Eli Lilly (LLY) — Q3 2026 Earnings Preview
Key Points
| Factor | Details |
|---|---|
| Consensus Revenue (Q3 2026) | $22,362M (+39% YoY vs. Q3 2025 actual $16,069M) |
| Consensus EPS (Q3 2026) | $9.25 (GAAP) |
| Guidance (FY 2026, latest) | Revenue: $85B–$87B; Non-GAAP EPS: $35.50–$36.50; Performance Margin: 49%–50.5% |
| Prior Year Comp (Q3 2025) | Revenue: $16,069M; EPS: $5.93 (GAAP); Revenue +54% YoY in Q3 2025 vs. Q3 2024 |
| Momentum/Trends | Strong double-digit growth in incretin portfolio (Zepbound, Mounjaro, Foundayo), robust OUS ramp |
| Key Watch Areas | Foundayo (orforglipron) U.S. launch trajectory, Medicare Bridge uptake, OUS launches, retatrutide |
| Risks/Headwinds | Price erosion (low to mid-teens %), commercial coverage stagnation, generic semaglutide OUS |
Most Important Factors to Watch This Quarter
| Factor | Why It Matters |
|---|---|
| Foundayo (orforglipron) Launch | Early U.S. launch metrics, share gains in oral GLP-1 segment, inflection in new patient starts |
| Medicare Bridge Program | Uptake and conversion of eligible seniors, impact on total prescription growth |
| International Expansion | OUS launches of Foundayo (notably in UAE, Saudi Arabia, Mexico), Mounjaro OUS momentum |
| Price Erosion | Magnitude of price headwind (guided low to mid-teens %), especially as CVS/commercial access expands |
| Portfolio Segmentation | Progress on retatrutide, eloralintide, and pipeline breadth for future growth |
| Commercial Coverage | Employer opt-ins, Employer Connect traction, commercial access trends (remains ~50%) |
| Adherence/Persistence | Early data on Foundayo adherence vs. injectables, impact on long-term revenue trajectory |
Quarterly Financials — Actuals and Consensus
Quarterly Results and Estimates ($M)
| Quarter | Revenue | YoY Growth | Gross Margin (%) | EBITDA | Net Income | EPS (GAAP) |
|---|---|---|---|---|---|---|
| Q2 2026 | 20,686 | +41% | 83.5 | 8,608 | 5,973 | 7.54 |
| Q3 2026E | 22,362 | +39%* | 83.7* | 12,189* | 8,873* | 9.25 |
| Q4 2026E | 23,341 | 83.2* | 12,292* | 8,872* | 9.71 |
*YoY growth for Q3 2026E is vs. Q3 2025 actual ($16,069M). Other figures marked * are consensus estimates.
Full-Year Guidance and Consensus ($M)
| Fiscal Year | Revenue Guidance | Consensus Revenue | Non-GAAP EPS Guidance | Consensus EPS (GAAP) |
|---|---|---|---|---|
| 2026 | $85,000–$87,000 | $88,495 | $35.50–$36.50 | $35.22 |
How Did They Report Last Year? (Q3 2025)
| Metric | Q3 2025 Actual | YoY Growth vs. Q3 2024 |
|---|---|---|
| Revenue | $16,069M | +54% |
| Gross Margin | 83.3% | +1.4pp |
| EBITDA | $7,087M | |
| Net Income | $5,271M | |
| EPS (GAAP) | $5.93 |
- Q3 2025 was a very strong quarter, with revenue up +54% YoY, driven by explosive growth in the incretin portfolio (Zepbound, Mounjaro).
- The company benefited from major product launches, international expansion, and strong volume growth.
- The prior year comp (Q3 2025) was exceptionally high, so Q3 2026 faces a tough YoY comparison, but consensus still expects another ~+39% YoY revenue growth.
Guidance Summary — FY 2026 (as of Q2 2026)
| Metric | Guidance (Q2 2026) | Change vs. Prior Guide | Notes |
|---|---|---|---|
| Revenue | $85B–$87B | Raised low end by $3B, high end by $2B | Reflects strong H1 performance, Key Products |
| Non-GAAP Performance Margin | 49%–50.5% | +2pp at both ends | Driven by higher revenue |
| Non-GAAP EPS | $35.50–$36.50 | +$2.78 at midpoint (pre-IPR&D) | Excludes $3.03/share IPR&D charges in Q2 |
| Price Headwind | Low to mid-teens % | Unchanged | Driven by Zepbound/Mounjaro, MFN, NRDL, Bridge |
| Foundayo Launch | Global rollout in 2027 | U.S. launch ongoing, OUS launches starting | |
| Retatrutide Submission | Q1 2027 (U.S.) | BLA pathway, pending CMC/data |
Management Commentary — Recent Tone and Focus
- Foundayo (orforglipron) U.S. Launch: Management is focused on three pillars: physician education, access/affordability, and consumer awareness. They report an inflection in new patient starts in late July, with >30% share of new oral GLP-1 starts and 36,000+ prescribers.
- Medicare Bridge Program: Early days, but seeing strong uptake (~600,000 patients), with 60–70% new to therapy. Preference is skewed toward injectables (80%), but Foundayo is gaining traction.
- International Expansion: Early launches in UAE, Saudi Arabia, Mexico show strong demand for orals, with most patients naive to incretins. Major OUS rollout expected in 2027.
- Price Erosion: Price headwind remains in the low to mid-teens %, but management expects volume growth to more than offset.
- Commercial Coverage: Remains at ~50%; Employer Connect and wrapper services are being promoted, but no step change expected before 2027.
- Pipeline: Retatrutide and eloralintide are highlighted as key future growth drivers, with retatrutide submission planned for Q1 2027.
- Adherence/Persistence: Early Foundayo refill rates are consistent with other orals and not far off injectables; management expects better adherence than typical chronic disease due to visible/experienced benefits.
What to Watch for in Q3 2026 Results
- Foundayo U.S. Launch Metrics: Acceleration in new patient starts, share gains in oral GLP-1 segment, and conversion from sampling to paid prescriptions.
- Medicare Bridge Uptake: Continued inflection in total prescriptions, especially among new-to-therapy seniors.
- OUS Foundayo Launches: Initial sales in UAE, Saudi Arabia, Mexico; signals for broader OUS ramp in 2027.
- Mounjaro/Zepbound Momentum: Sustained double-digit growth, especially OUS, and resilience vs. generic semaglutide.
- Price Erosion Impact: Magnitude of realized price declines, especially as commercial access expands.
- Commercial Coverage Trends: Any movement above 50% employer coverage, Employer Connect opt-ins.
- Pipeline Updates: Progress on retatrutide (regulatory, new data), eloralintide Phase III, and new indications.
- Adherence/Persistence Data: Early signals for Foundayo vs. injectables, implications for long-term revenue.
Summary and Conclusions
- LLY enters Q3 2026 earnings with strong momentum, coming off a record Q2 and a very tough Q3 2025 comp (+54% YoY last year).
- Consensus expects another +39% YoY revenue growth in Q3 2026, driven by the incretin portfolio and new launches.
- The most important factors are the trajectory of the Foundayo U.S. launch, Medicare Bridge program uptake, and OUS expansion.
- Price erosion remains a headwind, but management expects volume growth to more than offset.
- Commercial coverage is stable at ~50%, with incremental progress expected via Employer Connect and wrapper services.
- Pipeline breadth (retatrutide, eloralintide) and international scalability are key to sustaining long-term growth.
- Investors should focus on sequential acceleration in Foundayo metrics, Bridge program adoption, and any early signals from OUS launches as the main catalysts for upside surprise.
