Overview
Since the Report − 0.6%
Revenue grew 38.6% year over year, EPS beat the estimate by 13.2%; the stock rose 6.6% in its first reaction.
- RevenueQ3
- $24.40B
- ▲ 39% YoY · Beat by 7.9%
- EPSAdjusted
- $7.48
- Estimate $6.61 · Beat by 13.2%
Verdict
BUYLilly grew third-quarter revenue 39% to $24.4 billion and raised its full-year revenue guidance to $91-92 billion. Revenue beat estimates by 7.9% and adjusted EPS by 13.2%, lifting the stock 6.6% intraday. The next question is where growth settles once roughly $900 million of one-time benefits drop out.
Close on Report DayOct 29
$1,373.43▲ 6.6%Report-Day Move
- Market Cap(Today)
- ≈ $1.28 T
- 1Y Return(At Report)
- + 69%
- P/E(At Today's Price · $31.95 · Trailing 12M)
- 42.7
- PEG(Company Guidance 2026)
- 0.92
- Net Margin(Trailing 12M)
- 33.5%
Earnings Summary
In 30 Seconds- Revenue rose 39% to $24.40 billion, beating expectations by 7.9%, and adjusted EPS of $7.48 came in 13.2% above estimates.
- Full-year revenue guidance rose to $91-92 billion, though about $900 million of quarterly revenue came from one-time benefits.
- The stock rose 6.6% intraday on strong volume growth and the raised outlook.
The Numbers
Mounjaro Sales
$10.72B
▲ 65% YoY · Ex-U.S. ▲ 93%
Zepbound Sales
$5.35B
▲ 49% YoY
Stock Reaction
▲ 6.6%
Intraday, 12:36 ET; Update This Evening
Full-Year Revenue Guidance
$91–92B
Up From $85 – 87B · 3.3% Above Est.
Quarterly Revenue ($ Billion)
17.60
Q3 25 · $17.6 B
19.29
Q4 25 · $19.3 B · QoQ + 9.6%
19.80
Q1 26 · $19.8 B · QoQ + 2.6%
22.97
Q2 26 · $23.0 B · QoQ + 16.0%
24.40
Q3 26 · $24.4 B · QoQ + 6.2% · YoY + 38.6%
23.8–24.8
Q4 26E · 23.8–24.8 · QoQ − 0.3% · YoY + 26.1%
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26
- Q4 26E
Q4 2026 Company Guidance
- Full-Year Revenue91 – 92 B91 B92 B
Prior Range 85–87 · Market Expectation 88.63.3% Above Estimate ▲
- Full-Year Adjusted EPS35 – 36 $35 $36 $
Prior Range 35.50–36.50 · Includes $4.57 Acquired IPR&DMidpoint Lowered 1.4% ▼
- Full-Year Performance Margin52.0% – 52.5%52.0%52.5%52.0% – 52.5%
Prior Range 49.0–50.5%Raised 2.5 Points ▲
- Full-Year Tax Rate19% – 20%19%20%
Prior Range 18–19%1.0 Point Higher ▼
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±3.6% around the midpoint.
Segment and KPI Data
Revenue by Segment
- U.S.$15.1 BShare 61.9%▲ 34.0% YoY
Volume up 41%, price down 7%.
- Outside U.S.$9.30 BShare 38.1%▲ 47.0% YoY
Volume up 76%, price down 29%.
Key Metrics
Adjusted Gross Margin
84.4%
Press Release
Foundayo Sales
$184 M
Press Release
Kisunla Sales
$193 M
▲ 175.0% YoYPress Release
Jaypirca Sales
$228 M
▲ 59.0% YoYPress Release
Ebglyss Sales
$202 M
▲ 59.0% YoYPress Release
Acquired IPR&D Charge
$4.18 B
Press Release
Dividend Per Share
$1.73
▲ 15.0% YoYPress Release
Shares are computed over the segment total: $24.4 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“Lilly had another strong quarter, exceeding our prior expectations and allowing us to raise our full-year outlook. Revenue growth was driven by broad global consumer demand for Mounjaro and Zepbound, the global launches of Foundayo, expanded U.S. coverage for obesity care and a doubling in our newest products in oncology, immunology and neuroscience. To drive durable long-term growth, we continue to invest in our drug-making and technology capabilities, with new manufacturing expansions in Texas and Virginia.”
- Global Tirzepatide Demand
- Newest Products Doubling
- New U.S. Manufacturing Sites
Summary and Review
Summary
Lilly reported third-quarter revenue of $24.40 billion. That is up 39% year over year, against a market expectation of $22.61 billion. The revenue gate is open by 7.9%. Adjusted EPS was $7.48 versus an expected $6.61, so the earnings gate is open by 13.2%. The company lifted full-year revenue guidance from $85-87 billion to $91-92 billion. The midpoint sits 3.3% above expectations, so the guidance gate is open too. It is the third raise this year.
The stock rose 6.6% intraday to $1,373. The driver was volume. Units sold grew 53%, while realized prices fell 15%. The market read this report as a volume story, not a pricing story. Mounjaro and Zepbound together brought in $16.07 billion. A year ago the two drugs made up 57% of total revenue; this quarter they made up 66%. Mounjaro alone grew 65%.
With all three gates open, the score is 82 and the verdict is buy. Three caveats keep the score in the lower part of the band. About $900 million of revenue was one-time, including a final $410 million Jardiance milestone. Reported operating margin fell from 41.8% to 35.3% on acquired R&D charges. The stock also already trades 2.7% above the average analyst target of $1,337. The quarter is strong, but the price reflects much of it.
Full Review
Tirzepatide is still the growth engine.
Mounjaro revenue was $10.72 billion. That is up 65% year over year. U.S. sales rose 41% to $5.0 billion, and sales outside the U.S. jumped 93% to $5.7 billion. Zepbound brought in $5.35 billion, up 49%. Together the two drugs made $16.07 billion, two thirds of company revenue. This growth does not come from price. In the U.S., volume rose 41% while realized prices fell 7%. Outside the U.S., volume rose 76% and prices fell 29%. The main reason is Mounjaro's inclusion on China's national reimbursement list. Lilly is selling more cheaply to far more patients. That model erodes revenue per pack but grows total revenue. A year ago the two drugs were 57% of revenue; this quarter they were 66%. Growth now depends more than ever on one molecule's volume. That is both a strength and a vulnerability in a price fight.
One-time benefits need to be stripped out.
The company stated plainly that about $900 million of one-time benefits were in quarterly revenue. Of that, $410 million was a Jardiance milestone from the Boehringer Ingelheim partnership. In the company's words, no further milestones remain. The rest came from favorable adjustments to rebate and discount estimates. Excluding the $900 million, revenue was about $23.5 billion. Even that beats the market expectation by roughly 3.9%. So the beat does not depend on the benefits, but its size was inflated by them. Growth also slowed from 48% in the second quarter to 39%. The slowdown management flagged last quarter showed up in the numbers for the first time. The guidance note also says the first three quarters benefited from such items. Whether the same support arrives in the fourth quarter is unclear. So the raised full-year guidance partly includes benefits already in the past.
Margins hold, acquisitions cloud earnings.
Adjusted gross margin was 84.4%. That is 0.8 points above 83.6% a year ago. Against 86.3% in the second quarter, it is 1.9 points lower. The main pressure is acquired R&D. That charge was $4.18 billion, or $4.57 per share. A year ago it was $0.71 per share. As a result, reported operating margin fell from 41.8% to 35.3%, a contraction of 6.5 points. The company cut full-year EPS guidance to $35.00-36.00. Underlying guidance rose $4.07, while acquisitions took away $4.57. Performance margin guidance rose from 49.0-50.5% to 52.0-52.5%. That measure subtracts R&D and marketing costs from gross profit. So operating efficiency outside acquisitions is improving. R&D spending rose 23% to $4.25 billion, or 17% of revenue. Tax rate guidance also rose from 18-19% to 19-20%.
New products are building a second leg.
Revenue from newer products in immunology, oncology and neuroscience doubled year over year. Alzheimer's drug Kisunla grew 175% to $193 million. Blood cancer drug Jaypirca rose 59% to $228 million. Ebglyss brought in $202 million and Omvoh $114 million. The oral GLP-1 pill Foundayo sold $184 million. That is nearly double the $98 million of the second quarter, but reports say it fell short of expectations. Two developments expected last quarter have happened. U.S. insurance coverage for obesity care expanded, and Foundayo's global launches began. The FDA also approved Mounjaro's cardiovascular indication and the weekly insulin Onswik during the quarter. The next-generation obesity drug retatrutide beat the highest dose of Ozempic on weight loss in a head-to-head type 2 diabetes trial. That result is the pipeline's strongest card ahead of a 2027 filing.
Watch one number in the fourth quarter.
After $67.17 billion of revenue in the first nine months, full-year guidance leaves $23.8-24.8 billion for the fourth quarter. The midpoint is about $24.3 billion. There will be no Jardiance payment this quarter, so the number will be a cleaner volume reading. If fourth-quarter revenue comes in above $24.3 billion, volume is still beating price erosion. If it lands below $23.8 billion, much of this quarter's size came from one-time items. A second gauge is realized price change. This quarter it fell 15%. If the decline exceeds 20%, volume growth will start to struggle to offset price. Our guide explains how to read an earnings day.
Looking Ahead
Strengths and Risks
5 Strengths · 6 RisksStrengths
5- Revenue of $24.40 billion beat expectations by 7.9%, and adjusted EPS of $7.48 beat by 13.2%.
- Full-year revenue guidance rose $5.5 billion at the midpoint, landing 3.3% above market expectations.
- Mounjaro grew 93% outside the U.S.Volume more than offset the price cut in China.
- Revenue from newer immunology, oncology and neuroscience products doubled year over year.
- Performance margin guidance rose from 49.0-50.5% to 52.0-52.5%.
Risks
6- About $900 million of revenue was one-time, and no Jardiance milestones remain.
- Realized prices fell 15% year over yearOutside the U.S. the decline was 29%.
- Acquired R&D charges reached $4.57 per share and pulled full-year EPS guidance lower.
- Two drugs generate 66% of revenueDependence on tirzepatide rose over the year.
- Novo Nordisk will cut Wegovy and Ozempic list prices from January 1, 2027Price competition may intensify.
- The stock already trades 2.7% above the average analyst target of $1,337.
What to Watch
5- Fourth-quarter results are due around February 2027, together with 2027 guidance.
- Phase 3 trials of EloraTZP are set to start in the fourth quarter of 2026.
- A regulatory filing for retatrutide is planned for the first quarter of 2027.
- A U.S. regulatory decision on Foundayo for type 2 diabetes is pending.
- Construction timelines for the new plants in Texas and Virginia will be watched.
Upcoming Earnings
To Understand This