Zoetis Inc. stock research
FY2025 Q4
Zoetis (ZTS) Gross Margin — Quarter Ended Dec 31, 2025
Revenue was stable compared to the prior quarter and higher than the same quarter last year. Gross profit followed a similar pattern, while cost of revenue was slightly higher than the prior quarter but lower than the year-ago quarter, resulting in gross margin that weakened from the prior quarter but improved from the same quarter last year.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2025 Q4
Revenue was stable compared to the prior quarter and higher than the same quarter last year. Gross profit followed a similar pattern, while cost of revenue was slightly higher than the prior quarter but lower than the year-ago quarter, resulting in gross margin that weakened from the prior quarter but improved from the same quarter last year.
- The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue remained stable quarter over quarter while cost of revenue increased, putting downward pressure on gross margin. Compared to the year-ago quarter, revenue grew while cost of revenue declined, supporting margin expansion.
- Gross margin weakened sequentially, as cost of revenue grew faster than revenue. On a year-over-year basis, gross margin improved, driven by revenue growth outpacing cost of revenue growth.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
70.2%
Gross profit
$1.7B
Revenue
$2.4B
Cost of revenue
$712.0M
Quarter-over-quarter change
-1.4 pts
Year-over-year change
+0.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2025 | $2.2B | $1.6B | $618.0M | 71.9% |
| Jun 30, 2025 | $2.5B | $1.8B | $649.0M | 73.6% |
| Sep 30, 2025 | $2.4B | $1.7B | $683.0M | 71.5% |
| Dec 31, 2025 | $2.4B | $1.7B | $712.0M | 70.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
-1.4 pts
Year-over-year change
Dec 31, 2024
+0.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the relationship between revenue and cost of revenue: revenue remained stable quarter over quarter while cost of revenue increased, putting downward pressure on gross margin. Compared to the year-ago quarter, revenue grew while cost of revenue declined, supporting margin expansion.
Gross margin weakened sequentially, as cost of revenue grew faster than revenue. On a year-over-year basis, gross margin improved, driven by revenue growth outpacing cost of revenue growth.
Monitor the trajectory of cost of revenue relative to revenue, as a sequential increase in cost of revenue without proportional revenue growth could further pressure gross margin.