Zoetis (ZTS) 4 Nov 242024 Q3 Earnings call transcript

Welcome to the Third Quarter 2024 Financial Results Conference Call and Webcast for Zoetis. Hosting the call today is Steve Frank, Vice President of Investor Relations for Zoetis. The presentation materials and additional financial tables are currently posted on the Investor Relations section of zoetis.com. The presentation slides can be managed by you, the viewer, and will not be forwarded automatically.

In addition, a replay of this call will be available approximately 2 hours after the conclusion of this call via dial-in or on the Investor Relations section of zoetis.com. Instructions] [Operator

my you the may now Steve over to Steve, Frank. begin. pleasure is floor turn to It

Thank you, am operator. and the Kristin Zoetis Good our Wetteny morning, everyone, Quarter Peck, Financial Earnings and Joseph, XXXX our Call. Officer. Executive I Chief joined Chief by Third today Officer; welcome to

that that that forward-looking Before the of section Investor you presented results our today this include the actual and will remarks we and materially begin, projections. I'll call differ on statements Relations our slides remind from are on could website available those

report could and results to reports our For of today's SEC to, a list XX-Q. on description Form statement on annual but forward-looking differ, certain press you Form factors refer XX-K including, that and our limited filings, cause and I release in to not the our

Our U.S. accompany include remarks X, financial accounting most is press the GAAP measures were not November that to generally filing financial A included in Monday, financial release in comparable earnings measures, U.S. to GAAP. principles dated non-GAAP reconciliation which company's certain XXXX. accepted today X-K accordance these the measures with today, tables also prepared and our or directly references will the of

exchange. And results, the which We call also cite operational I impact with of will to exclude foreign Kristin. that, over the turn

call. and Thank earnings our joining quarter you, good Xrd Steve, morning, everyone. for Thank XXXX you

excellent international grew quarter. for grew the business. operationally. across our the XX% Driven XX% thanking start of demand operationally. We steady adjusted by saw and grew on revenue net and balanced the our dedicated deliver XX% purpose-driven U.S. Building income me operationally key XX%, franchises, growth is another by helped momentum up Let first revenue double-digit who from colleagues strong year, half the us

XX% Our basis. an operational animal grew grew livestock on portfolio XX% innovative while operationally, companion

we with and a set strong crafted evolving Our consistent innovation, portfolio. and improving for patient focus maintaining needs. the customer By a by of satisfaction through is a veterinarians fueled customers' durable pet understanding strong on outcomes, deep higher partnerships owners. carefully diverse, science-driven growth standard our and

pain effective franchise, customers this unmet it's that operational only a need, recognize make continues the to market. lives. From conversations with transformative making safe, world, profound addressing osteoarthritis XX% our Our our Valencia revenue impact Librela which growth a our our by around and globally. critical in solutions delivering impact meaningful are commitment clear We difference of developing to strengthens the work, patients' a

care before path a a this that and of category steady new navigated have approach. We requires building understand strategic

launch, visits even continue As where in down canine share to from market QX. the we we to Librela grow U.S. a pain lap typically slow QX

curve nonlinear of revenue year pain is in U.S., OA an importantly, Gabella demand to significant, In become more a billion-dollar we has X grew reinforcing equally In utilization. dogs XX% disrupting And this to year-over-year U.S., broader penetration for pet we of visits That's similar growth in bets, XX additional are pre-existing is and due XX% driving affect option growth by see Librela with record estimated to in the scratching many engagement. With to only and actively XX estimated sales, franchise's the long-term care. further million quarterly confidence opportunity could treatments, untreated million in the operationally and where an our We Europe, from tolerate the conditions. Globally, suffering nearly that with only potential. surface utilization the in have highlights expand fact, $XX clinic share we trajectory. With not already treated opportunity the U.S. to dogs. potential, X ends see increasing OA. $X trend we're million product significant launch. a before estimate Librela largest of and the This dogs months, compared which U.S. other in Librela million market receiving untreated fourth just because

market expand by on Given highlighting that for effective to and and its poised safe, positioning experience domestically. treatment Drawing create is the are convenient there, our Librela we as choice pain results preferred bets. this key to

important leverage as strong in partnerships prime do health with continue our of of to bringing Results and family undeniable. Today's treatment same the Librela and that alliance veterinarians these of X away with expand are from quality a treatments antibodies, bond monoclonal expect of shifting will members generation their we've their on example long human We how and of to understood owners integral pet like collaborating human-animal NSE. trends like and pets we're decades human care, is Valencia. animal what health adoption, kind innovation increasingly reaffirm

impressive as results Simparica deliver growing continues to XX% operationally. well, Our franchise

science-backed our #X commitment combination in most the Trio's now million high has And triple especially report XX and dogs our leadership. new and efficacy. The have is retail supported in of to as created customer years Through SIMPARICA U.S. Trio comprehensive the expanded for with our that Despite that the are customers, we market and products categories the for established solidified innovations unmet parasiticide have differentiation satisfaction. animal is sum, earned we field by competition, making share, While climb the loyalty force safety over outcomes gaining channel both monthly pet excellence to owners in success significant offering a rates set standard advantage prescription and vet convenient pet not flea, triple parasiticide just tick combination parasite chewable. In out to and needs. requires is competing entirely against accessible with heartworm close long-term stand pioneered scale engagement. X our owners with continue we and patient in driving X that X first-mover with products understood total increased Trio products prescribed demonstrated market our XX% franchise treated protection also with in improving Simparica X health, markets. collaboration overcoming in of is XXXX, Trio,

dynamic we landscape ahead outcomes. Looking XXXX, X key received a but to anticipate

consistent with market historic the overall trends, addressable will grow. First,

as impacts safety the innovation this we and and their focus $X.X pets enter a relentless It's of didn't need spectrum Second, discomfort. each enhancement franchise. having execution will proven and the we products demonstrates protection our for just ago, and Trio with struggling veterinary options it, along choice the operational and accelerate in market. Similarly, pet both innovation growing. our triple of and were dermatological heartbreaking we the conversion first on to enter canine solution well-being relief the that medicine, treatments. itch a franchise and of remain revenue efficacy preferred We grew start, Thanks convenience, more $XX to creating trusted cultivated see our first disruptive awareness just our find benefits dogs new drive address believe a vets head even challenge. will decade, owners. increasing persistent a crucial industry's With billion the to cycle and how dermatology Over XX% relationships, We to broad it, from will balance continuously of growth owners growth. strategic efficacy, it across unmet But market built significant in life decade education to Simparica over drive combination identified million sustained market. key the billion-dollar from evolved to

options. are options, worldwide, truly veterinarians us. and believe in our a market the first-line antibody our customer-focused relief for best our their Animal treatment delivered And bringing have safety the that by As the XX #X and compliance. These product we to regimens dogs chew applicable enhances million therapies only Vets globally, wanted products Cytopoint, rigorous over alongside it's treatment trusted approach other convenient best standards development. itch, sets is and a portfolio today, to apart, prescribed grown that And our when use. we like uninterrupted and result, first APOQUEL not treat for medication Health monoclonal are differentiated customers that to chewable chronic us in allow confidence dosing the they trust it's and

Our undertreated alongside With derm itch, potential including treatments can dogs safely that other vast. growth the million globally used XX selectively market with ensures be our JAK research-driven approach or untreated medications, to vaccines. over is inhibition

trusted. performance grow for expect we to Paris, are franchises. solutions. a and Zoetis and and to that proven switch, and trust Even a where treatments to market Our first-line continue providing in Similar trusted to of with effective key likely will market, execution needs experience being alternatives, first-line we market-leading are and the our safe, customers are far known less on deliver they our on. customer overall the commitment X expanding reflects cornerstones the innovation, has solutions optionality satisfied access relentless rely our focus

Zoetis' sharpening Phibro transaction disciplined to aligned soluble sale feed Animal the medicated areas products with is This our prime We highest genetics. areas allocation example a focus We deeply of investments on preventative additives to to Health. focus our capabilities. potential, allowing core including the livestock, on recently of our our strategy Turning remain closed of and antibiotic and innovation, us water capital alternatives to key certain with growth livestock, portfolios committed

global health we production. This animal genetic sustainable supply help animal partnership long-term strategic also Denon's well-being. improve dairy and and to announced September, dairy in testing on example, resilience strengthens industry environmental chain, in capabilities reducing a Danone For while focus with Zoetis' with a impact. producers productivity leverage collaboration promoting to This aims

that to have key navigating grow and details MFA XX% livestock will Innovation we environment. range. guidance X% our growth aim With primarily be X And quarters, the in the performance key franchises, guide of ahead, operational annually, testament strong a our reflect through of to to Looking our a our there. Wetteny we agility be driver anticipate expectations, industry along outpaced the that updated the have from end, end that at we complex impact to to first will growth. to higher the X% initial across a into with divestiture. revenue we

guidance return QX, previous into a growth to As look track meet with we anticipate on to levels revised our and year above-market momentum going we of XXXX. remain our full strong to

portfolio our This strength and for quarter's durable customers. commitment delivering results of our unwavering to highlight the diverse

capabilities. our exceptional colleagues. faster to I'll our market gratitude ability truly support feel key innovation about Their to performance. close, over growth the to excess return X With in to dedication our makes it drive to value Before our I capital revenue to the grow that, and They want deliver grow I is of net difference. commitment, Wetteny. the to purpose, faster shareholders. With and positive than adjusted on and my customers our passion income to we invest extend proposition turn revenue what and than to sincere our tenets her embody

and excellent of quarter another geographies. by double-digit innovation and an of owners pet the of Kristin, The you, and good morning, spend third health strength our performance willingness their growth differentiated owners to To operational remarkable our execution highlights underpinned the companion quarter, products species portfolio, pets and driven our normal portfolio of value and Thank everyone. practices. well-being reiterate, on diverse and of veterinary across of pet the the and to

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was Adjusted and quarter reported Our success driven operationally, of tied and and success and basis with contributed companion grew In on and on animal to innovations from XX% quarter, million. XX% to our our price. third Globally, Pay customers, net operationally. innovative by a is $XXX continue basis volume our XX% OA first-to-market posted XX% X% reported income in by Revenue revenue, in $XXX the growth mAbs their $X.X directly growth of million growing the billion practices. portfolio. we X%, driven the a fuel

contributed franchise million. revenue million, posted Simparica dermatology of $XXX our franchise and Our key $XXX

also contributed revenue. portfolio strong $XXX in Lifestyle Our million with growth

umbrella market our driving years and options Europe the leading and expansion broadening pain after treatments Culincia and Oita Librela Regarding for the maps, treatment by Talenti, X.X just across in cases. OA market, are on are

importance not represents into Kristin significant they be In group previously a growing the many maps mentioned, tolerate the expansion this were the opportunity. U.S., In because Bella As growth U.S., market these understated. NSAIDs. and of untreated of patients cannot patient the could Europe

launch U.S., particularly While a expanding new visits such pain brought for U.S. Librela to new of prescription-only care. that visits OA since has those the as are million to overall OA down, channels, patients category the with therapeutic are X.X standard for moving alternative rise. In the market almost on clinic visits by are the

the first substantially differentiated gone needs to have Our highlights we of triple of of in performance top-selling category is #X is such Trio, market market share by triple market share. to category products year we therapeutic by increased Simparica with our we combination market the U.S. And in from than owners XX% in and first competitive with convenient trusted, delivering safe, should the clear competition animal triple we U.S. to leadership. have to the within evolving retail, grew the health, of In U.S., most a to advantage. by dogs accelerate this XX% increased #X The largest, ability more channels not entrants in medicalized and in as franchise where our increased we combinations, being the meet our Trio combination pharmaceutical. launch revenue product. Since effective estimate triple the pet Parasiticides first-to-market where of the on almost share new combinations have voice from shift products. the the are the

delivered and safety potential. for between X Earlier, understood wanted Trio and where more on with quickly became the highlighted preferred customers products puppies products. the these our in patients, choice deliberate growth signaling efficacy delivered. key the new for treatment, is with and We balance strong of Kristin win convenient to continue options dermatology that clinics. important our Apoquel we most derm We

unique We both derm the have value products multiple for pet vet propositions the and owner. with

be can pet and years seasonal on cases satisfaction. owner real-world products and our and acute, used vet of have chronic of All

growth we trajectory. new we As our remain competition, face in confident

most We and clinics. have proven of among first-line portfolio remain in we experience confident important are our the defending established vet treatments brands products that

launch Trio was the Now livestock Librela, grew well maps, adoption growing key XX% animal OA Simparica franchise. move animal results. of let's with as driven our compliance segment dermatology U.S. X%. including by as and and the and revenue of companion U.S. comparing to our continued in performance growing XX% quarter,

for pet owner to delivery, and boost also for driven continue We medications. by with compliance grow OA injectables treatment increased above preference convenience for dermatology. and market, preference all therapeutic evolving Veterinarians retail which and home

reached QX. Calencia, generated history. again, OA. product faster our first the and in million bell launch just step ensuring a $XX crucial A successful the Librela on are And clinic utilization. has with availability. maps, XX% $XX OAP in increased than combined clinic any U.S. primarily million Our surface posted scratching sales Penetration our in in was we

long-term will franchise, seen $XX deliver with growth. growth key or treatment Just unmet can revolutionary needs growth, as with years XX% Librela Valencia we a posted million we've our tailwind addressing be and revenue ahead. dermatology for believe in

significantly line for XX%, few with is have in momentum untapped very lower incidence with With competition, growth U.S. dogs rate launched XX% at Valencia. increased OA ago, of expectations X year current similar cats patients Valencia rates over for presents CAT to prior the revenue. While million significant our the We the U.S. has to were seen OA fee highlighted and years XX%. free-line around than there in treatment high. through dogs, options a we first posted treatment $XXX Trio's previously remain few Trio medicalization and boosting opportunity. Simparica line

in older accelerate As absence do seen we differentiation, not But therapies. erode entrance the from have priorities, generations previous to served meaningful secondary share. they market with of conversion of

see compliance. and to livestock Cytopoint primarily U.S. driven to of quarter, This Jaxon price tablet in for was growth growth U.S. we robust to customer cattle, increased Trio, volume by preference thoughtful X% base. Seifer. benefit with retail volume be our offset $XXX contributions supply for driven growth by injectables. million driven where the key saw we the chewable across from growth or of environment XX% more driver discounting largest growth outpaced declines. continue declines, from the improved addition for by growth see and in channel. promotional conversion cannibalization the by the quarter. benefiting our dermatology, was price Apoquel continues APOQUEL In partially continue lower outsized grew to we In

contributor basis to Revenue animal operationally. operationally on quarter on improved account International growth in companion XX% key X% grew well and in International segment. grew of the Moving a by inflationary quarter. and XX% livestock the grew from Cattle our was reported contributions driven was as and grew equal growth price. and from supply. last growth site penetration. the volume Poultry markets XX% higher International as volume in by price operational with and the impact largest XX% operationally high driven price demand

in animal Lastly, a impact demand as International maps was Norway high the dermatology driven by driven as comparable Fish year. saw for of soft strong growth volume Simparica pain key period last our by well OA growth vaccines companion franchises. our and

XX% million Simparica and Our and million sales. $XX primarily driven international Europe driven XX% was positive China Simparica by $XX grew Brazil. by sales. operationally growth sales in Trio, Eastern Performance impact million launch. in to Europe, XX% franchise DTC $XX of grew Simparica operationally, from with benefiting key the operationally our account in QX in on growing

Our million revenue and Europe growth by growth, from of strong success, $XXX markets. now contributed the especially dispensed with international operational strong we see Apoquel was and Apoquel Cytopoint. key European XX% dermatology of more half also applicable chewable, double-digit is of franchise formulation. in from where adoption with driven doses Growth coming than benefiting operational DTC treble in

dermatology the key benefits offer as well provide growth. are internationally. chewable early significant of stages continues in and development. still franchise Many for countries that rate in injectables to run as a term can and the Our increases medicalization market expand

gains sales and for converting on growing million, launch second continued XX% an market Talenti in patients months markets. existing wave market on therapy. operational opportunity expansion higher Librela $XX see umbrella was combined grew million million, pain operationally, XX% were revenue. XX% $XX $XX posting maps World Internationally, sales driven operationally. well OA as our in Europe and increasing in were from share growing of use International We expansion NSAID by of as basis.

in performance. compensation higher revenue expenses XX% operationally. P&L for Adjusted of expenses expenses quarter. and quarter related R&D from due at increases grew expenses manufacturing quarter. operationally by to Now performance operating largely Adjusted internal costs. on with higher XX.X% XX% faster gross and EPS was to increased higher related X% portfolio mix, price company basis Growth net XX SG&A the operationally company XX% to X% points moving increases margin than to on Adjusted driven income the by primarily advancements. to was in diluted Adjusted offset due project of grew compensation-related operationally, the grew due for the spend operationally.

to guidance moving on XXXX. Now the year full for

franchises reduction and of water portfolio product a Our continued raised products strong by of sales partially completed guidance feed certain key our divestiture for reflects medicated additive October offset revenue our performance soluble the XX. to

we of see to and areas, reflects As Kristin partnerships strategic highlighted, and foreign note exchange that lifestyle as remain mid-October. committed by therapeutic rates enhanced in opportunities guidance several focus. our Please

For adjusted operational XX% narrowing $X.X the be is growth. in growth $X.XX and billion, now guidance. to our an of XX% year reported billion, the of expect we expect $X.XX EPS both in of year, to range expect revenue in $X.XX to the and be a and range our net to range be of representing We to between of range income $X.X XX.X%. of $X.XXX to increase $X.XX full to revenue operational diluted Finally, we billion $X.XX. adjusted range a diluted the This prior billion EPS versus XX.X% We to

innovative across broad-based outstanding year species seen We with the and beyond. growth performance of remainder and far very the thus from on we positive have remain products our geographies, and in XXXX key

specifically. deceleration results, expected with combined some Our revenue does our year-to-date rate for our growth guidance, in QX signal

QX of month our results our revenue X growth reduction business be the QX. months X out in from reminder, of divestiture, reflecting MFA a international sales will and in by impacted a U.S. As of

of saw remain XXXX. chewable the growth for also Apoquel into We then with line QX and demand last in in stocking and of the will dynamics historical and move rate. we impact of more Normalizing from in fourth the be these underlying QX confident our items, market we Librela as launch Additionally, year. both quarter

Our positive. outlook remains for next year

as dermatology trends and to from including key see continue Simparica our alternative as We momentum well favorable franchises, channels. OA, in

normalize, While we recent alone. our inflation to gains price-driven tailwinds from performance significantly outpaced anticipate the higher recent has

had moving to into approximately normalize Additionally, to normalize that XXXX. We these QX our percentage in growth next we impact expect estimate in headwinds year unfavorable in and this year. headwinds X China should have

confident by portfolio, are animal the grow continued market, We pipeline colleagues. strength driven in our the our health above dedicated and our of ability to

to Now Operator? I'll things over the questions. your operator line hand the open to for

of We'll from Morgan our Instructions] [Operator take first question Stanley. Wright Erin

X-parter here. A

how skewed I make into do enhanced XXXX year invest from mix to that how year Like actually reorder about Librela, internal to in So level your thinking moving rates expansion sale. scale, you here, Librela? sort more fourth margin we first progression Librela quarter just terms we And relative profit quarterly the also next months in of have XXXX. flow in a mix the of from of you're therapy in and should product to then and of the experience on as progression in terms next favorable should from to quarterly investments you pieces And just through dynamics that has the U.S. in been innovation, how you the be companion how guess you here of continue how picture stocking animal well. about And as about on of perspective, MSA into and need think given then XXXX? several that the think let sort much towards think bigger we going expectations? the terms about

think those how about guess, headwinds So do and XXXX? into tailwinds, you I

We committed at with launch to and $X most the remain question overall addressable just progression and that a Librela a look NSA. patients we've quarterly months, Look, XXX% million the higher already had And quarterly Aaron. can focus company's have a being XXXX you and significant rate. it's we're to compliance. an in date, runway first you to successful growth with and believe for still million patients large X growth been our we've really billion there's as U.S., are the market. franchise Thanks, really got the sort X on averaging start I'll pleased cadence XX X move XX% with on the XX%. In performance with of In on Globally, really globally penetration We on the we we on history. over umbrella million think got we the Wetteny with product. only

So question we're well forward as going as your I'll into well. optimistic on let get the as quarterly that. very Wetteny cadence XXXX

successful as of company in XX every in revenue Erin, most look Librela $XXX history said, and the our the launch that by penetration Yes, Kristin first approximately metric has months also been we million. at and

an we you expect give exiting I about what and to don't year of As given know, treated quarter. compared product for about see individual to we to see individual tend an cadence penetration, that down continue into dogs million. the to this growth of But at year, being Kristin that our guidance NSA next to would as we'll million strong say in terms X is X are said, umbrella

know OA we the we down commentary, as visits new the see time. you are around QX tend a prepared that when historical then And in at to in so And of of clear bit but is major back care typically the that pain, coming standards up X launching QX. Kristin franchises to in not take and peak these said in look QX do item level certainly a QX, comes other

going would the end you that expect of So about I of the XXXX. give that's and year think you consider another what sort to element you as into through

performance faster you we line, highlighted for And our in basis, certainly some just Now your faster ability in that the to third this considerations cetera. grow call, growing and animal with time are clearly question to well profitability, our year, the guidance around quarter, above exit income our top we of which, see as demonstrate this last still Look, this we as year health at adjusted increasing fact second delivered are and your the we market. continue income. we investments again raised our to market We we're XX%. above respect year, including on year-to-date a this our adjusted the than part we that recall, et and of

in the a as this tenet ahead, ahead mindful we And we'll core including we've the to force so value leverage launch and as drive we see is made continue products our the we investments we leverage continue of here look investments in past, we continue of and to across even growth have opportunity to field as to that the look to and proposition U.S., be market. those opportunity

you what right we're see we're We would and to as our year. faster. an making, than year bottom may part online and you on the investments to mix building see we demonstrated go important look ability will as to committed remain top an growing but some business a ability have next said into portfolio at market, the the has We the DTC line as markets, behind anticipate, levels brands. Again, advertising able we're defend we're inherent in as we that to continue I've them build very before, as given if in take. something How again, doing the much products to grow faster of well that any investments dependent we deliver them the price key expand will of and across these DTC an behind be promotion we now our

Our of America. next of Ryskin Bank question from Michael is

a points I there. on up to of on want couple follow touched you

had to want destocking quarter, "clean I about bit looking third stocking to competing here, some at just little in for for thinking making the we're that for inventory know Librela on some then on promotions, dynamics the want I of Derm, anything in terms just sure a First, like make in touch year-end the sure year-to-date. going maybe progression or launches just two, numbers some the management component. people especially anything for in I there customers, of like that? was for Librela MFA you earlier any Trio these year, things. And with destocking quarter

we the for you in divestment full should How quarter impact updating You fourth on XXXX touched year think the updated months about the guide terms in for U.S., on X that numbers. as of OUS. our

so I spend much million can up we much that how spend, terms say next year? annual roughly true of $XXX anything just you revenues, can it's R&D falls SG&A but models think to our how in start for in into

Sure.

was entire clean a the it U.S. across and in quarter our business abroad. First,

stocking let no more there's So question detailed dynamics But up MSAs. I'll build on or Wetteny there. take the inventory

Yes, end in clinics not QX closer point, visibility levels Kristin's in have similar if individually. where U.S., to at distributors our the levels, historical sure. Look, which year obviously as to remain visibility over ago averages destocking. particularly across to a after low you the But we our inventory look inventory were into, we much of across

that. a with that say product. And would clinics distribution. not is pollchain I going is So and this being with through then in mind, shipped Librela, keep direct

So given levels we it's influence ago, really incremental levels our product quarters penetration there's inventory here. really a that X not to penetration highlighted and

I MFAs, I thought XX% margins. about With year a this did answer about business would previously, is you last received. full So the reminder and have XXXX disclosed year, of already a just what to we $XXX add that million

I across that gives linear think the the year. and you roughly So seasonality is way, here by

-- the be R&D, would number you And think for specifics we'll quarters et not here of to So impact U.S. can a divestiture is run comping that year. SG&A it's month And that we the terms and if the I XXXX be X.X quarter. you you next exiting With months have look though of give cetera. X versus in at in this the this against. international, then half that about X numbers year, the of should year what because of even getting what on

think P&L. gives through you the an that I on impact

Our of William Blair. Vasquez is from Brandon next question

perhaps despite segment talk and been Simparica you seem on the really side to for to not a be Trio. want the care, you of the Trio. in taking you have I it's focus execution market It's commercial some guys, bit why maybe more you strong something a about on competition and little Can especially guys there. parasiticides guys

So the how that there the us for there's mix could just you then any can any in quarter, color 'XX. commentary any and companion animal on if much quick a . just is continue if -- price Wetteny, follow-up into there's give And side. you, especially

a think in that SIMPARICA Trio. Look, the million parasiticide. XX Thanks, of of product. real is performance It already is us is prescribed I XX% here Sure. focus globally the we're really really for been Brandon. used the having It's phenomenal dogs growing over #X proud

with I that. think it starts

future, I I XX% channels, which a made think been also leveraging the which is think product really fleet And that underscoring has Pupishare, all big But tick growth we've that is think of at in this with XX% -- I first is to good is able puppies. And in XX% the difference share I look a oral that. today grow which on hardware people the of as moving we tremendously market a has into indicator Trio, we're what's to about oral were more market where the you TRIO alternative really think category. is year-over-year. going that growing

product, mover a a convenient. comprehensive a advantage, being phenomenal having think chewable. It's between I So first that's it's coverage, got

partnered I with a it's great corporates. and product. I seeing the And of you're are product. look, think very all And we closely the customers pleased our think certainly really our with customers with

of in is of new And the XXXX. some underscore what next oral year. his year next remarks, into into the going momentum market prepared which I'll tick strong see what And that continuously said -- hardware we and expansion we're Whitney fleet we've enter market. expecting is the entrants comments seen as that is the So

do Wetteny, question? the second want take So half of the to you

Sure.

the In growth volume heard the terms was operational in price. mix price as here, and X% quarter the and XX% of X% you in volume prepared commentary,

price, which as would Now slightly your have than in previously, realization in the and mind, if as a say here has would contribution driving operate on promotions phenomenal stated say, volume question, been performance, which, Here, a Trio related specifically this I discounts price product, we balanced to price will well with if and to you the about it's just targeted as specifically. it's trial keep better execution, I increases, actually to more growth seeing more again, we've not our you're is customers, that on

next of question is from Block Our . Jon Stifel.

just call did there force to it, be Maybe adoption getting tack specific moderate. First now to follow-up and moves that of to would from, practice marching China Wendy, on is the unwinds. model noise the the that orders any thoughts want U.S. more revenue to you quarter, into U.S. there one, the the I headwinds be only Librela, mentioned to seems be Because Q-over-Q most year. second high-level are in XQ And the growth? commit building different X for any X to would honestly. point then XXXX I'm quite you for part, revenue just from new for utilization this about guessing driving any largely sales Librela blocks

other Librela, key got trajectory, of franchises. their You've the some obviously,

us into level, a even building again, take to any for consideration. So blocks at high

say would sales there's any not marching new I orders. Sure.

of little for but it's just ago. a across a continuing more which have getting was even a started on we focus more launch. severe at us moderate, lot clinics probably think not into to moving focus That key experience I while

to But product, growing we'll X there. that safety of on the patients I continue million with product pet and those sticking that's the at and it's NSAIDs patients demonstrating continuously the the product switching overall. to brand the messages assuming for look Librela, the opportunity currently really of think key really over the So that focus the NSAID on right of the to efficacy

not penetration, on moderate we've very So to NSAID. as it's focusing given really the needs down from but have expanding switch going we are continue again, the the now launch. just about as same just very, that medical that severe how the we in well with And pet's different out tactics we to talking use I given opportunity really obviously got think this launch, remain, the pleased of the we're pleased at

the second of question part the turn to Wetteny for building 'XX. I'll So over on box

of continue guidance we're in next have growth, on operate. February. terms sharing to a portfolio our that forward most few and helpful to Sure, here be of call just XXXX Look, we in markets. across look where in strong several where maybe we We right? directionally headed, demand sources And John. our might underlying reminders we see our

exiting Our derm remain positive outlook year. going Trio and for this and year next for into very

OA even year-over-year And franchise -- basis. historical we to X%. a expect pricing, to across above on our continued strong see above those We be X% to pain contribution expect would our growth pricing normalized of if you slightly more have

be next year. I normalized QX more covered will year into commentary, in starting exit and prepared we And in as this as China the

in you last so of less removing reminder those I would have last the product an year. next a was what give just those numbers products of which salable headwind year, shared a in portfolio, on those and current And is water already terms that into going piece I full the year. point did -- The almost MFA and

of you helpful into here. that's sort hopefully, of terms getting ballpark in some So

Our next of from Piper David question is Westenberg . Sandler.

quarter. on A Congrats great real on bit touch macro little quick.

next Just Yes, that how we veterinary off and seen a as the you clinic assumptions also in CPI? some can of you consider ever are a you to price go of lot buy isolated in terms year, of consideration we've relative do into Is that you channel. ways growth because

However, on to those for initial and quite scripts we've the need being seen last year come do visits, down. visits

of clarify we that. -- you clarification, you Now specifically, second I'm the the lines of -- promotion promotion meant season. then I remarks, year prepared your something and just you of some along a and reasonable an environments, what mean a on industry-wide Can as or a said about Whitney, in a enter next beginning thinking if think parasiticide Zoetis you environment

season like from full Plus, NexGuard I be Quattro know that. of anything don't of a have promotions might the You'll some lapping

I if get So a just could clarity there.

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that of overall. obviously, in are As SKU know visits health proxy is primary wellness what very referenced look visits of does. Really, pricing alternative we that Zoetis pain, the product-by-product a visits were But going is if say our more we and around environment is to not focus And the overall good I with and of channel, are you strongly. over by marketplace for continues derm animal to a thing up the -- or lot they're that some SKU lot for our products visits particularly down. but I we particular view up. those differentiation seeing pick And of how mean on any continue a start compete in those a grow and the market we products, environment really we you think given the about you're where inflation which pricing, visits. how around to the at products

overall. -- And the promotional I really turn question innovation environment the our pricing that value vet I'll is I product think is both the you, the what second pet is strategy think what And primarily we're provides to and the and the on on to what that our Wetteny. focused so really drives owner. the pricing

the thing even in overall Look, are Sure. would the visits down add to the U.S. only as visits is I

digits. our look more therapeutic double up sold the even the Pain OA key as of products business through us, up retail channel. Apoquel are you Derm are and at If areas visits for being more

some been driver the quarter, demonstrating XX% with auto us. of well were look up year-on-year channels ship now. that the significant And what again, for which, clearing reduces course, been as I Alternative across has you U.S. it growth think of the at on visits that that, pet it as care, the point. actually for on and So alternative dependency a really consistent time drives. some higher that sharing spells compliance and channels, if we've then

disciplined here you my more as in when parasiticide new see a promotional environment particularly competitor As year to were compare promotional civil comment last is activities, the when space. up far year, it we combination this far you against

and there's in So that is discounting comment here our to targeted are our much we promotional as customers. say to terms more really of not activity that

Prasad Our . next question is from of Barclays. Balaji

pulls about comment especially OpEx your we drivers especially headwinds, into you a don't -- growth Two Wetteny, X more XXXX. pushes that and again, can OpEx, and spend the from year. on incremental comment as if Could you bit guidance, about want on in just I see. get towards think the the you me, speaking to comment about but And

Simparica estate you that to what can to the on you $X terms what's of achieved XX have -- -- conversion comment basis? million move kind regard with in provided Trio could that on again, Secondly, dogs move million could of soils the pace be that a of real

you this? do Sure. take to Wetteny, want

Sure.

specific more look, to we've year, perspective. providing SG&A in our guidance February opportunity I think next Investor forward again, and leverage here. said in OpEx The we look as I terms see of at an first Day, from Balaji, to point

revenue. We progression pipeline our our R&D have than portfolio running been driven and by faster

revenue expect coming next we closer in into would that I get into year, consideration. to of detail think in that's what in certainly year. terms this We'll X you see but more that

I about think think this Argentina when I around conversations and other a of been pulls, there's year. lot pushes

you as year incremental mind I is, have markets the matter. think Again, where is rate we is Argentina basis. actually more if get taken keep you slightly this thing from we in have in pricing that Argentina X in to hyperinflationary year, that pricing highlighted, other historical this you above normalized and anticipate which on a price environment, declining that see expect our would a we for

results, important we've QX come closer be we though was we be actually reported Argentina QX think middle the headwinds inflation point the across you go the at that actually year-over-year down net is QX, has And X the is that P&L, in FX impact through negative the expect to of as through an and look if So down in next would of significant I P&L. you if year. But the to through the to work QX had peak perspective, X% then consider an from and P&L. item

of grow percentage all getting Paris. at the look thinking you're happen a put combination, look this clearly, than So those saw which that what other substantially. say, market as triple saw, about mind higher -- the a is important the on as and that is that we've we almost points are to I in decade we expect that at before. think seen we here, we really on much that's on to market you continue the And continual with puppies overall point really then to the launch the when parasiticide transition SG&A? ago of percentage dogs keep are of And exasolines, into This the same

continue but what's So going The is not from how strong something market. are of indication combinations. to have combinations, about XX% we that that of you collars and are X/X a to triple of is happen towards the is is is that parasiticides oils in those to needless other a between and in say, but the split so topic going prescription much over triple market gives where on, going versus specificity puppies

our of And because looks market, And I as on to the show would . we you I growth think with of at I like. from today some fourth Balaji, the Yes. what actually a the slides itself year you just well. look graphs think speaks that encourage double-digit it for

comes Glen question of from next Our Jefferies. Santangelo

pricing like company a evolving of? if kind the of sort part the of impact and like confidence having And site it of is you sort is customer confident given increases. business of sort macro and should aware take above-average any any or Kristen, be sounds that, competitive of of could office And give of flowing that an landscape through climate? what what's I'm its alternate the and trends curious year on in the ability given vet price percentage companion to another you we then just us versus that update on current that's

grew second Sure. I'll XX%. start with Retail your question.

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XX%. closer It's to

If channels, as you well alternative that's as online retail look as at all combined. well delivery big more

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price for and our taking offer. seen And that continuously there we've we've so the as see And parasiticides, convenience well how example, Trio Simparica price competition, benefits been as the where that's products. continued, we in we

add to I here. So do. Wetteny, don't new have you sure anything I'm not

are we price. if look think I Look, this right, at you year, taking

significant take despite growth. volume you our the range see X.X% And somewhere the X% to in out, right? Argentina across you it's portfolio, rest that, of If

testament X% volume think, I X% to and that price. quarter, growth This is a

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to that, . continue So we for we there's that innovations. these us value the bring with think room given

Chris is question next Schott of Our . from JPMorgan.

uptake. for just on maybe you about anticipate APOQUEL, bit umbrella can launch you're my elaborate some a any little should questions their X relatively the limited Maybe second slowdown and would to first question Zynrelia Just me. the be how promotion we to growth impact about on -- of specifically, then you there? And from are expecting your due impact thinking activities

notable I early, Just some any on trending compliance it's is trends. expectations? initial U.S. know of relative anything to those comments just in how but your

to Apoquel obviously, across Librela with on you another quarter. question. if and mean growth Wetteny, I had uptake quarter, start strong the I'll Sure. then from build Yes, want Apoquel XX%

on look forward both consumers the X and product We got think XX and dogs million given I in efficacy proud to product not our this there's million with of We're there. we performance given satisfaction safety huge I continuing convert this, therapy. We're and forward or strong confident very dogs of product It's across think overall. veterinarians a given the obviously is address currently out or very satisfaction, on compete of the our and beyond. the XXXX the to performance think it's going X to and other an the rate #X and treatments category. with safety, to ability compliance in XX% under satisfaction focus years untreated opportunity to dogs grow to with higher rates the for

a the take to want You update?

in see our And markets, strong I early continue always our detail to of the like compliance specifically, around a Look, I international will before, as this U.S. we've little to to successful out. bit sure. across compliance the company's cases to and get of at history. into those I think most ton our Yes, that's example, rates now growth double-digit Europe, the a launch said while therapy it's cases, be is Musson moderate we think which for that look transition in for X cover than And more high -- up at that of exceptionally XX% months look across represent market. driving which into more -- are markets years when in above in

an do and the very it of U.S. is in well. is the product, we're this and market given of what and launch are we the as here outside indication with you this So where think can the U.S., the revolutionary gives where in actually pleased and profile efficacy across doing what trajectory I markets the

Steve is from Our TD next Scala question Cowen. . of

on Chris strong And above-industry in is maintain only level on without growth, this current long thoughts are its XXXX a guidance At of impacting you average how how on-market a Steve able of based development? in best contributions products confidence be? on is to quarter then uncertainty confidence from This pipeline Zoetis being will term your for what Scala, growth has initial in sales your expecting conservative from business is competitive how matches And XXXX? many this second, First,

even if give above over think I'll the decade, you look our I it's that. the X shot. rates a history a argue, would that year, have look at market points Sure. we by Look, if average. market at this growth outperformed on you I

growth new you that into to our a our what's cycle when customers' -- and existing of we given only not greatest without which be invest how and innovation in going and between is drive, it's what portfolio is I innovation that. very We're it's really in sustain challenges. It's solving would note new that be rate I'm a not almost confident question area for go to hard how to is your for the launch we is confidence But say new would to R&D in XX% historically is give launches me we venture level brand that what our Now that ingrained that. is to because to a our to important spend. our continued and existing bifurcating life continue into ability market able we how something portfolio sustain

someone growth. market it's linear that claims along cetera, around is sequential So which super significantly build you've not to lot about once the way, questions time, to business. building the with established go And very that overtake it's we you has continue the market, to a drives know differentiated the really what grow how because something adding in and there's our also really is sequential over you. sticky it, and additional et time, growth, it's build come never markets. standard expand order the It's we, as market we I that's the of And over else

continuing So to able confident the industry. in be we're very outperform to

Paribas. to next move BNP We'll Instructions] Ty Navann [Operator of

on competition and on One X innovation.

around any at can And Apoquel -- to versus for a facing innovation, lesser levers is using So about promotions that Nexa is innovation longer discuss on that you safety extent or and Cuatro, on near-term antibodies you you the is competition, to injectables, long-acting around then that the were when what able Would Credelio launch both expand term on anything cardiology? which plan and be else. to -- progress in parasiticide or are pricing did CKD, and maybe defend and oncology you Anvia? monoclonal

remain confident safety I your with box again, of or strong. is whether Cytopoint regards XX new overall first towable We With competing competition, a a -- quite our we think, grow that's with even to in the question, dermatology against APOQUEL, years think competition. very to Sure. space, to was franchise the product and on warning APOQUEL, I our think, efficacy our continue and derm ability

advertising Quattro. What with more sharing tactics to Credelio direct-to-consumer. investing our conversion did. direct-to-consumer to of the in we'll customers, grows is entrants we our that That's to new a relationships Wetteny invest in do product, when we either or it opening come, don't also see really need of continue see deep really over market think oral need FX-tylene satisfaction, the the statement, any performance a of those. same change see the We building They given remarked class. really around I competition more is any them the in to We you'll don't continue always see and his the really with overall.

enter you not additional planning the look, remain and only as And on the think entrant the parts. about we well derm grow will confident. everyone our entrant we any of both promotional category very overall. changing tactics the So as We're expect will when Paris, and into that

will we growth be, talked of launches an As we be more about across when sessions. really think specific see launches, driver those the key yet all in but mentioned given at as Day, long previous on will our as acting guidance important haven't of you about our those of we innovation, near-term franchises, Investor

are for time. no comments. closing further questions there And to this Peck the at be I'd to happy Kristin return call

us. you Thanks, for all and thank joining

in proven, The for treated questions are animal not your communities your resilient, interest the importantly, impacted economy Zoetis. and we always, health our is really animals, the industries but appreciate and work it's people essential, As and and for remains globally. the only

ahead, shaping we continued your that, and this So are trust you move with the confidence future our by joining for and market leveraging you driving resilience excited I with value as growth and of forward creation. And committed thank strengthen looking want leadership to Health. to Animal to long-term us. Thanks for purpose

today's This you. Thank conclude does call.

You may now disconnect, and everyone, have a great day.