LLY · Q1 2026 Earnings

Q: How do margins perform under a wide range of price scenarios, and how do manufacturing investments affect competitive dynamics?

Dave explained that obesity/weight loss differs from other pharma categories due to out-of-pocket costs driving expansionary volume from price reductions. Unit economics are driven by fixed/sunk costs, providing margin latitude at the margin. Company has flexibility to invest in R&D and pipeline while maintaining competitive positioning.

Q: What are learnings from international Monjaro launch and will generic semaglutide entry impact the ramp?

Patrick reported strong uptake across 55+ countries with rapid market share gains. Generic semaglutide in India is stimulating overall obesity market growth and Monjaro is holding market share well. Monjaro prescriptions are ~10% higher post-generic entry, demonstrating dual agonist advantage over single agonist.

Q: How will the obesity market segment with introduction of retatrutide, Fundio, LRL and other follow-on assets?

Ken outlined market segmentation across multiple medicine types: GLP-1 single agonists, dual agonists, oral medicines, and potential next-generation options (non-GLP-1 mechanisms, ultra-long-acting, genetic medicine approaches). Retatrutide positioned for greater weight loss and other indications; Orlentide for tolerability-focused patients or as add-on therapy. Company investing in multiple modalities tied to common manufacturing platforms.

Q: What is confidence level in Fundio launch trajectory given early data, and what Fundio contribution was factored into revised guidance?

Ilya reported positive early indicators: 8,000+ prescribers (1/3 new to oral GLP-1), 20,000+ patients treated (80% new-to-class), strong HCP sentiment on efficacy and convenience. Commercial access locked for 2 of 3 large PBMs by mid-May; Medicare access July 1. Early 3-week launch tracking to expectations. Lucas stated plan developed at year-start; Fundio contribution reflects early progress, with trajectory building over time.

Q: What explains the $580/prescription realized price for ZepBound in Q1 vs. expected ~$450 cash price?

Dave confirmed the math is accurate and explained the delta: direct-to-consumer (Lilly Direct) pricing adjusted downward in December and remains stable; commercial business comprises the difference to net $550. Significant medical exception and OSA usage moves across channels at close to undiscounted prices, accounting for pricing variance by channel.

Bullish

Eli Lilly

Reported April 30, 2026

30-second summary

30-second take: Lilly opened FY2026 with $19.8B in revenue (+56% YoY), beating consensus of $17.81B by 11.2%, and non-GAAP EPS of $8.55 beating $6.79 by 25.9% — both materially ahead of the Street as Mounjaro ($8.66B, +125%) and Zepbound ($4.16B, +80%) compounded on top of the Foundayo (oral GLP-1) launch landing on April 9. Management raised FY2026 revenue guidance by $2B to $82–85B (28% YoY at midpoint), lifted non-GAAP EPS by $2.00 midpoint to $35.50–37.00, and bumped non-GAAP performance margin 100bps to 47.0–48.5% — a full-throated reaffirmation of the aggressive FY2026 framework set last quarter, now with Q1 evidence under it. The pricing headwind is widening (realized price -13% in Q1, FY guide of "low-to-mid teens") but 65% volume growth more than compensates.

Headline numbers

EPS

Q1 FY2026

$8.55

+25.9% vs est.

Revenue

Q1 FY2026

$19.80B

+56.0% YoY

+11.2% vs est.

Gross margin

Q1 FY2026

81.9%

Operating margin

Q1 FY2026

45.1%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$19.80B	+56.0%	$19.29B	+2.6%
EPS	$8.55	—	$7.54	+13.4%
Gross margin	81.9%	—	82.5%	-60bps
Operating margin	45.1%	—	43.4%	+170bps

Guidance

Strong Q1 beat drives significant FY2026 guidance raise: revenue +$2B and EPS +$2.00 midpoint, with 100 bps Performance Margin expansion.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Revenue	FY2026	$80.0B to $83.0B	$82.0B to $85.0B	+$2.0B midpoint increase (+1.2%)	Raised
Non-GAAP EPS	FY2026	$33.50 to $35.00	$35.50 to $37.00	+$2.00 midpoint increase (+5.8%)	Raised
Performance Margin	FY2026	46.0% to 47.5%	47.0% to 48.5%	+100 bps midpoint increase	Raised

Reaffirmed unchanged this quarter: Tax Rate (18% to 19%)

Segment KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
Mounjaro	$8.662B	+125.0%
Zepbound	$4.16B	+80.0%
Jaypirca	$0.165B	+79.0%
Ebglyss	$0.145B	+141.0%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026	YoY
United States	$12.1B	+43.0%
International	$7.7B	+81.0%
Volume Growth	65%	—
Realized Price Change	-13%	—
R&D Expenses as % of Revenue	18%	—
Operating Margin (Reported)	45.1%	—
Non-GAAP Gross Margin	82.6%	—
Effective Tax Rate (Reported)	16.4%	—
Full-Year Revenue Guidance (Midpoint)	$83.5 billion	—
Full-Year Non-GAAP EPS Guidance (Midpoint)	$36.25	—

Management tone

Q3 2025 platform inevitability → Q4 2025 launch year framing → Q1 2026 Foundayo as operating commercial reality, with incretins as multi-indication immunology platform.

Three quarters ago Foundayo (formerly orforglipron) was a Q4 submission target framed via clinical efficacy; last quarter it was a Q2 launch event with PBM contracting in motion; this quarter it is a live commercial product with 8,000+ prescribers, 20,000+ patients treated, and 80% new-to-class adoption inside three weeks of pharmacy availability. "Foundayo is a new molecule, a new modality for agonizing GLP-1, and it's a new brand. This is the first time a new incretin medicine has been launched with obesity as its indication first." The framing shift from "scalable oral option" to "category-defining first-mover" is the tell — management is now positioning Foundayo as the obesity-primary anchor, not a Mounjaro complement.

The incretin platform story has expanded from cardiometabolic into immunology in a way that was not signposted in prior quarters. Q3 and Q4 framed incretins as obesity + type 2 diabetes + sleep apnea + osteoarthritis pain — adjacent indications within the metabolic family. This quarter management introduced phase 3 data showing tirzepatide + ixekizumab delivering 27% co-primary endpoint achievement (total skin clearance + 10% weight loss) in psoriasis/obesity patients versus <6% for ixekizumab alone. "This result provides further evidence that incretins may have a broader role in treating immunological diseases." Combined with Crohn's and ulcerative colitis trials referenced, this repositions the entire incretin franchise as a multi-indication platform — the addressable market math changes materially if this thesis lands.

Retatrutide's framing has hardened from "speculative triple agonist" (Q2) to "TRIUMPH-4 readout pending" (Q3-Q4) to demonstrated efficacy this quarter: "participants lost an average of 11.1 to 16.6 kilograms, or 25 to 37 pounds" with "discontinuation rates due to adverse events were 5% or less across all arms" and glycemic control in line with tirzepatide, the most widely prescribed anchor therapy for type 2 diabetes. Management is now positioning retatrutide as the higher-efficacy tier within a segmented obesity portfolio (Foundayo for first-line oral, Mounjaro for injectable mainstream, retatrutide for higher-BMI / weight-loss-maximalist), not as a future optionality bet.

Pirtobrutinib's (Jaypirca) framing changed from "competitive BTK inhibitor" to "foundational CLL therapy" on the back of four successful Phase 3 studies across monotherapy, combination, head-to-head vs. covalent BTK, and now vs. venetoclax-based regimens. "The breadth of evidence suggests pirtobrutinib has potential to become a foundational therapy in CLL." This is a meaningful framing escalation for a non-incretin asset — and a signal that the oncology pipeline is being positioned as a second growth engine, not a portfolio rounding error.

The risk acknowledgement on Medicaid access loss for Zepbound (high-single-digit Rx growth impact in Q1) and pricing being "a low-to-mid teens" FY headwind is sharper and more numeric than Q4's framing, but management's confidence ("industry-leading growth") suggests they are pricing these in rather than flagging them as new risks.

Recurring themes management leaned on this quarter:

Foundeo as foundational first-to-market oral GLP-1 obesity medicine with scalability advantageRetatrutide as superior weight-loss option matching glycemic control of terzapatide with enhanced tolerabilityPertabrutinib as multi-indication CLL foundational therapy validated across fixed-duration and late-line settingsIncretin platform expansion into immunological disease combinations (psoriasis, Crohn's, ulcerative colitis)EBLIS durability and dose optimization enabling pediatric label expansion and reduced maintenance frequencyAggressive M&A strategy (Orna, Sintesa, Polonia, Ajax) to augment pipeline across four therapeutic areas

Risks management surfaced:

Loss of Medicaid access in certain states negatively impacting Zepbound prescription growth by high single digits in Q1U.S. price headwind expected in low-to-mid teens for full year 2026Gross margin compression of approximately 1 percentage point driven by lower list pricesRetatrutide counter-regulatory impacts of glucagon activity on blood sugar control requiring monitoringCompetitive expansion of oral GLP-1 market reducing Zepbound's market share acceleration potential

Q&A highlights

Jeff Meacham · Citi

How do margins perform under a wide range of price scenarios, and how do manufacturing investments affect competitive dynamics?

Dave explained that obesity/weight loss differs from other pharma categories due to out-of-pocket costs driving expansionary volume from price reductions. Unit economics are driven by fixed/sunk costs, providing margin latitude at the margin. Company has flexibility to invest in R&D and pipeline while maintaining competitive positioning.

75% of ex-U.S. business from Ontario is out-of-pocketVolume expansion is nonlinear to price reductionsRecord load of Phase III Nilex programs at LillyFull Phase II and Phase I pipeline deployed for capital investment

Chris Schott · J.P. Morgan

What are learnings from international Monjaro launch and will generic semaglutide entry impact the ramp?

Patrick reported strong uptake across 55+ countries with rapid market share gains. Generic semaglutide in India is stimulating overall obesity market growth and Monjaro is holding market share well. Monjaro prescriptions are ~10% higher post-generic entry, demonstrating dual agonist advantage over single agonist.

Monjaro launched in 55+ countries53% market share OUS averageBrazil and Korea launched H2 2025 with 60% estimated market shareChina Type 2 NRDL reimbursement achieved

Seamus Fernandez · Guggenheim

How will the obesity market segment with introduction of retatrutide, Fundio, LRL and other follow-on assets?

Ken outlined market segmentation across multiple medicine types: GLP-1 single agonists, dual agonists, oral medicines, and potential next-generation options (non-GLP-1 mechanisms, ultra-long-acting, genetic medicine approaches). Retatrutide positioned for greater weight loss and other indications; Orlentide for tolerability-focused patients or as add-on therapy. Company investing in multiple modalities tied to common manufacturing platforms.

Billions of patients worldwide with overweight/obesityRetatrutide positioned for greater weight loss and across obesity spectrumOrlentide alternative for tolerability concerns or add-on to incretin therapiesAdditional medicines in development: less frequent dosing, enhanced metabolic benefits, ultra-long-acting genetic medicine approaches

Asad Hyder · Goldman Sachs

What is confidence level in Fundio launch trajectory given early data, and what Fundio contribution was factored into revised guidance?

Ilya reported positive early indicators: 8,000+ prescribers (1/3 new to oral GLP-1), 20,000+ patients treated (80% new-to-class), strong HCP sentiment on efficacy and convenience. Commercial access locked for 2 of 3 large PBMs by mid-May; Medicare access July 1. Early 3-week launch tracking to expectations. Lucas stated plan developed at year-start; Fundio contribution reflects early progress, with trajectory building over time.

8,000+ Fundio prescribers; one-third new to oral GLP-120,000+ patients treated to date80% of Fundio prescriptions are new-to-classCommercial PBM access confirmed for 2 of 3 large players by mid-May

Umair Rafat · Evercore

What explains the $580/prescription realized price for ZepBound in Q1 vs. expected ~$450 cash price?

Dave confirmed the math is accurate and explained the delta: direct-to-consumer (Lilly Direct) pricing adjusted downward in December and remains stable; commercial business comprises the difference to net $550. Significant medical exception and OSA usage moves across channels at close to undiscounted prices, accounting for pricing variance by channel.

ZepBound Q1 realized price ~$580/prescriptionCash flow price estimated ~$450Direct-to-consumer pricing adjusted down in December, stable thereafterCommercial portion drives net pricing to ~$550

Answers to last quarter's watch list

Orforglipron Q2 launch metrics (now Foundayo) — All three of Custer's success criteria are tracking positively three weeks into launch: 80% of 20,000+ patients are new-to-class (vs. cannibalizing injectables), 8,000+ prescribers with one-third new to oral GLP-1 (broader prescriber base activation), and PBM access confirmed at 2 of 3 largest commercial PBMs by mid-May with Medicare access July 1. Lilly Direct is carrying 45% of early Foundayo volume, signaling channel readiness.

Resolved positively

Medicare access ramp — July 1, 2026 effective date reconfirmed; no contribution in Q1 as expected. The 10–20% direct-to-patient Medicare migration thesis won't be testable until Q3 print.

Continue monitoring

International revenue base — International revenue of $7.7B in Q1 came in +81% YoY, with Mounjaro at 53% OUS market share average, 60% in newly-launched Brazil and Korea, and China NRDL reimbursement contributing for the full quarter. The post-NRDL China demand pattern has stabilized and converted to revenue.

Resolved positively

FY2026 performance margin progression — Q1 operating margin (reported) of 45.0% sits below the FY non-GAAP performance margin guide of 47.0–48.5%, but the 100bps raise to that guide signals management sees H1 absorbing Foundayo launch spend and H2 expansion accelerating. The directionality (raise the guide on Q1 evidence) is the resolution; the H1/H2 split won't be visible until Q2.

Continue monitoring

Pricing dynamics on cash channel — Realized price was -13% in Q1 with FY guide of "low-to-mid teens" headwind — slightly wider than prior framing. Zepbound blended ASP held at ~$580/Rx with Lilly Direct stable post-December reset; commercial pricing is supporting the blend. No incremental Canadian generic semaglutide commentary in available materials.

Resolved positively

What to watch into next quarter

Foundayo Q2 prescription and revenue disclosure — Q1 captured only 3 weeks of launch. Q2 is the first full-quarter read. Watch whether the 80% new-to-class rate holds as the prescriber base expands beyond early adopters, whether the 3rd large PBM signs by Q2 close, and whether management discloses a Q2 Foundayo revenue figure (Zepbound was disclosed within two quarters of launch — Foundayo should follow).

Medicare obesity uptake from July 1 — The 10–20% direct-to-patient Medicare cohort migration is the most concrete forward number in the playbook. Watch Q3 print for whether actual Medicare prescription mix in Foundayo and Zepbound hits that range and whether employer opt-in for H2 2026 inflects as Ilya implied last quarter.

Retatrutide regulatory pathway — Management framed retatrutide this quarter with phase 3-grade efficacy data ("11.1 to 16.6 kilograms" weight loss) but did not commit to a submission timeline. Watch Q2 for any commentary on regulatory filing intent — this is the asset that anchors the higher-BMI tier of the segmented portfolio.

Incretin + immunology readouts (Crohn's, ulcerative colitis) — The Together PSO psoriasis data is the proof-of-concept for the immunology platform thesis. Watch for any next-readout timing on the Crohn's and ulcerative colitis combination trials — these are the data points that would convert the platform-expansion framing into addressable-market reality.

Performance margin H1 trajectory — With FY non-GAAP performance margin guide raised to 47.0–48.5% and Q1 reported operating margin at 45.0%, watch whether Q2 reported margin holds or compresses as Foundayo DTC TV advertising begins in Q3. If H1 absorbs the launch spend cleanly, the FY range likely proves conservative.

Zepbound Medicaid loss persistence — Management quantified Medicaid access loss as a high-single-digit Q1 Rx growth headwind. Watch whether this is a one-quarter step-down or whether additional state losses surface in Q2 — the +80% YoY growth still has cushion but the channel-mix question bears watching.

Sources

Eli Lilly Q1 2026 earnings press release (SEC Form 8-K exhibit): https://www.sec.gov/Archives/edgar/data/59478/000005947826000043/q126lillysalesandearningsp.htm
Eli Lilly Q1 2026 earnings call prepared remarks and Q&A
Tapebrief Q2 2025, Q3 2025, and Q4 2025 LLY briefs (internal)

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