Eli Lilly delivered a stellar performance in 2025, with full-year revenue surging 45% to $65.2 billion and non-GAAP EPS increasing 86% to $24.21, driven by the dominance of Mounjaro and Zepbound. Q4 revenue grew 43% year-over-year to $13 billion+ in key products, while the company maintained strong gross margins at 83.2%. Looking ahead, Lilly provided robust 2026 guidance with revenue projected between $80 billion and $83 billion (up 25% at the midpoint) and EPS of $33.50 to $35.00, despite anticipated pricing headwinds in the low-to-mid teens. Strategic highlights include the submission of oral obesity therapy Orforglipron, positive Phase 3 data for Retatrutide showing 29% weight loss, and a landmark Medicare agreement set to launch in July 2026.
| Metric | Value | Change |
|---|---|---|
| Full Year 2025 Revenue | $65.2 billion | +45% |
| Full Year 2025 EPS | $24.21 | +86% |
| Q4 Revenue Growth | N/A | +43% |
| Q4 EPS | $7.54 | +41.7% |
| 2026 Revenue Guidance | $80.0B - $83.0B | +25% at midpoint |
| 2026 EPS Guidance | $33.50 - $35.00 | N/A |
| Zepbound New Rx Share | ~70% | N/A |
| Mounjaro New Rx Share | >55% | N/A |
Management is positioning the oral GLP-1, Orforglipron (submitted in US and 40 countries), as a tool to expand the total obesity market rather than cannibalize existing injectable therapies. Kenneth Custer noted that oral competitors are 'mostly new starts,' validating the belief that a 'substantial number of people... have been sitting on the sidelines waiting for an oral option.' This strategy targets the estimated 90%+ of the obese population not yet treated, with a US launch expected in Q2 2026 and international rollout in 2027.
The agreement with the US government to provide Medicare/Medicaid access for obesity medicines at a $50 monthly copay is a pivotal strategic shift unlocking the senior demographic. David Ricks drew parallels to the insulin model, predicting this will drive 'enormously popular' uptake among seniors, a demographic currently under-penetrated. This access, effective July 1, 2026, is a primary driver for the 2026 volume growth assumptions and represents a structural change in how obesity is treated as a chronic disease in the public sector.
The Phase 3 TRIUMPH-4 data for Retatrutide revealed a 29% weight loss at 68 weeks, alongside significant reductions in osteoarthritis pain (76% reduction). Management views this molecule, a GIP/GLP-1/Glucagon agonist, as a potential best-in-class option for patients with severe obesity and comorbidities. With six additional Phase 3 trials reading out in 2026, this represents the next major leg of growth in the cardiometabolic franchise, moving beyond standard weight loss into treating complications like osteoarthritis and sleep apnea.
Lilly has committed over $55 billion to manufacturing since 2020, the largest in company history. In 2025, they exceeded their goal to produce 1.8x the number of incretin doses compared to 2024. This massive capital expenditure creates a significant competitive advantage in supply security, a critical factor as demand for obesity drugs skyrockets globally. Management noted that new sites in Wisconsin and North Carolina are now operational, de-risking the supply chain for the upcoming launches of Orforglipron and Retatrutide.
The company is actively pursuing combination therapies, such as Taltz (ixekizumab) plus Zepbound (tirzepatide) for psoriatic arthritis. The 'Together' trial showed a 64% relative increase in patients achieving symptom reduction compared to Taltz alone. This strategy leverages their obesity dominance to boost growth in immunology, potentially unlocking new value for existing assets by addressing the 'weight-dependent and weight-independent mechanisms' of inflammatory diseases.
Management explicitly guided for a 'low to mid-teens' drag on revenue growth due to price concessions in 2026. This includes the Medicare agreement, updated Zepbound pricing, and the inclusion of Mounjaro on China’s National Reimbursement Drug List (NRDL). While volume is expected to offset this, the magnitude of the price decline (up to ~15%) is a notable risk factor to gross margins, which are expected to be 'relatively stable to slightly down' due to these pricing pressures and new facility costs.
Sales of Verzenio increased only 3% globally, with management noting that 'overall market penetration has reached a plateau.' This indicates that the breast cancer franchise may be transitioning from a growth engine to a cash cow, requiring new oncology assets (like pirtobrutinib) to pick up the slack. The plateau in US trends specifically highlights the difficulty of sustaining growth in mature, late-life-cycle products.
In the TRIUMPH-4 trial for Retatrutide, higher discontinuation rates due to adverse events were observed in patients with lower baseline BMIs, specifically for 'perceived excessive weight loss.' While management noted this was consistent with other incretins in higher BMI groups, safety tolerability in lower BMI populations could limit the addressable market for the highest doses of Retatrutide, potentially restricting its use to only the most severe obesity cases.
While management downplayed the risk, the rapid expansion of the 'cash pay' or direct-to-patient channel introduces variability regarding net pricing and patient retention. David Ricks admitted that modeling the cash-pay business is a 'wildcard in our short and midterm outlook' because there is 'no good analog in our industry.' Reliance on a direct-to-consumer model increases customer acquisition costs and exposes the company to higher churn rates compared to traditional insurance reimbursement.
Overall: Management exhibited exceptional confidence and enthusiasm throughout the call, frequently using superlatives like 'strong,' 'robust,' and 'exceptional' to describe operational execution and clinical results. There was a notable lack of defensiveness regarding competition; instead, leaders focused on their internal pipeline depth and manufacturing capacity. The tone shifted from celebratory regarding past wins to assertive and pragmatic when discussing 2026 pricing headwinds, emphasizing that volume growth would more than offset price concessions.
Confidence: HIGH - Management displayed high conviction based on specific language patterns such as 'we exceeded our goal,' 'rare set of results,' and 'very, very encouraged.' They provided detailed, data-backed responses to analyst questions about market expansion and cannibalization, refusing to hedge on the success of their recent acquisitions and pipeline assets.
$80.0 billion to $83.0 billion
$33.50 to $35.00
Low to mid-teens decline
46.0% to 47.5%
US in 2026, International in 2027
Hedging & Uncertainty: Management used minimal hedging regarding past performance but employed specific temporal and probabilistic hedges regarding future launches and policy implementation. For example, regarding the Medicare deal, Ricks stated, 'We expect this to be effective by July 1, working through the details with the administration now,' acknowledging the administrative uncertainty. Regarding Retatrutide, Skovronsky used conditional language: 'depending on these upcoming data readouts, we believe retatrutide may have the potential...' However, the overall tone was assertive, with phrases like 'we delivered,' 'we exceeded,' and 'we are confident.' When discussing the oral market expansion, Kenneth Custer used the phrase 'It looks like these are mostly new starts,' indicating observational confidence rather than guaranteed data.
We achieved positive outcomes for nearly all R&D key events in 2025, a rare set of results in this industry. - Daniel Skovronsky, Chief Scientific and Product Officer
We believe these price concessions will be more than offset by increased volume over time. - Lucas Montarce, Chief Financial Officer
It looks like these are mostly new starts. That means it's expanding the market, and that's good news for Lilly. - Kenneth Custer, President of Lilly Cardiometabolic Health
I think it is a bit of a wildcard in our short and midterm outlook. - David Ricks, Chair and CEO
We're very, very encouraged from, again, the first month of seeing that data and it's very much consistent with our expectations. - Lucas Montarce, Chief Financial Officer
We expect this to be effective by July 1, working through the details with the administration now. - David Ricks, Chair and CEO
We're pleased with all the progress in Q4 and throughout 2025. It was a year of strong execution for Lilly. - David Ricks, Chair and CEO
Analyst Sentiment: Analysts were highly inquisitive about the sustainability of growth, specifically focusing on the 'cash pay' channel dynamics, the ramp of the new oral drug Orforglipron, and the specifics of the Medicare implementation. There was skepticism regarding the lack of cannibalization from orals, which management firmly rebutted.
Management Responses: Management was prepared and data-driven, frequently referencing 'real-world data' from competitors to support their market expansion thesis. They were transparent about the 'pushes and pulls' in the guidance but remained firm on their volume targets.
Orforglipron launch trajectory and market expansion vs. cannibalization.
International Mounjaro growth and the impact of China's NRDL pricing.
Medicare/Medicaid access mechanics and the $50 copay implementation.
Pricing elasticity in the cash-pay and direct-to-patient channels.
Immunology combination strategies (Taltz + Zepbound).
Eli Lilly is executing at a high level, dominating the GLP-1 market with Zepbound and Mounjaro while simultaneously building a deep pipeline of next-generation obesity and oncology therapies. The 2026 guidance for 25% revenue growth at the midpoint, despite aggressive pricing headwinds, highlights the power of their volume drivers and the upcoming oral launch. The Medicare agreement effectively unlocks a massive, untapped patient demographic. While gross margins face pressure from pricing and new facility costs, the operating leverage and pipeline diversity (Retatrutide, Orforglipron, Pirtobrutinib) justify premium valuation. The company is successfully transitioning from a pharma giant to a leader in the consumerization of healthcare.
The Medicare/Medicaid agreement for obesity drugs represents a structural shift in US healthcare coverage, treating obesity as a chronic condition covered by government insurance. This reduces the financial burden on patients ($50 copay) and significantly expands the total addressable market (TAM) to include the senior population.
International growth is accelerating, with Lilly becoming the share leader outside the US. However, the inclusion of Mounjaro on China’s NRDL creates a pricing trade-off (lower price) for volume access, a dynamic likely to repeat across socialized healthcare systems.
The 'cash pay' model is proving more resilient and expansive than traditional insurance models. Management noted that 1M patients engaged with their direct-to-patient platform, suggesting high consumer demand and willingness to pay out-of-pocket, bypassing traditional PBM friction.