Eli Lilly and Co
LLY · NYSEHealthcare · Pharmaceuticals
Since the Report − 2.2%
Close on Report DayAug 5
$1,169.86▲ 4.9%Report-Day Move
- Market Cap(Today)
- ≈ $1.08 T
- 1Y Return(At Report)
- + 56%
- P/E($31.49 · Trailing 12M)
- 36.3
- PEG(company guidance 2026)
- 0.75
- Net Margin(Trailing 12M)
- 33.5%
Lilly grew revenue 48% year over year to $22.97 billion and lifted its full-year revenue outlook by roughly $3 billion; the stock rose 4.9%, but the real debate is not about growth — it is about how long the price erosion and the slow start of the oral pill will last.
Revenue (Q2)
$22.97B
▲ 48% YoY
Mounjaro Sales
$9.9B
▲ 91%
Zepbound Sales
$4.9B
▲ 46%
Non-GAAP EPS
$8.38
27% Above Expectations
Realized Price
-13%
Volume Up 60%
Full-Year Revenue Guidance
$85-87B
Raised From $82-85B
Quarterly Revenue ($ Billion)
15.56
17.60
19.29
19.80
22.97
- Q2 25
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Annual Revenue Growth
- ▲ 48%$22.97B · Volume ▲ 60%
- Mounjaro + Zepbound Share
- ~65% of revenue$14.9B · Mounjaro ▲ 91%
- Foundayo (Oral GLP-1)
- $98MFirst Full Quarter · Slow Start
Q3 2026 Company Guidance
- Full-Year Revenue85 – 87 billion
Prior range $82-85B · Market Expectation 85.3Revised Up ▲
- Full-Year Adjusted EPS35.5 – 36.5 $
$3.03 acquired IPR&D charge in the quarterTop End Cut from $37.00 ▼
- Full-Year Performance Margin49.0% – 50.5%
Prior range 47-48.5%Revised Up ▲
The blue band is the company's low–high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. Axis is ±1.7% around the midpoint.
- Acquired IPR&D Charge
- $3.03Per Share · $0.14 a Year Ago
- Indiana Manufacturing Investment
- $4.5BAdded Pledge · Supply and Tariffs
- Gross Margin
- 86.3%▲ 1.3 Points YoY
“Lilly's momentum continues, as we delivered 48% revenue growth and raised our full-year guidance. At the same time, Lilly is building for the future. With our next-generation weight-loss medicine retatrutide and its complete clinical data package in hand, new manufacturing capacity coming online, and exciting new assets entering our pipeline through business development, Lilly's future, after 150 years, has never been brighter.”
- Medicare GLP-1 bridge program
- Growth across all major geographies
- Prescription leadership in obesity market
Summary
Eli Lilly reported $22.97 billion in second-quarter 2026 revenue, up 48% from a year earlier and about 11% above the Market Expectation of $20.6 billion. Non-GAAP earnings came in at $8.38 per share, roughly 27% ahead of what Wall Street had modeled. The engine is the same pair of drugs: Mounjaro, the diabetes treatment, grew 91% to $9.9 billion, and Zepbound, the obesity treatment, grew 46% to $4.9 billion. Together they produced $14.9 billion, close to two-thirds of total company revenue. Revenue outside the U.S. jumped 80% to $8.6 billion, making international the faster-growing leg for the first time. Management raised full-year revenue guidance to $85.0-$87.0 billion from $82-$85 billion.
The stock closed the day up 4.86% at $1,169.86. The muted enthusiasm has nothing to do with weak numbers and everything to do with how much the share price already assumes. Two details gave investors pause. First, revenue grew on a 60% jump in volume while realized prices fell 13% — down roughly 3% in the U.S. and 36% internationally. Second, Foundayo, the oral GLP-1 pill, delivered only $98 million in its first full quarter, and management openly acknowledged the launch has been slower than expected. On top of that, the top end of the non-GAAP EPS range was trimmed to $36.50 from $37.00, because the quarter carried $3.03 per share of acquired in-process R&D charges.
Our grade for the quarter itself is 85 out of 100, with a buy verdict. The reasoning is straightforward: every metric beat, both the revenue outlook and the margin target moved higher together, and growth is spreading across geographies rather than resting on one market. Two reservations keep it below 90 — the price erosion looks structural rather than temporary, and the company's most-watched new product is not landing as fast in the field as expected. This is a report card on the quarter, not a recommendation on the stock; what happens from here depends largely on how much of this growth valuation has already priced in.
Full Review
ClaudeOne drug family still drives the quarter.
Mounjaro and Zepbound together generated $14.9 billion, roughly 65% of the $22.97 billion total. Mounjaro's 91% growth alone accounts for a meaningful slice of what the entire company earned a year ago. The rest of the portfolio is moving too: immunology, oncology and neuroscience revenue rose 121%, the eczema treatment Ebglyss grew 131% to $201 million, and the blood-cancer drug Jaypirca grew 56% to $192 million. The Alzheimer's treatment Kisunla reached $167 million. Still, none of these is anywhere near the scale needed to replace the GLP-1 franchise. That concentration is a strength while things go well and a liability when they turn; having two-thirds of revenue tied to a single mechanism is the first item an investor should note on diversification grounds.
Volume is climbing while price erodes.
By the company's own disclosure, revenue growth came from a 60% increase in volume, while realized prices declined 13%. Read together, those two numbers define Lilly's story: many more patients, at a meaningfully lower price per box. U.S. realized price fell about 3% — a 9% decline once one-time rebate and discount adjustments are stripped out. International erosion was far sharper at 36%, driven largely by Mounjaro's addition to China's National Reimbursement Drug List, a deliberate price concession in exchange for volume. On the call, CFO Lucas Montarce said volume growth will more than offset the price declines and that this is already embedded in guidance. He may well be right, but it is an equation that has to be re-proved every quarter.
The oral GLP-1 story started slower than expected.
Foundayo (orforglipron) won FDA approval on April 1, 2026 and reached patients on April 9. As the first once-daily GLP-1 pill with no injection required, it was the most anticipated launch of the year. It brought in $98 million in its first full quarter — less than 2% of what Zepbound earned in the same period. Management conceded the rollout has been slower than anticipated. Ilya Yuffa, president of international operations, said the prescriber base expanded from 8,000 to 36,000, prescription volume doubled within a month, and roughly one in four patients starting therapy now chooses the pill. The company is leaning on 30-day sampling to break prescribing habits. Most international launches are pushed to 2027. In short, the product works, but the adoption curve shows the shift from injection to pill is not automatic.
Guidance went up, the profit ceiling came down slightly.
Revenue guidance was lifted to $85.0-$87.0 billion from $82-$85 billion, roughly a $2.5 billion increase at the midpoint. The performance-margin target moved from 47.0%-48.5% to 49.0%-50.5% — a two-point improvement, which is not a small number at this scale. Against that, the top of the non-GAAP EPS range was cut to $36.50 from $37.00. The cause is not operational deterioration: the quarter carried $3.03 per share of acquired in-process R&D charges, versus $0.14 a year earlier. In other words, Lilly is routing part of its profit into the pipeline by buying outside assets and licenses. That is spending which lands as an expense in the accounts but functions as investment in the business; reading the financial statements requires separating the two.
Capacity spending and pricing are one equation.
Lilly committed an additional $4.5 billion to expand its Indiana manufacturing sites and opened its first dedicated genetic medicine facility. There are two reasons for the outlay. The first is supply: GLP-1 demand has outrun capacity for years. The second is policy: the threat of tariffs on imported medicines and pressure to reshore production continue in the U.S., and manufacturing domestically is the most direct hedge against that risk. On price, the company signed a most-favored-nation agreement with the administration in November 2025: the average monthly price through TrumpRx fell from more than $1,080 to $346, Medicare and state Medicaid programs cover the medicines at $245 a month, and the patient pays a $50 copay. In exchange, obesity medicines came under Medicare coverage in the U.S. for the first time. The Medicare GLP-1 bridge program that began July 1, 2026 opened access to 20 million Americans; management said it produced a clear inflection in prescriptions, that about 80% of those patients chose injectables, and that 60%-70% were new to therapy. Cheaper pricing was the trade for a far larger patient pool.
The gap with Novo Nordisk is widening.
The 80% jump in international revenue shows Lilly extending its GLP-1 lead beyond the U.S.; during 2026 the company moved ahead of Novo Nordisk in GLP-1 market share outside the United States. That does not mean there is no pressure. A wave of generic semaglutide has arrived in India and Brazil; management said Mounjaro kept growing in those markets on the strength of differentiation and superiority data, and that the generic manufacturers themselves ran into supply constraints. On the oral front, the race is only starting: the first oral launch in the United Arab Emirates reportedly expanded the market, with most incoming patients never treated before. That supports the scenario in which the two companies grow the category rather than take share from each other — while leaving open the question of where price finally settles.
The bigger bet is shifting to retatrutide.
On the call, David Ricks shifted the emphasis to retatrutide, the next-generation triple-acting obesity medicine, and described its efficacy as unprecedented. The company reported positive Phase 3 data from three additional obesity trials; the complete clinical data package supports registrations in obesity, obstructive sleep apnea, and knee osteoarthritis pain. A Biologics License Application is planned for the first quarter of 2027. The uncertainty here is legal rather than scientific: there is a dispute over which regulatory pathway the filing should follow, and that could affect timing. For investors the implication is clear — 2026 and 2027 revenue rests with Mounjaro and Zepbound, while retatrutide will largely write the story after 2028.
Strengths
6- Revenue rose 48% year over year to $22.97 billion, about 11% above the Market Expectation.
- Non-GAAP EPS of $8.38 came in roughly 27% ahead of expectations; gross margin improved 1.3 points to 86.3%.
- Full-year revenue guidance was raised to $85.0-$87.0 billion from $82-$85 billion, and the performance-margin target to 49.0%-50.5% from 47.0%-48.5%.
- International revenue grew 80%; growth no longer depends on a single market, and Lilly moved ahead of Novo Nordisk in GLP-1 share outside the U.S.
- The non-GLP-1 side of the portfolio is accelerating: immunology, oncology and neuroscience revenue grew 121%.
- The additional $4.5 billion of Indiana manufacturing investment addresses the supply bottleneck and tariff risk at the same time.
Risks
6- Realized prices fell 13%, with international erosion reaching 36%; decisions such as China's reimbursement listing make that pressure structural.
- Roughly two-thirds of revenue comes from Mounjaro and Zepbound; that degree of dependence on one mechanism is a concentration risk.
- Foundayo, the oral GLP-1 pill, managed only $98 million in its first full quarter, and management admitted the launch is running slower than planned.
- The top of the non-GAAP EPS range was trimmed to $36.50 from $37.00, as $3.03 per share of acquired in-process R&D charges weighed on profit.
- Management flagged decelerating growth in the second half, as prior-period adjustments and international launch comparisons come into play.
- Political pressure on U.S. drug prices and the threat of tariffs on imported medicines persist; the most-favored-nation agreement has permanently lowered the price ceiling.
What to Watch
6- Third-quarter results: ~November 2026. That is the first read on whether the slowdown management flagged actually materializes.
- The full-quarter effect of the Medicare GLP-1 bridge program, which began July 1, 2026, will show up in third-quarter numbers for the first time.
- Foundayo has been submitted in the U.S. for a type 2 diabetes indication; the regulatory decision is among the developments to watch.
- A Biologics License Application for retatrutide is planned for the first quarter of 2027; the dispute over the filing pathway could shift that timing.
- Most Foundayo launches outside the U.S. are scheduled for 2027; international supply readiness is the item to track.
- The commissioning schedule for the additional $4.5 billion of Indiana capacity and the final shape of U.S. pharmaceutical tariff policy.
Upcoming Earnings
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