Eli Lilly | 10-Q: FY2026 Q1 Revenue Beats Estimate at USD 19.8 B

Revenue: As of FY2026 Q1, the actual value is USD 19.8 B, beating the estimate of USD 17.8 B.

EPS: As of FY2026 Q1, the actual value is USD 8.26, beating the estimate of USD 7.0666.

EBIT: As of FY2026 Q1, the actual value is USD 9.247 B.

Overall Financial Performance

Eli Lilly and Company’s total revenue increased to $19,799 million for the three months ended March 31, 2026, marking a 56% increase from $12,729 million in the same period of 2025. This growth was primarily volume-driven, partially offset by lower realized prices for Mounjaro and Zepbound . Net income surged by 168% to $7,396 million in Q1 2026 from $2,759 million in Q1 2025, mainly due to a higher gross margin and lower acquired in-process research and development (IPR&D) charges, despite increased R&D and marketing, selling, and administrative expenses .

Revenue by Type and Region

Net product revenue was $18,453 million in Q1 2026, up from $11,601 million in Q1 2025, while collaboration and other revenue increased to $1,346 million from $1,127 million .

Geographical Revenue Breakdown (Q1 2026 vs. Q1 2025): U.S. Revenue: $12,119 million (up 43%) vs. $8,489 million. Volume growth in the U.S. was primarily driven by Zepbound and Mounjaro, with lower realized prices mainly from Zepbound and Taltz . Outside U.S. Revenue: $7,680 million (up 81%) vs. $4,239 million. Volume increase outside the U.S. was driven by Mounjaro, with lower realized prices due to Mounjaro’s addition to the National Reimbursed Drug List (NRDL) in China . Europe: $3,646 million vs. $2,389 million . China: $693 million vs. $451 million . Japan: $571 million vs. $402 million . Rest of World: $2,771 million vs. $997 million .

Product Revenue Performance (Q1 2026 vs. Q1 2025)

Mounjaro: $8,662 million (up 125%) vs. $3,842 million. U.S. revenue increased 59% to $4,232 million, and outside U.S. revenue grew to $4,430 million from $1,186 million .
Zepbound: $4,160 million (up 80%) vs. $2,312 million. U.S. revenue increased 79% to $4,134 million .
Verzenio: $1,302 million (up 12%) vs. $1,159 million .
Jardiance: $1,114 million (up 10%) vs. $1,014 million .
Trulicity: $919 million (down -16%) vs. $1,095 million .
Taltz: $733 million (down -4%) vs. $762 million .

Costs and Expenses

Gross margin as a percent of revenue: Decreased to 81.9% in Q1 2026 from 82.5% in Q1 2025, primarily due to lower realized prices .
Research and development expenses: Increased 28% to $3,510 million in Q1 2026 from $2,734 million in Q1 2025, reflecting continued investments in early and late-stage portfolios .
Marketing, selling, and administrative expenses: Increased 19% to $2,934 million in Q1 2026 from $2,468 million in Q1 2025, driven by promotional efforts for ongoing and planned product launches .
Acquired IPR&D charges: Decreased by -63% to $584 million in Q1 2026 from $1,572 million in Q1 2025 .
Effective tax rate: Decreased to 16.4% in Q1 2026 from 20.2% in Q1 2025, mainly due to the unfavorable tax impact of a non-deductible acquired IPR&D charge in 2025 .

Cash Flow and Liquidity

Net Cash Provided by Operating Activities: $5,333 million in Q1 2026, up from $1,666 million in Q1 2025 .
Net Cash Used for Investing Activities: - $3,916 million in Q1 2026, compared to - $3,353 million in Q1 2025. This includes purchases of property and equipment totaling - $2,326 million in Q1 2026, an increase from - $1,510 million in Q1 2025 .
Net Cash Used for Financing Activities: - $3,470 million in Q1 2026, a shift from $1,380 million provided in Q1 2025 .
Cash and cash equivalents: Decreased to $5,282 million as of March 31, 2026, from $7,268 million as of December 31, 2025 .
Total debt: Increased to $43.4 billion as of March 31, 2026, from $42.5 billion as of December 31, 2025 .

Shareholder Returns and Strategic Investments

Eli Lilly and Company repurchased $2.3 billion of shares in Q1 2026 under its $15.0 billion share repurchase program, with $8.6 billion remaining as of March 31, 2026 . Dividends paid to shareholders in Q1 2026 totaled $1.5 billion, or $1.73 per share . The company acquired Ventyx Biosciences, Inc. for $1.1 billion (net of cash acquired) in March 2026 and Verve Therapeutics, Inc. for $549 million (net of cash acquired) in July 2025, with potential additional contingent value rights up to $300 million .

Outlook and Strategy

Eli Lilly and Company is expanding manufacturing capacity to meet anticipated demand for current and prospective products, with additional capacity expected to become operational over the next several years . Near-term financial performance will be influenced by the timing of regulatory approvals for orforglipron and the uptake of incretin products in new channels and markets, including U.S. Medicare for Zepbound and Foundayo . The company finalized agreements to lower Medicaid and certain other drug prices for U.S. patients and is addressing the impact of the Inflation Reduction Act of 2022 (IRA) on products like Jardiance, Trulicity, and Verzenio .