Lilly Q2 2026 Earnings: Mounjaro and Zepbound Drive 48% Revenue Growth

Lilly (NYSE: LLY) reported Q2 2026 revenue of $22.97 billion, up 48% year over year, while diluted GAAP EPS increased 26% to $7.94 from $6.29. For the quarter ended June 30, Mounjaro and Zepbound drove volume-led growth, although lower realized prices and acquisition-related charges limited the conversion of revenue growth into earnings growth.

Core earnings data

Worldwide volume increased 60%, more than offsetting a 13% decline in realized prices. Improved production costs and a favorable product mix also lifted GAAP gross margin by 1.5 percentage points to 85.8%.

Profit growth was slower than revenue growth as Lilly increased research, commercialization, and business-development spending. Acquired in-process research and development, or IPR&D, charges rose to $2.78 billion from $154 million.

Both GAAP and non-GAAP EPS included $3.03 per share of acquired IPR&D charges, compared with $0.14 in the prior-year quarter. Lilly’s non-GAAP calculations excluded intangible-asset amortization, special charges, and equity-investment gains, but did not exclude acquired IPR&D.

Product and geographic performance

Mounjaro and Zepbound remained the primary growth engines. Together, the two medicines generated approximately $14.9 billion, or about 65% of quarterly revenue, increasing Lilly’s dependence on its incretin portfolio.

The following selected products accounted for most of the disclosed growth:

Mounjaro’s U.S. revenue increased 45% to $4.8 billion, while revenue outside the U.S. rose 172% to $5.2 billion. Zepbound’s U.S. revenue increased 44% to $4.9 billion. Demand supported both products, but lower realized prices were a partial offset.

U.S. revenue increased 33% to $14.4 billion as volume rose 37% and realized prices declined 3%. Excluding adjustments to rebate and discount estimates, Lilly said U.S. prices would have fallen approximately 9%.

Revenue outside the U.S. increased 80% to $8.6 billion. Volume rose 113%, while realized prices declined 36%, primarily because Mounjaro was added to China’s National Reimbursement Drug List. International revenue also included a $250 million Jardiance sales-based milestone from Lilly’s collaboration with Boehringer Ingelheim.

Volume and mix protected margins, but deal costs limited profit conversion

Revenue increased 48%, but operating income rose 31% and GAAP net income increased 25%. The difference reflects spending and charges below gross profit rather than deterioration in production economics: gross margin expanded despite the decline in realized prices.

Research and development expense increased 14% to $3.82 billion as Lilly continued investing in early- and late-stage programs. Marketing, selling, and administrative expense rose 25% to $3.43 billion, primarily because of promotional spending for current and planned launches.

Acquired IPR&D charges reached $2.78 billion, mainly related to the Orna Therapeutics and Ajax Therapeutics acquisitions. Lilly also recorded $703 million of asset-impairment, restructuring, acquisition, and integration charges, compared with none a year earlier. The GAAP effective tax rate rose to 23.3% from 16.5%, primarily because acquired IPR&D charges were not deductible.

Pipeline and manufacturing priorities

Lilly reported positive results from three additional Phase 3 retatrutide obesity trials. The company said the clinical package is complete to support global registration efforts in obesity, obstructive sleep apnea, and knee osteoarthritis pain, with a U.S. FDA submission planned for the first quarter of 2027.

Other regulatory developments included FDA approval of an every-eight-week Ebglyss maintenance dose for moderate-to-severe atopic dermatitis, European Commission approval of Jaypirca monotherapy across all lines of chronic lymphocytic leukemia treatment, and a U.S. submission for orforglipron in type 2 diabetes.

Lilly completed the acquisitions of Orna Therapeutics, Ajax Therapeutics, Centessa Pharmaceuticals, and Kelonia Therapeutics during the quarter. It also committed another $4.5 billion to expand manufacturing sites in Indiana. These actions add pipeline assets and capacity but also explain a significant portion of the quarter’s acquisition-related expenses.

2026 guidance

Lilly raised its full-year revenue and performance-margin outlook following the second-quarter growth. However, it narrowed non-GAAP EPS guidance because $3.03 per share of acquired IPR&D charges more than offset a $2.78 midpoint increase attributed to underlying business growth, reducing the EPS midpoint by about $0.25.

The guidance excludes acquired IPR&D incurred after June 30, 2026. Lilly also noted that first-half results benefited from sales-based milestones and adjustments to rebate and discount estimates.

Recent insider transactions

The supplied insider data show 43 purchase transactions totaling 99,201 shares and five sale transactions totaling 294,715 shares over the previous six months. That produced net sales of 195,514 shares across 48 transactions, with reported insider holdings of 1.38 million shares and a net purchase rate of negative 12.4%.

Eight of the 10 most recent entries were director stock awards rather than open-market purchases. The other two entries were reported sales, including one by an executive and one by the Lilly Endowment.

The records alone do not establish the motivation behind either sale, while the director awards represent grants rather than discretionary purchases.

Risks investors should monitor

• Incretin concentration: Mounjaro and Zepbound produced about 65% of quarterly revenue. Changes in demand, access, supply, or competition affecting these medicines would therefore have an outsized effect on Lilly’s growth.
• Pricing pressure: Realized prices fell 13% worldwide, including a 36% decline outside the U.S. Continued price reductions could offset part of the benefit from higher volume and favorable product mix.
• Acquisition-related earnings volatility: Acquired IPR&D and special charges materially reduced profit conversion and increased the tax rate. The updated outlook excludes IPR&D arising after June 30, so additional transactions could change reported results.
• Quality and comparability of growth: First-half revenue benefited from a $250 million milestone and adjustments to rebate and discount estimates. Investors will need to separate these items from recurring product-volume growth in future quarters.
• Pipeline timing: Retatrutide’s Phase 3 package is complete, but Lilly’s U.S. submission is planned for the first quarter of 2027, leaving regulatory timing and outcomes as important future variables.

Summary

Lilly’s second-quarter growth was driven primarily by higher Mounjaro and Zepbound volumes, with improved production costs and product mix supporting a higher gross margin despite lower prices. Acquisition-related R&D, integration charges, and a higher tax rate kept earnings growth below revenue growth. The next areas to monitor are incretin pricing and volume, the sustainability of the raised revenue and margin outlook, additional business-development charges, and progress toward retatrutide’s planned 2027 submission.