Zoetis Inc.

We stand by. We're about to begin. Good morning, everyone, and welcome to the third quarter 2025 Financial Results Conference call and webcast for Zoetis. Hosting the call today is Steve Frank, Vice President of Investor Relations for Zoetis. The presentation materials and additional financial tables are currently posted on the Investor Relations section of Zoetis.com. The presentation slides can be managed by you, the viewer, and will not be forwarded automatically. In addition, a replay of this call will be available approximately two hours after the conclusion of this call via dial-in or on the investor relations section of zoetis.com. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. In the interest of time, we ask that you please limit yourself to one question and then queue up again with any follow-ups. Your line will be muted when you complete your question. Again, when posing your question, please pick up your handset to allow optimal sound quality. I'll now turn the call over to Mr. Steve Frank. Please go ahead, sir.

Thank you, operator. Good morning, everyone, and welcome to the Zoetis third quarter 2025 earnings call. I am joined today by Kristen Peck, our chief executive officer, and Whitney Joseph, our chief financial officer. Before we begin, I'll remind you that the slides presented on this call are available on the investor relations section of our website, and that our remarks today will include forward-looking statements, and that actual results could differ materially from those projections. For a list and description of certain factors that could cause results to differ, I refer you to the forward-looking statements in today's press release and our SEC filings, including but not limited to our annual report on Form 10-K and our reports on Form 10-Q. Our remarks today will also include references to certain financial measures which were not prepared in accordance with generally accepted accounting principles or US GAAP. The reconciliation of these non-GAAP financial measures to the most directly comparable US GAAP measures is included in the financial tables that accompany our earnings press release. and the company's 8K filing, dated today, Tuesday, November 4, 2025. We also cite operational results, which exclude the impact of foreign exchange. With that, I will turn the call over to Kristen.

Thank you, Steve, and welcome, everyone, to our third quarter earnings call. Today, we reported 4% revenue growth and 9% growth in adjusted net income on an organic, operational basis, thanks to the relentless focus and consistent execution of our colleagues across the world. Our international segment delivered 6% organic operational revenue growth with the U.S. contributing 3% growth, excluding the impact of the MFA divestiture. By species, companion animal revenue grew 2% operationally and livestock organic operational revenue grew 10%. As we anticipated, growth moderated this quarter, driven by a strong year-over-year comp and macro factors, including vet clinic visits, and promotional activity. Our resilient growth engine remains strong, fueled by our market-leading innovation and pipeline, a diversified portfolio across species and geographies, global reach, and trusted brands that continue to lead their categories and remain essential to veterinarians, despite some near-term headwinds. Now, let's turn to our key franchises, where we're continuing to drive growth and the market opportunities remain significant. In parasiticides, our Semperica franchise grew 7% operationally, with 6% operational growth from Semperica Trio. Internationally, we delivered strong, broad-based, double-digit growth, driven largely by the continued strength of Trio across all regions, underscoring the strong and growing global demand. And Trio's most recent approval in Brazil further extends that momentum, Another example of how our innovation and geographical expansion continue to fuel the franchise's long-term growth. In the U.S., while broader end market dynamics affected overall franchise performance, we continue to see solid growth in retail and home delivery channels, which drive compliance and convenience for pet owners. TRIO growth moderated against a strong prior year comp, with continued strength in the alternative channels helping to partially upset subdued clinic traffic. We continue to navigate a more competitive U.S. market and hold share with discipline and focused execution. TRIO continues to set the benchmark in the category, supported by the broader strength of this Imperica franchise. Our first mover advantage, strong retail presence, and customer loyalty position us well to sustain momentum across the portfolio. Parasiticides remain the largest category in animal health, and as the clear leader, we are competing from a position of strength, with best-in-class innovation and high adoption driving long-term growth. Our key dermatology franchise grew 3% operationally in the quarter, reflecting the resilience of our differentiated and innovative portfolio. In the U.S., growth was driven by applicable chewable adoption and strong retail performance. offset by clinic softness and competitive dynamics in the category. Internationally, dermatology grew despite heightened competitive dynamics, including aggressive promotional activity tied to new product launches. At the same time, we continue to expand our differentiated portfolio with Apoquel Chewable approved in Chile and Cytopoint receiving an expanded label in Brazil for allergic itch. Again, reflecting our approach to geographic expansion and lifecycle innovation that supports sustained category growth. As expected, we saw some minor share shifts during these launch periods. However, we're confident our portfolio will maintain its position as a preferred choice among customers. Even with this competitive backdrop, the overall opportunity in dermatology remains significant. More than half of periodic cases globally remain untreated and we see substantial runway for continued growth and market expansion. In the quarter, our osteoarthritis or OA pain franchise declined 11% operationally. In addition to impacts in the US, our performance in primarily English speaking international markets has also been affected by misperceptions amplified on social media, contributing to a 15% operational decline in global labella sales. We are executing a focused, multi-pronged strategy to return labella to growth. First, we're increasing awareness that OA is a serious, progressive disease requiring early and proactive care to control associated pain and improve a pet's quality of life. Second, we're deepening education and engagement with specialists and veterinarians to reinforce Labrella's positive risk-benefit profile and real-world impact. Third, we're continuing to share clear, science-based information and amplify the overwhelmingly positive experiences people and pets are having. Finally, beginning in Q4, our Phase 4 research conducted through independent, third-party studies aims to provide vets and specialists with even greater confidence in Labrella. We are encouraged by recent trends showing signs of stabilization, supported by strong satisfaction among the majority of pet owners, giving us confidence in the actions we're taking to support recovery and in how we're applying those learnings to future launches. To that end, we are excited about the first market approval of Lanivia, a distinct, long-acting molecule for dogs that offers greater choice and flexibility for veterinarians and pet owners. In Canada, with a launch expected there in the first half of 2026. We also received a positive CDMP opinion recommending marketing authorization in Europe. In addition to that, we received European approval for Pertella, our long-acting monoclonal antibody for feline OA pain, with a launch also expected in the first half of 2026, further extending our leadership in chronic pain management across species. These milestones highlight the durable strength of our innovation engines and our ability to advance a deep pipeline from approvals through launch. And we anticipate a major new market approval each year for the next several years. Together, Labrella, Lanivia, Silencia, and Portela form a next generation OA Payne portfolio unmatched in its depth and scientific innovation. offering flexibility reaching a broader patient population and reinforcing the long-term growth trajectory of this important and under-penetrated market to enable growth in this expanding portfolio we're continuing to invest in manufacturing excellence including our new atlanta advanced biologics facility and expanded monocle antibody production capabilities ensuring that every innovation we bring to market reaches veterinarians and pet owners with a quality viability, and scale they expect from Zoetis. Beyond our product portfolio, we're evolving our U.S. commercial structure to better serve customers and enhance our agility and efficiency, building on the strength of our key companion animal franchises and the critical role in veterinary practices. As the U.S. pet market expands, expectations for more personalized, convenient, and enhanced care continue to rise. To better meet those needs, we're implementing a go-to market model that sharpens our focus and simplifies our structure. The result will be a leaner, more agile field organization with single point of contact coverage, expanding our reach and frequency, and deepening engagement with our customers. We expect this model will support growth and bolster our competitive positioning. and we will continue evaluating opportunities for similar enhancements across the business into 2026, ensuring we continue delivering the best experience for customers and the strongest value for shareholders. We look forward to sharing updates on our progress. In livestock, organic operational revenue grew 10% in the quarter, reflecting broad-based growth across geographies and species. and we're on track for a third consecutive year of above-market growth in 2025, supported by strong execution and resilient market demand. As an example, poultry continues to benefit from focused and vaccine-led growth following the MFA divestiture, with deeper penetration among key accounts, market expansion, and growing adoption of Proserta across multiple regions. This progress reflects the strength of our strategy, advancing innovation, strengthening partnerships and ensuring our portfolio meets the evolving needs of producers worldwide. Rising protein consumption and the growing role of fish in the global food supply continue to reinforce the long term fundamentals of this business. And beyond strong performance, we continue to live our purpose through innovation, demonstrated by the speed and effectiveness of a response to emerging zoonotic diseases, including recent approvals related to HPAI and New World Screwworm. Turning to guidance, we're updating our full-year outlook based on our year-to-date performance and expectations for the remainder of the year. For organic operational revenue, we're revising and narrowing our range to 5.5 to 6.5, Given a more measured view of the macro and operational environment in the back half of the year. we're also narrowing organic operational adjusted net income growth range to five and a half to 7% supported by continued cost discipline, with a balanced approach to investment that enables us to sustain strong profitability and deliver shareholder value even amid near term variability overall. We have the right portfolio, the right strategy, and deep connections with customers and pet owners positioning us not only to navigate the current environment, but to capture the significant opportunities ahead. And we're delivering on the commitment we've made since outlining our innovation timeline in January, we've executed on or ahead of schedule We are continuing to differentiate our portfolio with more than 130 geographic expansions and lifecycle innovations this year, several of which you can see in today's slides. Our ability to deliver on our commitments continues to define Zoetis and position us to create significant value for shareholders. It's how we build trust year after year with customers, colleagues, and investors alike. We are confident that Zoetis has the most robust comprehensive pipeline in animal health, advancing care across every category and stage. Powered by innovation and purpose, we're shaping the future of animal health and creating entirely new categories of care. And with that in mind, as we announced yesterday, Rob Polzer, our head of R&D, will retire following a 10-year distinguished career at Zoetis, advancing our innovative pipeline. We are grateful for Rob's incredible contributions. Rob will remain in his role until the end of the year and, following his retirement at the end of February, will be available to Zoetis as a scientific advisor until the end of 2026, ensuring a smooth transition and continued momentum for Zoetis' pipeline. We are excited to appoint Kevin Esch as Rob's successor, effective January 1. Kevin has held a series of influential roles in our R&D organization over the last decade and is ready to step in and lead Zoetis' R&D into the future. Kevin has demonstrated a lifelong commitment to advancing animal health. Before joining Zoetis, Kevin was a practicing veterinarian and practice owner for more than 10 years and has a strong scientific background with formal training in public health, immunobiology, and pathology. I hope you'll join us on Tuesday, December 2nd, at 830 a.m. Eastern Time for an innovation webcast, when we will provide investors with the latest pipeline updates and the progress we're making to move the industry forward. With a resilient business, an unmatched pipeline, and significant market potential, we remain confident in Zoetis' long-term growth trajectory. And with that, I will turn it over to Watney.