Eli Lilly and Company (LLY) Q4 2023 earnings summary

Executive summary

• Q4 revenue rose 28% to $9.353B, led by Mounjaro, Verzenio, Jardiance and Zepbound; FY revenue grew 20% to $34.124B.

• Growth investments supported launches and late-stage R&D; POINT Biopharma and Mablink Biosciences acquisitions closed, and a $2.5B Germany manufacturing site was announced.

Financial highlights

• Q4 GAAP net income was $2.190B and diluted EPS $2.42, both up 13%; results included $0.62 per share of acquired IPR&D charges.

• Q4 non-GAAP adjusted net income was $2.249B and EPS $2.49, up 19% YoY; adjusted operating income was $2.585B, up 29%.

• FY GAAP net income was $5.240B and EPS $5.80; non-GAAP adjusted net income was $5.712B and EPS $6.32, down 21% and 20% YoY, respectively.

• FY non-GAAP adjusted operating income was $7.032B, down 12%; Q4 reported operating income rose 30% to $2.39B, while FY reported operating income declined 9% to $6.46B.

• Q4 R&D expense increased 28% to $2.56B; marketing, selling and administrative expense rose 17% to $1.92B.

Outlook and guidance

• 2024 revenue guidance is $40.4B–$41.6B; growth is expected to be led by New Products and partly offset by continued Trulicity declines.

• 2024 GAAP EPS guidance is $11.80–$12.30 and non-GAAP adjusted EPS is $12.20–$12.70, including a $0.40 amortization adjustment.

• Gross margin guidance is 80%–82% GAAP and 81%–83% non-GAAP; the (gross margin less OPEX)/revenue ratios are 30%–32% reported and 31%–33% non-GAAP.

• R&D and SG&A are expected to rise with late-stage programs and launches, with R&D growing faster than marketing and selling costs; other expense is $400M–$500M and tax rate ~14%.

• Outlook reflects launch momentum, geographic growth, second-half injectable incretin capacity expansion, Trulicity erosion and high-single-digit net price decline excluding divestitures; demand is expected to exceed supply.