01—Abstract
Summary
Summary of the 8-K filed April 30, 2026. Cited figures are marked; the original filing is the authoritative source.
Eli Lilly reported first-quarter 2026 results that were far above the prior year, with revenue up 56% to $19.8 billiona, driven by a 65% increase in volume partially offset by a 13% decline in realized prices.
Growth was led by Mounjaro (up 125% to $8.7 billionb) and Zepbound (up 80% to $4.2 billion). Reported EPS rose 170% to $8.26 and non-GAAP EPS rose 156% to $8.55, though both figures absorbed $0.52 of acquired IPR&D charges, versus $1.72 in the prior-year quarter. Gross margin as a percent of revenue slipped modestly to 81.9% (non-GAAP 82.6%), reflecting lower realized prices, while R&D rose 28% and marketing, selling and administrative expenses rose 19%.
Management raised full-year 2026 guidance: revenue is now expected at $82.0 billion to $85.0 billionc (from $80 to $83 billion) and non-GAAP EPS at $35.50 to $37.00 (from $33.50 to $35.00). Performance margin guidance was also raised to 47.0% to 48.5%, and the tax rate guidance is unchanged at 18% to 19%. The guidance excludes acquired IPR&D incurred after March 31, 2026, which is a meaningful caveat given the company's ongoing acquisition pace.
Regulatory and pipeline news was prominent: the FDA approved Foundayo (orforglipron), an oral GLP-1 for obesity, and several Phase 3 readouts were positive, including retatrutide in type 2 diabetes. Lilly also announced four acquisitions (Orna Therapeutics, Centessa Pharmaceuticals, Kelonia Therapeutics, and Ajax Therapeutics) and scheduled an Investment Community Meeting for December 7, 2026. Investors should note that the U.S. price declines and China NRDL pricing pressure are growing headwinds, even as volume growth dominates the top line.
02—Key points
Key Highlights
- Revenue rose 56% year over year to $19.8 billion, with volume up 65% and realized prices down 13%.
- Mounjaro revenue grew 125% to $8.7 billion and Zepbound grew 80% to $4.2 billion, together driving most of the growth.
- Reported EPS was $8.26 (up 170%) and non-GAAP EPS was $8.55 (up 156%), both including $0.52 of acquired IPR&D charges.
- Full-year 2026 revenue guidance was raised to $82.0–85.0 billion and non-GAAP EPS guidance to $35.50–37.00, with performance margin guidance raised to 47.0%–48.5%.
- Gross margin as a percent of revenue declined to 81.9% (reported) from 82.5%, primarily due to lower realized prices, particularly in China after Mounjaro's NRDL listing.
- Operating expenses rose sharply: R&D up 28% to $3.5 billion and marketing, selling and administrative up 19% to $2.9 billion.
- Foundayo (orforglipron) received FDA approval for obesity, and four acquisitions were announced, with an Investment Community Meeting set for December 7, 2026.
03—Questions
Frequently Asked Questions
Why did reported EPS grow so much faster than revenue or gross margin?
The prior-year quarter carried $1.72 per share of acquired IPR&D charges (largely the Scorpion Therapeutics program), versus $0.52 in Q1 2026. Lower IPR&D charges, along with a lower effective tax rate (16.4% versus 20.2%), account for much of the EPS growth. Excluding these items, the earnings increase is smaller than the headline percentage suggests.
Does the raised guidance include future acquisition costs?
No. Guidance excludes acquired IPR&D incurred after March 31, 2026. Given the four acquisitions announced in the quarter, future IPR&D charges could reduce reported earnings relative to the guided non-GAAP EPS.
How significant are pricing pressures for Lilly's growth outlook?
Realized prices fell 13% in Q1, with the U.S. down 7% (driven by Zepbound and Taltz, including cash-pay price reductions) and outside the U.S. down 25% (driven by Mounjaro's addition to China's NRDL). Volume growth has so far more than offset these declines, but continued price erosion is a key risk the company itself flags.
What were the one-time items that affected Q1 results?
Mounjaro and Zepbound U.S. revenue benefited from a one-time favorable adjustment to rebate and discount estimates, and Jardiance revenue outside the U.S. included $250 million in one-time benefits from the Boehringer Ingelheim collaboration. Asset impairment, restructuring and other special charges of $279 million were mainly related to litigation matters and were excluded from non-GAAP results.
What catalysts should investors watch next?
Key items include the Foundayo commercial launch following FDA approval, additional Phase 3 data (including retatrutide and Foundayo cardiovascular outcomes studies), integration of the four pending acquisitions, and the December 7, 2026 Investment Community Meeting, where management may provide longer-term financial and pipeline detail.
04—Continue