwinds to the business right now I think the street, Oops, sorry. i think the street oops sorry You can see obviously by the stock, the street was a little surprised by the Q1 results. you can see obviously by the stock the street was a little surprised by the q1 results Were either of those dynamics surprising to you in Q1, or did Q1 unfold the way that you thought it would? were either of those dynamics surprising to you in q1 or did q1 unfold the way that you thought it would

Speaker 2: When we look at each of these components, there are elements that we certainly saw, and that started late last year. For example, the competitive launches. The timing of those may vary, we've known competition's coming for some time. We know what the effect of what some of the tactics that are used are. It's the combination of these things plus the impact they had in terms of distributors and retailers replenishing their inventories that impacted the quarter more meaningfully than expected. It's the combination, not individual item, if you will, is what happened with the quarter and the impact that we saw. Now we've reflected those in the guidance for the rest of the year. To your point, we won't give guidance by quarter, a few things that I would remind everyone of. When we look at each of these components, there are elements that we certainly saw, and that started late last year. when we look at each of these components there are elements that we certainly saw and that started late last year For example, the competitive launches. for example the competitive launches The timing of those may vary, we've known competition's coming for some time. the timing of those may vary we've known competition's coming for some time We know what the effect of what some of the tactics that are used are. we know what the effect of what some of the tactics that are used are It's the combination of these things plus the impact they had in terms of distributors and retailers replenishing their inventories that impacted the quarter more meaningfully than expected. it's the combination of these things plus the impact they had in terms of distributors and retailers replenishing their inventories that impacted the quarter more meaningfully than expected It's the combination, not individual item, if you will, is what happened with the quarter and the impact that we saw. it's the combination not individual item if you will is what happened with the quarter and the impact that we saw Now we've reflected those in the guidance for the rest of the year. now we've reflected those in the guidance for the rest of the year To your point, we won't give guidance by quarter, a few things that I would remind everyone of. to your point we won't give guidance by quarter a few things that i would remind everyone of Number one, we came into 2026 expecting to see a first half versus second half dynamic. Is it more pronounced now with the results of the first quarter? Sure. Are we expecting an uptick in terms of significant improvement in vet clinic visits for the rest of the year? No. Are we expecting the macro to be significantly better? No. The competition intensity to reduce significantly? No. However, if you look at sequential execution across a number of our products in key categories, you see improvement as we go through the year. You see an easier comp on the back half of the year stemming from last year, by the way. We had a 9% growth first half last year. We ended the year at 6%, you saw the deceleration in the back half of the year. There's an easier comp we have there. Number one, we came into 2026 expecting to see a first half versus second half dynamic. number one we came into 2026 expecting to see a first half versus second half dynamic Is it more pronounced now with the results of the first quarter? is it more pronounced now with the results of the first quarter Sure. sure Are we expecting an uptick in terms of significant improvement in vet clinic visits for the rest of the year? are we expecting an uptick in terms of significant improvement in vet clinic visits for the rest of the year No. no Are we expecting the macro to be significantly better? are we expecting the macro to be significantly better No. no The competition intensity to reduce significantly? the competition intensity to reduce significantly No. no However, if you look at sequential execution across a number of our products in key categories, you see improvement as we go through the year. however if you look at sequential execution across a number of our products in key categories you see improvement as we go through the year You see an easier comp on the back half of the year stemming from last year, by the way. you see an easier comp on the back half of the year stemming from last year by the way We had a 9% growth first half last year. we had a 9% growth first half last year We ended the year at 6%, you saw the deceleration in the back half of the year. we ended the year at 6% you saw the deceleration in the back half of the year There's an easier comp we have there. there's an easier comp we have there You haven't asked about Librela, but let's talk about OA pain and what we saw in the first quarter. We've been saying how that's going to stabilize over time. You saw that stabilization play out, including sequential, albeit modest, growth in Librela. As we go to the back half of the year, the comps get a lot easier for that as well. There's a combination there. One last point I will make is we're not anticipating an uptick in terms of pull-through as we see the back half. It's really the comps that create a dynamic where you see a higher growth rate at the back end versus the front end. You haven't asked about Librela, but let's talk about OA pain and what we saw in the first quarter. you haven't asked about librela but let's talk about oa pain and what we saw in the first quarter We've been saying how that's going to stabilize over time. we've been saying how that's going to stabilize over time You saw that stabilization play out, including sequential, albeit modest, growth in Librela. you saw that stabilization play out including sequential albeit modest growth in librela As we go to the back half of the year, the comps get a lot easier for that as well. as we go to the back half of the year the comps get a lot easier for that as well There's a combination there. there's a combination there One last point I will make is we're not anticipating an uptick in terms of pull-through as we see the back half. one last point i will make is we're not anticipating an uptick in terms of pull-through as we see the back half It's really the comps that create a dynamic where you see a higher growth rate at the back end versus the front end. it's really the comps that create a dynamic where you see a higher growth rate at the back end versus the front end

Speaker 1: Okay. Let's pivot a little bit, and talk more about the innovation pipeline. This is, of course, an innovation-driven story and I think a sector that's heavily new product cycle driven. You touched on Librela, so maybe we'll segue into there, because that's probably the nearest term new market for you guys that is developing. What is it about as you went into Q1 that is finally stabilizing this business? Because I think that'll help us set the base for then to talk about what is it that's giving you confidence that this can actually return to growth in the back half of 2026. Okay. okay Let's pivot a little bit, and talk more about the innovation pipeline. let's pivot a little bit and talk more about the innovation pipeline This is, of course, an innovation-driven story and I think a sector that's heavily new product cycle driven. this is of course an innovation-driven story and i think a sector that's heavily new product cycle driven You touched on Librela, so maybe we'll segue into there, because that's probably the nearest term new market for you guys that is developing. you touched on librela so maybe we'll segue into there because that's probably the nearest term new market for you guys that is developing What is it about as you went into Q1 that is finally stabilizing this business? what is it about as you went into q1 that is finally stabilizing this business Because I think that'll help us set the base for then to talk about what is it that's giving you confidence that this can actually return to growth in the back half of 2026. because i think that'll help us set the base for then to talk about what is it that's giving you confidence that this can actually return to growth in the back half of 2026

Speaker 2: Sure. When you have a multi-pronged strategy that we've been executing now, we've been talking about it for the better part of a year, it's hard to pinpoint one element to say this is the piece that's having the greatest impact versus the other. I'll start high level. The OA pain opportunity remained very, very significant. You can see in the U.S., for example, it's somewhere between 25 million and 27 million dogs that suffer from OA pain, with about 9 million being treated and being treated largely with NSAIDs, which tells you that both clinicians and pet owners want to treat this. We're doing a lot to help educate more and more to the pet owners, in particular around the fact that this is a progressive disease that has other downstream implications as well if it's not treated. Sure. sure When you have a multi-pronged strategy that we've been executing now, we've been talking about it for the better part of a year, it's hard to pinpoint one element to say this is the piece that's having the greatest impact versus the other. when you have a multi-pronged strategy that we've been executing now we've been talking about it for the better part of a year it's hard to pinpoint one element to say this is the piece that's having the greatest impact versus the other I'll start high level. i'll start high level The OA pain opportunity remained very, very significant. the oa pain opportunity remained very very significant You can see in the U.S., for example, it's somewhere between 25 million and 27 million dogs that suffer from OA pain, with about 9 million being treated and being treated largely with NSAIDs, which tells you that both clinicians and pet owners want to treat this. you can see in the u.s for example it's somewhere between 25 million and 27 million dogs that suffer from oa pain with about 9 million being treated and being treated largely with nsaids which tells you that both clinicians and pet owners want to treat this We're doing a lot to help educate more and more to the pet owners, in particular around the fact that this is a progressive disease that has other downstream implications as well if it's not treated. we're doing a lot to help educate more and more to the pet owners in particular around the fact that this is a progressive disease that has other downstream implications as well if it's not treated That is resonating with pet owners as well as with veterinarians in terms of sharing data with them, what we're seeing across the world, real world data, et cetera, in terms of how the product is. You continue to see positive opinions around the risk-benefit profile of the product. All those are contributing to driving this. As we look ahead, we also have the approvals of the long-acting components with LENIVIA and PORTELA that are starting to launch in markets in Canada and parts of Europe. That is resonating with pet owners as well as with veterinarians in terms of sharing data with them, what we're seeing across the world, real world data, et cetera, in terms of how the product is. that is resonating with pet owners as well as with veterinarians in terms of sharing data with them what we're seeing across the world real world data et cetera in terms of how the product is You continue to see positive opinions around the risk-benefit profile of the product. you continue to see positive opinions around the risk-benefit profile of the product All those are contributing to driving this. As we look ahead, we also have the approvals of the long-acting components with LENIVIA and PORTELA that are starting to launch in markets in Canada and parts of Europe. all those are contributing to driving this. as we look ahead we also have the approvals of the long-acting components with lenivia and portela that are starting to launch in markets in canada and parts of europe We anticipate additional approvals in other markets as we get into next year in the U.S., et cetera, that will continue to help drive and access this market because the convenience factor, for example, of having a three-month injection versus a one-month, particularly for more moderate cases that are more chronic, that for years are going to require a monthly injection, that's a tall ask for a pet owner, and we believe firmly that will be additive in terms of the picture, but give flexibility to both pet owners and veterinarians in terms of how to treat in this category. We remain very much looking forward to continuing to drive the expansion in this market, both in terms of driving that for the existing products and then the contributions from the new products that will come out as well. We anticipate additional approvals in other markets as we get into next year in the U.S., et cetera, that will continue to help drive and access this market because the convenience factor, for example, of having a three-month injection versus a one-month, particularly for more moderate cases that are more chronic, that for years are going to require a monthly injection, that's a tall ask for a pet owner, and we believe firmly that will be additive in terms of the picture, but give flexibility to both pet owners and veterinarians in terms of how to treat in this category. we anticipate additional approvals in other markets as we get into next year in the u.s et cetera that will continue to help drive and access this market because the convenience factor for example of having a three-month injection versus a one-month particularly for more moderate cases that are more chronic that for years are going to require a monthly injection that's a tall ask for a pet owner and we believe firmly that will be additive in terms of the picture but give flexibility to both pet owners and veterinarians in terms of how to treat in this category We remain very much looking forward to continuing to drive the expansion in this market, both in terms of driving that for the existing products and then the contributions from the new products that will come out as well. we remain very much looking forward to continuing to drive the expansion in this market both in terms of driving that for the existing products and then the contributions from the new products that will come out as well

Speaker 1: Okay. Talk to us a little bit also, this is probably the nearest term. We have long-acting Cytopoint coming soon, and then there's renal, others. Talk to us a little bit about the pipeline, especially for those who are newer to the story in the next several years. What's the pipeline of the next kind of three or four biggest drugs that we should be thinking about? Okay. okay Talk to us a little bit also, this is probably the nearest term. talk to us a little bit also this is probably the nearest term We have long-acting Cytopoint coming soon, and then there's renal, others. we have long-acting cytopoint coming soon and then there's renal others Talk to us a little bit about the pipeline, especially for those who are newer to the story in the next several years. talk to us a little bit about the pipeline especially for those who are newer to the story in the next several years What's the pipeline of the next kind of three or four biggest drugs that we should be thinking about? what's the pipeline of the next kind of three or four biggest drugs that we should be thinking about

Speaker 2: Yeah. Clearly the OA pain launch and how that has transpired over the last couple of years has created a bit of a challenge for us in terms of the additive element in terms of growth across the horizon. As we look ahead, we have a number of launches and approvals in terms of life cycle innovation that's going to contribute to our growth, then we're anticipating the net new big areas to start to get approvals towards the back half of next year to start a new innovation cycle, if you will, for the company. Meanwhile, to your point, in terms of the areas that are going to continue to drive value for us, you mentioned Cytopoint, a product that has very high satisfaction levels. Yeah. yeah Clearly the OA pain launch and how that has transpired over the last couple of years has created a bit of a challenge for us in terms of the additive element in terms of growth across the horizon. clearly the oa pain launch and how that has transpired over the last couple of years has created a bit of a challenge for us in terms of the additive element in terms of growth across the horizon As we look ahead, we have a number of launches and approvals in terms of life cycle innovation that's going to contribute to our growth, then we're anticipating the net new big areas to start to get approvals towards the back half of next year to start a new innovation cycle, if you will, for the company. as we look ahead we have a number of launches and approvals in terms of life cycle innovation that's going to contribute to our growth then we're anticipating the net new big areas to start to get approvals towards the back half of next year to start a new innovation cycle if you will for the company Meanwhile, to your point, in terms of the areas that are going to continue to drive value for us, you mentioned Cytopoint, a product that has very high satisfaction levels. meanwhile to your point in terms of the areas that are going to continue to drive value for us you mentioned cytopoint a product that has very high satisfaction levels We're very excited about the anticipated approval for long-acting Cytopoint towards the end of this year with launch early next year that will drive that. We have seen approval in Canada for Convenia RTU, for example, and we anticipate over the next few years to see approvals in other markets for that product, one that has some generic competition against it currently. We've seen label improvements and geo expansion of products even like Trio with the launch in Brazil recently. We're very excited about the anticipated approval for long-acting Cytopoint towards the end of this year with launch early next year that will drive that. we're very excited about the anticipated approval for long-acting cytopoint towards the end of this year with launch early next year that will drive that We have seen approval in Canada for Convenia RTU, for example, and we anticipate over the next few years to see approvals in other markets for that product, one that has some generic competition against it currently. we have seen approval in canada for convenia rtu for example and we anticipate over the next few years to see approvals in other markets for that product one that has some generic competition against it currently We've seen label improvements and geo expansion of products even like Trio with the launch in Brazil recently. we've seen label improvements and geo expansion of products even like trio with the launch in brazil recently We've seen label expansion to include flea-induced tapeworm, so prevention of that on the label for Trio. Lots and lots of things that our R&D function and our manufacturing teams, et cetera, have been working on, and you're seeing the impact that those will have over time before we start to get into the renal chronic kidney disease, oncology, and so on that we can talk about. We've seen label expansion to include flea-induced tapeworm, so prevention of that on the label for Trio. we've seen label expansion to include flea-induced tapeworm so prevention of that on the label for trio Lots and lots of things that our R&D function and our manufacturing teams, et cetera, have been working on, and you're seeing the impact that those will have over time before we start to get into the renal chronic kidney disease, oncology, and so on that we can talk about. lots and lots of things that our r&d function and our manufacturing teams et cetera have been working on and you're seeing the impact that those will have over time before we start to get into the renal chronic kidney disease oncology and so on that we can talk about

Speaker 1: Okay. As we think about a Cytopoint later this year, we think about a renal later in 2027. How do we think, especially now in the context of Librela, that I think you guys have had some learnings, is maybe the way I'd phrase it, in how to launch that and how to make sure it's a durable trajectory. How do we think of the launch of new products like this? You've given us a guidance for late 2026 Cytopoint, I think a late 2027 renal. Correct me if those are wrong. What does that mean for when they will ramp and be more meaningful to the P&L? Okay. okay As we think about a Cytopoint later this year, we think about a renal later in 2027. as we think about a cytopoint later this year we think about a renal later in 2027 How do we think, especially now in the context of Librela, that I think you guys have had some learnings, is maybe the way I'd phrase it, in how to launch that and how to make sure it's a durable trajectory. how do we think especially now in the context of librela that i think you guys have had some learnings is maybe the way i'd phrase it in how to launch that and how to make sure it's a durable trajectory How do we think of the launch of new products like this? how do we think of the launch of new products like this You've given us a guidance for late 2026 Cytopoint, I think a late 2027 renal. you've given us a guidance for late 2026 cytopoint i think a late 2027 renal Correct me if those are wrong. correct me if those are wrong What does that mean for when they will ramp and be more meaningful to the P&L? what does that mean for when they will ramp and be more meaningful to the p&l

Speaker 2: As we've been talking about for some time now, one of the observations coming through the Librela experience has been the need to make sure that we spend time and invest in that time with specialists to get their hands on the product and get really familiar with it and using it so that they can be part of the voice, if you will, to the general practitioners that get their hands on a molecule or antibody. That approach, particularly when you consider we're getting into more and more therapeutic categories where you're treating sick animals, that's going to be increasingly important. We're preparing for that evolution in terms of how we approach launching products in a number of ways. Number one, you saw us talk about some changes we made to our go-to-market in the U.S. in terms of the field force. As we've been talking about for some time now, one of the observations coming through the Librela experience has been the need to make sure that we spend time and invest in that time with specialists to get their hands on the product and get really familiar with it and using it so that they can be part of the voice, if you will, to the general practitioners that get their hands on a molecule or antibody. as we've been talking about for some time now one of the observations coming through the librela experience has been the need to make sure that we spend time and invest in that time with specialists to get their hands on the product and get really familiar with it and using it so that they can be part of the voice if you will to the general practitioners that get their hands on a molecule or antibody That approach, particularly when you consider we're getting into more and more therapeutic categories where you're treating sick animals, that's going to be increasingly important. that approach particularly when you consider we're getting into more and more therapeutic categories where you're treating sick animals that's going to be increasingly important We're preparing for that evolution in terms of how we approach launching products in a number of ways. we're preparing for that evolution in terms of how we approach launching products in a number of ways Number one, you saw us talk about some changes we made to our go-to-market in the U.S. in terms of the field force. number one you saw us talk about some changes we made to our go-to-market in the u.s in terms of the field force While we look to optimize that and get even better reach and frequency across the field force, where we saw opportunities to reduce some of the headcount in that area, we reinvested components of that into professional service vets, veterinarians who are actually calling on vets, which is an important piece when you think about the pipeline that's coming in terms of how we might leverage those conversations and the input from vet-to-vet conversations that can happen. That's one example. While we look to optimize that and get even better reach and frequency across the field force, where we saw opportunities to reduce some of the headcount in that area, we reinvested components of that into professional service vets, veterinarians who are actually calling on vets, which is an important piece when you think about the pipeline that's coming in terms of how we might leverage those conversations and the input from vet-to-vet conversations that can happen. while we look to optimize that and get even better reach and frequency across the field force where we saw opportunities to reduce some of the headcount in that area we reinvested components of that into professional service vets veterinarians who are actually calling on vets which is an important piece when you think about the pipeline that's coming in terms of how we might leverage those conversations and the input from vet-to-vet conversations that can happen That's one example. that's one example In terms of how we go about the launches, we're going about them in a very deliberate manner where we will do early experience and exposure with specialists first, get feedback and input from them to factor into the rest of the rollout as we launch in other markets, which means you have a slightly slower beginning to help you accelerate later on as we continue in terms of the launch across those products. Certainly that's the approach we're taking with the long-acting OA pain product in LENIVIA as well as what we are contemplating with respect to chronic kidney disease, oncology, and other components that will come. In terms of how we go about the launches, we're going about them in a very deliberate manner where we will do early experience and exposure with specialists first, get feedback and input from them to factor into the rest of the rollout as we launch in other markets, which means you have a slightly slower beginning to help you accelerate later on as we continue in terms of the launch across those products. in terms of how we go about the launches we're going about them in a very deliberate manner where we will do early experience and exposure with specialists first get feedback and input from them to factor into the rest of the rollout as we launch in other markets which means you have a slightly slower beginning to help you accelerate later on as we continue in terms of the launch across those products Certainly that's the approach we're taking with the long-acting OA pain product in LENIVIA as well as what we are contemplating with respect to chronic kidney disease, oncology, and other components that will come. certainly that's the approach we're taking with the long-acting oa pain product in lenivia as well as what we are contemplating with respect to chronic kidney disease oncology and other components that will come

Speaker 1: Okay. Remind me, the long-acting LENIVIA, just to make sure we have this right, is that coming to the U.S. in 2026 as well, approval in 2026? Okay. okay Remind me, the long-acting LENIVIA, just to make sure we have this right, is that coming to the U.S. in 2026 as well, approval in 2026? remind me the long-acting lenivia just to make sure we have this right is that coming to the u.s in 2026 as well approval in 2026

Speaker 2: We have said that's a 2027 approval expectation. We have said that's a 2027 approval expectation. we have said that's a 2027 approval expectation

Speaker 1: Okay. Got it. In the general presentation here, I want to make sure we touch on, I don't give it enough love, the livestock side of the business especially because the position we're in right now especially around the world, cattle prices are high. It feels like a really attractive market. Tell us about the durability of growth on that side. What should that be through 2026+? What are kind of the tailwinds helping that business? Okay. okay Got it. got it In the general presentation here, I want to make sure we touch on, I don't give it enough love, the livestock side of the business especially because the position we're in right now especially around the world, cattle prices are high. in the general presentation here i want to make sure we touch on i don't give it enough love the livestock side of the business especially because the position we're in right now especially around the world cattle prices are high It feels like a really attractive market. it feels like a really attractive market Tell us about the durability of growth on that side. tell us about the durability of growth on that side What should that be through 2026+? what should that be through 2026+ What are kind of the tailwinds helping that business? what are kind of the tailwinds helping that business

Speaker 2: Sure. Thank you for asking a livestock question because it's an important growth driver for the business. If you've seen over the last three years coming into 2026, you've seen us deliver mid-single-digit growth somewhere between 6% and 7% over the last three years. We came into this year very strong with the first quarter performance, double-digit growth there, and we're continuing to expect mid-single-digit to high single-digit growth in livestock for the year. To your point, what we're seeing sustaining the growth that we're seeing across livestock right now are a number of factors. Number one, you see a long-term, by the way, population growth, another 2 billion people will be on this planet as you look out over the next 30 or so years. The incremental protein production that's going to be necessary to feed that population is going to be a secular tailwind here. Sure. sure Thank you for asking a livestock question because it's an important growth driver for the business. thank you for asking a livestock question because it's an important growth driver for the business If you've seen over the last three years coming into 2026, you've seen us deliver mid-single-digit growth somewhere between 6% and 7% over the last three years. if you've seen over the last three years coming into 2026 you've seen us deliver mid-single-digit growth somewhere between 6% and 7% over the last three years We came into this year very strong with the first quarter performance, double-digit growth there, and we're continuing to expect mid-single-digit to high single-digit growth in livestock for the year. we came into this year very strong with the first quarter performance double-digit growth there and we're continuing to expect mid-single-digit to high single-digit growth in livestock for the year To your point, what we're seeing sustaining the growth that we're seeing across livestock right now are a number of factors. to your point what we're seeing sustaining the growth that we're seeing across livestock right now are a number of factors Number one, you see a long-term, by the way, population growth, another 2 billion people will be on this planet as you look out over the next 30 or so years. number one you see a long-term by the way population growth another 2 billion people will be on this planet as you look out over the next 30 or so years The incremental protein production that's going to be necessary to feed that population is going to be a secular tailwind here. the incremental protein production that's going to be necessary to feed that population is going to be a secular tailwind here We're also seeing increased income levels across emerging markets where they're looking for more quality animal proteins to consume. That's certainly a part of the tailwind. We see in markets like the U.S. particularly driven by GLP-1s and so on, increased animal protein consumption that's driving some tailwind here as well. The fastest-growing animal protein categories are poultry and fish. We are number one in fish. We have some very effective vaccines that have been driving our growth in that globally. We continue to be the market leader in that spectrum. In poultry, we have opportunity to continue to expand. We're getting more and more approvals. You may have seen for vector vaccines that are delivered via the biodevices that we actually have a leading market share in globally as well. We're also seeing increased income levels across emerging markets where they're looking for more quality animal proteins to consume. we're also seeing increased income levels across emerging markets where they're looking for more quality animal proteins to consume That's certainly a part of the tailwind. that's certainly a part of the tailwind We see in markets like the U.S. particularly driven by GLP-1s and so on, increased animal protein consumption that's driving some tailwind here as well. we see in markets like the u.s. particularly driven by glp-1s and so on increased animal protein consumption that's driving some tailwind here as well The fastest-growing animal protein categories are poultry and fish. the fastest-growing animal protein categories are poultry and fish We are number one in fish. we are number one in fish We have some very effective vaccines that have been driving our growth in that globally. we have some very effective vaccines that have been driving our growth in that globally We continue to be the market leader in that spectrum. we continue to be the market leader in that spectrum In poultry, we have opportunity to continue to expand. in poultry we have opportunity to continue to expand We're getting more and more approvals. we're getting more and more approvals You may have seen for vector vaccines that are delivered via the biodevices that we actually have a leading market share in globally as well. you may have seen for vector vaccines that are delivered via the biodevices that we actually have a leading market share in globally as well We see continued opportunity to continue to increase our presence across protein around the world. Clearly, we have a very broad spectrum in terms of species that we cover in livestock, which also drive diversification across the business and help us capitalize on the growth wherever it might be around the world. We see continued opportunity to continue to increase our presence across protein around the world. we see continued opportunity to continue to increase our presence across protein around the world Clearly, we have a very broad spectrum in terms of species that we cover in livestock, which also drive diversification across the business and help us capitalize on the growth wherever it might be around the world. clearly we have a very broad spectrum in terms of species that we cover in livestock which also drive diversification across the business and help us capitalize on the growth wherever it might be around the world

Speaker 1: Okay. How do we think about innovation in that product, in that side? This is predominantly vaccines. Are there any other big areas that you are investing in the livestock side? Okay. okay How do we think about innovation in that product, in that side? how do we think about innovation in that product in that side This is predominantly vaccines. this is predominantly vaccines Are there any other big areas that you are investing in the livestock side? are there any other big areas that you are investing in the livestock side

Speaker 2: You certainly see prevention being the leading pathway to drive growth here. This is where the demand is around the world. Vaccines, first and foremost. Other elements, genetics, right? We talk about Zoetis. We happen to play across prevention, genetics, and so forth, as we see vaccines being a key component when it comes to livestock. This is why I use the example in the poultry and vector vaccines and how those are delivered in overall in eggs as well. Again, having the leading share of the devices that do that. Similarly, in the aqua fish business across cattle, et cetera, around the world, this is the leading area. There are parasiticide prevention in livestock that's also driving areas. There have been disease burden in certain areas that we continue to pursue solutions for. You certainly see prevention being the leading pathway to drive growth here. you certainly see prevention being the leading pathway to drive growth here This is where the demand is around the world. this is where the demand is around the world Vaccines, first and foremost. vaccines first and foremost Other elements, genetics, right? other elements genetics right We talk about Zoetis. we talk about zoetis We happen to play across prevention, genetics, and so forth, as we see vaccines being a key component when it comes to livestock. we happen to play across prevention genetics and so forth as we see vaccines being a key component when it comes to livestock This is why I use the example in the poultry and vector vaccines and how those are delivered in overall in eggs as well. this is why i use the example in the poultry and vector vaccines and how those are delivered in overall in eggs as well Again, having the leading share of the devices that do that. again having the leading share of the devices that do that Similarly, in the aqua fish business across cattle, et cetera, around the world, this is the leading area. similarly in the aqua fish business across cattle et cetera around the world this is the leading area There are parasiticide prevention in livestock that's also driving areas. there are parasiticide prevention in livestock that's also driving areas There have been disease burden in certain areas that we continue to pursue solutions for. there have been disease burden in certain areas that we continue to pursue solutions for Livestock is, again, an attractive end market for us, and we continue to drive innovation in that space, although it's not talked about as much because the size of individual markets don't get to the sizes that we talk about in terms of derm, et cetera, but they're very meaningful. Livestock is, again, an attractive end market for us, and we continue to drive innovation in that space, although it's not talked about as much because the size of individual markets don't get to the sizes that we talk about in terms of derm, et cetera, but they're very meaningful. livestock is again an attractive end market for us and we continue to drive innovation in that space although it's not talked about as much because the size of individual markets don't get to the sizes that we talk about in terms of derm et cetera but they're very meaningful

Speaker 1: Yep. Maybe the last minute or two here on the P&L and the financial side. Your stock right now is trading at the lowest multiple, I think, since you guys have gone public. How do you think about using your free cash flow, your balance sheet to get aggressive on share buybacks? I mean, you guys have used the balance sheet a little bit already for that. Level set us where you are with that and thoughts on a go-forward basis to use that. Yep. yep Maybe the last minute or two here on the P&L and the financial side. maybe the last minute or two here on the p&l and the financial side Your stock right now is trading at the lowest multiple, I think, since you guys have gone public. your stock right now is trading at the lowest multiple i think since you guys have gone public How do you think about using your free cash flow, your balance sheet to get aggressive on share buybacks? how do you think about using your free cash flow your balance sheet to get aggressive on share buybacks I mean, you guys have used the balance sheet a little bit already for that. i mean you guys have used the balance sheet a little bit already for that Level set us where you are with that and thoughts on a go-forward basis to use that. level set us where you are with that and thoughts on a go-forward basis to use that

Speaker 2: Sure. Look, both dividends and share buybacks are important pillars within our overall capital allocation priorities. The type of products and unmet need that still exists in animal health means that our primary focus has been and will continue to be in investing in the business to pursue driving solutions that are meaningful in terms of advancing animal care, which I mentioned earlier as being our primary purpose. Having said that, we do generate significant cash at Zoetis, and you've seen us deploy that via acquisitions. But even after CapEx and everything else, we delivered last year $2.3 billion of free cash flow. That gives us opportunities to both pay a dividend that has increased over the years, as well as pursue share buybacks. We, in December, also tap into the balance sheet to do more of that. Sure. sure Look, both dividends and share buybacks are important pillars within our overall capital allocation priorities. look both dividends and share buybacks are important pillars within our overall capital allocation priorities The type of products and unmet need that still exists in animal health means that our primary focus has been and will continue to be in investing in the business to pursue driving solutions that are meaningful in terms of advancing animal care, which I mentioned earlier as being our primary purpose. the type of products and unmet need that still exists in animal health means that our primary focus has been and will continue to be in investing in the business to pursue driving solutions that are meaningful in terms of advancing animal care which i mentioned earlier as being our primary purpose Having said that, we do generate significant cash at Zoetis, and you've seen us deploy that via acquisitions. having said that we do generate significant cash at zoetis and you've seen us deploy that via acquisitions But even after CapEx and everything else, we delivered last year $2.3 billion of free cash flow. but even after capex and everything else we delivered last year $2.3 billion of free cash flow That gives us opportunities to both pay a dividend that has increased over the years, as well as pursue share buybacks. that gives us opportunities to both pay a dividend that has increased over the years as well as pursue share buybacks We, in December, also tap into the balance sheet to do more of that. we in december also tap into the balance sheet to do more of that Where the stock is trading right now, by the way, we still have $1.8 billion remaining from the last authorization that we received from the Board. As of the end of Q1, we still have $1.8 billion. Clearly that gives us plenty of firepower to continue to execute on, and we do take into consideration current market conditions and share price into that equation. Consistently buying back shares is something that we have demonstrated over the years, and we'll continue to do that. Where the stock is trading right now, by the way, we still have $1.8 billion remaining from the last authorization that we received from the Board. where the stock is trading right now by the way we still have $1.8 billion remaining from the last authorization that we received from the board As of the end of Q1, we still have $1.8 billion. as of the end of q1 we still have $1.8 billion Clearly that gives us plenty of firepower to continue to execute on, and we do take into consideration current market conditions and share price into that equation. clearly that gives us plenty of firepower to continue to execute on and we do take into consideration current market conditions and share price into that equation Consistently buying back shares is something that we have demonstrated over the years, and we'll continue to do that. consistently buying back shares is something that we have demonstrated over the years and we'll continue to do that

Speaker 1: Okay, great. We'll end here for the presentation, and we'll go out to Meyer for the breakout session. We'll start there in 10 minutes. Thanks, everybody. Okay, great. okay great We'll end here for the presentation, and we'll go out to Meyer for the breakout session. we'll end here for the presentation and we'll go out to meyer for the breakout session We'll start there in 10 minutes. we'll start there in 10 minutes Thanks, everybody. thanks everybody

Speaker 2: Thanks. Thanks. thanks

Speaker 1: Thanks, Buddy. Thanks, Buddy. thanks buddy