Lilly reports fourth-quarter 2025 financial results and provides 2026 guidance

Core Insights - Eli Lilly and Company reported significant financial growth in Q4 2025, with a 43% increase in revenue to $19.3 billion compared to Q4 2024, driven by strong volume growth from key products like Mounjaro and Zepbound [3][4][8] - The company provided optimistic financial guidance for 2026, projecting revenue between $80 billion and $83 billion and non-GAAP EPS in the range of $33.50 to $35.00 [25][26] Financial Results - Q4 2025 revenue reached $19.3 billion, a 43% increase from $13.5 billion in Q4 2024, with a 46% increase in volume offset by a 5% decrease in realized prices [4][8] - Net income for Q4 2025 was $6.6 billion, up 50% from $4.4 billion in Q4 2024, with reported EPS increasing by 51% to $7.39 [11][15] - Non-GAAP net income for Q4 2025 was $6.8 billion, a 41% increase from $4.8 billion in Q4 2024, with non-GAAP EPS rising by 42% to $7.54 [14][37] Revenue Breakdown - U.S. revenue increased by 43% to $12.9 billion, driven by a 50% increase in volume, primarily from Zepbound and Mounjaro [5][8] - International revenue also rose by 43% to $6.4 billion, with a 38% increase in volume, largely attributed to Mounjaro [6][8] Key Product Performance - Mounjaro revenue surged by 110% to $7.4 billion in Q4 2025, with U.S. revenue at $4.1 billion, reflecting strong demand [18] - Zepbound revenue increased by 123% to $4.3 billion in Q4 2025, driven by heightened demand [19] - Verzenio revenue saw a modest increase of 3% to $1.6 billion, with U.S. revenue declining by 4% [20] Regulatory and Pipeline Developments - Regulatory advancements included FDA approvals for Kwikpen for tirzepatide and expanded indications for Jaypirca, along with submissions for orforglipron for obesity [8][21] - Positive Phase 3 trial results were reported for Taltz and Zepbound in treating psoriatic arthritis and obesity [23] Operational Expenses - Research and development expenses rose by 26% to $3.8 billion, representing 20% of revenue, reflecting ongoing investments in the product pipeline [9] - Marketing, selling, and administrative expenses increased by 29% to $3.1 billion, driven by promotional efforts for product launches [10] Gross Margin and Tax Rate - Gross margin for Q4 2025 was $15.9 billion, a 43% increase, with a gross margin percentage of 82.5% [9][12] - The effective tax rate for Q4 2025 was 19.7%, up from 12.5% in Q4 2024, influenced by a less favorable jurisdictional mix of earnings [10][13]