2026 08 05 Earnings LLY Q2 Fy2026

Summary

Lilly's Q2 FY2026 call (held 2026-08-05) is dense with demand-side forcing functions rather than the supply-side ones this project usually tracks. The load-bearing causal claim is a policy-driven step-change in the covered population: the Medicare GLP-1 Bridge Program went live 2026-07-01, putting GLP-1 obesity coverage in front of 20 million eligible Americans at $50/month out-of-pocket — which Ricks quantifies as "35% more people now have coverage for our obesity medicines in the United States." Second: retatrutide's TRIUMPH-1/2/3 phase III readouts show "weight loss approaching bariatric surgery levels at the highest doses" (Skovronsky), with a US BLA submission targeted for Q1 2027 — a dated catalyst that bears directly on the existing bariatric-substitution chain. Third: the oral Foundayo launch cleared all three major PBMs in June and expanded its prescriber base from 8,000 to 36,000, with Yuffa noting ~25% of new starts now going to the oral even as "around 80% of people that are getting treatment are injectable."

Headline numbers: revenue +48% YoY, gross margin 86.3%, non-GAAP EPS $8.38, FY2026 guidance raised to $85–87B revenue / $35.50–36.50 EPS (+$2.78 at the midpoint). MOUNJARO + ZEPBOUND together $14.9B in the quarter; US obesity prescriptions +78% YoY with Lilly at ~60% of total and ~70% of injectable scripts.

The admitted risks are the falsifiers: US price declined 3%, and Montarce concedes CVS formulary access "will drive basically…price to actually go down" — offset, in management's telling, "with volume growth." That volume-for-price trade is the thing to watch, and it is management's own claim, not a corroborated fact.

Fetch caveat: this is a partial clipping. The transcript host returns targeted verbatim attributed quotes and the complete analyst-question roster rather than full verbatim prepared remarks; fool.com had not published this quarter at fetch time. Quotes below are exact; the connective summaries of analyst answers are the host's, and are marked as such.

Transcript

Manufacturing, supply and capex

Dave Ricks (Chair & CEO): "We continued our manufacturing build-out and opened our first dedicated genetic medicine manufacturing facility in Lebanon, Indiana. We also produced the first batch of commercial material at our new manufacturing site in Limerick, Ireland."

Patrik Jonsson (President, Lilly International) — on supply adequacy for the Foundayo ex-US launch: "There will be no gating of launches either."

Retatrutide TRIUMPH phase III vs. bariatric surgery

Dan Skovronsky (Chief Scientific and Product Officer): "In TRIUMPH-1, we saw weight loss approaching bariatric surgery levels at the highest doses, and clinically meaningful efficacy at low doses with only one titration step."

Ken Custer (President, Lilly Cardiometabolic Health) — on osteoarthritis outcomes: "You're effectively reducing pain by unprecedented amounts, 75%."

Medicare GLP-1 Bridge Program

Dave Ricks (Chair & CEO): "The Medicare GLP-1 Bridge Program launched on July 1, granting 20 million eligible Americans insurance coverage for GLP-1s for obesity at the low out-of-pocket price of $50 per month. With this expansion, 35% more people now have coverage for our obesity medicines in the United States."

Foundayo (oral GLP-1) launch — prescribers and PBM access

Ilya Yuffa (President, Lilly USA and Global Customer Capabilities): "We've now increased that to 36,000 prescribers."

Dave Ricks (Chair & CEO): "After educating physicians and securing commercial access across all three major PBMs in June, we began broad direct-to-consumer marketing."

Full-year 2026 guidance

Lucas Montarce (CFO): "We now expect full-year revenue to be between $85 billion and $87 billion."

Lucas Montarce (CFO): "We now expect non-GAAP earnings per share of $35.50-$36.50, an increase of $2.78 per share at the midpoint."

Pricing pressure, competition and admitted risk

Lucas Montarce (CFO): "U.S. price declined by 3%, driven by ZEPBOUND and MOUNJARO."

Patrik Jonsson (President, Lilly International): "We continue to see TRx grow for MOUNJARO even after the launch of generic semaglutide...driven by the strong differentiation we have with the superiority data."

Analyst Q&A

Analyst questions and firms are as asked. Where the answer is quoted, the words are management's verbatim; unquoted lines are the transcript host's summary of the answer.

1. Seamus Fernandez (Guggenheim) — consumer expansion strategy and self-pay market dynamics. Answer (Ilya Yuffa, Patrik Jonsson): mid-single-digit obesity treatment utilization; access expansion via Bridge/Medicaid; LillyDirect offerings.

2. Asad Haider (Goldman Sachs) — Foundayo launch curve and competitive dynamics vs. Novo Nordisk. Answer (Ilya Yuffa): inflection in late July (doubling volume), 25% of new starts on Foundayo. (Patrik Jonsson): Lilly held combined incretin share in UAE despite competitor entry.

3. Courtney Breen (Bernstein) — retatrutide BLA pathway and FDA requirements. Dave Ricks: "we believe retatrutide is a biologic application, both in terms of amino acid count rule as well as analogous to a protein." (Ricks also stated litigation is ongoing.)

4. Chris Schott (JPMorgan) — Medicare Bridge rollout learnings and oral vs. injectable mix. Ilya Yuffa: "around 80% of people that are getting treatment are injectable" and "60%-70% being new people that are coming in that have not had access before."

5. Geoff Meacham (Citibank) — retatrutide commercial strategy and additional indications. Answer (Ken Custer): MASH/MASLD studies; chronic lower back pain trial readout next year.

6. Mohit Bansal (Wells Fargo) — post-Verzenio breast cancer strategy. Jake Van Naarden: "we envision absolutely combining with INLURIYO" — paired with PI3K inhibitor tersolisib and a CDK4/6 inhibitor, as an all-oral combination.

7. Akash Tewari (Jefferies) — guidance implies Q2→H2 deceleration; what's missing? Answer (Lucas Montarce): rebate/discount adjustments won't repeat in H2; 2025 had a "bolus of launches of MOUNJARO in all U.S. markets" creating a high comp; European Q3 seasonality factored in.

8. Michael Yee (UBS) — ex-US MOUNJARO growth regions and India generic impact. Patrik Jonsson: China NRDL leadership in 16 months; "TRx grow for MOUNJARO even after the launch of generic semaglutide" in India/Brazil, due to superiority data and generic supply constraints.

9. Terence Flynn (Morgan Stanley) — Foundayo sampling impact on IQVIA data and prescriber base. Ilya Yuffa: prescribers expanded from 8,000 to 36,000; "Sampling, we're incorporating the sample the first 30 days."

10. Umer Raffat (Evercore) — net pricing sustainability on obesity; medical exception driver. Lucas Montarce: pricing variance attributed to script size and medical exceptions; CVS formulary access "will drive basically...price to actually go down...we are going to more than offset that with volume growth."

11. Jason Gerberry (Bank of America) — M&A strategy in psychiatry and vaccines; scalability. Jake Van Naarden: the common thread is "immense unmet need that still remains"; acquired therapies came "at prices that allow us to remain disciplined and create value."

12. Louise Chen (Scotiabank) — pipeline products outside obesity deserving attention. Answer (Dan Skovronsky): Lp(a)-lowering drugs; PCSK9 gene editing; sleep-wake disorders (Centessa); oncology "richest period...of readouts"; psychiatry expansion.

13. Dave Risinger (Leerink) — Foundayo ex-US obesity potential and Type 2 diabetes reimbursement. Patrik Jonsson: "majority of the patients are naive to incretin patients"; diabetes reimbursement focus deferred to the 2027 rollout; "we're probably slightly better positioned with an oral for Type 2 reimbursement" due to orforglipron head-to-head data.

Additional figures stated on the call

• Revenue +48% YoY vs Q2 2025; key products grew by $6.8 billion.
• Gross margin 86.3% of revenue (+~1.3pp YoY); non-GAAP performance margin 54.8% (+9pp); non-GAAP EPS $8.38 (vs $6.31 in Q2 2025), including acquired IPR&D charges.
• MOUNJARO + ZEPBOUND combined $14.9B in Q2 revenue. US obesity prescriptions +78% YoY; Lilly ~60% of total prescriptions, ~70% of injectable prescriptions.
• Oncology, immunology and neuroscience medicines collectively grew 121% YoY.
• Retatrutide: US submission planned under the BLA pathway in Q1 2027.
• Regulatory: FDA approval for Ebglyss maintenance dosing; EU approval for Jaypirca in CLL.
• Foundayo international approvals: UAE, Saudi Arabia, Mexico.
• Business development: acquisitions of AtaiBeckley (psychiatry), Curevo, LimmaTech Biologics, and The Vaccine Company.