ZTS · 8-K · 20260806PR000038

Operating Expense Trends

Zoetis Inc. · 2026-08-06 · Importance 30 · Surprise 14 · No source text

Second-quarter reported SG&A expense declined 4% to $592 million, while adjusted SG&A declined 3% to $586 million and included $6 million of business-process-transformation costs. Reported R&D expense increased 4% to $173 million, and adjusted R&D increased 5% to $173 million, reflecting continued investment in a pipeline with more than 12 potential blockbuster candidates. For the first six months, reported R&D increased 8% to $353 million and adjusted R&D increased 8% to $352 million. Full-year 2026 guidance calls for adjusted SG&A of $2.330 billion to $2.380 billion and adjusted R&D of $720 million to $730 million.

Key facts

• Full-year 2026 adjusted SG&A guidance: $2,330 to $2,380 (prior guidance $2,350 to $2,400). source
• Full-year 2026 adjusted cost of sales as a percentage of revenue guidance: Approximately 29.0% (prior guidance approximately 28.5%). source
• Full-year 2026 adjusted R&D guidance: $720 to $730 (prior guidance $735 to $745). source
• Three months ended June 30, 2026 adjusted cost of sales: $669 million, adjusted SG&A: $586 million, adjusted R&D: $173 million, adjusted net income: $781 million. source
• Three months ended June 30, 2026 business process transformation program pre-tax costs: $6 million (six months: $11 million). source
• Three months ended June 30, 2026 research and development expenses: $173 million (up 4% reported vs prior year). source
• Three months ended June 30, 2026 interest expense, net of capitalized interest: $61 million (up 15% vs prior year). source
• Three months ended June 30, 2026 amortization of intangible assets: $31 million (down 6% vs prior year). source

Impact estimates