Overview of our business Zoetis is a global leader in the animal health industry, focused on the discovery, development, manufacture and commercialization of medicines, vaccines, diagnostic products and services, biodevices, genetic tests and precision animal health. With a legacy of nearly 75 years, we continue to pioneer ways to predict, prevent, detect, and treat animal illness, supporting those raising and caring for animals worldwide - from veterinarians and pet owners to livestock producers. We manage our operations through two geographic operating segments: the United States (U.S.) and International. Within each of these operating segments, we offer diverse products for both companion animals and livestock customers in order to capitalize on local and regional trends and customer needs. See Notes to Condensed Consolidated Financial Statements — Note 16. Segment Information. We directly market our products to veterinarians and livestock producers located in approximately 45 countries across North America, Europe, Africa, Asia, Australia and South America, and are a market leader in nearly all of the major regions in which we operate. In markets where we do not have a direct commercial presence, we generally contract with distributors that provide logistics and sales and marketing support for our products. Our companion animal and livestock products are primarily available by prescription through a veterinarian. On a more limited basis, in certain markets, we sell certain products through retail and e-commerce outlets. We also market our products by advertising to veterinarians, pet owners and livestock producers. We believe our investments in one of the industry’s largest sales organizations, including our extensive network of technical and veterinary operations specialists, our high-quality manufacturing and reliability of supply, and our long track record of developing products that meet customer needs, has led to enduring and valued relationships with our customers. Our research and development (R&D) efforts enable us to deliver innovative products to address unmet needs and evolve our product lines so that they remain relevant for our customers. We have approximately 300 product lines that we sell in over 100 countries for the prediction, prevention, detection and treatment of diseases and conditions that affect various companion animal and livestock species. The diversity of our product portfolio and our global operations provides stability to our overall business. A summary of our 2026 performance compared with the comparable 2025 periods follows: % Change Three Months Ended Related to June 30, Foreign (MILLIONS OF DOLLARS) 2026 2025(a) Total Exchange Operational(b) Revenue $ 2,468 $ 2,474 — 2 (2) Net income attributable to Zoetis 691 726 (5) 1 (6) Adjusted net income(b) 781 791 (1) 1 (2) % Change Six Months Ended Related to June 30, Foreign (MILLIONS OF DOLLARS) 2026 2025(a) Total Exchange Operational(b) Revenue $ 4,730 $ 4,672 1 2 (1) Net income attributable to Zoetis 1,292 1,328 (3) 1 (4) Adjusted net income(b) 1,427 1,424 — 1 (1) (a) See Fiscal year alignment of international subsidiaries section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) for further detail regarding the Fiscal Year Alignment. (b) Operational results and adjusted net income are non-GAAP financial measures. See Non-GAAP financial measures section of this MD&A for more information. Our operating environment For a description of our operating environment, including factors that could materially affect our business, financial condition, or future results, see "Our Operating Environment" in the MD&A of our 2025 Annual Report on Form 10-K. Set forth below are updates to certain of the factors disclosed in our 2025 Annual Report on Form 10-K. Quarterly Variability of Financial Results Our quarterly financial results are subject to variability related to a number of factors including, but not limited to: tariffs and other trade protection measures, the decline in global macroeconomic conditions, competitive dynamics, geopolitical tensions with and economic uncertainty in certain markets, inflation, global supply chain disruption and supply availability, variability in distributor inventory stocking levels including as a result of expected demand and promotional activities, weather patterns, herd management decisions, regulatory actions, disease outbreaks, product and geographic mix, timing of price increases and customer expectations related to the same, timing of investment decisions and operational and other changes made in connection with the change in accounting principle to eliminate the one-month financial reporting lag in 2026 for our subsidiaries operating outside the U.S. 24 | Table of Contents Tariffs and Trade Protection Measures Our business is subject to risks related to, among other factors, tariffs and other trade protection measures put in the place by the United States or other countries, as well as U.S. international trade relations, including those with China, Canada and the European Union. Starting in early 2025, the United States government announced additional tariffs on certain goods imported into the U.S. from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response. While the final tariffs and other measures to be imposed, and their applicability to our business, remain uncertain, such actions may negatively impact demand and result in an increase in some product costs. We will continue to actively monitor the situation and evaluate actions that can be taken to moderate and/or minimize its effects. For further information regarding the impact of potential additional tariffs and trade protection measures on the Company, see Part I., Item 1A, Risk Factors in our 2025 Annual Report on Form 10-K. Disease Outbreaks Sales of our livestock products have in the past, and may in the future be, adversely affected by the outbreak of disease carried by animals. Outbreaks of disease may reduce regional or global sales of particular animal-derived food products or result in reduced exports of such products, either due to heightened export restrictions or import prohibitions, which may reduce demand for our products. Also, the outbreak of any highly contagious disease near our main production sites could require us to immediately halt production of our products at such sites or force us to incur substantial expenses in procuring raw materials or products elsewhere. Alternatively, sales of products that treat specific disease outbreaks may increase. Foreign Exchange Rates Significant portions of our revenue and costs are exposed to changes in foreign exchange rates. Our products are sold in more than 100 countries and, as a result, our revenue is influenced by changes in foreign exchange rates. For the six months ended June 30, 2026, approximately 46% of our revenue was denominated in foreign currencies. We seek to manage our foreign exchange risk, in part, through operational means, including managing same-currency revenue in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. As we operate in multiple foreign currencies, including the Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese renminbi, euro and other currencies, changes in those currencies relative to the U.S. dollar will impact our revenue, cost of goods and expenses, and consequently, net income. Exchange rate fluctuations may also have an impact beyond our reported financial results and directly impact operations. These fluctuations may affect the ability to buy and sell our goods and services between markets impacted by significant exchange rate variances. For the six months ended June 30, 2026, approximately 54% of our total revenue was in U.S. dollars. Our year-over-year total revenue growth was favorably impacted by approximately 2% from changes in foreign currency values relative to the U.S. dollar. For operations in highly inflationary economies, we translate monetary items at rates in effect at the balance sheet date, with translation adjustments recorded in Other (income)/deductions––net, and we translate non-monetary items at historical rates. Non-GAAP financial measures We report information in accordance with U.S. generally accepted accounting principles (GAAP). Management also measures performance using non-GAAP financial measures that may exclude certain amounts from the most directly comparable GAAP measure. Despite the importance of these measures to management in goal setting and performance measurement, non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors and may not be comparable to the calculation of similar measures of other companies. We present certain identified non-GAAP measures solely to provide investors with useful information to more fully understand how management assesses performance. Operational Results We believe that it is important to not only understand overall revenue and earnings results, but also “operational” results. Operational results is a non-GAAP financial measure defined as revenue or earnings results excluding the impact of foreign exchange. This measure provides information on the change in revenue and earnings as if foreign currency exchange rates had not changed between the current and prior periods to facilitate a period-to-period comparison. We believe this non-GAAP measure provides a useful comparison to previous periods for the company and investors, but should not be viewed as a substitute for U.S. GAAP reported results. Adjusted Net Income and Adjusted Earnings Per Share Adjusted net income and the corresponding adjusted earnings per share (EPS) are non-GAAP financial measures of performance used by management. We believe these financial measures are useful supplemental information to investors when considered together with our U.S. GAAP financial measures. We report adjusted net income to portray the results of our major operations, and the discovery, development, manufacture and commercialization of our products, prior to considering certain income statement elements. We define adjusted net income and adjusted EPS as net income attributable to Zoetis and EPS before the impact of purchase accounting adjustments, acquisition and divestiture-related costs and certain significant items. We recognize that, as an internal measure of performance, the adjusted net income and adjusted EPS measures have limitations, and we do not restrict our performance management process solely to these metrics. A limitation of the adjusted net income and adjusted EPS measures is that they provide a view of our operations without including all events during a period, such as the effects of an acquisition, divestiture or amortization of purchased intangibles, and do not provide a comparable view of our performance to other companies. The adjusted net income and adjusted EPS measures are not, and should not be viewed as, a substitute for U.S. GAAP reported net income attributable to Zoetis and reported EPS. See Adjusted Net Income section below for more information. Fiscal year alignment of international subsidiaries Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Historically our consolidated financial statements, which have a year-end of December 31, have reflected financial information of subsidiaries operating outside the U.S. (the “International Subsidiaries”) on a one-month financial reporting lag with a year-end of November 30. In 25 | Table of Contents connection with our multi-year process to transition our enterprise resource planning (ERP) system, effective January 1, 2026, we eliminated the one-month financial reporting lag by our International Subsidiaries and adjusted their year-end to December 31 (the “Fiscal Year Alignment”). The elimination of this financial reporting lag represented a change in accounting principle which the company considers preferable because it provides investors more timely access to financial information about these subsidiaries. This change in accounting principle was applied retrospectively to all periods since January 1, 2024. The condensed consolidated financial statements as of and for the three and six months ended June 30, 2025, the Condensed Consolidated Balance Sheet as of December 31, 2025 and the related Notes to Condensed Consolidated Financial Statements have been recast to reflect this change in accounting principle. In addition, we plan to recast the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025 and the consolidated financial statements as of and for the twelve months ended December 31, 2025 and 2024 when they are presented as comparatives in future financial statements. As a result of the Fiscal Year Alignment, the results of operations of our International Subsidiaries for the month of December 2025 will not be included in our consolidated results of operations for fiscal year 2026 but will be included in the retrospective application of the new accounting principle to prior financial statement periods. This alignment is an important preliminary step in the process to transition our ERP system because it contributes to more seamless financial consolidation, regulatory compliance and consistent reporting. The operational changes in connection with the Fiscal Year Alignment to date included a shift implemented in the first quarter of 2026 to the timing of annual price increases in certain International Subsidiaries so that the price increase and anticipated customer buying preceding the price increase would occur in the same calendar year. In addition, processing of certain customer orders from December 2025 was delayed to the first quarter of 2026. Analysis of the condensed consolidated statements of income The following discussion and analysis of our statements of income should be read along with our condensed consolidated financial statements and the notes thereto included elsewhere in Part I— Item 1 of this Quarterly Report on Form 10-Q. Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Revenue $ 2,468 $ 2,474 — $ 4,730 $ 4,672 1 Costs and expenses: Cost of sales 673 664 1 1,314 1,282 2 % of revenue 27.3 % 26.8 % 27.8 % 27.4 % Selling, general and administrative expenses 592 614 (4) 1,180 1,188 (1) % of revenue 24 % 25 % 25 % 25 % Research and development expenses 173 166 4 353 328 8 % of revenue 7 % 7 % 7 % 7 % Amortization of intangible assets 31 33 (6) 62 65 (5) Restructuring charges and certain acquisition and divestiture-related costs 77 30 * 99 30 * Interest expense, net of capitalized interest 61 53 15 123 107 15 Other (income)/deductions—net (5) 2 * (25) (13) 92 Income before provision for taxes on income 866 912 (5) 1,624 1,685 (4) % of revenue 35 % 37 % 34 % 36 % Provision for taxes on income 175 186 (6) 332 357 (7) Effective tax rate 20.2 % 20.4 % 20.4 % 21.2 % Net income before allocation to noncontrolling interests 691 726 (5) 1,292 1,328 (3) Less: Net income/(loss) attributable to noncontrolling interests — — — — — — Net income attributable to Zoetis $ 691 $ 726 (5) $ 1,292 $ 1,328 (3) % of revenue 28 % 29 % 27 % 28 % * Calculation not meaningful Revenue Three months ended June 30, 2026 vs. three months ended June 30, 2025 Total revenue decreased by $6 million, which was relatively flat, for the three months ended June 30, 2026, compared with the three months ended June 30, 2025, a decrease of $41 million, or 2%, on an operational basis. The decrease in operational revenue was primarily due to the following: •volume decrease from key franchises of approximately 3%; and •volume decrease related to the impact of the divestiture of our medicated feed additive portfolio, certain water soluble products and related assets (MFA divestiture) of approximately 1%, partially offset by: •volume growth from other in-line products of approximately 2%. Foreign exchange favorably impacted total revenue by approximately $35 million, or 2%. 26 | Table of Contents Six months ended June 30, 2026 vs. six months ended June 30, 2025 Total revenue increased by $58 million, or 1%, in the six months ended June 30, 2026, compared with the six months ended June 30, 2025, a decrease of $53 million, or 1%, on an operational basis. The decrease in operational revenue was primarily due to the following: •volume decrease from key franchises of approximately 3%, partially offset by: •price growth of approximately 1%; and •volume growth from other in-line products of approximately 1%. Foreign exchange favorably impacted total revenue by approximately $111 million, or 2%. Costs and Expenses Cost of sales Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Cost of sales $ 673 $ 664 1 $ 1,314 $ 1,282 2 % of revenue 27.3 % 26.8 % 27.8 % 27.4 % Three months ended June 30, 2026 vs. three months ended June 30, 2025 Cost of sales as a percentage of revenue was 27.3% in the three months ended June 30, 2026, compared with 26.8% in the three months ended June 30, 2025. The increase was primarily a result of: •unfavorable product mix; and •unfavorable foreign exchange, partially offset by: •favorable manufacturing costs. Six months ended June 30, 2026 vs. six months ended June 30, 2025 Cost of sales as a percentage of revenue was 27.8% in the six months ended June 30, 2026, compared with 27.4% in the six months ended June 30, 2025. The increase was primarily a result of: •unfavorable product mix; and •unfavorable foreign exchange, partially offset by: •favorable manufacturing and other costs; and •price increases. Selling, general and administrative expenses Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Selling, general and administrative expenses $ 592 $ 614 (4) $ 1,180 $ 1,188 (1) % of revenue 24 % 25 % 25 % 25 % Three months ended June 30, 2026 vs. three months ended June 30, 2025 SG&A expenses decreased by $22 million, or 4%, in the three months ended June 30, 2026, compared with the three months ended June 30, 2025, primarily as a result of: •lower compensation-related costs; •lower charitable contributions; •lower certain significant items; and •lower depreciation expense, partially offset by: •unfavorable foreign exchange; and •higher professional and consulting expense. Six months ended June 30, 2026 vs. six months ended June 30, 2025 SG&A expenses decreased by $8 million, or 1%, in the six months ended June 30, 2026, compared with the six months ended June 30, 2025, primarily as a result of: •lower depreciation expense; •lower certain significant items; and 27 | Table of Contents •lower charitable contributions, partially offset by: •unfavorable foreign exchange; and •an increase in professional and consulting expense. Research and development expenses Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Research and development expenses $ 173 $ 166 4 $ 353 $ 328 8 % of revenue 7 % 7 % 7 % 7 % Three months ended June 30, 2026 vs. three months ended June 30, 2025 R&D expenses increased by $7 million, or 4%, in the three months ended June 30, 2026, compared with the three months ended June 30, 2025, primarily as a result of: •higher spend in project investments; and •an increase in compensation-related costs to support innovation and portfolio progression. Six months ended June 30, 2026 vs. six months ended June 30, 2025 R&D expenses increased by $25 million, or 8%, in the six months ended June 30, 2026, compared with the six months ended June 30, 2025, primarily as a result of: •higher spend in project investments; •an increase in compensation-related costs to support innovation and portfolio progression; and •unfavorable foreign exchange. Amortization of intangible assets Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Amortization of intangible assets $ 31 $ 33 (6) $ 62 $ 65 (5) Amortization of intangible assets decreased in the three and six months ended June 30, 2026 versus the comparable prior year period primarily due to assets that became fully amortized in the prior year. Restructuring charges and certain acquisition and divestiture-related costs Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Restructuring charges and certain acquisition and divestiture-related costs $ 77 $ 30 * $ 99 $ 30 * * Calculation not meaningful Restructuring charges and certain acquisition and divestiture-related costs in the three and six months ended June 30, 2026 were primarily driven by employee termination costs under a comprehensive cost and productivity program, with the six-month period also reflecting employee termination costs from additional organizational structure refinements. Restructuring charges and certain acquisition and divestiture-related costs in the three and six months ended June 30, 2025, primarily consisted of asset impairment charges and employee termination costs related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site. Interest expense, net of capitalized interest Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Interest expense, net of capitalized interest $ 61 $ 53 15 $ 123 $ 107 15 Interest expense, net of capitalized interest, increased in the three and six months ended June 30, 2026 versus the comparable prior year periods primarily as a result of a higher average debt balance in the current periods. 28 | Table of Contents Other (income)/deductions—net Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Other (income)/deductions—net $ (5) $ 2 * $ (25) $ (13) 92 Three months ended June 30, 2026 vs. three months ended June 30, 2025 The change in Other (income)/deductions—net in the three months ended June 30, 2026 versus the comparable prior year period was primarily as a result of asset impairment charges in the prior year period, partially offset by lower interest income in the current period. Six months ended June 30, 2026 vs. six months ended June 30, 2025 The change in Other (income)/deductions—net in the six months ended June 30, 2026 versus the comparable prior year period was primarily as a result of lower foreign currency losses and the gain on sale of a distribution facility in the current period, as well as asset impairment charges in the prior year period, partially offset by lower interest income in the current period. Provision for taxes on income Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change Provision for taxes on income $ 175 $ 186 (6) $ 332 $ 357 (7) Effective tax rate 20.2 % 20.4 % 20.4 % 21.2 % Three months ended June 30, 2026 vs. three months ended June 30, 2025 Our effective tax rate was 20.2% and 20.4% for the three months ended June 30, 2026 and 2025, respectively. The lower effective tax rate for the three months ended June 30, 2026, compared with the three months ended June 30, 2025, was primarily attributable to lower discrete tax expenses, partially offset by a less favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation decisions). Six months ended June 30, 2026 vs. six months ended June 30, 2025 Our effective tax rate was 20.4% and 21.2% for the six months ended June 30, 2026 and 2025, respectively. The lower effective tax rate for the six months ended June 30, 2026, compared with the six months ended June 30, 2025, was primarily attributable to a more favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation decisions) and lower net discrete tax expenses. 29 | Table of Contents Operating Segment Results On a global basis, the mix of revenue between companion animal and livestock products was as follows: % Change Three Months Ended Related to June 30, Foreign (MILLIONS OF DOLLARS) 2026 2025 Total Exchange Operational U.S. Companion animal $ 1,044 $ 1,176 (11) — (11) Livestock 222 180 23 — 23 1,266 1,356 (7) — (7) International Companion animal 664 614 8 3 5 Livestock 509 471 8 4 4 1,173 1,085 8 3 5 Total Companion animal 1,708 1,790 (5) 1 (6) Livestock 731 651 12 2 10 Contract manufacturing & human health 29 33 (12) 1 (13) $ 2,468 $ 2,474 — 2 (2) % Change Six Months Ended Related to June 30, Foreign (MILLIONS OF DOLLARS) 2026 2025 Total Exchange Operational U.S. Companion animal $ 1,909 $ 2,149 (11) — (11) Livestock 447 390 15 — 15 2,356 2,539 (7) — (7) International Companion animal 1,318 1,182 12 6 6 Livestock 1,004 888 13 5 8 2,322 2,070 12 5 7 Total Companion animal 3,227 3,331 (3) 2 (5) Livestock 1,451 1,278 14 4 10 Contract manufacturing & human health 52 63 (17) 1 (18) $ 4,730 $ 4,672 1 2 (1) 30 | Table of Contents Earnings by segment and the operational and foreign exchange changes versus the comparable prior year period were as follows: % Change Three Months Ended Related to June 30, Foreign (MILLIONS OF DOLLARS) 2026 2025 Total Exchange Operational U.S. Revenue $ 1,266 $ 1,356 (7) — (7) Cost of Sales 214 208 3 — 3 Gross Profit 1,052 1,148 (8) — (8) Gross Margin 83.1 % 84.7 % Operating Expenses 215 218 (1) — (1) Other (income)/deductions-net — — * * * U.S. Earnings 837 930 (10) — (10) International Revenue 1,173 1,085 8 3 5 Cost of Sales 340 321 6 4 2 Gross Profit 833 764 9 3 6 Gross Margin 71.0 % 70.4 % Operating Expenses 172 171 1 3 (2) Other (income)/deductions-net — 1 * * * International Earnings 661 592 12 4 8 Total operating segments 1,498 1,522 (2) 1 (3) Other business activities (135) (129) 5 Reconciling Items: Corporate (315) (324) (3) Purchase accounting adjustments (30) (33) (9) Acquisition and divestiture-related costs (2) (1) * Certain significant items (81) (48) 69 Other unallocated (69) (75) (8) Total Earnings $ 866 $ 912 (5) * Calculation not meaningful 31 | Table of Contents % Change Six Months Ended Related to June 30, Foreign (MILLIONS OF DOLLARS) 2026 2025 Total Exchange Operational U.S. Revenue $ 2,356 $ 2,539 (7) — (7) Cost of Sales 408 407 — — — Gross Profit 1,948 2,132 (9) — (9) Gross Margin 82.7 % 84.0 % Operating Expenses 414 423 (2) — (2) Other (income)/deductions-net — — * * * U.S. Earnings 1,534 1,709 (10) — (10) International Revenue 2,322 2,070 12 5 7 Cost of Sales 674 616 9 6 3 Gross Profit 1,648 1,454 13 4 9 Gross Margin 71.0 % 70.2 % Operating Expenses 347 334 4 5 (1) Other (income)/deductions-net 1 1 * * * International Earnings 1,300 1,119 16 5 11 Total operating segments 2,834 2,828 — 2 (2) Other business activities (276) (262) 5 Reconciling Items: Corporate (630) (602) 5 Purchase accounting adjustments (58) (65) (11) Acquisition and divestiture-related costs (4) (1) * Certain significant items (108) (54) * Other unallocated (134) (159) (16) Total Earnings $ 1,624 $ 1,685 (4) * Calculation not meaningful Three months ended June 30, 2026 vs. three months ended June 30, 2025 U.S. operating segment U.S. segment revenue decreased by $90 million, or 7%, in the three months ended June 30, 2026, compared with the three months ended June 30, 2025, reflecting a decrease of $132 million in companion animal products, partially offset by an increase of $42 million in livestock products. •Companion animal revenue decreased primarily due to softer end-market demand and an increasingly competitive landscape. The company's key dermatology franchise and Simparica Trio faced heightened competitive pressure and persistent macroeconomic-driven price sensitivity. Also contributing to the decline was the impact of generic competition on Cerenia and Convenia, as well as lower sales of Librela. •Livestock revenue growth was primarily due to increased demand for our cattle products. Sales of cattle products grew due to improved supply availability and elevated demand in response to the New World screwworm outbreak. U.S. segment earnings decreased by $93 million, or 10%, in the three months ended June 30, 2026, compared with the three months ended June 30, 2025, primarily due to lower gross profit, partially offset by lower operating expenses. International operating segment International segment revenue increased by $88 million, or 8%, in the three months ended June 30, 2026 compared with the three months ended June 30, 2025. Operational revenue increased by $53 million, or 5%, driven by growth of $33 million in companion animal products and $20 million in livestock products. •Companion animal operational revenue growth was driven primarily by increased sales of our parasiticides portfolio, as well as an increase in demand for small animal diagnostics and our mAb products for pain with the launch of Lenivia® and Portela™, the company's long-acting monoclonal antibody pain products, partially offset by decreased sales of key dermatology products. •Livestock operational revenue growth was due to increased sales in our cattle and poultry products. Sales of cattle products grew largely due to increased demand and price. Sales of poultry products grew due to increased demand, geographic expansion and price. •Additionally, International segment revenue was favorably impacted by foreign exchange which increased revenue by $35 million, or 3%, primarily driven by the Brazilian real, Australian dollar, euro and Mexican peso. 32 | Table of Contents International segment earnings increased by $69 million, or 12%, in the three months ended June 30, 2026, compared with the three months ended June 30, 2025. Operational earnings increased by $48 million, or 8%, primarily due to higher gross profit. Six months ended June 30, 2026 vs. six months ended June 30, 2025 U.S. operating segment U.S. segment revenue decreased by $183 million, or 7%, in the six months ended June 30, 2026, compared with the six months ended June 30, 2025, reflecting a decrease of $240 million in companion animal products, partially offset by an increase of $57 million in livestock products. •Companion animal revenue declined primarily due to softer end-market demand and an increasingly competitive landscape. The company's key dermatology franchise and Simparica Trio faced heightened competitive pressure and persistent macroeconomic-driven price sensitivity. Also contributing to the decline was the impact of generic competition on Convenia and Cerenia, as well as lower sales of Librela. •Livestock revenue growth was primarily due to increased demand for our cattle, poultry and swine products. Cattle products grew due to improved supply availability and elevated demand in response to the New World screwworm outbreak. Poultry products grew due to increased demand for vaccines, as well as price. Sales of our swine products grew due to increased demand for vaccine products. U.S. segment earnings decreased by $175 million, or 10%, in the six months ended June 30, 2026, compared with the six months ended June 30, 2025, primarily due to lower gross profit, partially offset by lower operating expenses. International operating segment International segment revenue increased by $252 million, or 12%, in the six months ended June 30, 2026 compared with the six months ended June 30, 2025. Operational revenue increased by $141 million, or 7%, driven by growth of $72 million in companion animal products and $69 million in livestock products. Growth in the current period was positively impacted by operational changes made in connection with the Fiscal Year Alignment. •Companion animal operational revenue growth was driven primarily by increased sales of our parasiticides portfolio, as well as an increase in demand for small animal diagnostics and vaccines, partially offset by decreased sales of key dermatology products. •Livestock operational revenue growth was due to increased sales in our cattle, swine, poultry and fish products. Sales of cattle products grew largely due to a mix of volume and price. Sales of poultry products grew due to increased demand, key account penetration, geographic expansion and price. Sales of swine products were volume-driven due to momentum across our key brands. Sales of our fish products grew due to increased pricing. •Additionally, International segment revenue was favorably impacted by foreign exchange which increased revenue by $111 million, or 5%, primarily driven by the euro, Brazilian real, Australian dollar, and Mexican peso. International segment earnings increased by $181 million, or 16%, in the six months ended June 30, 2026, compared with the six months ended June 30, 2025. Operational earnings increased by $127 million, or 11%, primarily due to higher gross profit, partially offset by higher operating expenses. Other business activities Other business activities includes our Client Supply Services contract manufacturing results, our human health business and expenses associated with our dedicated veterinary medicine research and development organization, research alliances, U.S. regulatory affairs and other operations focused on the development of our products. Other R&D-related costs associated with non-U.S. market and regulatory activities are generally included in the International segment. Three months ended June 30, 2026 vs. three months ended June 30, 2025 Other business activities net loss increased by $6 million in the three months ended June 30, 2026, compared with the three months ended June 30, 2025, reflecting lower revenue from client supply services and an increase in R&D costs related to projects and other strategic investments. Six months ended June 30, 2026 vs. six months ended June 30, 2025 Other business activities net loss increased by $14 million in the six months ended June 30, 2026, compared with the six months ended June 30, 2025, reflecting an increase in R&D costs related to projects and other strategic investments and lower revenue from client supply services. Reconciling items Reconciling items include certain costs that are not allocated to our operating segments results, such as costs associated with the following: •Corporate, which includes certain costs associated with information technology, facilities, legal, finance, human resources, business development, certain diagnostic costs and communications, among others. These costs also include certain compensation costs, certain procurement costs, and other miscellaneous operating expenses that are not charged to our operating segments, as well as interest income and expense; •Certain transactions and events such as Purchase accounting adjustments, Acquisition and divestiture-related costs and Certain significant items, which are defined below; and •Other unallocated, which includes (i) certain overhead expenses associated with our global manufacturing operations not charged to our operating segments; (ii) certain costs associated with finance that specifically support our global manufacturing operations; (iii) certain supply chain and global logistics costs; and (iv) certain procurement costs. Three months ended June 30, 2026 vs. three months ended June 30, 2025 Corporate expenses decreased by $9 million, or 3%, in the three months ended June 30, 2026, compared with the three months ended June 30, 2025, primarily due to a decrease in compensation-related costs and technology investments, partially offset by higher expenses in global diagnostics. Other unallocated expenses decreased by $6 million, or 8%, in the three months ended June 30, 2026, compared with the three months ended June 30, 2025, primarily due to lower manufacturing costs and other charges, partially offset by unfavorable foreign exchange and freight charges. 33 | Table of Contents Six months ended June 30, 2026 vs. six months ended June 30, 2025 Corporate expenses increased by $28 million, or 5%, in the six months ended June 30, 2026, compared with the six months ended June 30, 2025, primarily due to unfavorable foreign exchange, higher expenses in global diagnostics and an increase in compensation-related costs. Other unallocated expenses decreased by $25 million, or 16%, in the six months ended June 30, 2026, compared with the six months ended June 30, 2025, primarily due to lower manufacturing costs and other charges, as well as lower inventory obsolescence, partially offset by unfavorable foreign exchange and freight charges. See Notes to Condensed Consolidated Financial Statements—Note 16. Segment Information for further information. Adjusted net income General description of adjusted net income (a non-GAAP financial measure) Adjusted net income is an alternative view of performance used by management, and we believe that investors’ understanding of our performance is enhanced by disclosing this performance measure. The adjusted net income measure is an important internal measurement for us. Additionally, we measure our overall performance on this basis in conjunction with other performance metrics. The following are examples of how the adjusted net income measure is utilized: •senior management receives a monthly analysis of our operating results that is prepared on an adjusted net income basis; •our annual budgets are prepared on an adjusted net income basis; and •other goal setting and performance measurements. Purchase accounting adjustments Adjusted net income is calculated prior to considering certain purchase accounting impacts that result from business combinations and net asset acquisitions. These impacts, primarily associated with acquisitions, include amortization related to the increase in fair value of the acquired finite-lived intangible assets and depreciation related to the increase/decrease to fair value of the acquired fixed assets. Therefore, the adjusted net income measure includes the revenue earned upon the sale of the acquired products without considering the aforementioned significant charges. While certain purchase accounting adjustments can occur through 20 or more years, this presentation provides an alternative view of our performance that is used by management to internally assess business performance. We believe the elimination of amortization attributable to acquired intangible assets provides management and investors an alternative view of our business results by providing a degree of parity to internally developed intangible assets for which R&D costs previously have been expensed. A completely accurate comparison of internally developed intangible assets and acquired intangible assets cannot be achieved through adjusted net income. These components of adjusted net income are derived solely from the impact of the items listed above. We have not factored in the impact of any other differences in experience that might have occurred if we had discovered and developed those intangible assets on our own, and this approach does not intend to be representative of the results that would have occurred in those circumstances. For example, our R&D costs in total, and in the periods presented, may have been different; our speed to commercialization and resulting revenue, if any, may have been different; or our costs to manufacture may have been different. In addition, our marketing efforts may have been received differently by our customers. As such, in total, there can be no assurance that our adjusted net income amounts would have been the same as presented had we discovered and developed the acquired intangible assets. Acquisition and divestiture-related costs Adjusted net income is calculated prior to considering transaction, integration and disintegration costs associated with business combinations, net asset acquisitions and divestitures. These incremental costs are excluded as they are incurred to acquire and integrate, or dispose and disintegrate, certain businesses as a result of the acquisition or disposal decision and are unique to each transaction. We have made no adjustments for the resulting synergies from these transactions. We believe that viewing income prior to considering these charges provides investors with a useful additional perspective because the significant costs incurred in a business combination, net asset acquisition or divestiture result primarily from the need to eliminate duplicate assets, activities or employees––a natural result of acquiring or disposing of a fully integrated set of activities. For this reason, we believe that the costs incurred to convert disparate systems, to close duplicative facilities or to eliminate duplicate positions (for example, in the context of a business combination) can be viewed differently from those costs incurred in the ordinary course of business. The integration and disintegration costs associated with a business combination, asset acquisition or divestiture may occur over several years, with the more significant impacts generally ending within three years of the transaction. Because of the need for certain external approvals for some actions, the span of time needed to achieve certain restructuring, integration or disintegration activities can be lengthy. For example, due to the regulated nature of the animal health medicines, vaccines and diagnostic business, the closure of excess facilities can take several years, as all manufacturing changes are subject to extensive validation and testing and must be approved by the U.S. Food and Drug Administration and/or other regulatory authorities. Certain significant items Adjusted net income is calculated excluding certain significant items. Certain significant items represent substantive, unusual items that are evaluated on an individual basis. Such evaluation considers both the quantitative and the qualitative aspect of their unusual nature. Unusual, in this context, may represent items that are not part of our ongoing business; items that, either as a result of their nature or size, we would not expect to occur as part of our normal business on a regular basis; items that would be nonrecurring; or items that relate to products that we no longer sell. While not all-inclusive, examples of items that could be included as certain significant items would be costs related to a major non-acquisition or divestiture-related restructuring charge and associated implementation costs for a program that is specific in nature with a defined term, such as those related to our non-acquisition or divestiture-related cost-reduction and productivity initiatives; costs related to our business process transformation program; amounts related to disposals of products or facilities that do not qualify as discontinued operations as defined by U.S. GAAP; certain asset impairment 34 | Table of Contents charges; adjustments related to the resolution of certain tax positions; significant currency devaluation; the impact of adopting certain significant, event-driven tax legislation; or charges related to legal matters. See Notes to Condensed Consolidated Financial Statements—Note 15. Commitments and Contingencies. Our normal, ongoing defense costs or settlements of and accruals on legal matters made in the normal course of our business would not be considered certain significant items. Reconciliation A reconciliation of net income attributable to Zoetis, as reported under U.S. GAAP, to adjusted net income follows: Three Months Ended Six Months Ended June 30, % June 30, % (MILLIONS OF DOLLARS) 2026 2025 Change 2026 2025 Change GAAP reported net income attributable to Zoetis $ 691 $ 726 (5) $ 1,292 $ 1,328 (3) Purchase accounting adjustments—net of tax 24 25 (4) 45 50 (10) Acquisition and divestiture-related costs—net of tax 2 1 * 3 1 * Certain significant items—net of tax 64 39 64 87 45 93 Non-GAAP adjusted net income(a) $ 781 $ 791 (1) $ 1,427 $ 1,424 — * Calculation not meaningful (a) The effective tax rate on adjusted pre-tax income was 20.2% and 20.4% for the three months ended June 30, 2026 and 2025, respectively and 20.5% and 21.1% for the six months ended June 30, 2026 and 2025, respectively. The lower effective tax rate for the three months ended June 30, 2026, compared with the three months ended June 30, 2025, was primarily attributable to lower net discrete tax expenses, partially offset by a less favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation decisions). The lower effective tax rate for the six months ended June 30, 2026, compared with the six months ended June 30, 2025, was primarily attributable to a more favorable jurisdictional mix of earnings (which includes the impact of the location of pre-tax earnings, tax impact of permanent differences and repatriation decisions) and lower net discrete tax expenses. A reconciliation of reported diluted earnings per share (EPS), as reported under U.S. GAAP, to non-GAAP adjusted diluted EPS follows: Three Months Ended Six Months Ended June 30, % June 30, % 2026 2025 Change 2026 2025 Change Earnings per share—diluted(a): GAAP reported EPS attributable to Zoetis—diluted $ 1.65 $ 1.63 1 $ 3.08 $ 2.97 4 Purchase accounting adjustments—net of tax 0.06 0.06 — 0.11 0.12 (8) Acquisition and divestiture-related costs—net of tax — — * — — * Certain significant items—net of tax 0.16 0.09 78 0.21 0.10 * Non-GAAP adjusted EPS—diluted $ 1.87 $ 1.78 5 $ 3.40 $ 3.19 7 * Calculation not meaningful (a) Diluted earnings per share was computed using the weighted-average common shares outstanding during the period plus the common stock equivalents related to stock options, restricted stock units, performance-vesting restricted stock units and deferred stock units. Adjusted net income includes the following charges for each of the periods presented: Three Months Ended Six Months Ended June 30, June 30, (MILLIONS OF DOLLARS) 2026 2025 2026 2025 Interest expense, net of capitalized interest $ 61 $ 53 $ 123 $ 107 Interest income 16 20 37 42 Income taxes 198 203 367 381 Depreciation 81 83 160 161 Amortization 8 8 17 17 35 | Table of Contents Adjusted net income, as shown above, excludes the following items: Three Months Ended Six Months Ended June 30, June 30, (MILLIONS OF DOLLARS) 2026 2025 2026 2025 Purchase accounting adjustments: Amortization and depreciation $ 30 $ 33 $ 61 $ 65 Other — — (3) — Total purchase accounting adjustments—pre-tax 30 33 58 65 Income taxes(a) 6 8 13 15 Total purchase accounting adjustments—net of tax 24 25 45 50 Acquisition and divestiture-related costs: Acquisition-related costs 2 1 4 1 Total acquisition and divestiture-related costs—pre-tax 2 1 4 1 Income taxes(a) — — 1 — Total acquisition and divestiture-related costs—net of tax 2 1 3 1 Certain significant items: Other restructuring charges and cost-reduction/productivity initiatives(b) 75 7 95 7 Business process transformation program(c) 6 11 11 18 Certain asset impairment charges(d) — 27 — 27 Net loss on sale of business — 3 — 3 Other — — 2 (1) Total certain significant items—pre-tax 81 48 108 54 Income taxes(a) 17 9 21 9 Total certain significant items—net of tax 64 39 87 45 Total purchase accounting adjustments, acquisition and divestiture-related costs, and certain significant items—net of tax $ 90 $ 65 $ 135 $ 96 (a) Income taxes include the tax effect of the associated pre-tax amounts, calculated by determining the jurisdictional location of the pre-tax amounts and applying that jurisdiction’s applicable tax rate. (b) For the three and six months ended June 30, 2026, primarily driven by employee termination costs under a comprehensive cost and productivity program, with the six-month period also reflecting employee termination costs from additional organizational structure refinements. For the three and six months ended June 30, 2025, primarily consisted of employee termination costs related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site. (c) Represents costs related to our multi-year business process transformation program, which includes the implementation of a new ERP system, related digital technology solutions and other related costs. This comprehensive program is a major global and cross-functional company-wide effort, of which the Fiscal Year Alignment is a part, that we believe will transform how we work across our business and contribute to all of our strategic priorities. Due to the nature, scope and magnitude of this investment, these costs are incremental transformational costs that are far in excess of the historical normal level of spending to support operations and are not expected to recur in the foreseeable future. (d) For the three and six months ended June 30, 2025, represents certain asset impairment charges related to a transition from internal to external innovation and manufacturing of certain products and the closure of a related site, as well as charges related to our aquaculture product portfolio. 36 | Table of Contents The classification of the above items excluded from adjusted net income are as follows: Three Months Ended Six Months Ended June 30, June 30, (MILLIONS OF DOLLARS) 2026 2025 2026 2025 Cost of sales: Purchase accounting adjustments $ 1 $ 1 $ 2 $ 2 Business process transformation program 3 2 4 3 Other — — 1 (1) Total Cost of sales 4 3 7 4 Selling, general and administrative expenses: Purchase accounting adjustments 3 2 5 5 Business process transformation program 3 9 7 15 Other — — (3) — Total Selling, general and administrative expenses 6 11 9 20 Research and development expenses: Purchase accounting adjustments — 1 1 1 Total Research and development expenses — 1 1 1 Amortization of intangible assets: Purchase accounting adjustments 26 29 53 57 Total Amortization of intangible assets 26 29 53 57 Restructuring charges and certain acquisition and divestiture-related costs: Acquisition-related costs 2 1 4 1 Employee termination costs 74 5 94 5 Asset impairments — 22 — 22 Exit costs 1 2 1 2 Total Restructuring charges and certain acquisition and divestiture-related costs 77 30 99 30 Other (income)/deductions—net: Net loss on sale of business — 3 — 3 Asset impairment charges — 5 — 5 Other — — 1 — Total Other (income)/deductions—net — 8 1 8 Provision for taxes on income 23 17 35 24 Total purchase accounting adjustments, acquisition and divestiture-related costs, and certain significant items—net of tax $ 90 $ 65 $ 135 $ 96 Analysis of the condensed consolidated statements of comprehensive income Changes in other comprehensive income for the periods presented are primarily related to foreign currency translation adjustments and unrealized gains/(losses) on derivative instruments. The foreign currency translation adjustment changes result from the strengthening or weakening of the U.S. dollar as compared to the currencies in the countries in which we do business. Unrealized gains/(losses) on the changes in the fair value of derivative instruments are recorded within Accumulated other comprehensive income/(loss) and reclassified into earnings depending on the nature and purpose of the financial instrument, as described in Note 9. Financial Instruments of the Notes to Condensed Consolidated Financial Statements. Analysis of the condensed consolidated balance sheets June 30, 2026 vs. December 31, 2025 For a discussion about the changes in Cash and cash equivalents and Long-term debt, net of discount and issuance costs, see “Analysis of financial condition, liquidity and capital resources” below. Short-term investments increased as a result of the purchase of time deposits. Accounts receivable, less allowance for doubtful accounts increased primarily as a result of the timing of net sales in the period, partially offset by the timing of customer payments. Other current assets increased primarily due to the timing of income taxes paid and the jurisdictional netting of income taxes receivable and income taxes payable, partially offset by a decrease in collateral posted related to derivative contracts. The decrease in Operating lease right-of-use assets reflects lease amortization in the current period. 37 | Table of Contents Identifiable intangible assets, less accumulated amortization decreased primarily due to amortization expense. See Note 11. Goodwill and Other Intangible Assets of the Notes to Condensed Consolidated Financial Statements. The net changes in Noncurrent deferred tax assets, Noncurrent deferred tax liabilities, Income taxes payable and Other taxes payable primarily reflect adjustments to the accrual for the income tax provision, the timing of income tax payments and the tax impact of various acquisitions. Other noncurrent assets increased primarily due to capitalized cloud computing arrangements implementation costs. Accrued compensation and related items decreased primarily due to the payments of 2025 annual incentive bonuses, savings plan contributions to eligible employees and payments for sales incentive bonuses, partially offset by the accrual of 2026 annual incentive bonuses, sales incentive bonuses and savings plan contributions to eligible employees. Other current liabilities increased primarily due to the mark-to-market adjustments of derivative instruments. Other noncurrent liabilities decreased primarily due to the mark-to-market adjustments of derivative instruments. For an analysis of the changes in Total Equity, see Condensed Consolidated Statements of Equity and Notes to Condensed Consolidated Financial Statements— Note 13. Stockholders’ Equity. Analysis of the condensed consolidated statements of cash flows Six Months Ended June 30, $ (MILLIONS OF DOLLARS) 2026 2025 Change Net cash provided by (used in): Operating activities $ 1,056 $ 1,120 $ (64) Investing activities (387) (415) 28 Financing activities (1,653) (1,241) (412) Effect of exchange-rate changes on cash and cash equivalents 10 54 (44) Net decrease in cash and cash equivalents $ (974) $ (482) $ (492) Operating activities Six months ended June 30, 2026 vs. six months ended June 30, 2025 Net cash provided by operating activities was $1,056 million for the six months ended June 30, 2026, compared with $1,120 million for the six months ended June 30, 2025. The decrease in operating cash flows was primarily attributable to lower net income adjusted by non-cash items and the timing of receipts and payments in the ordinary course of business, partially offset by the timing of income taxes paid and lower inventory build-up of certain products versus the comparable prior year period. Investing activities Six months ended June 30, 2026 vs. six months ended June 30, 2025 Our net cash used in investing activities was $387 million for the six months ended June 30, 2026, compared with $415 million for the six months ended June 30, 2025. The net cash used in investing activities for the six months ended June 30, 2026 was primarily due to capital expenditures and the purchase of short-term investments, partially offset by net proceeds from derivative instrument activity. The net cash used in investing activities for the six months ended June 30, 2025 was primarily due to capital expenditures and net payments of derivative instrument activity. Financing activities Six months ended June 30, 2026 vs. six months ended June 30, 2025 Our net cash used in financing activities was $1,653 million for the six months ended June 30, 2026, compared with $1,241 million for the six months ended June 30, 2025. The net cash used in financing activities for the six months ended June 30, 2026 and 2025 was primarily attributable to the purchase of treasury shares and the payment of dividends. Analysis of financial condition, liquidity and capital resources While we believe our cash and cash equivalents on hand, our operating cash flows and our existing financing arrangements will be sufficient to support our cash needs for the next twelve months and beyond, this may be subject to the environment in which we operate. Risks to our meeting future funding requirements are described in Global economic conditions below. 38 | Table of Contents Selected measures of liquidity and capital resources Certain relevant measures of our liquidity and capital resources follow: June 30, December 31, (MILLIONS OF DOLLARS) 2026 2025 Cash and cash equivalents $ 1,476 $ 2,450 Short-term investments 200 — Accounts receivable, net(a) 1,571 1,409 Long-term debt 9,048 9,042 Working capital 4,295 4,600 Ratio of current assets to current liabilities 3.08:1 3.12:1 (a) Accounts receivable are usually collected over a period of 45 to 75 days. For the periods ended June 30, 2026 and December 31, 2025, the number of days that accounts receivables were outstanding remained within this range. We regularly monitor our accounts receivable for collectability, particularly in markets where economic conditions remain uncertain. We believe that our allowance for doubtful accounts is appropriate. Our assessment is based on such factors as past due aging, historical and expected collection patterns, the financial condition of our customers, the robust nature of our credit and collection practices and the economic environment. For additional information about the sources and uses of our funds, see Analysis of the condensed consolidated balance sheets and Analysis of the condensed consolidated statements of cash flows sections of this MD&A. Credit facility and other lines of credit In August 2025, we entered into a new revolving credit agreement with a syndicate of banks providing for a multi-year $1.25 billion senior unsecured revolving credit facility (the credit facility), which expires in August 2030. Subject to certain conditions, we have the right to increase the credit facility to up to $1.75 billion. The credit facility contains a financial covenant requiring us to not exceed a maximum total leverage ratio (the ratio of consolidated net debt as of the end of the period to consolidated Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) for such period) of 3.50:1. Upon entering into a material acquisition, the maximum total leverage ratio increases to 4.00:1, and extends until the fourth full consecutive fiscal quarter ended immediately following the consummation of a material acquisition. In addition, the credit facility contains other customary covenants. We were in compliance with all financial covenants as of June 30, 2026 and December 31, 2025. There were no amounts drawn under the credit facility as of June 30, 2026 and December 31, 2025. We have additional lines of credit and other credit arrangements with a group of banks and other financial intermediaries for general corporate purposes. We maintain cash and cash equivalent balances in excess of our outstanding short-term borrowings. As of June 30, 2026, we had access to $46 million of lines of credit which expire at various times and are generally renewed annually. There were no borrowings outstanding related to these facilities as of June 30, 2026 and December 31, 2025. Domestic and international short-term funds Many of our operations are conducted outside the U.S. The amount of funds held in the U.S. will fluctuate due to the timing of receipts and payments in the ordinary course of business and due to other reasons, such as business development activities. As part of our ongoing liquidity assessments, we regularly monitor the mix of U.S. and international cash flows (both inflows and outflows). Actual repatriation of overseas funds can result in additional U.S. and local income taxes, such as U.S. state income taxes, local withholding taxes, and taxes on currency gains and losses. Global economic conditions Global financial markets may be impacted by macroeconomic, business and financial volatility. Challenging economic conditions in recent years have not had, nor do we anticipate that it will have, a significant impact on our liquidity. Due to our operating cash flows, financial assets, access to capital markets and available lines of credit and revolving credit agreements, we continue to believe that we have the ability to meet our liquidity needs for the foreseeable future. As markets change, we continue to monitor our liquidity position. There can be no assurance that a challenging economic environment or an economic downturn will not impact our liquidity or our ability to obtain financing in the future. Debt securities Convertible Senior Notes On December 18, 2025, we completed a private offering (the “offering”) of 0.250% convertible senior notes (the “convertible senior notes”) with a maturity date of June 15, 2029, unless earlier repurchased, redeemed or converted. The aggregate principal amount of the convertible senior notes sold in the offering was $2.0 billion, which includes $250 million in aggregate principal amount of convertible senior notes issued pursuant to the initial purchasers’ option to purchase additional convertible senior notes on the same terms and conditions, which the initial purchasers exercised in full for settlement on December 18, 2025. The convertible senior notes were issued pursuant to an indenture, dated as of December 18, 2025, between us and Deutsche Bank Trust Company Americas, as trustee. If we call any convertible senior notes for redemption, a "make-whole fundamental change" will occur under the indenture with respect to those convertible senior notes, in which case the conversion rate applicable to the conversion of those convertible senior notes will be increased if they are converted during a specified period of time after they are called for redemption. The convertible senior notes are convertible at an initial conversion price of approximately $148.20 per share of common stock. Prior to March 15, 2029, the convertible senior notes are convertible during certain periods only: (i) if the trading price of our common stock is greater than or equal to 130% of the conversion price for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days prior to the end of a calendar quarter, (ii) the trading price per $1,000 principal amount of convertible senior notes for each trading day of the specified measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day, (iii) if we call the notes for redemption and (iv) upon the occurrence of certain corporate events, as set forth in the indenture. On or after March 15, 2029, holders may convert all or any portion of their notes, 39 | Table of Contents regardless of the foregoing conditions. Upon any conversion of the convertible senior notes, we will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock or a combination thereof, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted. The net proceeds from the offering were $1,970 million, after deducting the initial purchasers’ discounts and expenses of $30 million. We used the net proceeds from the offering as follows: (i) $187 million to fund the cost of entering into the capped call transactions described below, (ii) $248 million to purchase approximately 2.1 million shares of Zoetis’ common stock, par value $0.01 per share (the “common stock”), in privately negotiated transactions entered into concurrently with the pricing of the offering effected with or through one of the initial purchasers or its affiliate and (iii) the remaining $1,535 million for additional repurchases of 12.3 million shares of common stock following the date of the offering, which repurchases were completed as of March 31, 2026. In connection with the issuance of the convertible senior notes, we also entered into privately negotiated capped call transactions with certain counterparties (the “capped calls”). The capped calls each have a strike price of approximately $148.20 per share, subject to certain adjustments, which correspond to the initial conversion price of the convertible senior notes. The capped calls have initial cap prices of approximately $211.72 per share, subject to certain adjustments. The capped calls cover, subject to anti-dilution adjustments, approximately 13.5 million shares of our common stock. We have the option to settle the capped calls in either shares, cash or a combination thereof. The capped calls are generally intended to reduce or offset the potential dilution to our common stock upon any conversion of the convertible senior notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. However, if the market price per share of our common stock, as measured under the terms of the capped calls, exceeds the cap prices of the capped calls, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the capped calls. The capped calls are separate transactions, and not part of the terms of the convertible senior notes. We analyzed the transactions under ASC 815, Derivatives and Hedging, and determined that the capped calls met the criteria for classification as an equity transaction with no subsequent remeasurement, as long as they continue to meet the conditions for equity classification. These capped calls are recorded in stockholders’ equity on our balance sheet and are not accounted for as a bifurcated derivative. The cost of the capped calls of $187 million, net of $42 million in deferred tax assets, was recorded as a decrease to Additional paid-in capital on our Consolidated Balance Sheets as of December 31, 2025. On December 17, 2025, we and the lenders under the credit facility entered into the First Waiver to the Revolving Credit Agreement, dated as of December 17, 2025 (the “waiver”), among us, the lenders party thereto, the issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The waiver waived a technical provision in the credit facility and explicitly permits early conversions of the convertible senior notes pursuant to their terms. Senior Notes and Other Long-Term Debt On August 18, 2025, we issued $850 million aggregate principal amount of 4.150% senior notes due 2028 and $1.00 billion aggregate principal amount of 5.000% senior notes due 2035 (collectively, 2025 senior notes), with an original issue discount of $2 million. The net proceeds were used to redeem in full the $600 million aggregate principal amount of our 5.400% 2022 senior notes due 2025 and the $750 million aggregate principal amount of our 4.500% 2015 senior notes due 2025 on August 28, 2025 and September 17, 2025, respectively, and the remainder is being used for general corporate purposes. Our senior notes are governed by an indenture and supplemental indentures (collectively, the indenture) between us and Deutsche Bank Trust Company Americas, as trustee. The indenture contains certain covenants, including limitations on our and certain of our subsidiaries' ability to incur liens or engage in sale lease-back transactions. The indenture also contains restrictions on our ability to consolidate, merge or sell substantially all of our assets. In addition, the indenture contains other customary terms, including certain events of default, upon the occurrence of which the senior notes may be declared immediately due and payable. Pursuant to the indenture, we are able to redeem the senior notes of any series, in whole or in part, at any time by paying a “make whole” premium, plus accrued and unpaid interest to, but excluding, the date of redemption. Upon the occurrence of a change of control of us and a downgrade of the senior notes below an investment grade rating by each of Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, we are, in certain circumstances, required to make an offer to repurchase all of the outstanding senior notes at a price equal to 101% of the aggregate principal amount of the senior notes together with accrued and unpaid interest to, but excluding, the date of repurchase. Our outstanding debt securities are as follows: Description Principal Amount Interest Rate Terms 2017 Senior Notes due 2027 $750 million 3.000% Interest due semi annually, not subject to amortization, aggregate principal due on September 12, 2027 2018 Senior Notes due 2028 $500 million 3.900% Interest due semi annually, not subject to amortization, aggregate principal due on August 20, 2028 2025 Senior Notes due 2028 $850 million 4.150% Interest due semi annually, not subject to amortization, aggregate principal due on August 17, 2028 2025 Convertible Senior Notes due 2029 $2,000 million 0.250% Interest due semi annually, not subject to amortization, aggregate principal due on June 15, 2029 2020 Senior Notes due 2030 $750 million 2.000% Interest due semi annually, not subject to amortization, aggregate principal due on May 15, 2030 2022 Senior Notes due 2032 $750 million 5.600% Interest due semi annually, not subject to amortization, aggregate principal due on November 16, 2032 2025 Senior Notes due 2035 $1,000 million 5.000% Interest due semi annually, not subject to amortization, aggregate principal due on August 17, 2035 2013 Senior Notes due 2043 $1,150 million 4.700% Interest due semi annually, not subject to amortization, aggregate principal due on February 1, 2043 2017 Senior Notes due 2047 $500 million 3.950% Interest due semi annually, not subject to amortization, aggregate principal due on September 12, 2047 2018 Senior Notes due 2048 $400 million 4.450% Interest due semi annually, not subject to amortization, aggregate principal due on August 20, 2048 2020 Senior Notes due 2050 $500 million 3.000% Interest due semi annually, not subject to amortization, aggregate principal due on May 15, 2050 40 | Table of Contents Credit ratings Two major corporate debt-rating organizations, Moody’s and S&P, assign ratings to our short-term and long-term debt. A security rating is not a recommendation to buy, sell or hold securities and the rating is subject to revision or withdrawal at any time by the rating organization. Each rating should be evaluated independently of any other rating. The following table provides the current ratings assigned by these rating agencies to our commercial paper and senior unsecured non-credit-enhanced long-term debt: Commercial Paper Long-term Debt Date of Last Action Name of Rating Agency Rating Rating Outlook Moody’s P-2 A3 Stable January 2025 S&P A-2 BBB+ Stable April 2025 Share repurchase program In August 2024, our Board of Directors authorized a multi-year share repurchase program of up to $6 billion of our outstanding common stock. In connection with the December 18, 2025 private offering of 0.250% convertible senior notes, we purchased approximately 2.1 million shares of Zoetis’ common stock, par value $0.01 per share, for $248 million in privately negotiated transactions entered into concurrently with the pricing of the convertible senior notes offering effected with or through one of the initial purchasers or its affiliate. Following the date of the offering, we used $1,535 million of the remaining proceeds from the offering for additional repurchases of 12.3 million shares of common stock which repurchases were completed as of March 31, 2026. As of June 30, 2026, there was $1.3 billion remaining under this authorization. Purchases of Zoetis shares may be made at the discretion of management, depending on market conditions and business needs. Share repurchases may be executed through various means, including open market or privately negotiated transactions. During the first six months of 2026, 11.0 million shares were repurchased for $1,159 million, which excludes an $11 million accrual for excise tax on net share repurchases. Off-balance sheet arrangements In the ordinary course of business and in connection with the sale of assets and businesses, we may indemnify our counterparties against certain liabilities that may arise in connection with a transaction or that are related to activities prior to a transaction. These indemnifications typically pertain to environmental, tax, employee and/or product-related matters, and patent-infringement claims. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we would be required to reimburse the loss. These indemnifications are generally subject to threshold amounts, specified claim periods and other restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of June 30, 2026 and December 31, 2025, recorded amounts for the estimated fair value of these indemnifications are not material. New accounting standards See Note 3. Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements for discussion of recent accounting pronouncements, including the respective dates of adoption or expected adoption and effects or expected effects on our consolidated financial position, results of operations and cash flows. Forward-looking statements and factors that may affect future results This report contains “forward-looking” statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). We generally identify forward-looking statements by using words such as “anticipate,” “estimate,” “could,” “expect,” “intend,” “project,” “plan,” “predict,” “believe,” “seek,” “continue,” “outlook,” “forecast,” “objective,” “target,” “may,” “might,” “will,” “should,” “can have,” “likely” or the negative version of these words or comparable words or by using future dates in connection with any discussion of future performance, actions or events. In particular, forward-looking statements include statements relating to our future actions, business plans or prospects, prospective products, product approvals or products under development, product and supply chain disruptions, R&D costs, timing and likelihood of success, future operating or financial performance, future results of current and anticipated products and services, strategies, sales efforts, expenses, production efficiencies, production margins, anticipated timing of generic market entries, integration of acquired businesses, anticipated impact or timing of divestitures, interest rates, tax rates, tariffs, changes in tax regimes and laws, impacts of the timing and processing of sales in the International segment, possible impacts of the Fiscal Year Alignment, foreign exchange rates, growth in emerging markets, the outcome of contingencies, such as legal proceedings, plans related to share repurchases and dividends, government regulation, taxes and financial results. These statements are not guarantees of future performance, actions or events. Forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, and are based on assumptions that could prove to be inaccurate. Among the factors that could cause actual results to differ materially from past results and future plans and projected future results are the following: •the possible impact and timing of competing products, including generic alternatives, on our products and our ability to compete against such products; •unanticipated safety, quality or efficacy concerns or issues about our products; •the economic, political, legal and business environment of the foreign jurisdictions in which we do business; •the decline in global economic conditions, including the ongoing conflicts and rising tensions in various parts of the world, economic weakness in China and inflation; •consolidation of our customers and distributors; •changes in the distribution channel for companion animal products; •an outbreak of infectious disease carried by animals; •disruptive innovations and advances in medical practices and technologies; 41 | Table of Contents •failure to successfully acquire businesses, license rights or products, integrate businesses, form and manage alliances or divest businesses; •restrictions and bans on the use of and consumer preferences regarding antibacterials in food-producing animals; •perceived adverse effects linked to the consumption of food derived from animals that utilize our products or animals generally; •increased regulation or decreased governmental support relating to the raising, processing or consumption of food-producing animals; •modification of foreign trade policy by the U.S. or other countries or the imposition of tariffs on imported or exported goods; •adverse weather conditions and the availability of natural resources; •the impact of climate change on our activities and the activities of our customers and suppliers; •an inability to hire and retain executive officers and other key personnel; •product launch delays, inventory shortages, recalls or unanticipated costs caused by manufacturing problems and capacity imbalances; •failure of our R&D, acquisition and licensing efforts to generate new products and product lifecycle innovations; •difficulties or delays in the development or commercialization of new products; •illegal distribution and/or sale of our products or the misuse or off-label use of our products; •legal factors, including product liability claims, antitrust litigation and governmental investigations, including tax disputes, environmental concerns, laws and regulations regarding data privacy, commercial disputes and patent disputes with branded and generic competitors, any of which could preclude commercialization of products or negatively affect the profitability of existing products; •fluctuations in foreign exchange rates and potential currency controls; •a cyberattack, information security breach or other misappropriation of our data; •governmental laws and regulations affecting domestic and foreign operations, including without limitation, tax obligations and changes affecting the tax treatment by the U.S. of income earned outside the U.S. that may result from pending or possible future proposals; •failure to protect our intellectual property rights or to operate our business without infringing the intellectual property rights of others; •failure to generate sufficient cash to service our substantial indebtedness; and •the other factors set forth under “Risk Factors” in Item 1A. of Part I of our 2025 Annual Report on Form 10-K and Item 1A. of Part II in this Form 10-Q. However, there may also be other risks that we are unable to predict at this time. These risks or uncertainties may cause actual results to differ materially from those contemplated by a forward-looking statement. You should not put undue reliance on forward-looking statements. Forward-looking statements speak only as of the date on which they are made. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the SEC. You are advised, however, to consult any further disclosures we make on related subjects in our Form 10-Q and 8-K reports and our other filings with the SEC. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider the above to be a complete discussion of all potential risks or uncertainties.