Latest quarter
Lilly reported Q2 FY2026 revenue of $23.0 billion, compared with the consensus of $20.3 billion, or 13.4% above the consensus. The company reported adjusted EPS, as the consensus counts it, of $8.38, compared with the consensus of $6.01, or 39.4% above the consensus. Lilly’s reported diluted EPS was $7.94, versus $6.29 in Q2 FY2025, while revenue rose 47.7% from $15.6 billion.
The filing attributes the revenue increase primarily to higher volume for Mounjaro and Zepbound, partly offset by lower realized prices. Lilly reported that Mounjaro and Zepbound generated $14.9 billion of Q2 2026 revenue. Gross margin was 85.8%, up 1.5 percentage points, which the filing attributes principally to production costs and product mix, partly offset by lower realized prices. Operating margin was 39.1%, down 5.1 percentage points from a year earlier. Free cash flow was $7.8 billion, compared with $1.4 billion in Q2 FY2025. The company did not provide quarter-specific revenue or EPS guidance for Q2 FY2026 for comparison.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $23.0 billion | $15.6 billion | 47.7% |
| Diluted EPS | $7.94 | $6.29 | 26.2% |
| Gross margin | 85.8% | 84.3% | 1.5 percentage points |
| Operating margin | 39.1% | 44.1% | −5.1 percentage points |
| Free cash flow | $7.8 billion | $1.4 billion | 458.1% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $8.38 | $6.01 | Beat by 39.4% |
| Revenue | $23.0 billion | $20.3 billion | Beat by 13.4% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
On the earnings call, Chief Financial Officer Lucas Montarce said Lilly raised its full-year revenue outlook by $2.5 billion after its first-half performance. Montarce said U.S. adjustments to estimates for rebates and discounts, including adjustments recorded in Q2, were one-off items that Lilly does not expect to continue in the second half. He said Lilly expects dollar growth to continue in the second half, while noting that the prior year’s second half included the effect of launches in new international markets.
Montarce said the company’s outlook incorporates European third-quarter holiday seasonality and U.S. type 2 diabetes seasonality in the fourth quarter. In response to questions about Zepbound pricing and medical exceptions, Montarce said Lilly expects prices to decline as access expands and that this expectation is embedded in guidance; he said Lilly expects volume growth to more than offset that effect. He did not quantify the pricing effect beyond the prices and access programs discussed on the call.
David Ricks said Lilly is in active litigation concerning its view that retatrutide can be submitted as a biologics license application. Ricks said Lilly has the clinical data needed for submission but needs additional chemistry, manufacturing and controls work, and he said the company looks forward to a submission by Q1 next year. Ken Kuster said Lilly is studying retatrutide in additional indications, including MASH or MASL-D and chronic lower back pain, and said the company may provide more detail later.
Patrick Johnson said Mounjaro continued to perform across international markets and cited growth in China, Korea, the UK, Mexico and Germany. When asked about generic semaglutide launches, Johnson said Lilly continued to see Mounjaro prescription growth in India and Brazil and said generic companies had supply constraints in Canada. Ilya Yuffa said Lilly had increased the number of Foundeo prescribers to 36,000 and continued sampling programs while maintaining full supply. The filing states that Lilly is investing in global manufacturing facilities and expects meaningfully higher capital expenditures in the near term.
Guidance
Lilly raised its FY2026 revenue guidance to $85.0 billion to $87.0 billion from $82.0 billion to $85.0 billion. The company’s results release set FY2026 underlying non-GAAP EPS guidance at $35.50 to $36.50. Montarce said the company raised underlying non-GAAP EPS guidance by $2.78 at the midpoint before Q2 acquired IPR&D charges, which he said resulted in the updated range.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| EPS, non-GAAP | FY2026 | $35.50–$36.50 | — | New |
| Revenue, GAAP | FY2026 | $85.0 billion–$87.0 billion | $82.0 billion–$85.0 billion | Raised |
| EPS | FY2026 | $35.50–$37.00 | — | New |
| Operating margin | FY2026 | 47.0%–48.5% | — | New |