Exchange: NYSE | Sector: Healthcare | Industry: Drug Manufacturers General
Q4 2024
Published: Feb 19, 2025
Earnings Highlights
Revenue of $13.53B up 44.7% year-over-year
EPS of $4.88 increased by 111.3% from previous year
Gross margin of 82.2%
Net income of 4.41B
""2024 was a productive year for Lilly. We grew our top line, advanced our pipeline and invested in our supply chain to meet the increasing demand for our medicines."" - David Ricks
Eli Lilly and Company (LLY) Q4 2024 Financial Results: Strong Revenue Growth and Robust Pipeline Advancement
Executive Summary
Eli Lilly and Company reported remarkable financial results for the fourth quarter of 2024, with a revenue of $13.53 billion, marking a strong 45% increase from the prior year. This surge was primarily driven by the impressive performance of its recently launched products Mounjaro and Zepbound, which collectively contributed over $3.1 billion. Net income soared to $4.41 billion, a staggering year-over-year increase of 101.39%, translating to an earnings per share (EPS) of $4.88. The company also showcased its commitment to innovation with the initiation of several new Phase III studies and strategic investments in its manufacturing capabilities. Management remains optimistic about 2025, projecting revenues of $58 to $61 billion, driven by sustained growth in the incretin class and expanding access to their innovative therapies.
Quarterly Trends:
The company achieved 18% growth in net income on a quarter-over-quarter basis, indicating strong performance consistency. The operational adjustments, particularly an increase in marketing spend by 26%, have enhanced product visibility in the marketplace, especially for Mounjaro and Zepbound. Moreover, Lilly strategically managed to limit rebates and discounts, which positively impacted realized prices despite an observed price decrease of 5%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
13.53B
44.68%
18.30%
Gross Profit
11.13B
44.64%
20.08%
Operating Income
5.15B
67.27%
16.11%
Net Income
4.41B
101.39%
354.48%
EPS
4.88
111.26%
351.85%
Key Financial Ratios
currentRatio
0.12
grossProfitMargin
82.2%
operatingProfitMargin
38%
netProfitMargin
32.6%
returnOnAssets
5.6%
returnOnEquity
30.8%
debtEquityRatio
2.35
operatingCashFlowPerShare
$5.48
freeCashFlowPerShare
$1.61
dividendPayoutRatio
26.5%
priceToBookRatio
48.71
priceEarningsRatio
39.55
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key Insights from Management:
- Revenue Growth: "In 2024, full year revenue grew 32% compared to 2023, exceeding our first-time guidance by $4 billion." - Dave Ricks, CEO.
- Pipeline Advancements: "We have started several key Phase III programs, including for insulin efsitora alfa and Zepbound for new indications." - Lucas Montarce, CFO.
- Shareholder Returns: "We returned $3 billion to shareholders via dividends and share repurchases and announced a $15 billion share repurchase program." - Dave Ricks, CEO.
"2024 was a productive year for Lilly. We grew our top line, advanced our pipeline and invested in our supply chain to meet the increasing demand for our medicines."
— David Ricks
"We expect to launch Mounjaro in new markets outside the U.S. and Europe throughout the year, contributing significantly in 2025."
— Lucas Montarce
Forward Guidance
Lilly's guidance for 2025 anticipates revenue between $58 billion and $61 billion, representing approximately 32% growth compared to 2024 figures. Management pointed to continued growth in the incretin class, particularly from Mounjaro and Zepbound, along with efforts to launch these products in new international markets. The pace of revenue growth is expected to remain strong as Lilly continues to expand its manufacturing capabilities, aiming to produce 1.6 times the salable doses of incretin therapies in the first half of 2025. Investors should monitor the uptake of newer products and the execution of Phase III studies, particularly for Orforglipron and tirzepatide, as they play a critical role in achieving these targets.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
LLY Focus
82.24%
38.00%
30.80%
39.55%
JNJ
68.30%
17.10%
4.80%
25.14%
BMY
61.00%
4.13%
0.44%
398.48%
ABBV
70.90%
-9.87%
-0.66%
-3,564.62%
PFE
66.70%
17.90%
0.47%
91.67%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Eli Lilly presents a compelling investment opportunity bolstered by its strategic growth initiatives, a robust pipeline of innovative therapies, and strong financial metrics. The projected revenue growth, particularly from the incretin class and ongoing clinical advancements, positions Lilly favorably against peers like Johnson & Johnson and AbbVie. Given the company's commitment to return capital to shareholders alongside its reinvestments in R&D, investors have several factors to consider when evaluating the company’s long-term viability. Monitoring upcoming product launches, efficacy data from ongoing trials, and the overall market acceptance will be crucial as these factors play a significant role in driving future performance.
Key Investment Factors
Growth Potential
Eli Lilly’s robust pipeline, highlighted by new product launches and multiple Phase III trials, demonstrates significant growth potential. Key drivers include Mounjaro's strong uptake, a growing portfolio in oncology, and obesity treatments, with ample market opportunity for new products.
Profitability Risk
Potential risks include competitive pressures from other drug manufacturers, price erosion in the U.S. market due to increased discounting, regulatory delays, and the broader economic impact on patient access to medications. Additionally, the company's reliance on the incretin class presents execution risks.
Financial Position
Eli Lilly holds a healthy cash position of $3.27 billion and a strong total equity of $14.32 billion, serving as a cushion against its long-term debt of $28.53 billion. The effective management of cash flows allows for sustained R&D investment, critical in the pharmaceutical industry.
SWOT Analysis
Strengths
Strong revenue growth driven by new product launches
Diverse and productive R&D pipeline with multiple Phase III trials underway
Solid cash position and strong balance sheet
Weaknesses
High reliance on a limited number of new product launches for revenue growth
Significant long-term debt compared to equity
Opportunities
Expansion of product launches into new international markets
Increasing market penetration of incretin drugs
Potential upside from innovative collaborations and acquisitions
Threats
Intense competition within the pharmaceutical sector
Pressure on pricing and margins due to insurance reimbursement policies
Economic fluctuations affecting patient access to medications