Lilly’s Q1 2026 Beats Estimates, Raises Revenue Outlook on Mounjaro, Zepbound Surge

* Revenue and earnings: Lilly reported $22.0 billion in revenue for Q1 2026, up 56% from a year ago and well ahead of the $20.8 billion consensus estimate. GAAP EPS came in at $8.26, topping the $7.90 forecast, while non‑GAAP EPS was $8.55 versus $8.10 expected. Net income rose 46% to $7.4 billion (non‑GAAP $7.7 billion). The earnings beat was driven almost entirely by volume‑led growth in Mounjaro and Zepbound, which together generated $13.4 billion of the quarter’s revenue.

* Product performance: Mounjaro’s worldwide sales exploded 125% to $8.7 billion, with U.S. revenue up 59% to $4.2 billion and international sales climbing on sheer volume. Zepbound, launched in late 2023, posted an 80% jump to $4.2 billion, with U.S. sales up a staggering 79% to $4.1 billion. Both drugs benefited from aggressive payer negotiations and expanded formulary access, but the company noted modest price erosion—7% in the United States and 25% internationally, the latter driven by China’s inclusion of the drugs in the NRDL.

* Segment dynamics: The Key Products segment contributed $13.4 billion, accounting for roughly 61% of total revenue. Meanwhile, the Immunology, Oncology, and Neuroscience segment surged 160% YoY, reflecting the rollout of Jaypirca (C‑LL/SLL) and Ebglyss (multiple myeloma). Smaller launches—Kisunla, Omvoh, and the first‑quarter debut of Inluriyo—showed double‑digit growth, underscoring Lilly’s expanding portfolio beyond GLP‑1.

* Margin pressure: Gross profit rose 54% to $16.2 billion, but gross‑margin percentage slipped to 81.9% GAAP (82.6% non‑GAAP) as pricing pressure outpaced volume gains. R&D expense climbed 28% to $3.5 billion (18% of revenue) as the company funded late‑stage trials for Foundayo, retatrutide, and the new oncology combos. Marketing, selling and administrative costs were up 19% to $2.9 billion, reflecting launch spend for Zepbound, Jaypirca and the newly approved oral GLP‑1 pill Foundayo.

* Strategic acquisitions: Management announced four acquisitions—Orna Therapeutics, Centessa Pharmaceuticals, Kelonia Therapeutics, and Ajax Therapeutics—aimed at bolstering the pipeline in gene‑editing, antibody‑drug conjugates, and neuro‑degeneration. The deals will add roughly $1.2 billion of projected 2027 revenue and diversify Lilly’s platform exposure beyond metabolic disease.

* Guidance uplift: On the back of the strong start, Lilly raised its full‑year 2026 revenue outlook to $82.0‑$85.0 billion, up from the prior $78‑$81 billion range. Non‑GAAP EPS guidance was lifted to $35.50‑$37.00, implying a 13%‑15% YoY increase. The company did not provide explicit margin or cap‑ex guidance, but the higher tax rate improvement to 16.4% (from 20.2% a year ago) suggests a more favorable effective tax environment moving forward.

* Market reaction: The earnings beat and guidance hike sent the stock up 8.2% in after‑hours trading, outpacing the S&P 500’s 0.4% gain. The move reflects investor confidence that the GLP‑1 franchise will continue to dominate revenue growth while the newly approved oral formulation, Foundayo, opens a lower‑cost, higher‑adherence pathway.

* Outlook: Lilly’s growth narrative now hinges on three pillars: sustaining volume momentum for Mounjaro and Zepbound amid price pressure, scaling Foundayo as the first oral GLP‑1 therapy, and delivering late‑stage data from its expanding oncology and neuroscience pipeline. If the company can keep international price erosion in check—particularly in China—and integrate the upcoming acquisitions without diluting cash flow, the raised guidance appears credible. Analysts will be watching Q2 2026 closely for signs of Foundayo uptake and any headwinds from payer reforms.

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