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Revenue
 9 Months Ended
Sep. 30, 2023
Revenue Recognition and Deferred Revenue [Abstract]  
Revenue
4. Revenue
A. Revenue from Product Sales
We offer a diversified portfolio of products which allows us to capitalize on local and regional customer needs. Generally, our products are promoted to veterinarians and livestock producers by our sales organization which includes sales representatives and technical and veterinary operations specialists, and then sold directly by us or through distributors, retailers or e-commerce outlets. The depth of our product portfolio enables us to address the varying needs of customers in different species and geographies. Many of our top-selling product lines are distributed across both of our operating segments, leveraging our research and development (R&D) operations and manufacturing and supply chain network.
Over the course of our history, we have focused on developing a diverse portfolio of animal health products, including medicines, vaccines and diagnostics, complemented by biodevices, genetic tests and a range of services. We refer to all different brands of a particular product, or its dosage forms for all species, as a product line. We have approximately 300 comprehensive product lines, including products for both companion animals and livestock within each of our major product categories.
Our major product categories are:
•parasiticides: products that prevent or eliminate external and internal parasites such as fleas, ticks and worms;
•vaccines: biological preparations that help prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response;
•dermatology products: products that relieve itch associated with allergic conditions and atopic dermatitis;
•other pharmaceutical products: pain and sedation, antiemetic, reproductive, and oncology products;
•anti-infectives: products that prevent, kill or slow the growth of bacteria, fungi or protozoa;
•animal health diagnostics: testing and analysis of blood, urine and other animal samples and related products and services, including point-of-care diagnostic products, instruments and reagents, rapid immunoassay tests, reference laboratory kits and services and blood glucose monitors; and
•medicated feed additives: products added to animal feed that provide medicines to livestock.
Our remaining revenue is derived from other non-pharmaceutical product categories, such as nutritionals, as well as products and services in biodevices, genetic tests and precision animal health.
Our companion animal products help extend and improve the quality of life for pets; increase convenience and compliance for pet owners; and help veterinarians improve the quality of their care and the efficiency of their businesses. Growth in the companion animal medicines, vaccines and diagnostics sector is driven by economic development, related increases in disposable income and increases in pet ownership and spending on pet care. Companion animals are also living longer, deepening the human-animal bond, receiving increased medical treatment and benefiting from advances in animal health medicine, vaccines and diagnostics.
Our livestock products primarily help prevent or treat diseases and conditions to allow veterinarians and producers to care for their animals and to enable the cost-effective production of safe, high-quality animal protein. Human population growth and increasing standards of living are important long-term growth drivers for our livestock products in three major ways. First, population growth and increasing standards of living drive demand for improved nutrition, particularly through increased consumption of animal protein. Second, population growth leads to greater natural resource constraints driving a need for enhanced productivity. Finally, as standards of living improve and the global food chain faces increased scrutiny, there is more focus on food quality, safety and reliability of supply.
The following tables present our revenue disaggregated by geographic area, species and major product category:
Revenue by geographic area
Three Months EndedNine Months Ended
September 30,September 30,
(MILLIONS OF DOLLARS)2023202220232022
United States$1,174 $1,090 $3,344 $3,201 
Australia84 80 248 225 
Brazil101 70 276 233 
Canada63 56 183 172 
Chile31 31 109 106 
China69 92 255 291 
France34 28 102 91 
Germany50 43 148 132 
Italy26 24 87 86 
Japan34 37 120 137 
Mexico42 33 119 101 
Spain30 29 94 97 
United Kingdom78 59 209 174 
Other developed markets127 121 374 354 
Other emerging markets187 186 605 581 
2,130 1,979 6,273 5,981 
Contract manufacturing & human health21 23 58 59 
Total Revenue$2,151 $2,002 $6,331 $6,040 
Revenue by major species
Three Months EndedNine Months Ended
September 30,September 30,
(MILLIONS OF DOLLARS)2023202220232022
U.S.
Companion animal$908 $819 $2,588 $2,488 
Livestock266 271 756 713 
1,174 1,090 3,344 3,201 
International
Companion animal506 452 1,540 1,412 
Livestock450 437 1,389 1,368 
956 889 2,929 2,780 
Total
Companion animal1,414 1,271 4,128 3,900 
Livestock716 708 2,145 2,081 
Contract manufacturing & human health21 23 58 59 
Total Revenue$2,151 $2,002 $6,331 $6,040 
Revenue by species
Three Months EndedNine Months Ended
September 30,September 30,
(MILLIONS OF DOLLARS)2023202220232022
Companion Animal:
Dogs and Cats$1,354 $1,213 $3,931 $3,715 
Horses60 58 197 185 
1,414 1,271 4,128 3,900 
Livestock:
Cattle374 371 1,102 1,063 
Swine129 129 404 427 
Poultry127 116 397 361 
Fish57 60 158 151 
Sheep and other29 32 84 79 
716 708 2,145 2,081 
Contract manufacturing & human health21 23 58 59 
Total Revenue$2,151 $2,002 $6,331 $6,040 
Revenue by major product category
Three Months EndedNine Months Ended
September 30,September 30,
(MILLIONS OF DOLLARS)2023202220232022
Parasiticides$465 $422 $1,465 $1,417 
Vaccines449 449 1,308 1,300 
Dermatology397 348 1,048 978 
Other pharmaceuticals313 252 922 771 
Anti-infectives264 284 796 802 
Animal health diagnostics95 83 284 268 
Medicated feed additives86 78 257 261 
Other non-pharmaceuticals61 63 193 184 
2,130 1,979 6,273 5,981 
Contract manufacturing & human health21 23 58 59 
Total Revenue$2,151 $2,002 $6,331 $6,040 
B. Revenue from Contracts with Customers
Contract liabilities reflected within Other current liabilities as of December 31, 2022 and 2021, and subsequently recognized as revenue during the first nine months of 2023 and 2022 were $4 million and $3 million, respectively. Contract liabilities as of September 30, 2023 and December 31, 2022 were $13 million and $14 million, respectively.
Estimated future revenue expected to be generated from long-term contracts with unsatisfied performance obligations as of September 30, 2023 is not material.