Eli Lilly (NYSE: LLY) lifts 2026 revenue guidance to $92 billion as incretin volumes surge

Eli Lilly reported third-quarter revenue of $24.4 billion on 29 October, up 39% from a year earlier, and raised its 2026 revenue guidance to between $91.0 billion and $92.0 billion, an increase of $5.5 billion at the midpoint. Non-GAAP earnings per share rose 7% to $7.48, held back by $4.57 a share of acquired in-process research and development charges, and the company set its full-year non-GAAP EPS range at $35.00 to $36.00.

The composition of growth matters as much as its scale. Worldwide volume rose 53%, partly offset by a 15% decline in realised prices. In the United States revenue grew 34% to $15.1 billion, with volume up 41% and prices down 7%, a decline Lilly attributes primarily to Zepbound. Outside the US revenue rose 47% to $9.3 billion, but realised prices fell 29%, driven mainly by the inclusion of Mounjaro on China's National Reimbursement Drug List. Lilly is, in effect, trading price for reach, and so far the volume response has been large enough to make the trade pay.

Tirzepatide remains the engine. Mounjaro sales rose 65% to $10.7 billion, with the international business, up 93% to $5.7 billion, now larger than the US business, which grew 41% to $5.0 billion. Zepbound added $5.35 billion, up 49%. The oral GLP-1 Foundayo contributed $184 million in its launch period, a modest figure set against the injectables but one that will be watched closely given the competition with Novo Nordisk in the oral obesity market. Among newer products, Kisunla in Alzheimer's disease rose 175% to $193 million, and Jaypirca and Ebglyss each grew 59%.

Several caveats temper the headline. Revenue included about $900 million of one-off benefits, among them $410 million of Jardiance milestone payments, of which Lilly says none remain, and favourable adjustments to rebate and discount estimates. Reported earnings per share rose 16% to $7.22, while non-GAAP EPS grew only 7% because acquired in-process research and development charges reached $4.2 billion, mainly related to the acquisitions of AtaiBeckley and Curevo. Lilly said underlying non-GAAP EPS guidance rose by $4.07 at the midpoint, more than offset by those charges, which explains why the EPS range has edged down even as the revenue range has jumped.

Margins show the operating leverage of the franchise. Gross margin reached 83.9% of revenue, up one percentage point, even as research and development spending rose 23% to $4.2 billion, or 17% of revenue, and marketing, selling and administrative costs increased 14% to $3.1 billion to support launches. Lilly is also spending heavily on capacity, citing new manufacturing expansions in Texas and Virginia, and on business development, which it has been pursuing at pace, including its expanded alliance with Gate Bioscience.

The pipeline gives the guidance a longer runway. Lilly reported positive topline results from a head-to-head Phase 3 trial of retatrutide against the 2 mg dose of Ozempic in type 2 diabetes, building on the TRIUMPH-2 obesity and diabetes data, and said Phase 3 trials of EloraTZP, its amylin and tirzepatide combination, would start in the fourth quarter. Approvals during the period included a cardiovascular risk-reduction indication for Mounjaro in type 2 diabetes and the once-weekly insulin Onswik.

The commercial risk is price erosion that outpaces volume. US obesity coverage is expanding, and chief executive David Ricks credited broader coverage alongside consumer demand, but each expansion of access has so far come with lower realised prices. China illustrates the bargain: reimbursement brings scale at a steep discount. Competition from Novo Nordisk, from oral entrants and eventually from cheaper incretins will test how long volume growth of this magnitude can last.

The investment question is less whether Lilly can grow than what investors should pay for growth that increasingly depends on accepting lower prices. A revenue run rate above $90 billion, gross margins near 84% and a deep incretin pipeline justify much of the premium. But with one-off benefits flattering this quarter and acquisition charges absorbing the earnings upgrade, the cleaner signal will come from whether volume growth holds as price cuts deepen in 2027.