Elanco Animal Health (ELAN) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 15% year-over-year to $1.371 billion, with 10% organic constant currency growth, surpassing guidance for revenue, adjusted EBITDA, and adjusted EPS.

• Growth was driven by both price (+2%) and volume (+8%), with gains across all geographies and species, and notable contributions from innovation products like Zenrelia and Credelio Quattro.

• Innovation revenue contributed $287 million in Q1, leading to a raised full-year innovation target of $1.2 billion.

• Net leverage ratio improved to 3.5x at quarter-end, with a year-end target of 3.0x–3.2x and a long-term goal below 3x.

• Net income declined to $57 million due to higher interest and restructuring costs, while adjusted net income rose to $204 million.

Financial highlights

• Q1 2026 revenue was $1.371 billion, up 15% year-over-year; adjusted EBITDA was $334 million (+21%); adjusted EPS was $0.40 (+8%).

• Adjusted gross margin was 57% (down 40 bps year-over-year); gross profit was $785 million.

• Net income was $57 million, down from $67 million in Q1 2025; diluted EPS was $0.11.

• Cash and cash equivalents stood at $428 million; net debt at $3.3 billion as of March 31, 2026.

• Adjusted EBITDA margin improved to 24.5% from 23.1% year-over-year.

Outlook and guidance

• Full-year 2026 revenue guidance raised to $5,010–$5,085 million, with 5%–7% organic constant currency growth expected.

• Adjusted EBITDA guidance increased to $975–$1,005 million; adjusted EPS guidance raised to $1.03–$1.09.

• Q2 2026 revenue expected at $1.3–$1.325 billion, with 4%–6% organic growth.

• Net leverage ratio target for year-end 2026 improved to 3.0x–3.2x, with a long-term goal of 2.0x–2.5x.

• AHV International acquisition expected to accelerate farm animal product growth, with greater impact in 2027.