U.S. segment revenue increased by 2%, driven by a $75 million increase in companion animal products, particularly Simparica Trio and mAb products for OA pain. This highlights the success of the company's focus on companion animal health.

U.S. livestock revenue decreased by $55 million due to the impact of the medicated feed additive (MFA) divestiture. This indicates a strategic shift away from certain livestock products.

International revenue was flat, but operational revenue increased by 7%, driven by companion animal and livestock products. However, foreign exchange impacts, particularly from the Brazilian real and euro, significantly reduced reported revenue.

While operating expenses increased by 3% in the U.S., they decreased by 3% in the international segment. This suggests varying levels of success in cost management across different geographies.

Research and development expenses decreased by 3%, primarily due to the timing of spend related to projects. This could indicate a temporary lull in innovation or a shift in R&D priorities.

The company repurchased $443 million in shares during Q1 2025, with $5.2 billion remaining under the authorized program. This demonstrates management's belief that the company is undervalued and has sufficient cash flow.

The company acknowledges that tariffs and restrictive trade measures may raise costs and disrupt supply chains, potentially leading to reputational harm and reduced customer demand. This highlights the vulnerability of the company to global trade dynamics.

The company relies on third-party suppliers, making it subject to increased labor and material costs, as well as potential disruptions in supply. This could impact the company's ability to meet demand and launch new products.

The company is subject to extensive regulations related to its products and manufacturing facilities, and failure to comply could result in various penalties, including shutdowns and product withdrawals. This underscores the importance of maintaining rigorous quality control and compliance programs.

The company acknowledges the potential impact of competing products, including generic alternatives, on its products and its ability to compete. This underscores the importance of continued innovation and product differentiation.

The company notes that consolidation of customers and distributors could affect its access to the market. This highlights the need to maintain strong relationships with key partners and adapt to changing market dynamics.

The company identifies disruptive innovations and advances in medical practices and technologies as a risk factor. This emphasizes the need to stay at the forefront of innovation and adapt to evolving customer needs.

Cost of sales as a percentage of revenue decreased from 29.4% to 28.0%, primarily due to price increases and the favorable impact of the MFA divestiture. This suggests improvements in operational efficiency and cost management.

Corporate expenses decreased by 6%, primarily due to favorable foreign exchange and lower compensation-related costs. This indicates successful efforts to control administrative overhead.

Other unallocated expenses increased slightly due to higher manufacturing costs and inventory obsolescence. This suggests that while some areas of operational efficiency are improving, others are facing challenges.

Company continues to emphasize R&D investments, although spending decreased slightly this quarter due to project timing. This highlights the importance of innovation to the company's long-term strategy.

Management highlights R&D efforts to deliver innovative products to address unmet needs and evolve product lines. This indicates a commitment to staying at the forefront of animal health innovation.

The company acknowledges that disruptive innovations and advances in medical practices could alter the competitive landscape. This underscores the need to stay at the forefront of innovation and adapt to evolving customer needs.

The company repurchased $443 million in shares during Q1 2025, with $5.2 billion remaining under the authorized program. This demonstrates a commitment to returning capital to shareholders.

Net cash used in investing activities was primarily due to capital expenditures. This indicates a focus on investing in infrastructure and assets to support future growth.

The company maintains access to a $1.0 billion revolving credit facility and monitors its debt levels. This demonstrates a focus on maintaining financial flexibility and managing debt obligations.

The company notes the adoption of the European Sustainability Reporting Standards (ESRS) and the passage of climate-related disclosure laws in California. This indicates an awareness of the growing importance of ESG reporting.

The company acknowledges that climate change regulation could result in additional costs in the form of investments of capital to maintain compliance with laws and regulations and taxes. This suggests an awareness of the financial implications of ESG initiatives.

The company notes that governmental authorities are increasingly focused on preventing environmental contamination from per- and polyfluoroalkyl substances (PFAS). This indicates an awareness of the environmental risks associated with certain chemicals.

The company acknowledges that global financial markets may be impacted by macroeconomic, business and financial volatility. This highlights the vulnerability of the company to external economic factors.

The company notes that significant portions of its revenue and costs are exposed to changes in foreign exchange rates. This underscores the importance of managing foreign exchange risk.

The company acknowledges the economic, political, legal and business environment of the foreign jurisdictions in which it does business as a risk factor. This highlights the need to navigate complex international regulations and economic conditions.