tapebrief
LLY · Q3 2025
LLY · Q1 2026

LLY · Q4 2025 Earnings

Bullish

Eli Lilly

Reported February 4, 2026

30-second summary

30-second take: Lilly closed 2025 with $19.3B in Q4 revenue (+43% YoY) and FY2025 revenue of $65.2B, beating its own raised FY guide of $63.0–63.5B by $1.7–2.2B on the back of Mounjaro ($7.41B in Q4, +110%) and Zepbound ($4.26B, +123%). FY2026 guidance of $80–83B revenue and $33.50–35.00 non-GAAP EPS implies 23–27% revenue growth and 38–45% EPS growth, with non-GAAP performance margin guided to 46.0–47.5% versus a 40.4% FY2025 actual operating margin — management is calling for ~600bps of margin expansion on top of a fresh Orforglipron launch in Q2 2026 and Medicare obesity access landing no later than July 1, 2026. The FY2026 framework is more aggressive than the sell-side framing of "tough comps" had implied.

Headline numbers

EPS

Q4 FY2025

$7.54

Revenue

Q4 FY2025

$19.29B

+43.0% YoY

Gross margin

Q4 FY2025

82.5%

Operating margin

Q4 FY2025

43.4%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$19.29B+43.0%$17.60B+9.6%
EPS$7.54—$7.02+7.4%
Gross margin82.5%—82.9%-40bps
Operating margin43.4%—41.8%+160bps

Guidance

Lilly beat FY2025 guidance on both revenue and non-GAAP EPS, and issued FY2026 guidance implying 23–27% revenue growth and 38–45% EPS growth, signaling confidence in obesity platform scale-up and margin expansion.

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

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueFY2025$63.0B to $63.5B$65.179B+$1.68B to +$2.18B above guideBeat
Non-GAAP EPSFY2025$23.00 to $23.70$24.21+$0.51 to +$1.21 above guideBeat

New guidance

MetricPeriodGuideYoY
RevenueFY2026$80B to $83B+22.9% to +27.4% YoY
Non-GAAP EPSFY2026$33.50 to $35.00+38.3% to +44.5% YoY
Performance Margin (non-GAAP)FY202646.0% to 47.5%—
Tax RateFY202618% to 19%—

Segment KPIs

Q4 FY2025
SegmentQ4 FY2025YoY
Mounjaro$7.409B+110.0%
Zepbound$4.261B+123.0%
Verzenio$1.604B+3.0%
Key Products Revenue$13.8 billion—
Mounjaro Full Year Revenue$22.965 billion—
Zepbound Full Year Revenue$13.542 billion—

Other KPIs

Q4 FY2025
SegmentQ4 FY2025YoY
United States$12.9B+43.0%
International$6.4B+43.0%
Volume Growth46%—
U.S. Volume Growth50%—
Non-GAAP Gross Margin83.2%—
Operating Income Growth63%—
R&D Expense as % of Revenue20%—

Management tone

Q1 anchor unavailable → Q2 ATTAIN-1 readout / "price to value" → Q3 Orforglipron "foundational" / submission imminent → Q4 platform confidence and 2026 launch year.

The arc across the last three calls is a steady ratchet from clinical optionality to commercial scale-up to platform inevitability. In Q2 management framed Orforglipron via efficacy and a Q4 submission target; in Q3 Skowronski described "best molecule or first molecule or both" against "nearly every logical target" and Ricks framed the moat as "execution and scale"; this quarter's press-release framing of a "deep pipeline and platforms like LillyDirect" and "positioned to reach more patients than ever" treats the obesity franchise as the operating model rather than a growth bet. The shift from regulatory-pathway commentary to platform-and-channel commentary is the tell.

In Q&A, Patrick Johnson's confirmation that international Mounjaro is now 75% chronic weight management / 25% reimbursed type-2 diabetes — with China NRDL effective January 1, 2026 and reimbursement now in 9 countries — substantially de-risks the cash-pay-to-reimbursed transition that was the open question in Q3. The framing is "continued growth with maintained pricing discipline," which is more confident than Q2's "price to value" hedge.

On Medicare, Lucas's confirmation that obesity access is "expected no later than July 1, 2026" with a $50 monthly copay and 10–20% of direct-to-patient patients estimated to be Medicare beneficiaries is a sharper, more specific framing than anything provided previously. Dave's analogy to the Part D insulin pilot — where utilization rates increased "pretty dramatically" — frames the program as a volume expansion lever, not just a channel shift. This is the single most concrete piece of forward color in the call.

Ken Custer's framing of the oral GLP-1 market as expansion-driven ("oral option bringing mostly new patients") rather than cannibalistic is the analytical foundation under the FY2026 guide. If the oral and injectable markets are additive, the 23–27% revenue growth target requires no share donation from Zepbound — it can ride alongside an Orforglipron Q2 launch.

Q&A highlights

Chris Schott · JP Morgan

International Monjaro showed significant upside in 2025 with $3.3B in Q4 revenue driven by new market launches. What is the outlook for sequential growth from these elevated levels in 2026 as the company laps major launches?

Patrick indicated Q4 2025 should be viewed as the base for 2026 growth. International business is now 75% chronic weight management (cash pay) and 25% reimbursed type 2 diabetes. Priorities for 2026 include market expansion and penetration through patient activation. Company is pursuing reimbursement in additional countries, currently reimbursed in 9 countries including China as of January 1, 2026. China NRDL listing slightly impacted December purchasing patterns. Company expects continued growth with maintained pricing discipline.

Q4 2025 international Monjaro revenue: $3.3 billionInternational business mix: 75% chronic weight management, 25% type 2 diabetes reimbursedCurrent reimbursement in 9 countries including China (effective 1/1/26)Q4 slightly impacted by China NRDL listing driving purchasing pattern shifts

Evan Siegerman · BMO Capital Markets

What metrics and qualitative indicators should investors track for Orforglupron's successful launch starting in Q2 2026?

Ken identified three key success metrics: (1) market expansion - encouraging early data shows oral option bringing mostly new patients to obesity treatment, validating substantial addressable market of people waiting for oral option; (2) competitive positioning - confidence in oral formulation profile with no food/water restrictions; (3) real-world outcomes - focus on patient satisfaction scores and real-world efficacy as oral agents reach broader market.

Expected Q2 2026 launch of OrforglupronOral formulation has no restrictions on food and water intakeEarly oral GLP-1 market data shows expansion rather than cannibalization5-10% of patients discontinue incretin therapy due to tolerability, representing significant addressable population

Terrence Flynn · Morgan Stanley

What volume assumptions for Medicare obesity coverage ramp are embedded in 2026 guidance, and is Medicare coverage driving employer opt-in decisions for commercial plans?

Lucas stated Medicare access expected no later than July 1, 2026. 10-20% of direct-to-patient patients are estimated to be Medicare beneficiaries and expected to shift relatively quickly to Medicare channel once available at $50 copay. Longer-term penetration expected in 2027. Ilya added that employer coverage remains relatively stable at year-start with some adding/removing coverage. New focus on employer engagement through third-party partnerships offering flexible design and pricing transparency. Increased employer coverage anticipated in back half 2026 and into 2027 as Medicare legitimizes obesity as chronic disease.

Medicare obesity access expected effective no later than July 1, 2026Estimated 10-20% of current direct-to-patient patients are Medicare beneficiaries$50 monthly copay for Medicare patientsCommercial employer coverage relatively stable at year-start

Asad Haider · Goldman Sachs

What is the current contracting environment for Eli Lilly's obesity portfolio across major PBMs, and how sensitive is pricing to volume in the cash-pay channel?

Ilya indicated similar PBM coverage at start of 2026 as at end of 2025, with Zepbound covered by 2 of 3 large PBMs. Active discussions ongoing to expand access in those PBMs with Orforglupron's Q2 launch. For pricing, company has been transparent on Part D $50 copay and updated direct-to-patient pricing implemented end of December. Company continues improving access in commercial segment. Regarding price elasticity, data shows affordability and cost predictability matter - evidenced by increased ZepBound vial utilization when entry price improved to $2.99 at year-end. Expecting significant uptake of oral market at entry price similar to oral semaglutide.

Zepbound covered by 2 of 3 large PBMsActive PBM discussions for Orforglupron access expansion ahead of Q2 launchPart D copay: $50 per monthDirect-to-patient pricing updated end of December 2025

James Shin · Deutsche Bank

What are the similarities and differences between the CMS obesity demonstration program and the previous Part D insulin $35 copay program?

Dave highlighted key parallels: (1) achieving low perceived out-of-pocket cost is impactful; (2) consistent cost month-to-month critical to patient satisfaction (unlike variable Part D costs); (3) open to all innovators - allows doctors/patients to choose best therapy regardless of manufacturer. Noted difference: unlike insulin program, obesity program expected to demonstrate cost savings to Medicare program within years. Senior population underutilizing GLP-1s relative to general population due to cost; program addresses this. Senior obesity burden tends to manifest after 65, creating significant opportunity. Expects program to drive substantial utilization increases similar to insulin pilot, where frustration with copay variability was a major barrier. Program expected effective by July 1, 2026.

Medicare obesity demonstration expected effective by July 1, 2026$50 monthly copay for Medicare beneficiariesProgram open to all innovatorsSeniors underutilize GLP-1s relative to general population

Answers to last quarter's watch list

Orforglipron submission confirmation and indication scope — The company didn't disclose a granular submission update on this call, but the Q2 2026 launch target Ken Custer cited in Q&A confirms regulatory progress is on track. Indication scope and the National Priority Review Voucher question remain unaddressed in the materials available.
Continue monitoring
International revenue trajectory — International revenue grew +43% YoY in Q4 to $6.4B, decelerating sharply from Q3's +74% as launches lapped and the China NRDL purchasing-pattern shift compressed December. Patrick Johnson explicitly told investors Q4 should be the base for 2026 growth — i.e., management is not assuming continued sequential acceleration. The 75%/25% cash/reimbursed mix held, and reimbursement footprint expanded to 9 countries.
Continue monitoring
TRIUMPH-4 retatrutide readout — Not addressed in the materials available.
Continue monitoring
ATTAIN-Maintain readout — Not addressed in the materials available.
Continue monitoring
FY2026 initial framework — Resolved: revenue $80–83B (+23–27% YoY), non-GAAP EPS $33.50–35.00 (+38–45% YoY), non-GAAP performance margin 46.0–47.5%, tax rate 18–19%. The framework is more aggressive than the "tough comps" narrative had implied, with embedded assumptions on Orforglipron Q2 launch contribution, Medicare access by July 1, and continued international scale. Canadian generic semaglutide impact on self-pay pricing was not directly addressed but Ilya's commentary on direct-to-patient repricing implies management is managing that channel actively.
Resolved positively

What to watch into next quarter

Orforglipron Q2 launch metrics — Custer set three success criteria: new-patient capture (oral expanding the market vs. cannibalizing injectables), real-world tolerability (the 5–10% incretin discontinuation cohort is the litmus test), and PBM access traction. Watch Q1 commentary on initial PBM contracting wins and pre-launch demand signals from LillyDirect.

Medicare access ramp — July 1, 2026 effective date means Q2 has zero Medicare contribution but Q3/Q4 are the test. Watch whether the 10–20% direct-to-patient Medicare cohort migrates as quickly as Lucas implied and whether employer opt-in begins in H2 2026 as anticipated.

International revenue base — Patrick explicitly framed Q4 as the base for 2026 growth. Watch whether Q1 2026 international revenue holds at or above $6.4B and whether the post-NRDL China demand pattern stabilizes.

FY2026 performance margin progression — The 46.0–47.5% non-GAAP performance margin guide sits 100–150bps above FY2025's 45.0–46.0% delivery; with Orforglipron launch spend front-loaded into Q2, watch H1 performance margin for early signs of whether the FY range is conservative or stretched.

Pricing dynamics on cash channel — Ilya's confirmation that the $2.99 Zepbound vial drove measurable elasticity, plus the late-December direct-to-patient pricing update, sets up Q1 as the read on whether net pricing in self-pay is stable or eroding. Watch realized price disclosure and any commentary on Canadian generic semaglutide as it launches.

Sources

  1. Eli Lilly Q4 2025 earnings press release (SEC Form 8-K exhibit): https://www.sec.gov/Archives/edgar/data/59478/000005947826000008/q425lillysalesandearningsp.htm
  2. Eli Lilly Q4 2025 earnings call Q&A
  3. Tapebrief Q3 2025 and Q2 2025 LLY briefs (internal)

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