Lilly's $24.4 Billion Quarter Forces a Third Guidance Raise

Lilly's $24.4 Billion Quarter Forces a Third Guidance Raise

Revenue beats by almost 8% on volume surge

Eli Lilly reported third-quarter 2026 worldwide revenue of $24.4 billion, up 39% from $17.6 billion a year earlier and well above Wall Street consensus around $22.4 billion to $22.6 billion. Volume rose 53%, partly offset by a 15% decline in realized prices. Revenue included about $900 million of benefits, mainly a $410 million Jardiance milestone plus favorable rebate and discount adjustments, with no further Jardiance milestones remaining.

Mounjaro and Zepbound now two-thirds of sales

Mounjaro revenue rose 65% to $10.7 billion, with $5.0 billion in the U.S., up 41%, and $5.7 billion outside the U.S., up 93%. Zepbound revenue rose 49% to $5.35 billion, including $5.3 billion in the U.S., up 48%, beating FactSet expectations near $5.0 billion to $5.09 billion. Together the two drugs account for 66% of Lilly's total revenue. Newer obesity pill Foundayo posted $184 million, below analyst estimates near $216.9 million.

Adjusted earnings beat despite $4.57 deal charge

Net income was $6.5 billion and reported earnings per share were $7.22, up 16% from $6.21. On a non-GAAP basis, earnings per share were $7.48, up from $7.02 and beating consensus near $5.60 to $5.68 by roughly $1.88. Both figures included $4.57 of acquired in-process research and development charges, versus $0.71 a year earlier. Gross margin expanded 1.0 percentage point to 83.9% of revenue.

Full-year sales outlook raised for third time

Lilly raised 2026 revenue guidance to $91 billion to $92 billion, lifting the midpoint by $5.5 billion to $91.5 billion, above the $88.7 billion consensus. The prior range was $85 billion to $87 billion, and the company began the year at $80 billion to $83 billion. Underlying non-GAAP earnings guidance was raised by $4.07 at the midpoint, more than offset by the $4.57 of third-quarter business-development charges, leaving an updated adjusted earnings range of $35.00 to $36.00 versus consensus of $34.46.

Price erosion concentrated in U.S. and China

U.S. realized prices fell 7%, attributed mainly to Zepbound and partly offset by rebate adjustments. Prices outside the U.S. fell 29%, driven by Mounjaro's addition to China's National Reimbursement Drug List in the first quarter of 2026. Key Products revenue reached $17.1 billion, led by Mounjaro and Zepbound, while revenue in immunology, oncology and neuroscience doubled year over year.

Four FDA actions broaden the portfolio

Regulatory progress included U.S. Food and Drug Administration approval of Mounjaro to reduce cardiovascular risk in adults with type 2 diabetes; Onswik, a once-weekly basal insulin for type 2 diabetes; Inluriyo with Verzenio for ER-positive, HER2-negative, ESR1-mutated advanced or metastatic breast cancer; and an expanded Jaypirca indication for previously untreated chronic lymphocytic leukemia or small lymphocytic lymphoma. Jaypirca third-quarter revenue rose 59% to $228 million, and Kisunla rose 175% to $193 million.

Retatrutide beats Ozempic head to head

Pipeline highlights included positive topline results from the 80-week head-to-head Phase 3 trial TRANSCEND-T2D-2 of retatrutide versus Ozempic 2 mg in type 2 diabetes. Both retatrutide doses cut A1C by an average of 2.2%, versus 1.8% for Ozempic, with more than double the weight loss, meeting the primary and all key secondary endpoints. Lilly plans a Biologics License Application in the first quarter of 2027. Phase 3 results for Ebglyss in moderate-to-severe hand and foot atopic dermatitis and Phase 2 results for EloraTZP in obesity and type 2 diabetes were also reported, with EloraTZP Phase 3 trials starting in the fourth quarter of 2026.

Shares jump as GLP-1 lead widens

Shares rose more than 4% premarket after the beat. The results underscore Lilly's expanding lead over Novo Nordisk in the GLP-1 market and a market valuation around $1.2 trillion. Chair and CEO David A. Ricks said growth reflected broad global demand for Mounjaro and Zepbound, global Foundayo launches, expanded U.S. obesity coverage and a doubling in newer oncology, immunology and neuroscience products, with continued investment in manufacturing and technology capabilities.