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EL

ELI LILLY & Co (LLY)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 was a high-quality beat: revenue grew 54% YoY to $17.60B, driven by Mounjaro/Zepbound volume; non-GAAP EPS was $7.02 vs S&P Global consensus of $5.89, and revenue was $17.60B vs $16.07B consensus, with EBITDA also ahead ($8.97B actual vs $7.09B consensus). Primary drivers were incretin demand, ex-US launches, and favorable mix, partially offset by lower realized prices . Consensus from S&P Global shown with asterisks below (Values retrieved from S&P Global)*.
  • FY25 guidance raised again: revenue to $63.0–$63.5B (from $60.0–$62.0B), non-GAAP EPS to $23.00–$23.70 (from $21.75–$23.00), and non-GAAP performance margin to 45–46% (from 43–44.5%) .
  • Incretin franchise remains the engine: Mounjaro $6.52B (+109% YoY) and Zepbound $3.59B (+185% YoY); ex-US momentum included a $200M Jardiance milestone and $180M Cialis divestiture revenues; US price was pressured by a prior-year rebate estimate adjustment and high-single-digit underlying declines .
  • Strategy catalysts: orforglipron completed four additional Phase 3 readouts (global obesity submissions this year), ongoing payer/consumer channel expansion (LillyDirect + Walmart pickup), and a NVIDIA partnership to build what LLY calls the industry’s most powerful AI supercomputer to accelerate R&D and operations .

What Went Well and What Went Wrong

  • What Went Well

    • Step-up in growth and profitability: Q3 revenue +54% YoY to $17.60B, non-GAAP EPS $7.02; gross margin expanded to 83.6% non-GAAP on favorable mix despite price pressure . CEO: “Lilly delivered another strong quarter, with 54% revenue growth year-over-year driven by continued demand for our incretin portfolio” .
    • Incretin leadership entrenched: Mounjaro $6.52B (+109% YoY) and Zepbound $3.59B (+185% YoY) with strong US TRx and rapid ex-US uptake; mgmt noted ~2 out of 3 new incretin Rx are Lilly and 71% share of US new obesity Rx exiting Q3 for Zepbound .
    • Guidance raised across revenue and EPS; non-GAAP performance margin outlook lifted to 45–46% for FY25, reflecting operating leverage on higher volumes .

  • What Went Wrong

    • Pricing headwinds: Global price -10% YoY drag; US price -15% YoY due in part to a favorable one-time base period rebate/discount adjustment in Q3’24; excluding that, US price declined high-single-digits .
    • Non-operational items: Q3 included $655.7M of acquired IPR&D and $364.9M of asset impairment/restructuring/other special charges (litigation and Verve costs); reported ETR was 22.8% including unfavorable impact from US tax law changes .
    • PBM/formulary noise: CVS formulary template change was “disruptive,” though impact on Zepbound performance was modest; share recovered by quarter end .

Financial Results

Quarterly trend (actuals)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($B)$12.73 $15.56 $17.60
EPS (Diluted, Reported)$3.06 $6.29 $6.21
EPS (Non-GAAP)$3.34 $6.31 $7.02
Gross Margin % (Reported)82.5% 84.3% 82.9%
Gross Margin % (Non-GAAP)83.5% 85.0% 83.6%

Q3 vs S&P Global consensus (consensus values marked with *)

MetricQ3 2025 ActualQ3 2025 Consensus*
Revenue ($B)$17.6008 $16.0694*
EPS (Primary/Non-GAAP)$7.02 $5.8916*
EBITDA ($B)$8.9701 [GetEstimates actual mapping]$7.0869*
  • Values retrieved from S&P Global for consensus figures and the EBITDA comparison (denoted with an asterisk).
  • LLY reported non-GAAP EPS bridge included: +$0.39 US Tax Law Change, +$0.11 amortization, +$0.36 special charges, and $(0.04) equity securities, plus $0.71 acquired IPR&D; non-GAAP EPS $7.02 vs reported $6.21 .

Product sales breakdown (selected products)

Product ($MM)Q1 2025Q2 2025Q3 2025
Mounjaro$3,841.8 $5,198.9 $6,515.1
Zepbound$2,311.9 $3,381.4 $3,588.1
Verzenio$1,158.9 $1,489.3 $1,470.2
Total Revenue$12,728.5 $15,557.7 $17,600.8

KPIs (Q3 2025)

  • Gross margin non-GAAP 83.6%
  • Non-GAAP performance margin 48.3% (company definition)
  • US obesity market dynamics: Zepbound ended Q3 with ~71% share of new Rx; vials ≈30% of total US Zepbound TRx and >45% of new Rx
  • Incretin class: nearly 6 of 10 US incretin prescriptions are Lilly; ~2 of 3 new incretin Rx are Lilly
  • Ex-US Mounjaro: 75% of ex-US Mounjaro revenue from people with obesity paying out-of-pocket

Guidance Changes

MetricPeriodPrevious (Q2’25)Current (Q3’25)Change
RevenueFY 2025$60.0–$62.0B $63.0–$63.5B Raised
Performance Margin (Reported)FY 202542.0–43.5% 43.5–44.5% Raised
Performance Margin (Non-GAAP)FY 202543.0–44.5% 45.0–46.0% Raised
Other Inc/(Exp) (Reported)FY 2025$(750)–$(650)MM $(700)–$(600)MM Improved
Other Inc/(Exp) (Non-GAAP)FY 2025$(700)–$(600)MM Unchanged Maintained
Tax Rate (Reported)FY 2025~19% Unchanged Maintained
Tax Rate (Non-GAAP)FY 2025~17% Unchanged Maintained
EPS (Reported)FY 2025$20.85–$22.10 $21.80–$22.50 Raised
EPS (Non-GAAP)FY 2025$21.75–$23.00 $23.00–$23.70 Raised

Notes: Guidance footnotes include inclusion of acquired IPR&D through Q3 and tariff assumptions unchanged as of Oct 30, 2025 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesGeneral digital/LLYDirect expansion in Q1; AI collaborations elsewhere in 1H (company updates) .Announced NVIDIA partnership to build an AI supercomputer and AI “factory” for discovery, development, manufacturing, and AI agents; TuneLab expansion .Accelerating
Supply chain/manufacturing capacity“Accelerating manufacturing investments… four new facilities” (Q1) ; continuing expansion (Q2) .New facilities in Virginia and Texas; expansion in Puerto Rico .Expanding
Tariffs/macroGuidance based on existing tariff environment (Q2 footnote) .Guidance continues to be based on existing tariffs as of Oct 30, 2025 .Unchanged
Product performance (incretins)Strong growth in Q1/Q2; Zepbound and Mounjaro led .Continued outperformance; Zepbound US NBRx recovery post CVS disruption, 71% NBRx; Mounjaro ex-US robust ramp .Improving scale
Regional trendsUS and ex-US growth; Q2 ex-US +37% with FX tailwind .Ex-US +74% with 66% volume; notable $200M Jardiance milestone and $180M Cialis rights revenue; 75% of ex-US Mounjaro from self-pay obesity .Strengthening
Regulatory/legal/ETRQ1 IPR&D elevated; Q2 taxes raised outlook .Q3 special charges (litigation), US tax law change increased ETR and added $0.39 to EPS bridge .Mixed headwinds
R&D executionOrforglipron positive data in obesity/diabetes in Q1/Q2 .Four additional Phase 3 successes; obesity filings starting in 2025; retatrutide program advancing; oncology approvals (Inluriyo) .Broad progress

Management Commentary

  • “We raised our revenue and earnings per share guidance” on the back of “continued demand for our incretin portfolio” and progress in orforglipron and Inluriyo approval .
  • CFO: “Non-GAAP performance margin… was 48.3%,” up >8 pp YoY, with price dynamics “very much in line with what we said early in the year” despite CVS changes .
  • On orforglipron launch approach: LLY will pursue “all of the above” for speed; aiming for broad coverage plus DTC access (LillyDirect) to reduce friction for patients .
  • Strategic capacity: “Two new U.S. facilities… and expansion in Puerto Rico will support… portfolio including orforglipron” .
  • AI as enterprise capability: building an AI supercomputer with NVIDIA to “set a new scientific standard” and “supercharge” discovery and manufacturing .

Q&A Highlights

  • Orforglipron path-to-market and scale: Submissions for obesity “beginning imminently,” launch expected next year; LLY emphasized speed and broad access, combining payer and DTC channels .
  • US pricing/PBM dynamics: Management supportive of transparent models (e.g., Cigna move), seeing basis of competition shift to clinical differentiation; no significant erosion beyond prior expectations in Q3 .
  • Ex-US ramp and elasticity: Initial stocking in new markets, followed by sustained demand; consumer price elasticity exists but orforglipron expected to broaden reach (easier manufacturing, no refrigeration) and expand market segments .
  • Attain-Maintain (switch study) importance: A “first of its kind” study to quantify weight maintenance after switching from injectable incretins to oral orforglipron; seen as a market-expansion opportunity, not cannibalization .
  • IRA/semaglutide negotiated price: Part D-only impact in 2027; LLY underscores tirzepatide’s superior efficacy as foundation for payer value discussions .

Estimates Context

  • Q3 beat across revenue, non-GAAP EPS, and EBITDA versus S&P Global consensus: Revenue $17.60B vs $16.07B*, EPS $7.02 vs $5.89*, EBITDA $8.97B vs $7.09B*. Upside reflects sustained incretin volume, robust ex-US growth, and favorable mix; headwinds from price were expected and managed [GetEstimates].
  • Street likely to raise FY25 models on: higher revenue run-rate, improved performance margin guidance (45–46%), and visibility into multi-channel access expansion (Walmart pickup for LLYDirect) .
  • Consensus figures and EBITDA comparison from S&P Global (denoted with asterisks). Values retrieved from S&P Global.

Key Takeaways for Investors

  • The core narrative remains intact and strengthening: powerful incretin volume growth, increased global access, and expanding capacity underpinning sustained revenue/EPS upside .
  • Estimates should reset higher post broad revenue/EPS beats and raised FY guidance; performance margin guidance upgrade signals durable operating leverage .
  • Near-term catalysts: orforglipron obesity submissions in 2025 (potential 2026 launch in T2D), Attain-Maintain readout, and continued ex-US Mounjaro rollout; watch for payer/DTC channel updates, including Walmart pickup execution .
  • Pricing risk is real but manageable: Q3 shows LLY absorbing anticipated price pressure while expanding mix/margins; momentum in DTC/self-pay channels provides additional volume resiliency .
  • AI and manufacturing as competitive moats: NVIDIA supercomputer and multi-site capacity build create speed/scale advantages in discovery and supply—key for sustaining leadership in cardiometabolic and beyond .
  • Watch execution on oncology and neuroscience franchises (Inluriyo, Kisunla EU launch), plus broader pipeline milestones (retatrutide TRIUMPH, Lp(a) small molecule) for diversification beyond incretins .

Appendix: Additional Notable Q3 Press Releases

  • LillyDirect and Walmart Pharmacy launch first retail pick-up for Zepbound vials at $349 (start) and $499 (higher doses) self-pay pricing; ~35% of new Zepbound scripts in Q2 were fulfilled via LillyDirect .
  • NVIDIA collaboration to build an AI supercomputer to accelerate discovery, development, imaging, and manufacturing; select models to be shared via TuneLab .

Citations

  • Q3 press release and 8-K exhibit: ; .
  • Q3 call transcript: .
  • Q2 and Q1 press releases for trend: ; .
  • AI and access press releases: .

S&P Global Estimates

  • Revenue consensus, EPS consensus, EBITDA consensus and actual used for comparison (marked with asterisks) are from S&P Global. Values retrieved from S&P Global.