Eli Lilly and Company

Q1 2026 revenue grew 56% versus Q1 2025. Gross margin was 82.6%, down approximately 1 percentage point year over year. Non-GAAP performance margin was 50%, up about 7 points year over year. Non-GAAP EPS was $8.55, versus $3.34 in Q1 2025. U.S. revenue increased 43%; Europe grew 37% in constant currency; Japan grew 42% in constant currency; China revenue growth accelerated; and Rest of World more than doubled in constant currency. For 2026, Lilly raised revenue guidance to $82 billion-$85 billion and non-GAAP EPS guidance to $35.50-$37, while still expecting price to be a low-to-mid-teens headwind and non-GAAP performance margin of 47%-48.5%.

Dave Ricks said the year is off to a strong start, highlighting robust revenue growth, pipeline progress across all four therapeutic areas, business development, and investment for future growth. He emphasized that Koundeo’s U.S. approval is an important milestone and framed obesity as a category where volume expansion can outweigh pricing pressure, especially as access broadens through Medicare, employers, and commercial channels. His tone was upbeat and confident, but he also stressed continued discipline on capital allocation and the need to keep investing in future medicines.

Lucas Montarce said Q1 revenue growth was driven by Mounjaro and Zepbound, with gross margin at 82.6% and non-GAAP performance margin at 50%. He noted SG&A rose 19% and R&D rose 28%, including investments tied to 42 active Phase III programs. He also detailed pricing headwinds: U.S. price declined 7% in Q1, or 10% excluding a one-time rebate/discount estimate adjustment, and said the company still expects price to be a low-to-mid-teens headwind for the full year. He pointed to capital returns of $1.5 billion in dividends and $2.4 billion in share repurchases in the quarter.

Analysts focused on obesity pricing, international Mounjaro, Medicare access, employer coverage, and the early Koundeo launch curve. Management said obesity demand appears more volume-elastic than other pharma categories, and that price cuts can drive strong volume growth; they also said international Mounjaro is benefiting from broad launches and that generic semaglutide appears to be stimulating the market rather than hurting Lilly’s share. On Koundeo, management said early indicators are positive, citing over 8,000 prescribers and just over 20,000 patients treated, with access expanding through PBMs and Medicare in coming months. On Medicare and employer coverage, they framed 2026-2027 as a gradual build and said broader coverage will likely progress incrementally rather than in one step.