Q2 FY2026
Filed Aug 5, 2026Lilly reports second-quarter 2026 financial results, raises full-year guidance, and highlights continued growth and pipeline progress.
Revenue increased 48% to $23.0 billion, reported EPS increased 26% to $7.94, and the company increased 2026 full-year revenue guidance to $85.0 billion to $87.0 billion. Growth was led by Mounjaro and Zepbound volume, while gross-margin expansion persisted despite lower realized prices and acquisition-related charges.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $ 22,974 | – | 48% |
| Total Revenue, year-to-dateGAAP | 42,773 | – | 51% |
| Net income – ReportedGAAP | 7,095 | – | 25% |
| Earnings per share – ReportedGAAP | 7.94 | – | 26% |
| Net income – Non-GAAPnon-GAAP | 7,493 | – | 32% |
| Earnings per share – Non-GAAPnon-GAAP | 8.38 | – | 33% |
| Gross marginGAAP | $19.7 billion | – | 50% |
| Gross margin as a percent of revenueGAAP | 85.8% | – | an increase of 1.5 percentage points versus the same quarter last year |
| Research and development expensesGAAP | $3.8 billion | – | 14% |
| Research and development expenses as a percent of revenueGAAP | 17% of revenue | – | – |
| Marketing, selling, and administrative expensesGAAP | $3.4 billion | – | 25% |
| Acquired in-process research and development chargesGAAP | $2.8 billion | – | – |
| Asset impairment, restructuring and other special chargesGAAP | $703 million | – | – |
| Effective tax rateGAAP | 23.3% | – | – |
| Gross marginnon-GAAP | $19.8 billion | – | 50% |
| Gross margin as a percent of revenuenon-GAAP | 86.3% | – | an increase of 1.3 percentage points versus the same quarter last year |
| Effective tax ratenon-GAAP | 22.2% | – | – |
| Amortization of intangible assets per sharenon-GAAP | .11 | – | – |
| Asset impairment, restructuring and other special charges per sharenon-GAAP | .72 | – | – |
| Net gains on investments in equity securities per sharenon-GAAP | (.39) | – | – |
| Acquired IPR&D per sharenon-GAAP | 3.03 | – | NM |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| MounjaroWorldwide revenue increased primarily through volume growth. U.S. revenue reflected strong demand, partially offset by lower realized prices, while revenue outside the U.S. was driven primarily by volume growth. | $ 9,943 | – | 91% |
| ZepboundU.S. revenue increased primarily driven by strong demand, partially offset by lower realized prices, including previously announced reductions in cash-pay prices. | 4,928 | – | 46% |
| JaypircaNo product-specific revenue driver was provided. | 192 | – | 56% |
| EbglyssNo product-specific revenue driver was provided. | 201 | – | 131% |
| KisunlaNo product-specific revenue driver was provided. | 167 | – | NM |
| OmvohNo product-specific revenue driver was provided. | 102 | – | 36% |
| InluriyoNo product-specific revenue driver was provided. | 75 | – | NM |
| FoundayoNo product-specific revenue driver was provided. | 98 | – | NM |
| United States revenueA 37% increase in volume, driven by Zepbound and Mounjaro, was partially offset by a 3% decrease in realized prices. | $14.4 billion | – | 33% |
| Revenue outside the U.S.A 113% increase in volume, driven by Mounjaro, was partially offset by a 36% decrease in realized prices, primarily from Mounjaro's addition to the National Reimbursement Drug List in China. | $8.6 billion | – | 80% |
2026 full-year outlook
- Revenue$85.0 billion to $87.0 billion
- NoteUpdated non-GAAP EPS range of $35.50 to $36.50.
- NoteRaised underlying non-GAAP EPS guidance for the full year by $2.78 at the midpoint, which was more than offset by $3.03 of acquired IPR&D charges from Q2 business development activity.
What drove it
- Worldwide revenue increased 48%, driven by a 60% increase in volume, partially offset by a 13% decrease in realized prices.
- Key Products revenue grew to $15.7 billion in Q2 2026, led by Mounjaro and Zepbound.
- Key Products revenue in Immunology, Oncology, and Neuroscience grew 121% compared with Q2 2025.
- Jardiance revenue outside the U.S. included a sales-based milestone of $250 million in Q2 2026 associated with the collaboration with Boehringer Ingelheim.
- Reported gross-margin expansion was driven by improved cost of production and favorable product mix, partially offset by lower realized prices.
- Regulatory progress included U.S. FDA approval of Ebglyss for one maintenance dose every eight weeks and European Commission approval of Jaypirca as monotherapy for adults with chronic lymphocytic leukemia across all lines of therapy.
- The company plans to submit a Biologics License Application for retatrutide to the U.S. FDA in the first quarter of 2027.
Concerns
- Worldwide realized prices decreased 13%, with U.S. realized prices down 3% and realized prices outside the U.S. down 36%.
- Mounjaro's addition to the National Reimbursement Drug List in China in Q1 2026 contributed to lower realized prices outside the U.S.
- Reported Q2 2026 results included $2.8 billion of acquired in-process research and development charges and $703 million of asset impairment, restructuring and other special charges.
- The effective tax rate increased to 23.3% from 16.5%, primarily due to the unfavorable tax impact of non-deductible acquired IPR&D charges.
- Marketing, selling, and administrative expenses increased 25%, primarily driven by promotional efforts supporting ongoing and planned launches.
What to watch
- Execution against the updated 2026 full-year revenue guidance range of $85.0 billion to $87.0 billion and updated non-GAAP EPS range of $35.50 to $36.50.
- Mounjaro and Zepbound demand, volume growth, realized-price trends, and the effects of rebates, discounts, and Zepbound cash-pay price reductions.
- The contribution of Key Products, which grew to $15.7 billion in Q2 2026.
- The planned first-quarter 2027 U.S. FDA Biologics License Application submission for retatrutide.
- Integration and financial effects of the acquisitions of Orna Therapeutics, Inc., Ajax Therapeutics, Inc., Kelonia Therapeutics, Inc., and Centessa Pharmaceuticals plc.
- Manufacturing expansion supported by the additional $4.5 billion commitment to Indiana sites.
Balance sheet and cash flow
- Committed an additional $4.5 billion to expand Indiana manufacturing sites.
Analysis
Lilly reported a strong second quarter, with revenue of $ 22,974, up 48%, and reported EPS of 7.94, up 26%. Non-GAAP EPS increased 33% to 8.38. Worldwide growth was volume-led, as a 60% volume increase more than offset a 13% decline in realized prices. The company raised its 2026 full-year revenue guidance to $85.0 billion to $87.0 billion and updated its non-GAAP EPS range to $35.50 to $36.50.
Mounjaro and Zepbound remained the principal growth engines. Mounjaro revenue was $ 9,943, up 91%, while Zepbound revenue was 4,928, up 46%. U.S. revenue increased 33% to $14.4 billion, supported by a 37% volume increase driven by Zepbound and Mounjaro. Revenue outside the U.S. increased 80% to $8.6 billion, with Mounjaro volume growth the principal driver. Key Products revenue grew to $15.7 billion, and Key Products revenue in Immunology, Oncology, and Neuroscience grew 121% compared with Q2 2025.
Pricing is the principal counterweight to volume growth. Lower realized prices affected both geographies, particularly outside the U.S., where realized prices declined 36% primarily because Mounjaro was added to the National Reimbursement Drug List in China. In the U.S., lower realized prices reflected Zepbound and Mounjaro, although adjustments to estimated rebates and discounts partially offset the decline. Excluding these adjustments, U.S. price would have declined by approximately 9%.
Profitability remained strong at the gross-margin level. Reported gross margin increased 50% to $19.7 billion, with gross margin as a percent of revenue reaching 85.8%, an increase of 1.5 percentage points. The improvement reflected cost of production and favorable product mix, partly offset by lower realized prices. Research and development expenses increased 14% to $3.8 billion, while marketing, selling, and administrative expenses increased 25% to $3.4 billion as Lilly supported ongoing and planned launches.
Acquisition-related items materially affected reported results and the updated EPS outlook. The company recognized $2.8 billion of acquired IPR&D charges, primarily related to Orna Therapeutics, Inc. and Ajax Therapeutics, Inc., plus $703 million of asset impairment, restructuring and other special charges related to Kelonia Therapeutics, Inc. and Centessa Pharmaceuticals plc. The effective tax rate was 23.3%, compared with 16.5%, primarily due to non-deductible acquired IPR&D charges. Lilly also committed an additional $4.5 billion to expand Indiana manufacturing sites and cited regulatory, clinical, and business-development progress as it builds its pipeline and capacity.
Management, verbatim
Lilly's momentum continues, as we delivered 48% revenue growth and raised our full-year guidance.
David A. Ricks, Lilly chair and CEO
At the same time, Lilly is building for the future. With our next-generation weight-loss medicine retatrutide and its complete clinical data package in hand, new manufacturing capacity coming online, and exciting new assets entering our pipeline through business development, Lilly's future, after 150 years, has never been brighter.
David A. Ricks, Lilly chair and CEO
Not in the filing
stated, not guessed- Period-end date.
- Prior-quarter comparisons for reported financial metrics.
- GAAP operating income and operating margin.
- Non-GAAP operating income and operating margin.
- Operating cash flow.
- Free cash flow.
- Cash, cash equivalents, investments, and debt balances.
- Share repurchases, dividends, and other capital-return amounts.
- Full detailed 2026 guidance for gross margin, operating expenses, and tax rate.
- Previous-release outlook needed for comparison with prior guidance.
- Product revenue drivers for Jaypirca, Ebglyss, Kisunla, Omvoh, Inluriyo, and Foundayo.
- Prior-year dollar amounts for gross margin, research and development expenses, and marketing, selling, and administrative expenses.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.