10-QPeriod: Q1 FY2025

ELI LILLY & Co Quarterly Report for Q1 Ended Mar 31, 2025

Filed May 1, 2025For Securities:LLY

Summary

Eli Lilly and Company (LLY) reported a strong first quarter for 2025, with revenue soaring by 45% year-over-year to $12.7 billion, driven by significant growth in key products like Mounjaro and Zepbound. Net income also saw a substantial increase of 23%, reaching $2.76 billion. This impressive performance reflects robust demand and improved gross margins, although offset by higher acquired in-process R&D charges and increased marketing expenses. The company's strategic focus on innovation and pipeline development continues, as evidenced by a significant increase in acquired in-process R&D, primarily related to the Scorpion Therapeutics acquisition. While R&D expenses saw a moderate increase, the company's commitment to developing new medicines remains a core driver of its long-term strategy. Lilly's financial position remains solid, with ample liquidity and cash flow to support its operations, ongoing investments in manufacturing capacity, and shareholder returns through its share repurchase program and dividends.

Financial Highlights

48 data points
Beta

Revenue

$12.73B

82.5% Gross Margin

Net Income

$2.76B

21.7% Net Margin

EPS (Diluted)

$3.06

Total Assets

$89.39B

Cash & Equivalents

$3.09B

Free Cash Flow

$1.67B

Financial Statements
Beta
Revenue$12.73B
Cost of Revenue$2.23B
Gross Profit$10.50B
SG&A Expenses$2.47B
Net Income$2.76B
EPS (Basic)$3.07
EPS (Diluted)$3.06
Shares Outstanding (Basic)898.70M
Shares Outstanding (Diluted)900.60M

Key Highlights

  • 1Revenue surged by 45% to $12.7 billion, driven by strong performance of Mounjaro and Zepbound, with U.S. revenue up 49% and international revenue up 38%.
  • 2Net income increased by 23% to $2.76 billion, and diluted EPS grew to $3.06.
  • 3Acquired in-process R&D (IPR&D) expenses significantly increased to $1.57 billion, primarily due to the acquisition of Scorpion Therapeutics' PI3Kα inhibitor program.
  • 4Gross margin improved to 82.5% of revenue, benefiting from improved cost of production and a favorable product mix.
  • 5Marketing, selling, and administrative expenses rose by 26%, reflecting investments in promotional efforts for ongoing and future product launches.
  • 6The company repurchased $1.2 billion of shares under its $15.0 billion share repurchase program authorized in December 2024.
  • 7Cash and cash equivalents decreased slightly to $3.09 billion, but overall financial condition remains strong with significant investments and credit facilities.

Frequently Asked Questions

The substantial revenue growth of 45% to $12.7 billion was primarily driven by increased volume, particularly from key products Mounjaro and Zepbound, which saw significant demand in both U.S. and international markets. A one-time benefit of $370.0 million related to an amendment of the Boehringer Ingelheim collaboration for the Jardiance product family also contributed to the increase in international revenue.

Acquired in-process R&D (IPR&D) expenses increased significantly to $1.57 billion from $110.5 million in the prior year quarter. This increase was primarily attributed to the acquisition of Scorpion Therapeutics, Inc.'s PI3Kα inhibitor program, STX-478, which is currently in Phase 1/2 clinical trials.

Eli Lilly is investing in global facilities to expand manufacturing capacity for both existing and future products, recognizing that demand for certain medicines, particularly incretin medicines like tirzepatide, has at times exceeded production. While supply considerations continue to influence market launches, production increases and delivery presentation initiatives are ongoing, with additional capacity expected over the next several years. The company is also actively addressing the issue of counterfeit, misbranded, and compounded incretins.

The company acknowledges the ongoing impact of the Inflation Reduction Act (IRA), which requires the U.S. Department of Health and Human Services (HHS) to set prices for certain Medicare-reimbursed drugs. Jardiance was among the first ten selected products, with price setting effective in 2026. Lilly anticipates that additional significant products will be selected in the future, and the IRA is expected to meaningfully influence business strategies and could significantly impact financial results.