Eli Lilly and Company (LLY) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 45% year-over-year to $12.73B, driven by strong volume growth from Mounjaro and Zepbound, which together accounted for $7.5B in revenue.

• EPS increased 23% to $3.06 (reported) and 29% to $3.34 (non-GAAP), both including $1.72 per share in acquired IPR&D charges, mainly from the Scorpion Therapeutics acquisition.

• Significant pipeline progress included positive Phase 3 data for orforglipron in type 2 diabetes and regulatory approvals for Jaypirca and Omvoh in new indications and geographies.

• Over $50B in U.S. manufacturing investments announced since 2020, with plans to build four new facilities and 10 active projects to expand supply capacity.

• Closed acquisition of Scorpion Therapeutics' PI3Ka inhibitor program and distributed $1.3B in dividends and $1.2B in share repurchases in Q1.

Financial highlights

• Q1 2025 total revenue reached $12.73B, up 45% year-over-year, with U.S. revenue up 49% to $8.49B and international revenue up 38% to $4.24B.

• Gross margin was 82.5% (reported), 83.5% (non-GAAP), up 1.6 percentage points year-over-year, aided by improved production costs and favorable product mix.

• Non-GAAP performance margin was 42.6%, up over 11 percentage points year-over-year.

• Net income was $2.76B, up 23% year-over-year; operating income grew 47% to $3.70B.

• Effective tax rate increased to 20.2%, mainly due to non-deductible IPR&D charges.

Outlook and guidance

• 2025 revenue guidance reaffirmed at $58.0–$61.0B, with non-GAAP EPS guidance of $20.78–$24.00, reflecting Q1 IPR&D charges.

• Performance margin guidance unchanged at 41.5%–43.5% (non-GAAP); effective tax rate for 2025 expected at approximately 17%.

• Mid to high single-digit price erosion expected for the year, consistent with Q1 trends.

• Announced tariffs and IRA-mandated price controls are expected to have limited financial impact in 2025, but ongoing monitoring of external risks continues.

• Ongoing investments in manufacturing capacity and capital expenditures are expected to remain elevated for several years.