Executive Summary

LLY delivered a high-quality Q4 print: revenue rose 45% YoY to $13.53B on 48% volume growth (price -4%), with non-GAAP EPS up 114% to $5.32; strength was led by Mounjaro and Zepbound, while non-incretin revenue grew 20% YoY .
2025 guidance implies ~32% growth at the midpoint: revenue $58–$61B, non-GAAP EPS $22.50–$24.00, (Gross Margin – OPEX)/Revenue 41.5–43.5% (non-GAAP), tax ~16% .
Key positives: U.S. Zepbound reached $1.91B; Mounjaro $3.53B; GM% expanded 130 bps (reported) on favorable mix; new/updated labels (OSA for Zepbound) and regulatory wins (Omvoh Crohn’s; Kisunla China) bolster 2025 catalysts .
Watch items: Trulicity -25% YoY, single-digit pricing erosion expected in 2025, and Q4 channel inventory below prior guidance update (Jan 14 preannounce) tempered the quarter’s optics despite strong underlying demand .

What Went Well and What Went Wrong

What Went Well
- Broad-based growth with mix tailwinds: reported GM% rose to 82.2% (+130 bps YoY), driven by favorable product mix (incretins) .
- Incretin momentum and capacity: “We delivered on our production target to make 1.5x the saleable doses of incretin medicines in the second half of ’24 vs. second half of ’23,” positioning for 1.6x in 1H25 vs. 1H24 .
- 2025 outlook confidence: CEO David Ricks—“We enter 2025 with tremendous momentum and look forward to strong financial performance and several important Phase 3 readouts” .
What Went Wrong
- Trulicity demand pressure: Trulicity revenue fell 25% YoY to $1.25B (U.S. -36% on competitive dynamics), partially offset OUS by pricing/volume .
- Pricing headwinds: management expects continued single-digit pricing erosion into 2025, even as access improves .
- Channel/stocking optics: company flagged lower-than-expected year-end channel inventory in its Jan 14 preannounce; Q4 revenue landed ~3% below the low end of the late-October guidance even as TRx momentum persisted .

Financial Results

Headline P&L vs prior year (YoY)

Metric	Q4 2023	Q4 2024
Revenue ($USD Millions)	$9,353.4	$13,532.8
Diluted EPS – Reported	$2.42	$4.88
Diluted EPS – Non-GAAP	$2.49	$5.32
Gross Margin % – Reported	80.9%	82.2%

Sequential trajectory (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$11,302.8	$11,439.1	$13,532.8
Diluted EPS – Reported	$3.28	$1.07	$4.88
Diluted EPS – Non-GAAP	$3.92	$1.18	$5.32
Gross Margin % – Reported	80.8%	81.0%	82.2%

Selected Product Revenue (YoY)

Product ($USD Millions)	Q4 2023	Q4 2024	YoY
Mounjaro	$2,205.6	$3,530.1	+60%
Zepbound	$175.8	$1,907.2	NM
Verzenio	$1,145.4	$1,555.2	+36%
Trulicity	$1,669.3	$1,250.2	-25%
Jardiance	$798.1	$1,198.4	+50% (includes $300M OUS one-time)
Taltz	$784.6	$952.0	+21%
Humalog	$366.6	$619.9	+69%

KPIs and Operating Items

KPI	Q4 2024
Volume and Price	+48% volume; -4% realized price YoY
U.S. Revenue	$9.03B; +40% YoY (volume +45%; price -5%)
OUS Revenue	$4.50B; +55% YoY; includes Jardiance $300M one-time
Gross Margin $	$11.13B; +47% YoY (mix-driven)
R&D Expense	$3.02B (+18% YoY)
SG&A Expense	$2.42B (+26% YoY)
IPR&D Charges	$189.2M (vs $622.6M in Q4’23)
Asset Impairment/Special	$344.0M (Vitrakvi intangible impairment)
Effective Tax Rate	12.5% reported; 13.2% non-GAAP
New Products revenue	$5.64B (vs Q4’23 +$3.15B), led by Zepbound/Mounjaro
Growth Products revenue	$5.95B (+13% YoY)

Note: Jardiance OUS included a $300M one-time payment tied to alliance amendments with Boehringer Ingelheim .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$58.0–$61.0B (issued Jan 14, 2025)	$58.0–$61.0B	Maintained
EPS (Reported)	FY 2025	n/a in Jan 14 preannounce	$22.05–$23.55	New detail
EPS (Non-GAAP)	FY 2025	n/a in Jan 14 preannounce	$22.50–$24.00	New detail
(GM – OPEX)/Revenue (Reported)	FY 2025	n/a	40.5–42.5%	New detail
(GM – OPEX)/Revenue (Non-GAAP)	FY 2025	n/a	41.5–43.5%	New detail
Other Income/(Expense)	FY 2025	n/a	($700) to ($600)M	New detail
Effective Tax Rate	FY 2025	n/a	~16%	New detail

Management reiterated the 2025 revenue range first disclosed on Jan 14 and provided full EPS and margin framework on Feb 6 .

Earnings Call Themes & Trends

Topic	Q-2 (Q2’24)	Q-1 (Q3’24)	Q4 2024 (Current)	Trend
Incretin supply ramp	Reiterated 1.5x 2H24 vs 2H23; vials planned; capacity projects highlighted	Noted channel inventory variability; reaffirmed acceleration into Q4/Q1’25	Achieved 1.5x in 2H24; targeting ≥1.6x in 1H25 vs 1H24	Improving
Access & payer dynamics	U.S. Zepbound ~86% commercial; employer opt-ins >50%	Employer opt-in “north of 50%”; Medicaid states expanding	OSA label viewed as Medicare/Medicaid access catalyst; anticipate some Medicare Part D coverage H2’25	Broadening
Pricing	Stable seq pricing; H2 comps normalize as cards sunset	–	Single-digit price erosion expected to continue in 2025	Mild headwind
Compounding/legal	Raised safety concerns; policy push against mass compounding	–	Against compounding; FDA removal from shortage list; court date Feb 18 referenced	De-risking as supply improves
Orforglipron (oral GLP-1)	Phase 3 underway; 2025 readouts planned	–	Positioning as injectable-like efficacy oral; ACHIEVE-1 in T2D Q2’25; obesity readouts Q3’25	Advancing
Retatrutide (triple incretin)	Program initiation; late-2025 OA readout context	–	OA readout not a point estimate for obesity efficacy; expect broader obesity better outcomes	Clarified
Neuro/Alzheimer’s	Kisunla U.S. launch; CED coverage noted	–	Kisunla: system readiness focus; >80% P&T approvals in key accounts, 800+ prescribers	Building
M&A/BD & AI	Morphic acquisition; scale manufacturing	–	OpenAI collaboration cited; Scorpion PI3Kα program acquisition announced	Active

Management Commentary

Strategic positioning and momentum: “We enter 2025 with tremendous momentum and look forward to strong financial performance and several important Phase 3 readouts…” (David Ricks) .
Demand/guide construct: “We expect…a continuation of basically the total prescription growth that we have seen in 2024. So that’s what we built in our 2025 guidance” (CFO, Q&A) .
Margin philosophy: “Getting into high 40s or 50% is not actually a good way to drive…sustainable growth…low 40s…is…the right balance” (CFO, Q&A) .
Access tailwinds from OSA: “CMS confirmed…they will reimburse [OSA] if Part D plans decide to list it…we anticipate…some Medicare coverage by the second half of this year” (Patrik Jonsson) .
Supply vs. compounding: “We’ve been in supply since August…and the FDA took us off the list…We don’t think there’s a place for [mass] compounding” (David Ricks) .

Q&A Highlights

2025 guidance pacing: Management confirmed the guide assumes continuation of 2024 TRx growth, not acceleration, easing execution risk .
Zepbound access: OSA label expected to open Medicare/Medicaid doors in 2H25; employer opt-ins already >50% .
Pricing: Expect ongoing single-digit price erosion into 2025, with improving access offsetting some pressure .
Orforglipron strategy: Target “injectable GLP‑1-like” efficacy in an oral; ACHIEVE-1 T2D readout Q2’25; obesity trials in Q3’25; slower titration to improve tolerability .
Operating margin ceiling: Company prefers sustainable low‑40s (GM−OPEX)/Revenue rather than pushing toward 50% to preserve R&D and launch investment .

Estimates Context

We attempted to retrieve S&P Global consensus for Q4’24 EPS and revenue to quantify beats/misses, but the SPGI endpoint returned a daily limit error; therefore, consensus comparisons are unavailable at this time. Values would normally be sourced from S&P Global; consensus unavailable due to request limit.
Implications: Given reported Q4 revenue of $13.53B and non‑GAAP EPS of $5.32, alongside preannounced color (Jan 14) indicating slower-than-anticipated acceleration and lower year-end channel inventory, Street models may need to adjust mix (pricing, OUS contributions, non-incretin durability) rather than top-line directionally for 2025 .

Key Takeaways for Investors

2025 setup is robust: midpoint revenue growth ~32% with non-GAAP EPS $22.50–$24.00; execution hinges on sustained TRx trends and 1.6x incretin dose capacity in 1H25 vs 1H24 .
Incretin flywheel intact: Mounjaro/Zepbound demand remains strong; mix supports margin expansion, while new indications (OSA) expand reimbursement pathways (Medicare/Medicaid potential in 2H25) .
Manageable headwinds: expect single-digit price erosion; Trulicity erosion continues as portfolio shifts to newer agents; Jardiance Q4 included a $300M one-time OUS benefit .
Pipeline catalysts in 2025: Orforglipron Phase 3 readouts (T2D Q2, obesity Q3), SURPASS CVOT data (Q3), retatrutide OA data later in 2025; oncology and neuroscience assets also progressing .
Capital allocation and margins: company prioritizes reinvestment; targeting low‑40s (GM−OPEX)/Revenue as sustainable, not 50%, to support durable growth .
Trading implications: Near term, stock likely keyed to (1) visibility on supply ramp vs. TRx growth, (2) payer adoption post-OSA, (3) cadence of 2025 readouts; print quality (mix, GM%, EPS leverage) and reiterated guide support positive bias barring pricing shocks .

Note: Where “non-GAAP” is referenced, reconciliation items include amortization of intangibles, asset impairment/restructuring/special charges, and investment gains/losses per the company’s tables **[59478_0000059478-25-000037_q424lillysalesandearningsp.htm:3]** **[59478_0000059478-25-000037_q424lillysalesandearningsp.htm:11]**.

ELI LILLY & Co (LLY)·Q4 2024 Earnings Summary