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 ...

Core Insights - Elanco Animal Health Incorporated reported financial results for Q1 2025, exceeding guidance for revenue, adjusted EBITDA, and adjusted EPS, with a 4% organic constant currency revenue growth and a revenue of $1,193 million, a decline of 1% year-over-year [2][4][7] - The company raised its 2025 revenue guidance to a range of $4,510 to $4,580 million, attributing the increase to favorable foreign exchange rates and strong performance in its diverse portfolio [2][19] - Elanco's adjusted net income for Q1 2025 was $184 million, or $0.37 per diluted share, reflecting a 9% increase compared to the same period in 2024 [15][19] Financial Performance - Q1 2025 revenue was $1,193 million, down 1% year-over-year, but showed a 4% organic constant currency growth [4][7] - Reported net income for Q1 2025 was $67 million, compared to $32 million in Q1 2024, with adjusted EBITDA at $276 million, a 6% decrease from the previous year [15][17] - The net leverage ratio as of March 31, 2025, was 4.4x adjusted EBITDA, with an improved year-end target of 3.9x to 4.3x [17][19] Business Segments - Pet Health revenue was $635 million, a decrease of 1% year-over-year, with a 1% increase when excluding foreign exchange impacts [8][9] - Farm Animal revenue was $546 million, down 2% year-over-year, but showed a 7% increase when excluding unfavorable impacts from the aqua divestiture and foreign exchange rates [9][10] - The company achieved approximately 10% dollar share of broad-spectrum sales in U.S. vet clinics for Credelio Quattro™ and over 35% penetration for Zenrelia™ in U.S. clinics [5][6] Guidance and Outlook - For the full year 2025, Elanco expects adjusted EBITDA of $830 to $870 million and adjusted EPS of $0.80 to $0.86, maintaining previous guidance despite macroeconomic uncertainties [19][21] - The company anticipates a revenue headwind of approximately $5 million in Q2 2025 due to unfavorable foreign exchange rates, but expects 4% to 6% organic constant currency revenue growth excluding these impacts [23][24] - Operating expenses are projected to increase by approximately 11% year-over-year in constant currency, driven by strategic investments in the innovation portfolio [23][24]

Group 1 - Elanco Animal Health announced the sale of future tiered royalties and commercial milestones related to Xdemvy for $295 million in cash, aimed at accelerating debt reduction [1] - The proceeds from the sale will help Elanco achieve a net leverage ratio of 3.9x to 4.3x adjusted EBITDA by the end of 2025 [1] - Elanco plans to repay portions of its outstanding term loans, which is expected to reduce interest expenses by approximately $10 million [2] Group 2 - Xdemvy, the first lotilaner-based product approved for human use, addresses Demodex blepharitis and is licensed to Tarsus Pharmaceuticals for exploration of human health applications [3] - The agreement covers tiered royalties on Xdemvy's U.S. net sales from April 2025 through August 2033 [3] - Elanco retains rights to all royalty payments on net sales outside the U.S. and any future human applications of lotilaner beyond ophthalmic solutions [4] Group 3 - Elanco is scheduled to release its Q1 2025 financial results, with analysts expecting adjusted earnings per share of 31 cents and sales of $1.21 billion [4] - The current stock price of Elanco is $9.75, which is below the 200-day moving average of $12.34, indicating potential bearish sentiment [6] - Recent trading saw Elanco's stock decrease by 1.03% to $9.65 [7]

Core Insights - Elanco Animal Health announced the sale of future tiered royalties and commercial milestones related to XDEMVY for $295 million in cash, aimed at accelerating debt reduction and achieving a net leverage ratio of 3.9x to 4.3x adjusted EBITDA by the end of 2025 [1][3] - The transaction is expected to reduce interest expenses by approximately $10 million, offset by the sale of about $10 million in royalties based on Elanco's initial 2025 guidance [1] Company Overview - Elanco Animal Health is a global leader in animal health, dedicated to innovating and delivering products and services to prevent and treat diseases in farm animals and pets, with a 70-year heritage in the industry [7] - The company is focused on high-impact innovation and aims to enhance its core business sales growth in 2025 [3] Product Development - Lotilaner was exclusively licensed to Tarsus Pharmaceuticals in 2019 for human health applications, and in 2023, XDEMVY became the first lotilaner-based product approved for human use, specifically for treating Demodex blepharitis [2] - Elanco retains rights to all royalty payments on net sales outside the U.S. and any future human applications of lotilaner beyond ophthalmic solutions [4] Strategic Partnerships - The collaboration with Blackstone Life Sciences and Blackstone Credit & Insurance is recognized as a significant investment to support Elanco's goals and the potential impact of XDEMVY on patients [3][9]

Core Insights - Elanco Animal Health announced the sale of future tiered royalties and commercial milestones related to XDEMVY for $295 million in cash, aimed at accelerating debt reduction and achieving a net leverage ratio of 3.9x to 4.3x adjusted EBITDA by the end of 2025 [1][3] - The agreement includes royalties from U.S. net sales of XDEMVY from April 2025 through August 2033, while Elanco retains rights to royalties from sales outside the U.S. and future human applications of lotilaner beyond ophthalmic solutions [4] Company Overview - Elanco is a global leader in animal health, dedicated to innovating products and services for disease prevention and treatment in farm animals and pets, with a 70-year heritage in the industry [7] - The company is focused on high-impact innovation and aims to enhance core business sales growth in 2025, leveraging the cash from the royalty sale to support its deleveraging goals [3] Product Development - Lotilaner was exclusively licensed to Tarsus Pharmaceuticals in 2019 for human health applications, and in 2023, XDEMVY became the first lotilaner-based product approved for human use, specifically for treating Demodex blepharitis [2][4] - The collaboration between Elanco and Tarsus has led to the rapid adoption and commercial success of XDEMVY, addressing a significant health need for patients suffering from a common eyelid disease [3]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Elanco Animal Health Incorporated due to a class action complaint alleging breaches of fiduciary duties by the board of directors [1] Group 1: Allegations and Complaints - The class action complaint filed against Elanco alleges that during the Class Period, the company made materially false and misleading statements regarding its business and operations [2] - Specific allegations include that Zenrelia was less safe than represented, and that Elanco was unlikely to meet its timeline for U.S. approval and commercial launch of Zenrelia and Credelio Quattro [2] - The complaint asserts that these misrepresentations led to an overstatement of the company's business and financial prospects [2] Group 2: Contact Information - Long-term stockholders of Elanco are encouraged to contact Bragar Eagel & Squire, P.C. for more information regarding the claims and their rights [3] - The law firm provides contact details for inquiries, emphasizing that there is no cost or obligation for stockholders [3][6] Group 3: About the Law Firm - Bragar Eagel & Squire, P.C. is a nationally recognized law firm that represents individual and institutional investors in various complex litigations [4] - The firm operates in both New York and California, focusing on commercial and securities litigation [4]