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Executive Summary

Elanco reported Q2 2026 adjusted EPS of $0.34, a 26.5% beat vs. the $0.27 consensus, on revenue of $1.368B (8% organic constant currency growth). The company raised full-year guidance across all key metrics—revenue to $5.09B-$5.14B, adjusted EBITDA to $1.01B-$1.035B, and adjusted EPS to $1.10-$1.16—while improving its year-end net leverage target to ~3.0x. This marks a second consecutive beat-and-raise quarter, driven by accelerating innovation product adoption (Zenrelia, Credelio Quattro) and faster-than-expected margin expansion from the Elanco Ascend productivity program.

Key Financial Metrics

Key Facts

• Q2 2026 revenue of $1,368M, +10% reported YoY, +8% organic constant currency
• Adjusted EPS of $0.34 beat consensus of $0.27 by 26.5%
• Full-year 2026 guidance raised: revenue to $5.09B-$5.14B, adjusted EBITDA to $1.01B-$1.035B, adjusted EPS to $1.10-$1.16
• Net leverage ratio improved to 3.1x at quarter-end, down from 3.5x at Q1 end and 3.6x at Dec 2025
• Innovation revenue target raised to $1.25B; Zenrelia achieved blockbuster status, Credelio Quattro penetrated >50% of U.S. clinic base
• Operating cash flow of $277M in Q2 vs $237M in prior year; adjusted gross margin expanded 80bps to 58.1%

Financial Impact

Q2 revenue $1.368B, adjusted EPS $0.34; full-year guidance raised by ~$70M at midpoint on revenue and ~$0.07 on adjusted EPS

Risk Factors

• Q3 guidance implies a sequential revenue decline of ~11% from Q2, reflecting normal seasonality in animal health
• Operating expenses up ~10% YoY in constant currency for Q3, pressuring near-term margins
• Swine revenue declined 4% YoY on an organic constant currency basis, a potential headwind if pork demand softens
• Integration of AHV International acquisition adds execution risk
• Substantial debt load ($3.16B net debt) limits financial flexibility despite deleveraging progress

Market Snapshot

Investment Themes

Documents Analyzed

This report is based on 6 SEC documents filed with EDGAR.

US Market Status