Revenue

6 Months Ended

Jun. 30, 2025

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.

On October 31, 2024, we completed the divestiture of our medicated feed additive product portfolio, certain water soluble products and related assets,

and, as a result, our major product categories no longer include the category of medicated feed additives. See Note 5. Divestitures.

Our major product categories are:

•parasiticides: products that prevent or eliminate external and internal parasites such as fleas, ticks, lice and worms;

•vaccines: biological preparations that help prevent diseases of the respiratory, gastrointestinal and reproductive tracts or induce a specific immune response;

•dermatology: products that relieve itch associated with allergic conditions and atopic dermatitis;

•anti-infectives: products that prevent, kill or slow the growth of bacteria, fungi or protozoa;

•pain and sedation: products that alleviate pain, primarily associated with osteoarthritis and postoperative pain;

•other pharmaceutical: antiemetic, reproductive and oncology products; and

•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.

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 Ended				Six Months Ended
	June 30,				June 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
United States	$	1,356	$	1,308	$	2,539	$	2,471
Australia	83		83		158		156
Brazil	93		99		181		200
Canada	73		75		140		136
Chile	36		31		70		62
China	72		68		132		144
France	33		34		73		75
Germany	58		58		109		109
Italy	38		36		67		64
Japan	45		39		81		76
Mexico	38		46		75		90
Spain	37		33		70		65
United Kingdom	77		73		154		150
Other developed markets	162		138		295		265
Other emerging markets	225		222		473		450
	2,426		2,343		4,617		4,513
Contract manufacturing & human health	34		18		63		38
Total Revenue	$	2,460	$	2,361	$	4,680	$	4,551

Revenue by major species

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
U.S.
Companion animal	$	1,176	$	1,080	$	2,149	$	1,978
Livestock	180		228		390		493
	1,356		1,308		2,539		2,471
International
Companion animal	612		569		1,185		1,121
Livestock	458		466		893		921
	1,070		1,035		2,078		2,042
Total
Companion animal	1,788		1,649		3,334		3,099
Livestock	638		694		1,283		1,414
Contract manufacturing & human health	34		18		63		38
Total Revenue	$	2,460	$	2,361	$	4,680	$	4,551

Revenue by species

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Companion Animal:
Dogs and Cats	$	1,716	$	1,581	$	3,197	$	2,965
Horses	72		68		137		134
	1,788		1,649		3,334		3,099
Livestock:
Cattle	320		350		678		741
Swine	119		130		230		257
Poultry	103		132		209		271
Fish	74		62		127		107
Sheep and other	22		20		39		38
	638		694		1,283		1,414
Contract manufacturing & human health	34		18		63		38
Total Revenue	$	2,460	$	2,361	$	4,680	$	4,551

Revenue by major product category

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(MILLIONS OF DOLLARS)	2025		2024		2025		2024
Parasiticides	$	673	$	600	$	1,235	$	1,104
Vaccines	504		445		951		897
Dermatology	463		418		853		781
Anti-infectives	219		264		468		545
Pain and sedation	217		221		427		415
Other pharmaceutical	172		153		331		309
Animal health diagnostics	110		103		213		185
Other non-pharmaceutical	63		65		129		126
Medicated feed additives	5		74		10		151
	2,426		2,343		4,617		4,513
Contract manufacturing & human health	34		18		63		38
Total Revenue	$	2,460	$	2,361	$	4,680	$	4,551

B. Revenue from Contracts with Customers

Contract liabilities reflected within Other current liabilities as of December 31, 2024 and 2023, and subsequently recognized as revenue during each of the first six months of 2025 and 2024 were $5 million and $3 million, respectively. Contract liabilities as of June 30, 2025 and December 31, 2024 were $19 million and $18 million, respectively.

Estimated future revenue expected to be generated from long-term contracts with unsatisfied performance obligations as of June 30, 2025 is not material.