Elanco’s second quarter results were well received by the market, reflecting both strong execution and momentum in its innovation-driven portfolio. Management credited broad-based growth across Pet Health and Farm Animal segments, with U.S. Pet Health leading the way, supported by recent product launches such as Credelio Quattro and Zenrelia. CEO Jeffrey N. Simmons noted that “growth was driven by both price and volume,” with innovation adding stability and expansion to the base business, especially through geographic launches and strong uptake of new therapies.
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Elanco (ELAN) Q2 CY2025 Highlights:
- Revenue: $1.24 billion vs analyst estimates of $1.19 billion (4.8% year-on-year growth, 4.7% beat)
- Adjusted EPS: $0.26 vs analyst estimates of $0.20 (29.5% beat)
- Adjusted EBITDA: $238 million vs analyst estimates of $216.9 million (19.2% margin, 9.8% beat)
- The company lifted its revenue guidance for the full year to $4.60 billion at the midpoint from $4.55 billion, a 1.1% increase
- Management raised its full-year Adjusted EPS guidance to $0.88 at the midpoint, a 6% increase
- EBITDA guidance for the full year is $870 million at the midpoint, in line with analyst expectations
- Operating Margin: 6.8%, up from 3% in the same quarter last year
- Constant Currency Revenue rose 8% year on year (13% in the same quarter last year)
- Market Capitalization: $8.85 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Elanco’s Q2 Earnings Call
- Jonathan David Block (Stifel) asked about the sustainability of accelerated investments and whether margin improvement in 2026 depends on Ascend. CEO Jeffrey N. Simmons and CFO Robert M. VanHimbergen explained that higher spending is focused on successful product launches, with Ascend expected to drive additional efficiencies and margin gains in the coming years.
- Daniel Christopher Clark (Leerink Partners) inquired about which products drove the increased innovation sales target. VanHimbergen indicated that Credelio Quattro led the basket’s growth, but most recent launches contributed, with seasonality influencing results.
- Michael Leonidovich Ryskin (Bank of America) questioned when new product launches shift from being margin dilutive to accretive. VanHimbergen responded that as launches scale, their higher margins improve the overall mix, and operational improvements further support margin expansion.
- Ekaterina V. Knyazkova (JPMorgan) requested details on Credelio Quattro’s share gains and Experior’s uptake. Simmons confirmed that 70% of Quattro’s share comes from new starts or switches, and Experior is benefiting from herd rebuilding and high retention.
- Erin Elizabeth Wilson Wright (Morgan Stanley) sought clarity on implied growth deceleration in the second half and inventory dynamics. Simmons stated inventory levels are at or below five-year lows and that guidance reflects a prudent, balanced approach given seasonality and competitive factors.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will closely monitor (1) the continued adoption and global rollout of key innovation products, particularly Zenrelia and Credelio Quattro; (2) the execution of the Ascend initiative and its early impact on margins and operational efficiency; and (3) the pace of deleveraging and improvements in net leverage ratio. Additionally, label updates for Zenrelia and progress toward IL-31 regulatory approval will be critical milestones.
Elanco currently trades at $17.65, up from $13.98 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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