Core Insights - Elanco Animal Health reported a full-year revenue of $4.715 billion, reflecting a 6% growth, with an organic constant-currency revenue growth of 7% projected for 2025 [1][8] - The company achieved an adjusted EBITDA of $901 million and an adjusted EPS of $0.94, an increase from $0.91 in 2024 [1] - Elanco's fourth-quarter revenue reached $1.14 billion, marking a 12% increase on a reported basis and a 9% organic constant-currency growth [3][4] Financial Performance - Full-year adjusted EBITDA was $901 million, with adjusted EPS at $0.94, up from $0.91 in 2024 [1] - Fourth-quarter adjusted EBITDA was $189 million, a 7% year-over-year increase, while adjusted EPS was $0.13, down 7% due to a higher anticipated tax rate [2] - The full-year adjusted gross margin was 54.9%, remaining flat compared to 2024, as inflation and higher manufacturing costs offset price and volume benefits [1] Growth and Innovation - Elanco's innovation revenue for 2025 was $892 million, with a raised outlook for 2026 to $1.15 billion, indicating at least $250 million growth year-over-year [7][9] - Key products driving growth include Credelio Quattro, Zenrelia, and the soon-to-launch Befrena, with Credelio Quattro being highlighted as the fastest blockbuster in the company's history [9] - The company reported strong performance in U.S. Farm Animal and U.S. Pet Health segments, with growth rates of 17% and 10% respectively in the fourth quarter [4] Strategic Initiatives - Elanco's net leverage improved to 3.6x by year-end 2025, with a target of 3.1–3.3x by the end of 2026, and net debt reported at approximately $3.2 billion [6][14] - The company announced an agreement to acquire AHV International, expected to contribute modestly in 2026 and more significantly in 2027 [6][15] - Management is focused on cash generation and has initiated a company-wide productivity initiative, Elanco Ascend, aimed at achieving $25 million in savings in 2026 [16] Market Dynamics - Elanco expects accelerating price contributions in 2026, with 2025 price growth at about 2% [10] - The company noted strong relationships with major distributors, with 90% of corporate accounts growing in 2025 compared to 13% in 2024 [11][13] - There were no significant changes in distributor stocking trends, with strong dispensing patterns observed [12] 2026 Guidance - For 2026, Elanco guided organic revenue growth of 4–6%, with projected revenue between $4.95 billion and $5.02 billion, adjusted EBITDA of $955–$985 million, and adjusted EPS of $1.00–$1.06 [8][18] - The first-quarter guidance includes revenue of $1.28 billion to $1.305 billion and adjusted EBITDA of $290 million to $310 million [15]