2026 04 30 Earnings LLY Q1 Fy2026

Summary

Eli Lilly Q1 2026: revenue +56% YoY to $11.3B, non-GAAP EPS $8.55 (vs $3.34 in Q1 2025), FY guidance raised to $82-85B (+28% from 2025). Load-bearing chains: (1) Foundayo (oral orforglipron) launched March 2026 as obesity indication — first oral GLP-1, 80% of Rx new-to-class, 8,000 prescribers in 3 weeks; (2) Medicare GLP-1 Bridge starts July 1 ($50/month copay cap through Dec 2027); (3) generic semaglutide in India/international growing the total market without taking Mounjaro share; (4) Morningstar $780B fair value note on SPCX is relevant: LLY is a direct beneficiary if the GLP-1 category expands (Lilly +60% US market share). Pipeline: 5 positive Phase III trials in Q1 including Foundayo ACHIEVE-4 cardio outcome. Directly relevant to the GLP-1 second-order effects analysis.

Transcript

Dave Ricks (Chairman and CEO): Thanks, Mike. 2026 is off to a strong start. During the quarter, we delivered robust revenue growth, advanced our pipeline across all four therapeutic areas, announced multiple business development transactions, and invested to drive our future growth.

Foundayo is a new molecule, a new modality for agonizing GLP-1, and it is a new brand. This is the first time a new incretin medicine has been launched with obesity as its indication first.

Regarding launch priorities, the company focused on broad digital and traditional distribution availability, high levels of awareness with consumers of this new option for weight management, educating a broad group of HCPs.

While the US approval is an important first step, there are over 1 billion people around the world with obesity and related conditions who can be helped.

Our key products grew by more than $7 billion. Two important updates occurred this quarter to expand access to obesity medications. First, we launched Lilly Employer Connect — a platform introduced as a new way for employers to offer obesity management medicines to their employees.

CMS announced the extension of the Medicare GLP-1 Bridge, which provides access to obesity medicines to people with Medicare. The program will begin no later than 07/01/2026 and run through December 2027. This program has the potential to help improve the health of millions of seniors while capping their out-of-pocket costs at $50 per month.

We posted another quarter of impressive revenue and earnings growth, shared top-line results from five positive Phase III trials, announced four acquisitions, initiated six new Phase III programs, and launched an important new Lilly medicine. It was a productive quarter and yet there is a lot more to come in 2026.

Lucas Montarce (Chief Financial Officer): Q1 was another strong quarter of financial performance. Revenue grew 56% compared to Q1 2025, driven by Zepbound and Mounjaro, and solid momentum across all therapeutic areas and geographies.

Gross margin as a percentage of revenue was 82.6% in Q1, a decrease of approximately 1 percentage point versus the same quarter last year. The change was driven primarily by lower list prices.

Marketing, selling, and administrative expenses increased 19% as we continue to invest in promotional activities to support ongoing and planned new product launches. R&D expenses increased 28%, driven by continued investments in our pipeline, including 42 active Phase III programs.

Our non-GAAP performance margin was 50%, an increase of approximately 7 percentage points from Q1 2025, driven by revenue growth. Non-GAAP earnings per share was $8.55, including acquired IPR&D charges of $0.52. This compares to non-GAAP earnings per share of $3.34 in Q1 2025.

US revenue increased 43% in Q1, primarily driven by volume growth from Zepbound and Mounjaro, as well as contributions from our immunology, oncology, and neuroscience portfolio. US price declined by 7%, including the impact of the previously announced direct-to-patient prices for Zepbound. Excluding the one-time rebate adjustment impact, US price would have declined 10%.

Europe revenue grew 37% in constant currency, driven by sustained strong volume growth of Mounjaro. In Japan, revenue grew 42% in constant currency. In China, revenue growth accelerated with the inclusion of Mounjaro on the National Reimbursement Drug List.

We have increased the top and the bottom end of the revenue range by $2 billion and now expect full-year revenue to be between $82 billion and $85 billion. This reflects the strong underlying performance of Mounjaro and Zepbound in Q1. The midpoint of the new revenue range represents 28% growth compared to 2025.

We now expect non-GAAP earnings per share of $35.50 to $37.00, an increase of $2.00 to the top and bottom of the non-GAAP earnings per share range.

Daniel M. Skovronsky (Chief Scientific and Medical Officer): In addition to the US approval of Foundayo for obesity, we also announced positive top-line results from ACHIEVE-4, the seventh and final Phase III trial in our global registration program for type 2 diabetes and obesity.

Foundayo met the primary endpoint of non-inferiority, with a 16% lower risk of MACE-4 events. And Foundayo met the secondary endpoint with a 23% lower risk in MACE-3 events. Additionally, in a preplanned analysis not controlled for multiplicity, the survival advantage for patients on Foundayo was 57% compared to insulin glargine.

We initiated three additional Phase III programs for oloralintide. In addition to the ongoing Phase III obesity programs, we initiated Phase III programs in OA knee pain, obstructive sleep apnea, and as an add-on therapy for obesity.

As a selective amylin receptor agonist, or SARA, oloralintide has shown a unique profile in Phase II trials, with GLP-1-like weight loss and improved tolerability.

We announced an agreement to acquire Centessa Pharmaceuticals, which will expand our neuroscience portfolio and capabilities into treating sleep disorders. Centessa, a leader in orexin science, is advancing a pipeline of orexin receptor 2 agonists.

Q&A — Dave Ricks on price vs. volume dynamics:

Dave Ricks: Maybe a couple things to point out now that we are five or six quarters deep into this sort of post-shortage world. I think you can see something that is a little different about the obesity and weight loss category from what we think about in other pharmaceuticals, where the barrier is typically more informational, not price sensitivity. But here, clearly, because of the out-of-pocket nature — 75% of ex-US business for Mounjaro is out of pocket — we see quite expansionary volume, perhaps nonlinear, to price reductions.

Of course, there is a floor on that, and we have sensitivity on our cost structures. But pretty much every time we reduce pricing, we see a pretty large expansion.

In terms of margin sensitivity, it remains true that for this category, for us at least, the unit economics are really driven by fixed costs that are either sunk in the past or unmovable depending on the volume in the present.

Q&A — Patrik Jonsson on international and generic semaglutide:

Patrik Jonsson (President, Lilly Diabetes and Obesity): When we look at the first quarter, it is truly strong growth of all our prioritized products across international, but of course Mounjaro. Now we have fully launched in more than 55 countries and we have seen a very strong speed of uptake and also rapid market share gain.

Referring to Brazil and Korea — where we currently have an estimated market share of 60%.

When we look at the generic, we only have a few weeks of data from India, but it seems like it is really stimulating the growth in the overall obesity market, and that includes our product. Mounjaro has actually been holding market share quite nicely. If we look at Mounjaro prescriptions, they are about 10% higher in recent weeks compared to the period prior to generic sema.

Generic semaglutide seems to be stimulating market growth, and we continue to do well. We expect continued strong year-on-year growth and sequential growth driven by patient activation.

Q&A — Ilya Yuffa on Foundayo launch trajectory:

Ilya Yuffa (President, Lilly Neuroscience): First, it is early days, but we are pleased with the trajectory and encouraging first start to launch. We just started active Salesforce promotion just over a week ago, and had broad availability in the supply channel only two weeks ago.

There are three key catalysts of growth: growing familiarity among healthcare providers with the clinical profile of Foundayo, building out access, and growing awareness of Foundayo with consumers. We are making progress on all three fronts.

For HCPs, we now have over 8,000 prescribers of Foundayo, a third of whom have not previously written an oral GLP-1. This is expansive.

The current sentiment we are hearing is positive on overall efficacy and the 'no hassle' factor of a daily oral GLP-1.

On access, we have confirmed commercial access at two of the large PBMs by mid-May. Medicare access will start in July.

On the consumer front, we now have just over 20,000 patients treated to date, and 80% of those Foundayo prescriptions are new to class. This is expansive and bringing new people into treatment for overweight or obesity.

Q&A — Dave Ricks on Medicare Bridge trajectory:

Dave Ricks: When we signed the agreement with the administration, we all knew Bridge was going to be put in place because it was a midyear launch, and we had understood at the time that there was commitment to 2027 if, as a contingency, the Part D plans did not choose to opt in at a certain rate.