Core Viewpoint - Elanco Animal Health Incorporated has appointed Robert VanHimbergen as Executive Vice President and Chief Financial Officer, effective July 7, 2025, following a competitive search aimed at long-term value creation [1][3] Company Leadership Transition - Robert VanHimbergen will succeed Todd Young, who will remain as an advisor until August 31, 2025, to ensure a smooth transition [1][3] - VanHimbergen has nearly three decades of experience in finance, having previously served as CFO at Hillenbrand, Inc. and held various roles at Johnson Controls [2][3] Company Growth and Strategy - Elanco has experienced seven consecutive quarters of growth and is focused on accelerating growth, globalizing operations, maximizing innovation, and improving cash generation [3] - The company aims to build on its current momentum and leverage its diverse portfolio of innovations to enhance shareholder value [3] Financial Guidance - Elanco reconfirms its second quarter and full year guidance as previously issued during the first quarter earnings call on May 7, 2025 [3]

Summary of Elanco Animal Health Conference Call Company Overview - **Company**: Elanco Animal Health - **Industry**: Animal Health Key Points and Arguments Financial Performance - Elanco reported a robust Q1 with a **4% constant currency revenue growth**, marking the **seventh consecutive quarter of growth** [4][5] - The company exceeded guidance on revenue, adjusted EBITDA, and adjusted EPS [5] - Revenue guidance was raised to **$660 million to $740 million** for the innovation basket initiated in 2021 [6] Innovation and Product Development - The innovation basket includes six key products contributing significantly to growth, particularly **Quattro**, **Experior**, and **ZENRELIA** [7][8] - **Experior** is identified as having a **$350 million potential market** in North America [8] - ZENRELIA is gaining traction with **11,000 clinics** adopting it, indicating strong market demand in the **$1.9 billion dermatology market** [25][26] - The derm market is expected to grow **double digits**, with ZENRELIA positioned as a leading product [25] Cash Flow and Debt Management - Elanco announced monetizing royalties on the Lotta Lanner asset, bringing in nearly **$300 million** for debt reduction [9] - The company anticipates **$450 million to $500 million** for debt paydown, improving leverage ratios [9] Tariff and Regulatory Environment - Elanco is actively managing tariff impacts, estimating a **$16 million to $20 million** effect primarily from U.S.-China trade relations [10][11] - The company is engaged in discussions with the administration regarding potential tariff exemptions for the animal health industry [16][19] - Regulatory reform discussions are ongoing, with a focus on streamlining processes with the FDA and USDA [17][34] Market Dynamics and Competitive Landscape - The farm animal segment is experiencing growth, with Elanco being a leader in beef, swine, and poultry [73] - The company is optimistic about the protein market, noting a **20% decline** in animal protein alternatives [74] - Elanco's competitive strategy includes leveraging its innovation pipeline and addressing market needs effectively [46][87] Future Outlook - Elanco is focused on expanding its product portfolio, with plans for **seven blockbuster products** in the pipeline [87] - The company is enhancing its distribution strategy, increasing physical availability across various retail channels [90][92] - The outlook for the farm animal segment remains positive, with specific growth anticipated in cattle and poultry, while the pig industry faces challenges [99] Additional Insights - Elanco emphasizes the importance of a stable core business supported by innovation, which is crucial for sustained growth [100] - The company is committed to maintaining a competitive edge through scientific rigor and addressing consumer demands for sustainability [80][81] Conclusion Elanco Animal Health is positioned for continued growth through innovation, effective management of market dynamics, and a strong focus on regulatory engagement. The company's diverse product portfolio and strategic initiatives in the animal health sector are expected to drive future performance.

Elanco Animal Health Incorporated  ELAN reported first-quarter 2025 adjusted earnings per share of 37 cents. That’s up 9% year over year.The company beat the management guidance of 29 to 34 cents and the consensus of 31 cents.Elanco reported sales of $1.19 billion. It beat the consensus of $1.17 billion and the management guidance of $1.16 billion-$1.18 billion.Sales decreased 1% on a reported basis and increased 4% on organic constant currency growth.Also Read: Elanco Animal Health Sells Xdemvy Royalties T ...

Elanco Animal Health Incorporated (ELAN) reported $1.19 billion in revenue for the quarter ended March 2025, representing a year-over-year decline of 1%. EPS of $0.37 for the same period compares to $0.34 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $1.17 billion, representing a surprise of +2.17%. The company delivered an EPS surprise of +19.35%, with the consensus EPS estimate being $0.31.While investors scrutinize revenue and earnings changes year-over-year and how they com ...

PART I - Financial Information [Financial Statements](index=6&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) Unaudited condensed consolidated financial statements for Q1 2025 show $1.193 billion revenue, $67 million net income, and $12.94 billion total assets | | Three Months Ended March 31, | | :--- | :--- | :--- | | (in millions, except per-share data) | 2025 | 2024 | | **Revenue** | **$1,193** | **$1,205** | | Gross profit | $684 | $690 | | Income before income taxes | $60 | $12 | | **Net income** | **$67** | **$32** | | **Diluted EPS** | **$0.13** | **$0.06** | | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | (in millions) | (Unaudited) | | | **Total current assets** | **$3,440** | **$3,215** | | Total assets | $12,941 | $12,614 | | **Total current liabilities** | **$1,269** | **$1,315** | | Total liabilities | $6,588 | $6,518 | | **Total equity** | **$6,353** | **$6,096** | | | Three Months Ended March 31, | | :--- | :--- | :--- | | (in millions) | 2025 | 2024 | | **Net Cash (Used for) Provided by Operating Activities** | **($4)** | **$2** | | Net Cash (Used for) Provided by Investing Activities | ($58) | $37 | | Net Cash Provided by (Used for) Financing Activities | $52 | ($27) | | **Net increase (decrease) in cash and cash equivalents** | **$19** | **($7)** | [Notes to Financial Statements](index=11&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Key notes detail revenue disaggregation, the 2024 aqua business divestiture, total debt, a May 2025 royalty sale, and ongoing shareholder lawsuits | Product Category | Q1 2025 Revenue (in millions) | Q1 2024 Revenue (in millions) | | :--- | :--- | :--- | | Pet Health | $635 | $639 | | Farm Animal | $546 | $556 | | Contract Manufacturing and Other | $12 | $10 | | **Total Revenue** | **$1,193** | **$1,205** | - In July 2024, the company sold its aqua business to Merck Animal Health for **$1.294 billion** in cash, recognizing a pre-tax gain of **$640 million**; the divested assets had a carrying value of **$634 million**, including **$458 million** in goodwill[41](index=41&type=chunk)[42](index=42&type=chunk) - Total long-term debt, including the current portion, was **$4.42 billion** as of March 31, 2025, with approximately **80%** bearing a fixed interest rate, inclusive of interest rate swaps[46](index=46&type=chunk)[49](index=49&type=chunk) - The company is defending against several shareholder lawsuits, including class actions and derivative actions, related to allegations of misleading statements about product safety (Zenrelia), launch timelines, and financial disclosures[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - In May 2025, after the quarter's end, Elanco sold the rights to future U.S. royalties and certain milestones for the human health product XDEMVY to Blackstone for **$295 million**[77](index=77&type=chunk) [Management's Discussion and Analysis (MD&A)](index=21&type=section&id=Item%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q1 2025 financial results, including a 1% revenue decrease, doubled net income, key product launches, and sufficient liquidity [Business Overview and Key Developments](index=21&type=section&id=Business%20Overview%20and%20Key%20Developments) Elanco, a global animal health leader, highlights key product approvals and launches, alongside the strategic divestiture of its aqua business - Key product innovation and launch highlights include: **Bovaer** (FDA approval in May 2024 for a first-in-class methane-reducing feed ingredient); **Zenrelia** (FDA approval in September 2024 for a canine dermatitis treatment); and **Credelio Quattro** (FDA approval in October 2024 for a comprehensive chewable parasiticide for dogs, launched in January 2025)[82](index=82&type=chunk) - The divestiture of the aqua business was completed on July 9, 2024, for **$1.294 billion** in cash, resulting in a **$640 million** pre-tax gain[87](index=87&type=chunk) - The business experiences seasonality, particularly in Pet Health, where key parasiticide products like Seresto and Advantage Family generated **70%** and **55%** of their respective 2024 annual revenues in the first half of the year[89](index=89&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q1 2025 total revenue decreased 1% to $1.193 billion, with Pet Health down 1% and Farm Animal down 2%, while net income significantly increased to $67 million | (Dollars in millions) | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | **$1,193** | **$1,205** | **(1)%** | | Gross profit | $684 | $690 | (1)% | | Asset impairment, restructuring | $9 | $46 | (80)% | | Interest expense, net | $40 | $66 | (39)% | | **Net income** | **$67** | **$32** | **109%** | | (Dollars in millions) | Revenue | Price | FX Rate | Volume | Divestiture | Total % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Pet Health | $635 | 2% | (2)% | (1)% | —% | (1)% | | Farm Animal | $546 | 3% | (3)% | 4% | (6)% | (2)% | | **Total** | **$1,193** | **2%** | **(2)%** | **2%** | **(3)%** | **(1)%** | - Pet Health revenue decreased **1%** due to lower volumes from a prior year channel stocking event and a challenging U.S. retail environment, partially offset by new product revenue and strong demand in Europe[95](index=95&type=chunk) - Farm Animal revenue decreased **2%**, as the impact of the aqua business divestiture and unfavorable FX outweighed a **4%** increase in volumes (led by U.S. cattle) and a **3%** price increase[96](index=96&type=chunk) - Interest expense decreased by **$26 million** (**39%**) compared to the prior year, primarily due to lower average outstanding debt balances[102](index=102&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Primary liquidity sources include $487 million cash, operating cash flow, and over $825 million in credit facilities, deemed sufficient to meet obligations | (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from Operating activities | $(4) | $2 | | Net cash from Investing activities | $(58) | $37 | | Net cash from Financing activities | $52 | $(27) | | **Net change in cash** | **$19** | **$(7)** | - As of March 31, 2025, the company had **$487 million** in cash, approximately **$750 million** available on its Revolving Credit Facility, and approximately **$75 million** available on its Securitization Facility[107](index=107&type=chunk) - Cash used for investing activities was **$58 million**, primarily due to **$65 million** in purchases of property, equipment, and software, an increase of **$41 million** from the prior year, mainly for the expansion of the monoclonal antibody manufacturing facility in Elwood, Kansas[111](index=111&type=chunk) [Market Risk Disclosures](index=27&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Elanco is exposed to foreign currency and interest rate risks, mitigated by derivative instruments, with approximately 80% of long-term debt at a fixed rate - The company is exposed to foreign currency exchange risk, primarily with respect to the Euro, British pound, Swiss franc, Brazilian real, Australian dollar, Japanese yen, Canadian dollar, and Chinese yuan[118](index=118&type=chunk) - To manage interest rate risk, the company uses interest rate swaps; including these swaps, approximately **80%** of its long-term indebtedness bears interest at a fixed rate as of March 31, 2025[120](index=120&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Management, with the participation of the CEO and CFO, evaluated disclosure controls and procedures as of March 31, 2025, and concluded they were effective[122](index=122&type=chunk) - There were no changes in internal control over financial reporting during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[123](index=123&type=chunk) PART II - Other Information [Other Information (Items 1-5)](index=28&type=section&id=Item%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 11 for legal proceedings, the 2024 Form 10-K for risk factors, and confirms no unregistered equity sales or new trading plans - For a summary of legal proceedings, the report refers to Note 11. Commitments and Contingencies in the financial statements[126](index=126&type=chunk) - There have been no material changes from the risk factors previously disclosed in the company's 2024 Form 10-K[127](index=127&type=chunk)

Financial Data and Key Metrics Changes - Elanco reported revenue of $1,193 million, a decrease of 1% on a reported basis, but achieved organic constant currency growth of 4% compared to Q1 2024 [39][40] - Adjusted EBITDA was $276 million, a decrease of $18 million year-over-year, but increased by $8 million when excluding the impact of the Aqua divestiture and foreign exchange headwinds [44][45] - Adjusted EPS improved to $0.37, driven by a favorable discrete tax rate benefit and interest expense savings from debt reduction [45] Business Line Data and Key Metrics Changes - Total Pet Health revenue increased by 1% in constant currency, with U.S. Pet Health revenue declining by 3% due to a challenging retail environment and soft vaccine demand, while international Pet Health grew by 5% [40][41] - The U.S. Farm Animal business grew by 17%, driven by demand for Experior and the launch of Pradillac, while international Farm Animal business contributed 2% in organic constant currency [42][43] - Innovation revenue reached $198 million in Q1, leading to an increase in full-year expectations for innovation contributions to $660 million to $740 million [7][20] Market Data and Key Metrics Changes - U.S. Retail business declined by 21% in January and February due to adverse weather conditions, but rebounded to a positive 13% growth in March [14][16] - International Pet Health business saw 5% organic constant currency growth, driven by products like AdTab and Credelio [17][18] - The U.S. Farm Animal business experienced significant growth, particularly in cattle, with Experior leading the way [19][31] Company Strategy and Development Direction - Elanco's strategy focuses on innovation, cash management, and a global operating model to navigate external uncertainties [9][10] - The company is committed to maintaining a balanced profile of risks and implementing mitigating strategies to offset tariff impacts and macroeconomic challenges [11][12] - Continued investment in product launches and facility expansions is planned, with a focus on maintaining cost discipline [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on 2025 goals, citing strong Q1 performance and positive trends in March and April [49][53] - The company is closely monitoring consumer spending and macroeconomic conditions, emphasizing its resilience and execution capabilities [104][106] - Management highlighted the growth potential in the animal protein market, indicating a favorable outlook for the farm animal business [106][107] Other Important Information - Elanco raised its full-year revenue guidance due to favorable foreign exchange impacts, maintaining an organic constant currency growth outlook of 4% to 6% [8][47] - The company expects to achieve a net leverage ratio of 3.9 to 4.3 times adjusted EBITDA by year-end, reflecting strong cash generation and debt reduction efforts [37][50] Q&A Session Summary Question: Can you elaborate on the Q2 guidance and the impact of investments on EBITDA? - Management confirmed that Q2 investments are aimed at supporting product launches during the peak parasiticide season, which may dampen near-term EBITDA but are expected to drive revenue growth in the second half [59][60] Question: What is the expected impact of tariffs and the pharma exemption on EBITDA? - Management indicated a potential $25 million EBITDA tailwind from foreign exchange moves, which has not been reflected in guidance due to uncertainty surrounding the pharma exemption [62][64] Question: Can you provide insights on the innovation revenue contributions? - Management highlighted that the overall innovation portfolio, including products like ZENRELIA and Credelio Quattro, is driving growth, with a focus on expanding market share and clinic adoption [71][93] Question: How is the macro environment affecting consumer spending? - Management noted that while monitoring consumer spending is essential, the company is well-positioned to navigate fluctuations due to its diverse product offerings and strong execution capabilities [104][106]

Financial Data and Key Metrics Changes - Elanco reported revenue of $1,193 million for Q1 2025, a decrease of 1% on a reported basis, but achieved 4% organic constant currency growth compared to Q1 2024 [39][40] - Adjusted EBITDA was $276 million, a decrease of $18 million year-over-year, but increased by $8 million when excluding the impact of the Aqua divestiture and foreign exchange headwinds [44][45] - Adjusted EPS improved to $0.37, reflecting a favorable discrete tax rate benefit and interest expense savings from debt reduction [45] Business Line Data and Key Metrics Changes - Total Pet Health revenue increased by 1% in constant currency, with U.S. Pet Health revenue declining by 3% due to a challenging retail environment and soft vaccine demand, while international Pet Health grew by 5% [40][41] - The U.S. Farm Animal business grew by 17%, driven by strong demand for Experior and the launch of Pradillac, while international farm animal revenue increased by 2% [42][43] - Innovation revenue reached $198 million in Q1, leading to an increase in full-year expectations for innovation contributions to $660 million to $740 million [6][18] Market Data and Key Metrics Changes - U.S. retail experienced a decline of 21% in January and February due to adverse weather, but rebounded to a positive 13% growth in March [13][16] - International Pet Health growth was driven by products like AdTab, Credelio, and Seresto, with AdTab doubling its revenue year-over-year [16][41] - The U.S. Farm Animal business saw significant growth, particularly in cattle, with Experior leading the way [17][31] Company Strategy and Development Direction - Elanco's strategy focuses on innovation, cash management, and a global operating model to navigate external uncertainties [7][10] - The company is committed to maintaining a balanced profile of risks and implementing mitigating strategies against tariffs and macroeconomic challenges [10][11] - Continued investment in product launches and facility expansions is planned, with a focus on long-term value creation [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 goals, citing strong Q1 performance and positive trends in March and April [48][52] - The company is prepared to address potential economic slowdowns and tariff impacts while leveraging favorable foreign exchange rates [11][48] - Management emphasized the importance of innovation and a diverse product portfolio in driving growth [34][35] Other Important Information - Elanco announced the monetization of its Lotta Lantern U.S. royalties for $295 million, which will aid in deleveraging efforts [37] - The company expects to maintain its full-year adjusted EBITDA and adjusted EPS guidance despite external challenges [10][48] Q&A Session Summary Question: Can you elaborate on the Q2 guidance and the impact of investments on EBITDA? - Management confirmed that Q2 investments are aimed at supporting product launches during the peak parasiticide season, which may dampen near-term EBITDA but are expected to drive revenue growth in the second half [57][59] Question: What is the expected impact of tariffs on EBITDA? - Management indicated a potential $25 million EBITDA tailwind from favorable foreign exchange rates, which has not been reflected in the current guidance due to uncertainties surrounding the pharma exemption [60][62] Question: Can you provide more details on the ZENRELIA label change? - Management confirmed ongoing constructive dialogue with the FDA regarding label changes, with expectations for feedback in the second half of the year [63][64] Question: What are the key drivers of innovation revenue growth? - Management highlighted the strong performance of the innovation portfolio, particularly ZENRELIA and Credelio Quattro, as significant contributors to the increase in innovation revenue expectations [70][92] Question: How is the macro environment affecting consumer spending? - Management noted that while monitoring consumer spending is essential, Elanco's diversified capabilities and innovation position the company well to navigate potential economic fluctuations [103][106]

Elanco Animal Health Incorporated (ELAN) came out with quarterly earnings of $0.37 per share, beating the Zacks Consensus Estimate of $0.31 per share. This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 19.35%. A quarter ago, it was expected that this company would post earnings of $0.15 per share when it actually produced earnings of $0.14, delivering a surprise of -6.67%.Over the last four quar ...

Financial Performance & Guidance - Elanco's Q1 2025 revenue exceeded guidance by $25 million[9] - Adjusted EBITDA for Q1 2025 exceeded guidance by $26 million[9] - Adjusted EPS for Q1 2025 exceeded guidance by $005[9] - The company is raising its 2025 revenue guidance due to foreign exchange tailwinds, while maintaining adjusted EBITDA guidance of $830-$870 million and adjusted EPS guidance of $080-$086[11] - Elanco expects $450-$500 million of gross debt paydown in 2025[10] Revenue Analysis - Elanco achieved 4% organic constant currency revenue growth in Q1 2025[10, 14] - Q1 2025 total Elanco revenue was $1193 million, a decrease of 1% compared to $1205 million in Q1 2024[29, 31] - US Farm Animal revenue increased by 17% to $230 million in Q1 2025 compared to $197 million in Q1 2024[31] - International Farm Animal revenue decreased by 12% to $316 million in Q1 2025 compared to $360 million in Q1 2024, but increased 2% on an organic constant currency basis[31] Innovation & Portfolio - Q1 2025 innovation revenue contribution was $198 million[10, 18] - Elanco is raising its 2025 innovation sales target to $660-$740 million[10, 17, 20]

Exhibit 99.1 FOR IMMEDIATE RELEASE Investor Contact: Tiffany Kanaga (765) 740-0314 or tiffany.kanaga@elancoah.com Media Contact: Colleen Parr Dekker (317) 989-7011 or colleen.dekker@elancoah.com Elanco Animal Health Reports First Quarter 2025 Results Accelerating Debt Paydown in 2025 GREENFIELD, Ind (May 7, 2025) - Elanco Animal Health Incorporated (NYSE: ELAN) today reported financial results for the first quarter of 2025, provided guidance for the second quarter of 2025, and updated guidance for the full ...