Financial Data and Key Metrics Changes - The company reported $2.5 billion in revenue, growing 4% on a reported basis and 8% on an organic operational basis, excluding foreign exchange and the MFA divestiture [21] - Adjusted net income of $783 million grew 10% on both a reported and organic operational basis [21] - Organic operational revenue growth was balanced, driven by 4% price and 4% volume [21] Business Line Data and Key Metrics Changes - The companion animal portfolio generated $1.8 billion in revenue, growing 8% operationally [22] - The Simparica franchise contributed $448 million, growing 17%, while the key dermatology franchise posted $460 million, growing 11% [22] - The livestock segment achieved 6% organic operational revenue growth, driven by strong international performance [18][22] Market Data and Key Metrics Changes - The U.S. market grew 4% on a reported basis and 7% on an organic operational basis, with companion animal growing 9% and livestock declining 2% [23] - International revenue grew 3% on a reported basis and 9% on an organic operational basis, with companion animal growing 8% and livestock growing 10% [28] Company Strategy and Development Direction - The company is raising its full-year guidance for organic operational revenue growth to 6.5% to 8% based on strong first-half performance [19] - The focus remains on executing with discipline, advancing meaningful innovation, and staying connected to customer needs [20] - The company aims to leverage its leadership position in the market and continue to drive growth through innovation and differentiated products [17][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the animal health sector, citing strong fundamentals and a diversified portfolio [20] - The company is focused on addressing competitive pressures and macroeconomic challenges while maintaining above-market growth [38] - Management highlighted the importance of compliance and education in driving adoption of new products like Librela [51][70] Other Important Information - The company is actively advancing its pipeline, with expectations for major market approvals every year for the next few years [71] - The adjusted gross margin was reported at 73.7%, with a favorable impact from foreign exchange [34] - The company continues to manage costs effectively while investing in long-term growth [61] Q&A Session Summary Question: Changes in strategy regarding competition in the Trioderm franchises - Management noted that they have not changed their strategy and continue to see strong growth in the Simparica franchise despite competition [45][46] Question: Expectations for Librela's growth and timing - Management is focused on medical education and third-party studies to support Librela's adoption, with expectations for growth potentially starting in 2026 [51][70] Question: Ability to achieve high single-digit operational growth next year - Management emphasized the broad-based results and innovation driving growth, with confidence in achieving above-market growth [58][60] Question: Strategies to promote Cytopoint in dermatology - Management highlighted the differentiated benefits of Cytopoint and the ongoing investment in all three dermatology products [78][79] Question: Clarification on contract manufacturing for human health - Management indicated that the increase in contract manufacturing is relatively small and not expected to be a recurring significant factor [83]

Financial Data and Key Metrics Changes - The company reported $2.5 billion in revenue for Q2 2025, growing 4% on a reported basis and 8% on an organic operational basis, excluding foreign exchange impacts and the MFA divestiture [19][20] - Adjusted net income reached $783 million, growing 10% on both a reported and organic operational basis [19][20] - Organic operational revenue growth was balanced, driven by 4% price and 4% volume [19] Business Line Data and Key Metrics Changes - The companion animal portfolio generated $1.8 billion in revenue, growing 8% operationally [20] - The Simparica franchise contributed $448 million, growing 17%, while the key dermatology franchise posted $460 million, growing 11% [20][21] - Livestock revenue declined 2% on an organic operational basis, primarily due to timing of supply [21][27] Market Data and Key Metrics Changes - The U.S. segment grew 4% on a reported basis and 7% on an organic operational basis, with companion animal growing 9% and livestock declining 2% [21][27] - International revenue grew 3% on a reported basis and 9% on an organic operational basis, with companion animal growing 8% and livestock growing 10% [27][31] Company Strategy and Development Direction - The company is focused on innovation and customer engagement, with a strong emphasis on expanding its portfolio and addressing unmet needs in animal health [15][19] - The company raised its full-year guidance for organic operational revenue growth to 6.5% to 8% based on strong first-half performance [17][18] - The strategy includes leveraging first-mover advantages in the parasiticides market and expanding into new therapeutic areas such as renal and oncology [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the animal health sector, citing strong fundamentals and a diversified portfolio [18][19] - The company is navigating challenges such as tariffs and competitive pressures while maintaining above-market growth [38][39] - Management highlighted the importance of compliance and education in driving adoption of new products like Librela [51][70] Other Important Information - The company reported adjusted gross margins of 73.7%, with a favorable impact from foreign exchange and improved pricing [32] - Adjusted operating expenses increased by 5% operationally, driven by higher advertising and promotion spending [33] Q&A Session Summary Question: Changes in strategy regarding competition in Trioderm franchises - Management noted that they have not changed their strategy and continue to see strong growth in the Simparica franchise despite competition [45][47] Question: Expectations for Librela's growth - Management is focused on medical education and third-party studies to support Librela's adoption, with expectations for growth potentially returning in 2026 [52][70] Question: Strategies to maintain market share in dermatology - Management emphasized the differentiation of their products and the ongoing investment in their pipeline to support growth in the dermatology franchise [77][80] Question: Impact of tariffs on animal health - Management indicated that the tariff environment remains dynamic but expressed confidence in the resilience of the animal health sector [102][104]

Financial Performance & Strategy - Elanco reported revenue of $4439 billion in 2024[10] - Adjusted EPS was $091 in 2024[10] - Adjusted EBITDA reached $910 million in 2024[10] - The company expects $660-$740 million in incremental revenue from innovation by 2025[19, 33, 41] - Elanco anticipates revenue growth of 4%-6% in 2025[49] Portfolio & Market - Pet health accounts for 50% of Elanco's revenue[47] - Farm animal also accounts for 50% of Elanco's revenue[47] - 53% of revenue comes from outside the U S[10] - The global animal health pharmaceutical industry is valued at approximately $41 billion, with pet health at $16 billion and farm animal at $25 billion[19] Debt Reduction - Elanco reduced gross debt by $148 billion in 2024[76]

Core Viewpoint - Elanco Animal Health Incorporated has released its 2024 Impact Report, emphasizing its commitment to enhancing animal care and the well-being of those who care for them through a new framework focused on four key communities of impact [1][2][3] Group 1: Commitment to Animals - Elanco's strong portfolio and high-impact innovations drive the company's mission to improve animal lives [4] - Key innovations such as Zenrelia, Credelio Quattro, and Pradalex generated $461 million in revenue in 2024, exceeding the target of $420 million to $450 million [7] - The company ranked as the 1 retail parasiticide dispenser in the U.S. and expanded global retail offerings [7] Group 2: Commitment to Customers - Elanco aims to advocate for and earn the trust of customers while solving significant challenges to create value [5] - The company has launched new veterinary-formulated pet supplements under the Advantage family umbrella [7] Group 3: Commitment to Society - Elanco is dedicated to improving public health through animal health initiatives and safeguarding the food system [6] - The company donated over $400,000 worth of products to support animal health and well-being [7] - Elanco's UpLook database helps U.S. dairy farmers earn around $10 million in net returns from carbon credit reductions [7] Group 4: Commitment to Employees - Elanco promotes a purpose-driven culture that encourages ownership, growth, and well-being among its employees [8] - The company achieved a 71% Employee Engagement Score, reflecting a 4% increase from the previous year [11] - Over 26,000 volunteer hours were recorded in 2024, contributing an estimated value of $870,000 across 1,100 global organizations [11] Group 5: Future Outlook - Elanco invites stakeholders to explore the full 2024 Impact Report and is committed to advancing its purpose of making life better for animals, customers, society, and employees [9]

Company Overview - Zoetis has over 70 years of experience in the animal health industry [4] - The company's annual revenue is $9.3 billion [4] - Zoetis has a global presence with operations in over 100 countries [4] - Companion animal products account for 68% of the company's revenue [4] - Livestock products account for 31% of the company's revenue [4] - Client Supply Services and Human Health represent 1% of total 2024 revenue [4] Market Position and Growth - The company has consistently grown faster than the animal health market [19] - Zoetis has experienced an 8% revenue CAGR since its IPO in 2013, compared to 5% for the animal health industry [21] - Zoetis U S Companion Animal revenue has a 91% correlation to growth in clinic revenue [26] - Zoetis U S Companion Animal revenue has a 12% correlation to growth in clinic visits [27] Future Market Growth - The animal health market is expected to grow from ~$48 billion in 2023 to ~$60-70 billion in 2028, and ~$75-85 billion in 2033 [33] - This represents a 6% CAGR to 2028 and a 4% CAGR from 2028 to 2033 [33]