Elanco(ELAN) - 2024 Q4 - Annual Results

Revenue Performance - Fourth quarter 2024 revenue was $1,020 million, a decrease of 1$4,439 million, flat to the prior year on a reported basis and up 3% on an organic constant currency basis[3]. - Pet Health revenue for the fourth quarter was $439 million, a 6$570 million, a 7% decrease on a reported basis but a 2% increase on an organic constant currency basis[8]. - Revenue for Q4 2024 was $1,020 million, a decrease of 1.5$1,035 million in Q4 2023[36]. - Full year revenue for 2024 was $4,439 million, an increase of 0.5$4,417 million in 2023[36]. - Full year 2025 revenue guidance is set between $4,445 million and$4,510 million, with an estimated foreign exchange headwind of $110 million[18]. - The innovation revenue target for 2025 has been raised to between$640 million and $720 million[18]. Profitability and Loss - Adjusted EBITDA for the fourth quarter of 2024 was$177 million, representing 17.4% of revenue, an increase of 7% compared to the fourth quarter of 2023[16]. - Adjusted net income for Q4 2024 was $80 million, compared to an adjusted net income of$180 million in Q4 2023[43]. - The reported net loss for the fourth quarter of 2024 was $8 million, compared to a net loss of$141 million in the same period of 2023[15]. - Basic loss per share for Q4 2024 was $(0.02), improving from$(0.29) in Q4 2023[36]. - Adjusted EBITDA for the twelve months ended December 31, 2024, was $910 million, down from$979 million in 2023, resulting in an adjusted EBITDA margin of 20.5% compared to 22.2%[55]. - The company reported a diluted EPS of $0.68 for the year ended December 31, 2024, compared to a loss of$2.50 in 2023, marking a significant turnaround[52]. - Total adjustments to diluted EPS for the year ended December 31, 2024, amounted to $0.23, while for 2023, it was$3.39, indicating a significant reduction in adjustments year-over-year[52]. Cash Flow and Debt - The company generated over $500 million in operating cash flow for 2024, doubling from the prior year[3]. - The company reported a net debt of$2,500 million, with a net leverage ratio of 3.5x trailing twelve month adjusted EBITDA[32]. - The total gross debt as of December 31, 2024, was $4.349 billion, with a net debt of$3.881 billion after accounting for cash and cash equivalents of $468 million[57]. Future Guidance and Expectations - The company expects operating expenses to increase approximately 6$(0.05) to $0.01, with adjusted EPS expected to be between$0.80 and $0.86[60]. - Reported net (loss) income for 2025 is projected to be between$(25) million and $7 million, with adjusted EBITDA guidance ranging from$830 million to $870 million[62]. - First quarter 2025 reported EPS guidance is between$0.03 and $0.08, while adjusted EPS is expected to be between$0.29 and $0.34[63]. - First quarter 2025 reported net income is projected to be between$13 million and $41 million, with adjusted EBITDA guidance ranging from$240 million to $260 million[65]. - Adjusted EBITDA margin for 2025 is expected to be between 18.7$0.85[60]. - Non-GAAP adjustments for 2025 full year include asset impairment and restructuring charges of approximately $20 million[62]. - Amortization of intangible assets for 2025 full year is approximately$1.02 million[60]. - Tax impact of adjustments for 2025 full year is estimated to be between $(0.25) and$(0.24) million[60].