Earnings Call Insights: Eli Lilly and Company (LLY) Q3 2025
Management View
- David Ricks, Chairman, CEO & President, opened the call stating, “Q3 was another strong quarter for Lilly. We made progress across all our strategic deliverables. We delivered compelling financial results, advanced our pipeline and achieved key milestones to expand our manufacturing footprint.” He emphasized a 54% year-over-year revenue increase and highlighted Lilly’s increased market share in incretin analogs in the U.S., with “Lilly medicines account for nearly 6 out of 10 prescriptions within this large and growing class.” Ricks also reported FDA approval for imlunestrant (Inluriyo), EU approval for Kisunla, and positive Phase III data for Jaypirca, Verzenio, and orforglipron, as well as progress in manufacturing expansion with two new U.S. facilities planned.
- Lucas Montarce, Executive VP & CFO, stated, “Q3 was another strong quarter of financial performance. Revenue grew 54% compared to Q3 2024, driven by our key products. Gross margin as a percentage of revenue was 83.6% in Q3, an increase of 1.4 percentage points versus the same quarter last year.” Montarce detailed that non-GAAP performance margin rose to 48.3% and earnings per share increased to $7.02, including $0.71 of acquired IPR&D charges.
Outlook
- Lilly raised its full-year 2025 revenue guidance to between $63 billion and $63.5 billion, an increase of more than $2 billion at the midpoint. Montarce projected, “we now expect non-GAAP performance margin to be between 45% and 46% of revenue. At the bottom line, we have increased our outlook for non-GAAP earnings per share and expect EPS of $23 to $23.70.”
- Management attributed the guidance raise to robust product performance, especially in incretin analogs and key international launches, and anticipated further updates on new manufacturing facilities.
Financial Results
- Revenue grew 54% year-over-year, driven by key products. Gross margin reached 83.6%. Non-GAAP performance margin increased by more than 8 percentage points to 48.3%. EPS rose to $7.02, including $0.71 of acquired IPR&D charges.
- U.S. revenue increased 45%, driven by Zepbound and Mounjaro, despite a 15% price decline due to a one-time adjustment in Q3 2024. European revenue increased by over 100% in constant currency, bolstered by Mounjaro uptake and a $380 million milestone benefit. Revenue for Japan, China, and Rest of World grew 24%, 22%, and 51% respectively, with Mounjaro volume as the primary driver.
- Key product updates included $12 billion in quarterly revenue from core products. EBGLYSS U.S. total prescriptions increased by 41% sequentially. Kisunla total prescriptions grew by 50% compared to Q2 2025. Zepbound U.S. prescriptions tripled year-over-year, with vials comprising 30% of total and over 45% of new prescriptions.
Q&A
- Terence Flynn, Morgan Stanley, asked about orforglipron’s path to market and the National Priority Review Voucher program. Ricks responded that Lilly is pursuing “an all of the above strategy to get the medicine out more quickly” and expects the regulatory package submission imminently.
- Christopher Schott, JPMorgan, inquired about Mounjaro’s international ramp. Patrik Jonsson explained, “What we have seen is, of course, an initial stocking in those markets where we launched, and we refer to the big ones being in Q2 being China, Brazil, Mexico and India. Since then, we have seen a lift in the performance also in those markets in Q3 and a continued very strong performance globally.”
- Seamus Fernandez, Guggenheim, questioned market dynamics and competitive M&A. Daniel Skovronsky emphasized, “we have a very strong R&D engine behind it. I think when you look at where the science leads us… we have robust programs against those targets.”
- James Shin, Deutsche Bank, asked about PBM reforms. Ricks stated, “I applaud this. I think it’s a good move for innovators. It’s a good move for patients.”
- Several analysts focused on orforglipron’s commercial strategy, pricing, U.S. and OUS volume unlocks, and implications of IRA pricing. Responses from Ilya Yuffa, Jonsson, and Montarce highlighted Lilly’s dual focus on broad access and consumer-centric offerings, observing significant demand in the cash pay channel and pricing resilience despite competitive and regulatory shifts.
Sentiment Analysis
- Analysts maintained a positive to slightly positive tone, frequently congratulating management on performance and focusing on product launches, pricing, and market expansion. Questions were probing but generally constructive, reflecting strong interest in the pipeline and commercial execution.
- Management’s tone was confident and assertive during prepared remarks and responsive in Q&A, with frequent references to robust execution, strong product profiles, and ambitious plans. Phrases like “we are very focused on both of them,” “we’re ready to launch,” and “we think this is a great profile” supported high confidence.
- Compared to the previous quarter, both analysts and management showed increased optimism, shifting focus more toward scaling launches and manufacturing expansion, with less emphasis on pricing headwinds.
Quarter-over-Quarter Comparison
- Guidance was raised in Q3 to $63–$63.5 billion from the prior $60–$62 billion, and EPS guidance increased to $23–$23.70 from $21.75–$23.
- Revenue growth accelerated from 38% in Q2 to 54% in Q3. Gross margin decreased slightly from 85% in Q2 to 83.6% in Q3, while non-GAAP performance margin improved.
- Management’s confidence and emphasis on manufacturing expansion and global launches intensified, with product performance and regulatory milestones dominating the discussion.
- Analysts’ questions shifted toward execution risks around large-scale launches and implications of regulatory changes, reflecting the company’s strengthened market position.
Risks and Concerns
- Management acknowledged “obesity reimbursement remains limited internationally,” but expressed encouragement from strong out-of-pocket uptake.
- Potential pressure from PBM and payer changes was discussed, with Ricks describing industry reforms as supportive for “valuable medicines” but not expecting immediate pricing effects.
- Analyst inquiries on pricing, competition, and launch logistics highlighted ongoing risks in regulatory, market access, and competitive dynamics, but management largely expressed confidence in mitigation strategies and execution.
Final Takeaway
Management emphasized that Q3 2025 was marked by significant revenue growth, strengthened market leadership in core therapeutic areas, and robust pipeline advances. The company raised full-year guidance, citing strong product uptake and successful international launches, while continuing to invest in manufacturing expansion and R&D. Lilly signaled ongoing confidence in scaling its next generation therapies and executing on its strategic growth initiatives across global markets.