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]