Elanco Animal Health Incorporated

Elanco reported $1.368 billion in revenue, up 10% year over year on a reported basis, and 8% organic constant-currency growth. Adjusted gross margin was 58.1%, up 80 basis points year over year; adjusted EBITDA was $288 million, up $50 million or 21%; and adjusted EPS was $0.34, up 31% year over year. For full-year 2026, management now expects organic constant-currency revenue growth of 6% to 7%, reported revenue of $5.09 billion to $5.14 billion, adjusted EBITDA of $1.01 billion to $1.035 billion, and adjusted EPS of $1.10 to $1.16. For 3Q26, guidance is revenue of $1.195 billion to $1.22 billion, organic constant-currency growth of 5% to 7%, adjusted EBITDA of $215 million, and adjusted EPS of $0.19 to $0.22.

Jeff Simmons said Elanco is winning through innovation, portfolio breadth, and omnichannel execution, with Zenrelia and Quattro driving momentum and helping the company raise guidance again. He pushed back on concerns about vet-visit declines, arguing that pet-owner buying behavior is shifting across channels rather than demand weakening. He also emphasized a durable market, stronger pricing, and a long runway for the Big 6 innovation portfolio, including a raised 2026 innovation target of approximately $1.25 billion.

Bob VanHimbergen highlighted the quarter’s financial outperformance: $1.368 billion in revenue, 58.1% adjusted gross margin, $288 million of adjusted EBITDA, and $0.34 adjusted EPS. He said gross margin expansion was helped by favorable mix and Elanco Ascend, while Q2 pricing was 2% in Pet Health and in line with expectations. He also noted about $90 million of net debt reduction, Q2 leverage at 3.1x, and a year-end target of approximately 3x; debt paydown remains the top capital allocation priority, with smaller tuck-in M&A still part of the strategy.

Analysts focused on pricing, margin phasing, Zenrelia and Quattro share runway, Befrena’s early demand, DTC spending, and farm-animal growth. Management said pricing remains “responsible,” saw no deterioration, and expects acceleration in the second half; on margins, Bob said the business is more first-half weighted and that higher DTC and launch investments will continue in the back half, even as gross margin and EBITDA margins improve longer term. On Befrena, Jeff said demand is more than double expectations, supply is being gated and ramped, and unconstrained supply is expected in early 2027. On Zenrelia and Quattro, management said both have long runway ahead, with Quattro adding about 3,000 clinics in the quarter and Zenrelia seeing over 40% first-line use in some cases.