ZTS · 10-Q · 2026Q2 · Full report

ERP Transformation and Compliance

Zoetis Inc. · 2026-08-06 · Importance 37 · Surprise 42

Effective January 1, 2026, Zoetis eliminated the one-month reporting lag for International Subsidiaries as part of a multi-year enterprise resource planning (ERP) transition. The company described the broader business-process transformation as a major global, cross-functional effort involving a new ERP system and related digital technology solutions. The Fiscal Year Alignment is intended to support more seamless financial consolidation, regulatory compliance and consistent reporting, with prior periods retrospectively recast and additional 2025 comparative periods planned for recasting.

Key facts

• Effective January 1, 2026, we eliminated the one-month financial reporting lag by our International Subsidiaries and adjusted their year-end to December 31 (the “Fiscal Year Alignment”). source
• The operational changes in connection with the Fiscal Year Alignment to date included a shift implemented in the first quarter of 2026 to the timing of annual price increases in certain International Subsidiaries. source
• The business process transformation program costs are incremental transformational costs far in excess of the historical normal level of spending to support operations and are not expected to recur in the foreseeable future. source
• The change in accounting principle for the Fiscal Year Alignment was applied retrospectively to all periods since January 1, 2024. source
• Processing of certain customer orders from December 2025 was delayed to the first quarter of 2026. source
• Represents costs related to our multi-year business process transformation program, which includes the implementation of a new ERP system, related digital technology solutions and other related costs. source