Eli Lilly and Company (LLY) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 20% to $11.44B, or 42% year-over-year excluding the prior year’s $1.42B olanzapine portfolio sale, driven by strong volume growth from Mounjaro and Zepbound.

• Net income was $970.3M (reported) and $1.06B (non-GAAP), with EPS of $1.07 (reported) and $1.18 (non-GAAP), both including $3.08 per share of acquired IPR&D charges.

• Key regulatory approvals included Ebglyss in the U.S. for atopic dermatitis and Kisunla in Japan and Great Britain for Alzheimer's disease.

• Positive late-stage clinical data for tirzepatide, donanemab, imlunestrant, and lebrikizumab; pipeline expanded with Morphic acquisition.

• Major investments included $1.8B in Irish manufacturing, $4.5B for the Lilly Medicine Foundry, and appointment of Lucas Montarce as CFO.

Financial highlights

• Q3 2024 revenue: $11.44B (+20% YoY); YTD 2024: $31.51B (+27% YoY); excluding olanzapine sale, Q3 revenue up 42%.

• Gross margin: 81.0% (reported), 82.2% (non-GAAP); operating income: $1.75B (non-GAAP); net income: $970.3M (reported), $1.06B (non-GAAP).

• R&D expenses up 13% to $2.73B; SG&A up 16% to $2.10B; $2.83B in acquired IPR&D charges, mainly from Morphic acquisition.

• U.S. revenue up 46% to $7.81B; international revenue down 12% due to olanzapine sale, but up 33% excluding it.

• Effective tax rate: 38.9% (reported), 37.6% (non-GAAP), both impacted by IPR&D charges.

Outlook and guidance

• 2024 revenue guidance updated to $45.4–$46.0B, implying ~50% Q4 growth year-over-year.

• EPS guidance: $12.05–$12.55 (reported), $13.02–$13.52 (non-GAAP); tax rate guidance at ~17%.

• Gross margin minus OPEX as a percent of revenue expected at 36%–38% (reported), 37%–39% (non-GAAP).

• Guidance includes $3.09B ($3.33/share) of acquired IPR&D charges through Q3 2024.

• Accelerating demand-generation activities as supply constraints ease and new international launches drive Q4 growth.