Financial Performance - Consolidated net sales for Q2 2026 were $373.9 million, reflecting a 21% increase year-over-year [12] - Animal health segment sales grew by 26%, while Mineral Nutrition increased by 9%, and Performance Products declined by 10% [12][14] - Adjusted EBITDA increased by 41% to $82.2 million, driven by the new MFA business and improved gross profit [15][18] - Adjusted net income rose by 60%, and adjusted diluted EPS increased by 58% [14] Business Segment Performance - Animal health segment net sales reached $290 million, a 26% increase, with the new MFA business contributing $94.1 million [14][15] - Nutritional specialties saw a 9% increase in net sales due to higher North American demand for dairy [15] - Vaccine net sales grew by 13%, driven by poultry products in Latin America and higher international demand [15] - Mineral nutrition segment net sales were $68.9 million, a 9% increase, while Performance Products segment sales decreased by 10% to $15 million [15][16] Market Insights - The protein markets are experiencing strong demand, particularly in beef, chicken, pork, turkey, dairy, and eggs [32] - Favorable feed costs are helping maintain margins, with expectations of some shifts in trade due to tariffs and disease outbreaks [32] - The company is well-diversified across livestock species and geographic markets, enhancing its competitive position [33] Company Strategy and Direction - The company is focused on sustainability and profitability, emphasizing better gut health and improved feed conversion [11] - The Phibro Forward strategy aims to drive future growth through R&D and digital capabilities [11][50] - The leadership transition is seen as an opportune moment, with continuity in management and a strong cultural foundation [10] Management Commentary - Management expressed confidence in the company's direction and the strength of its business, citing positive feedback from customers and strong alignment among leadership [7][9] - The integration of the MFA portfolio is yielding positive results, with management noting strong performance and customer partnerships [5][8] Other Important Information - The company raised its full-year guidance for fiscal year 2026, with net sales expected to be between $1.45 billion and $1.5 billion [18] - The gross leverage ratio was 3.1x, and net leverage ratio was 2.8x at the end of the quarter [17] Q&A Session Summary Question: What are the main drivers of gross margins this quarter? - Management highlighted successful pricing strategies, positive product mix, and internal focus on higher-margin products as key drivers [22][23] Question: Can you elaborate on the guidance update and what is performing better than expected? - Management noted strong revenue performance, effective integration of the acquired portfolio, and improved mix as factors contributing to the positive outlook [24][25] Question: What impact did customer timing have on the MFA business? - Management explained that fluctuations in customer inventory levels affected sales, but improvements are expected in the next quarter [28][29] Question: How sustainable is the current demand in livestock markets? - Management expressed confidence in the sustainability of demand due to diversification and favorable feed costs [32][33] Question: Are there share gains from the stronger combined portfolio? - Management confirmed strong performance in poultry and swine segments, indicating share gains due to a more complete product offering [35][41] Question: Update on the Phibro Forward initiative? - Management stated that Phibro Forward continues to be a significant growth driver, with expected contributions accelerating through fiscal year 2026 [48][50]

Financial Performance - Consolidated net sales for Q2 2026 were $373.9 million, reflecting a 21% increase year-over-year [12] - Animal health segment sales grew by 26%, while mineral nutrition increased by 9%, and performance products declined by 10% [12][14] - Adjusted EBITDA increased by 41% to $82.2 million, driven by the new MFA business and improved gross profit [15] - Adjusted net income rose by 60%, and adjusted diluted EPS increased by 58% [14] Business Segment Performance - Animal health segment net sales reached $290 million, a 26% increase, with the new MFA business contributing $94.1 million [14][15] - Nutritional specialties net sales increased by 9% due to higher demand in North America [15] - Vaccine net sales grew by 13%, driven by poultry products in Latin America [15] - Mineral nutrition segment net sales were $68.9 million, a 9% increase, while performance products segment sales decreased by 10% [15][16] Market Insights - The protein markets are experiencing strong demand, particularly in beef, poultry, pork, turkey, dairy, and eggs [32] - Favorable feed costs are helping maintain margins, with expectations of some shifts in trade due to tariffs and disease outbreaks [32] - The company is well-diversified across livestock species and geographic markets, enhancing its competitive position [33] Company Strategy and Direction - The company is focused on sustainability and profitability, emphasizing better gut health and improved feed conversion [11] - The Phibro Forward strategy aims to drive future growth through R&D and digital capabilities [11][50] - The leadership transition is seen as an opportune moment to capitalize on current momentum and operational excellence [10][11] Management Commentary - Management expressed confidence in the company's direction and the strength of its business, citing positive feedback from customers and strong alignment within the leadership team [7][9] - The integration of the MFA portfolio is yielding positive results, with management noting a strong performance in the acquired business [24][40] Other Important Information - The company raised its full-year guidance for fiscal year 2026, with net sales expected to be between $1.45 billion and $1.5 billion [18] - Adjusted EBITDA guidance was increased to a range of $245 million to $255 million, reflecting a growth range of 33%-39% [18] - Cash and cash equivalents were reported at $74.5 million, with a gross leverage ratio of 3.1 times [17] Q&A Session Summary Question: What are the main drivers of the strong gross margins this quarter? - Management highlighted successful pricing strategies, positive product mix, and internal focus on higher-margin products as key drivers [23][24] Question: Can you elaborate on the guidance update and what is performing better than expected? - Management noted strong revenue performance, effective integration of the acquired portfolio, and improved mix as factors contributing to the positive outlook [25] Question: What impact did customer timing have on the MFA business? - Management explained that fluctuations in customer inventory levels affected sales, but improvements are expected in the next quarter [29] Question: How sustainable is the current demand in livestock markets? - Management expressed confidence in the sustainability of demand due to strong consumer interest and favorable feed costs [32] Question: Are you gaining market share with the combined portfolio? - Management confirmed strong performance in poultry and swine segments, indicating share gains due to a more comprehensive product offering [35][40]

Financial Performance - Consolidated net sales for Q2 2026 were $373.9 million, reflecting a 21% increase year-over-year [11] - Animal health segment sales grew by 26%, while mineral nutrition increased by 9%, and performance products declined by 10% [12] - Adjusted EBITDA increased by 41% to $82.2 million, driven by the new MFA business and improved gross profit [13] - Adjusted net income rose by 60%, and adjusted diluted EPS increased by 58% [12] Business Segment Performance - The animal health segment reported net sales of $290 million, a 26% increase, with the new MFA business contributing $94.1 million [12][13] - Nutritional specialties net sales increased by 9% due to higher demand in North America [13] - Vaccine net sales grew by 13%, driven by poultry products in Latin America [13] - Mineral nutrition segment net sales were $68.9 million, a 9% increase, while performance products declined to $15 million, a 10% decrease [13][14] Market Insights - Demand for high-quality proteins remains strong across various livestock sectors, including beef, poultry, and dairy [30][31] - Favorable feed costs are helping maintain margins, with expectations of some shifts in trade due to tariffs and disease outbreaks [30] - The company is well-diversified across livestock species and geographic markets, enhancing its competitive position [31] Company Strategy and Direction - The company is focused on sustainability and profitability, emphasizing better gut health and improved feed conversion [10] - The Phibro Forward strategy aims to drive future growth through R&D and digital capabilities [10][48] - Leadership transition is positioned to occur from a place of momentum and operational excellence [9] Management Commentary - Management expressed confidence in the company's direction and the strength of its business, citing positive feedback from customers and strong performance metrics [6][8] - The integration of the MFA portfolio is seen as a significant contributor to current success [5][12] - Management anticipates continued strong performance and demand for products globally [17] Other Important Information - The company raised its fiscal year 2026 guidance for net sales to a range of $1.45 billion to $1.5 billion, representing a growth range of 12%-16% [16] - Adjusted EBITDA guidance was increased to a range of $245 million to $255 million, reflecting a growth range of 33%-39% [16] - Cash and cash equivalents were reported at $74.5 million, with a gross leverage ratio of 3.1 times [15] Q&A Session Summary Question: What are the main drivers of gross margins this quarter? - Management highlighted strong pricing, positive product mix, and effective internal growth strategies as key drivers of gross margins [20][21] Question: Can you elaborate on the guidance update and what is performing better than expected? - Management noted strong revenue performance, effective integration of the acquired portfolio, and improved mix as factors contributing to the positive outlook [22][23] Question: What impact did customer timing have on the MFA business? - Management explained that customer inventory levels caused fluctuations, with expectations for improvement in the next quarter [27] Question: How sustainable is the current demand in livestock markets? - Management expressed confidence in the sustainability of demand due to strong consumer interest and favorable feed costs [30] Question: Are there share gains from the stronger combined portfolio? - Management confirmed that the company has seen strong performance and share gains in poultry and swine segments due to a more complete product offering [33][40]

Financial Performance and Key Metrics - Consolidated net sales for Q1 2026 were $363.9 million, a 40% increase year-over-year, driven by a 55% growth in the animal health segment [8][9] - Adjusted EBITDA for Q1 increased by 102% to $31.2 million, with adjusted net income rising by 112% and adjusted diluted EPS increasing by 108% [8][9] - The animal health segment's net sales reached $283.5 million, reflecting a 55% increase, while mineral nutrition grew by 7% and performance products declined by 7% [9][10] Business Line Performance - Medicated feed additives saw an 81% growth, with the new MFA business contributing $80.5 million in sales [5][9] - Nutritional specialties net sales increased by 13%, primarily due to higher demand for microbial and companion animal products [9] - Vaccine sales grew by 25%, driven by poultry products in Latin America and increased international demand [9] Market Data and Key Metrics - Strong demand for animal-based proteins is noted, supported by global population growth and changing consumer preferences towards high-quality proteins [30] - Livestock sector profitability remains positive across various regions, with lower feed costs encouraging investment in animal health products [30][31] Company Strategy and Industry Competition - The company is focused on innovation and execution, with the recent launch of Restoris, a dental gel for dogs, marking a significant step in the companion animal strategy [6][23] - The Phibro-forward initiatives aim to enhance operational discipline and drive sustainable long-term value creation [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for products globally and anticipates continued improvement in business performance [13][14] - The company raised its full-year earnings guidance, reflecting strong performance and disciplined financial management [12][13] Other Important Information - The company generated $34 million in positive free cash flow for the 12 months ending September 30, 2025, with a gross leverage ratio of 3.3 times [11] - A quarterly dividend of $0.12 per share was paid, totaling $4.9 million [12] Q&A Session Summary Question: Sustainability of growth in the MFA business - Management noted strong demand across the MFA portfolio, particularly in poultry, swine, and beef cattle segments, with limited impact on pricing in Q1 [15][16][17] Question: Margin profile for the remainder of the year - Management indicated that Q1 margins were favorable due to product mix, but expected a slight drop in margins as investments in new product launches occur [18][19] Question: Guidance update and revenue range - Management explained that while EBITDA and EPS guidance were raised, revenue guidance remained unchanged due to conservatism and being only one quarter into the fiscal year [21][22] Question: Role in the companion animal market - Management confirmed a focus on unique opportunities in the companion animal space, rather than competing directly with larger players [34][36]

Core Viewpoint - Wall Street analysts anticipate Zoetis (ZTS) to report quarterly earnings of $1.61 per share, reflecting a year-over-year increase of 3.2%, with revenues expected to reach $2.4 billion, up 1.7% from the previous year [1] Revenue Estimates - Analysts predict 'Revenues- Contract Manufacturing & Human Health' will reach $21.18 million, indicating a year-over-year change of +17.7% [4] - 'Revenues- Livestock' is expected to be $625.62 million, suggesting a decline of -9.9% year over year [4] - 'Revenues- Companion Animal' is projected to reach $1.76 billion, reflecting a year-over-year increase of +6.7% [4] Product Category Revenue Projections - 'Revenues by major product category- Vaccines' is estimated at $451.72 million, indicating a change of +1.5% from the year-ago quarter [5] - 'Revenues by major product category- Parasiticides' is expected to be $638.60 million, reflecting a change of +6.4% from the previous year [5] - 'Revenues by major product category- Medicated feed additives' is projected at $5.00 million, indicating a significant decline of -93.2% from the prior-year quarter [6] Geographic Revenue Estimates - 'Geographic Revenues- U.S.' is forecasted to reach $1.33 billion, indicating a year-over-year change of +1.7% [6] - 'Geographic Revenues- International Revenue' is expected to be $1.05 billion, reflecting a year-over-year change of +1.3% [6] - 'Geographic Revenues- International- Livestock' is projected at $438.42 million, indicating a decline of -5.9% from the prior-year quarter [7] - 'Geographic Revenues- International- Companion Animal' is expected to reach $618.49 million, reflecting a year-over-year increase of +8.7% [7] - 'Geographic Revenues- U.S.- Livestock' is forecasted to be $202.16 million, indicating a decline of -11.3% from the previous year [8] - 'Geographic Revenues- U.S.- Companion Animal' is projected at $1.15 billion, reflecting a year-over-year change of +6.2% [8] Stock Performance - Zoetis shares have decreased by -6.5% over the past month, contrasting with the Zacks S&P 500 composite's increase of +2.7% [8]