LLY · Q2 2026 Earnings

Bullish

Eli Lilly

Reported August 5, 2026

30-second summary

30-second take: Lilly delivered $23.0B of Q2 revenue (+48% YoY), beating consensus of $20.69B by 11.2%, and non-GAAP EPS of $8.38 versus $6.55 expected (+28.0% beat), as Mounjaro accelerated to $9.94B (+91%) and Zepbound reached $4.93B (+46%). Management raised FY2026 revenue guidance to $85.0–87.0B (low end +$3.0B, midpoint +$2.5B vs. prior $82.0–85.0B) and lifted non-GAAP performance margin guidance by 200bps to 49.0–50.5%. The FY non-GAAP EPS range moved from $35.50–37.00 to $35.50–36.50: management explicitly reconciled this as a $2.78 underlying midpoint raise more than offset by $3.03 of acquired IPR&D charges from Q2 business development activity, netting to a -$0.25 midpoint. International volume of +113% is now the standout driver, expanding the geographic story beyond the U.S. obesity market.

Headline numbers

EPS

Q2 FY2026

$8.38

+28.0% vs est.

Revenue

Q2 FY2026

$23.00B

+48.0% YoY

+11.2% vs est.

Gross margin

Q2 FY2026

86.3%

Operating margin

Q2 FY2026

39.1%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$23.00B	$15.56B	+47.8%	$19.80B	+16.2%
EPS	$8.38	$6.31	+32.8%	$8.55	-2.0%
Gross margin	86.3%	84.3%	+200bps	81.9%	+440bps
Operating margin	39.1%	44.1%	-500bps	45.1%	-600bps

Guidance

Eli Lilly raised FY2026 revenue guidance to $85.0B–$87.0B (midpoint +$2.5B vs prior) and performance margin guidance to 49.0%–50.5%, reflecting 48% Q2 YoY revenue growth driven by Mounjaro (91% growth) and international momentum (80% YoY growth); EPS high-end narrowed slightly to $36.50 despite qualitative claim of +$2.78 midpoint raise.

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	$82.0B to $85.0B	$85.0B to $87.0B	+$3.0B high end, +$2.0B low end	Raised
EPS (non-GAAP)	FY2026	$35.50 to $37.00	$35.50 to $36.50	-$0.50 high end (note: midpoint raised $2.78 in qualitative statement)	Raised
Performance Margin	FY2026	47.0% to 48.5%	49.0% to 50.5%	+200 bps low end, +200 bps high end	Raised

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

Segment KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Mounjaro	$9.943B	$5.2B	+91.2%
Zepbound	$4.928B	$3.38B	+45.8%
Mounjaro YoY Growth	91%	—	—
Zepbound YoY Growth	46%	—	—
Key Products Revenue Growth	121% in Immunology, Oncology, and Neuroscience	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
U.S. Revenue	$14.4B	—	+33.0%
Revenue outside U.S.	$8.6B	—	+80.0%
U.S. Volume Growth	37%	46%	—
International Volume Growth	113%	35%	—
Gross Margin (non-GAAP)	86.3%	85.0%	—
R&D as % of Revenue	17%	—	—
Volume Growth Overall	60%	—	—

Management tone

No earnings call transcript was available for Q2 2026; tone analysis below draws on press-release framing and language shifts across four quarters of prior briefs.

Q3 2025 platform inevitability → Q4 2025 launch year framing → Q1 2026 Foundayo as operating commercial reality → Q2 2026 international engine and pipeline visibility.

The press-release narrative arc has shifted toward international and pipeline, but Foundayo is not absent from the disclosure — it was broken out as a discrete Key Product line at $98M in Q2, its first full launch quarter. That is a measured but real disclosure decision: management chose to establish a quarterly cadence for the asset rather than hide it inside the aggregated bucket. The Q1 watch item on Foundayo Q2 revenue disclosure is resolved.

The introduction of a specific pipeline milestone — a Biologics License Application submission to the U.S. FDA in Q1 2027, explicitly tied to retatrutide in the release's pipeline highlights — is a new disclosure element. Prior quarters framed forward pipeline events by asset (retatrutide readouts, ATTAIN-Maintain, TRIUMPH-4) but did not commit to specific BLA calendar dates. Committing to a Q1 2027 BLA plants a concrete regulatory catalyst two quarters out, bridging the narrative from Foundayo commercial ramp to the next generation of incretin assets.

International volume growth of +113% now dominates the geographic framing in a way that was not the case even one quarter ago. Q1 2026 international revenue was $7.7B (+81%); Q2 is $8.6B (+80%) with volume +113% — the growth rate is holding while volume is accelerating, meaning price is decelerating faster internationally, driven largely by Mounjaro's NRDL addition in China. The framing shift from "U.S.-led obesity market" to "geographic diversification with international as major driver" is now numerically defensible, whereas in Q4 2025 the two geographies were at parity growth of +43%/+43% and the international premium had temporarily compressed.

Answers to last quarter's watch list

Foundayo Q2 prescription and revenue disclosure — Foundayo was broken out as a discrete Key Product line at $98M in Q2 2026 (its first full launch quarter). Prescription counts, PBM contracting updates, and new-to-class rates were not quantified in the press release. Status: Resolved on revenue disclosure; other metrics continue monitoring

Medicare obesity uptake from July 1 — The July 1, 2026 Medicare obesity access effective date fell within Q2, but the press release does not quantify Medicare prescription mix, direct-to-patient migration, or employer opt-in inflection. This is a Q3 resolution question — the first full quarter of Medicare coverage.

Continue monitoring

Retatrutide regulatory pathway — The press release explicitly states that with the retatrutide Phase 3 clinical data package now complete for obesity, obstructive sleep apnea, and knee osteoarthritis pain, Lilly plans to submit a BLA to the U.S. FDA in Q1 2027. Status: Resolved

Incretin + immunology readouts (Crohn's, ulcerative colitis) — Omvoh delivered durable disease clearance in ulcerative colitis through four years (first and only IL-23p19 to do so); no incretin+immunology combination readouts disclosed. Status: Partially resolved

Performance margin H1 trajectory — Q2 non-GAAP performance margin (gross margin less R&D and SG&A, per the press release definition) computes to approximately (19,831 − 3,819 − 3,430) / 22,974 ≈ 54.8%, already above the FY midpoint of 49.75%. The FY guide of 49.0–50.5% is well within reach on the current trajectory; the earlier concern about H1/H2 asymmetry does not hold once the correct non-GAAP definition is applied. Status: Resolved favorably

Zepbound Medicaid loss persistence — Zepbound decelerated from +80% in Q1 to +46% in Q2 — the sharpest sequential deceleration of any product line. Management's framing available in the press release does not isolate Medicaid impact separately from Foundayo cannibalization or channel/pricing effects. The +46% is still growth but the cushion narrative from Q1 has narrowed materially.

Resolved negatively

What to watch into next quarter

Foundayo ramp and PBM completion — With a $98M Q2 baseline now established, Q3 is the second full launch quarter and the first with Medicare tailwind. Watch the sequential ramp trajectory, whether the 3rd large PBM has signed, and whether the new-to-class rate cited in Q1 has held as the prescriber base expands.

Medicare obesity Q3 mix — With July 1 effective, Q3 is the first full quarter of Medicare coverage. Watch whether direct-to-patient Medicare mix reaches a material share and whether Zepbound U.S. growth re-accelerates from the Q2 deceleration as Medicare volume offsets Medicaid loss.

H2 non-GAAP performance margin sustainability — Q2 already prints above the FY midpoint at ~54.8%. Watch whether Q3 sustains above ~50% or whether Foundayo launch spend and business-development integration compress the ratio back toward the guide range.

Retatrutide BLA execution — With Q1 2027 named, watch Q3 for any refinement of scope (which indications are in the initial submission — obesity, OSA, OA pain) and manufacturing readiness commentary.

Zepbound growth trajectory — Q2's deceleration from +80% to +46% is the most important single data point in the segment mix. Watch whether Q3 stabilizes above +40% (implying Medicaid loss is one-time and Foundayo cannibalization is bounded) or continues decelerating toward +30% (implying structural channel erosion).

Business development pace and IPR&D cadence — Q2 alone drove $3.03 of IPR&D EPS impact from four closed acquisitions, with three more infectious-disease deals and AtaiBeckley announced post-quarter. Guidance excludes post-June-30 IPR&D, so H2 EPS reporting will carry additional charges outside the guide range.

Sources

Eli Lilly Q2 2026 earnings press release (SEC Form 8-K exhibit): https://www.sec.gov/Archives/edgar/data/59478/000005947826000077/q226lillysalesandearningsp.htm
Tapebrief Q1 2026, Q4 2025, Q3 2025, and Q2 2025 LLY briefs (internal)

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