Elanco Animal Health (ELAN) Q4 2024 earnings summary

Executive summary

• Achieved sixth consecutive quarter of organic constant currency revenue growth, with Q4 2024 up 4% year-over-year and both pet health and farm animal segments contributing.

• Full-year 2024 revenue was $4,439 million, flat on a reported basis but up 3% organically; adjusted EBITDA was $910 million and adjusted EPS was $0.91.

• Innovation revenue exceeded 2024 targets at $461 million, with six potential blockbuster products now in the market and 2025 target raised to $640–$720 million.

• Successfully divested the aqua business, using proceeds and strong cash flow to pay down $1.48 billion in debt and reduce net leverage to 4.3x.

• Entering 2025 with momentum, reaffirming guidance for accelerating growth and innovation-led strategy.

Financial highlights

• Q4 2024 revenue was $1,020 million, down 1% reported but up 4% organic constant currency; adjusted EBITDA was $177 million (17.4% margin), and adjusted EPS was $0.14.

• Full-year 2024 adjusted EBITDA was $910 million (20.5% margin); operating cash flow for 2024 was $541 million, up $270 million year-over-year.

• Gross margin for Q4 increased by 80 bps to 51%; full-year gross margin was 54.9%, down 140 bps due to divestiture, FX, and inflation.

• Net leverage ratio improved to 4.3x at year-end 2024 from 5.6x at start of year.

• Adjusted tax rate for 2024 was 18.1%, down 420 bps due to non-recurring tax credits.

Outlook and guidance

• 2025 revenue guidance: $4,445–$4,510 million; adjusted EBITDA $830–$870 million; adjusted EPS $0.80–$0.86, including a $0.07 FX headwind.

• 2025 organic constant currency revenue growth expected at 4%–6%, with FX headwinds reducing reported growth.

• Q1 2025 guidance: revenue $1,155–$1,180 million, adjusted EBITDA $240–$260 million, adjusted EPS $0.29–$0.34.

• CapEx expected to rise to $225–$255 million in 2025, driven by manufacturing expansions.

• Net leverage expected in the low to mid-fours by year-end 2025, with potential improvement if USD weakens.