Eli Lilly and Company
LLY · NYSE
Next quarter
Expected to report Feb 3, 2027 — estimated from last year’s reporting date.
Consensus is $10.77 EPS for Dec 2026 across 4 estimates, ranging $10.07 to $11.60.
LLY Sep 2026
- 39.03%
- +6.63%
- $5.38
- $7.48
- —
- $24.40B
Reported results
- $24.40B
- 83.88%
- $6.45B
- $7.22
Highlights
- Revenue: Q3 revenue rose 39% year over year to $24.40 billion, with volume up 53% and realized prices down 15%; revenue increased about 6% from $22.97 billion in Q2.
- EPS: Non-GAAP EPS of $7.48 exceeded the $5.38 consensus by 39%; GAAP diluted EPS was $7.22, up 16% year over year but down from $7.94 in Q2.
- Incretin sales: Mounjaro revenue grew 65% to $10.72 billion and Zepbound grew 49% to $5.35 billion; together they contributed $16.08 billion, about two-thirds of Q3 revenue.
- Guidance: Lilly raised 2026 revenue guidance by $5.5 billion at the midpoint to $91–92 billion and raised performance-margin guidance to 52.0–52.5%; non-GAAP EPS guidance moved to $35–36 from $35.50–36.50.
- Revenue benefits: Q3 included approximately $900 million of benefits, mainly a $410 million Jardiance milestone and favorable rebate and discount estimate adjustments; no further Jardiance sales milestones remain.
- Acquired R&D: Q3 acquired IPR&D charges were $4.18 billion, including charges primarily tied to AtaiBeckley and Curevo; the $4.57 per-share impact was included in both reported and non-GAAP EPS.
- Margins and investment: Reported gross margin rose 1.0 percentage point to 83.9%, while R&D expense increased 23% to $4.25 billion as Lilly continued investing in its pipeline.
- Portfolio progress: The FDA approved Mounjaro to reduce cardiovascular risk in adults with type 2 diabetes and approved Onswik, Inluriyo with Verzenio, and an expanded Jaypirca indication; retatrutide also produced positive head-to-head Phase 3 results versus Ozempic 2 mg.
Analysis
Lilly’s Q3 was defined by accelerating scale in its incretin franchise and a substantial upward reset to revenue expectations. Revenue of $24.40 billion grew 39% year over year from $17.60 billion and about 6% sequentially from $22.97 billion. Non-GAAP EPS of $7.48 beat the supplied $5.38 consensus by 39%; GAAP diluted EPS was $7.22, 16% above the year-ago $6.21 but below Q2’s $7.94. Net income was $6.45 billion, down from $7.09 billion in Q2 despite the year-over-year increase.
Mounjaro and Zepbound generated $16.08 billion combined, but growth came with pricing pressure: global volume rose 53% while realized prices fell 15%. Revenue also benefited from about $900 million of milestone and rebate-estimate items. Lilly raised its 2026 revenue midpoint by $5.5 billion to $91–92 billion and lifted performance-margin guidance, while lowering its non-GAAP EPS range by $0.50 at the midpoint. The EPS revision reflects $4.57 per share of acquired IPR&D charges from business development activity, even as underlying EPS guidance improved by $4.07 at the midpoint. The quarter also brought multiple FDA approvals and positive pipeline results, extending the portfolio beyond current growth drivers.
Incretin sales
- Mounjaro: Revenue increased 65% year over year to $10.72 billion. U.S. sales were $5.00 billion, up 41%, and sales outside the U.S. were $5.73 billion, up 93%, primarily on volume growth.
- Zepbound: Revenue rose 49% to $5.35 billion, almost entirely from the U.S., where strong demand drove growth despite lower realized prices.
- Growth versus pricing: Worldwide revenue increased 39%, as volume growth of 53% more than offset a 15% decline in realized prices. U.S. revenue rose 34% to $15.14 billion, while revenue outside the U.S. climbed 47% to $9.26 billion. Lower prices outside the U.S. were primarily associated with Mounjaro’s inclusion on China’s NRDL.
- Revenue quality: Q3 included approximately $900 million of benefits, primarily a $410 million Jardiance sales milestone and favorable adjustments to rebate and discount estimates. Lilly said no further Jardiance sales milestones remain.
2026 guidance
- Revenue: The full-year range increased from $85–87 billion to $91–92 billion, a $5.5 billion increase at the midpoint. Lilly attributed the update to strong underlying portfolio performance; the first three quarters also benefited from sales milestones and rebate and discount estimate adjustments.
- Performance margin: Guidance increased from 49.0–50.5% to 52.0–52.5%.
- EPS: Non-GAAP EPS guidance changed from $35.50–36.50 to $35–36. Lilly said the underlying midpoint increased by $4.07, more than offset by $4.57 per share of acquired IPR&D charges from Q3 business development activity.
Earnings and investment
Reported gross margin increased 40% year over year to $20.46 billion, and gross margin as a share of revenue improved 1.0 percentage point to 83.9%. Lilly cited favorable product mix and improved production costs, partly offset by lower realized prices. R&D expense rose 23% to $4.25 billion, or 17% of revenue, while marketing, selling, and administrative expense increased 14% to $3.13 billion, reflecting investment in the pipeline and product launches.
Acquired IPR&D charges were $4.18 billion, versus $656 million a year earlier, and contributed to the difference between the strength of revenue growth and more modest EPS growth. Charges were primarily related to AtaiBeckley and Curevo. The reported effective tax rate rose to 23.3% from 22.8%, with the larger nondeductible acquired IPR&D impact contributing to the increase.
Pipeline and approvals
- Regulatory approvals: The FDA approved Mounjaro to reduce cardiovascular risk in adults with type 2 diabetes, Onswik as a once-weekly basal insulin for adults with type 2 diabetes, Inluriyo with Verzenio for certain patients with advanced or metastatic breast cancer, and an expanded Jaypirca indication for untreated CLL/SLL.
- Retatrutide: A head-to-head Phase 3 trial in adults with type 2 diabetes showed greater A1C reduction and more than double the weight loss versus Ozempic 2 mg, according to Lilly.
- Other development: Lilly reported Phase 3 results for Ebglyss in moderate-to-severe hand and foot atopic dermatitis and Phase 2 results for EloraTZP in adults with obesity and type 2 diabetes; Phase 3 trials of EloraTZP are planned to begin in Q4 2026.
- Newer products: Foundayo, launched in the U.S. in Q2 for obesity, generated $184 million in Q3 revenue. Lilly also cited ongoing launches and expanded U.S. obesity-care coverage as contributors to demand.
Acquisitions and capacity
Business development added to both the pipeline and the quarter’s expense burden. Lilly completed its acquisition of AtaiBeckley during Q3 to advance therapies for treatment-resistant depression and other mental health conditions; acquired IPR&D charges also reflected Curevo. In October, after quarter end, Lilly completed its acquisition of Merida Biosciences for up to $2.9 billion, including potential milestone payments, to pursue autoimmune and allergic-disease treatments.
Lilly reported $27.42 billion of operating cash flow for the first nine months of 2026 and $8.44 billion of property-and-equipment purchases over that period. Cash and equivalents were $4.89 billion at September 30, down from $7.27 billion at year-end, while total debt rose to $49.5 billion from $42.5 billion. The company also highlighted manufacturing expansions in Texas and Virginia to support expected demand.
