Executive Summary
Eli Lilly and Company (LLY) delivered robust financial performance in Q2 2024, with revenue soaring to $11.3 billion, marking a remarkable 36% year-over-year increase. This growth is primarily attributed to the strong demand for new products such as Mounjaro and Zepbound, which collectively accounted for a significant portion of the revenue increase. During this quarter, Mounjaro's sales alone reached $3.1 billion, demonstrating the product's rapid adoption in the diabetes and obesity markets.
The company's gross profit margin improved to 82%, supported by favorable pricing dynamics and increased production efficiency. Operating income spiked to $4.3 billion, almost doubling from the previous year, while net income climbed to $2.97 billion, translating to an EPS of $3.92. With management raising the full-year revenue guidance by $3 billion, expectations remain high for continued momentum into the latter half of 2024, particularly with upcoming product launches and expansions in manufacturing capacity.
Key Performance Indicators
QoQ: 64.31% | YoY:102.48%
Key Insights
1. **Revenue:** $11.30 billion (YoY increase of 36%, QoQ up 28.91%)
2. **Gross Profit:** $9.13 billion (Gross Profit Margin: 82%)
3. **Operating Income:** $4.30 billion (YoY increase of 102.48%)
4. **Net Income:** $2.97 billion (YoY increase of 68.27%)
5. **EPS:** $3.92 (YoY increase of 67.86%)
6. **R&D Expenses:** $2.71 billion (15% increase)
7. **Adjusted Revenue Guidance for 2024:** $45.4 billion to $46.6 billion...
Financial Highlights
1. Revenue: $11.30 billion (YoY increase of 36%, QoQ up 28.91%)
2. Gross Profit: $9.13 billion (Gross Profit Margin: 82%)
3. Operating Income: $4.30 billion (YoY increase of 102.48%)
4. Net Income: $2.97 billion (YoY increase of 68.27%)
5. EPS: $3.92 (YoY increase of 67.86%)
6. R&D Expenses: $2.71 billion (15% increase)
7. Adjusted Revenue Guidance for 2024: $45.4 billion to $46.6 billion
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
11.30B |
35.98% |
28.91% |
| Gross Profit |
9.13B |
40.40% |
26.25% |
| Operating Income |
4.30B |
102.48% |
64.31% |
| Net Income |
2.97B |
68.27% |
32.28% |
| EPS |
3.29 |
67.86% |
32.13% |
Key Financial Ratios
operatingProfitMargin
38.1%
operatingCashFlowPerShare
$1.63
freeCashFlowPerShare
$0.07
dividendPayoutRatio
39.5%
Management Commentary
- Growth Strategy: CEO Dave Ricks highlighted the acceleration in revenue growth attributed to expanding access to Mounjaro and Zepbound, stating, "Our investments in advancing innovative medicine are focused on manufacturing expansion... Revenue grew 36% in Q2 with our new products growing nearly $3.5 billion compared to the same period last year."
- Pipeline Developments: The approval of Kisunla for Alzheimer's disease and a strong performance in the heart failure market with tirzepatide were also noted, with Ricks adding, "Lilly now has a significant opportunity to create new medicines through a broad internal portfolio and active business development to support our long-term growth."
- Manufacturing Investments: Ricks emphasized the unprecedented $18 billion committed for building and upgrading facilities, enhancing Lilly's production capacity: "We believe this is the largest single investment in synthetic medicine active pharmaceutical ingredient manufacturing in the history of the United States."
"Our investments in advancing innovative medicine are focused on manufacturing expansion... Revenue grew 36% in Q2 with our new products growing nearly $3.5 billion compared to the same period last year."
— Dave Ricks, CEO
"Lilly now has a significant opportunity to create new medicines through a broad internal portfolio and active business development to support our long-term growth."
— Dave Ricks, CEO
Forward Guidance
Lilly’s updated guidance forecasts total revenue to lie between $45.4 billion and $46.6 billion for the full year 2024, indicating an optimistic outlook bolstered by supply chain improvements and anticipated demand growth. The expectation of production of salable doses of incretin medicines is projected to be at least 1.5 times higher in the second half of 2024 compared to the first half. Management is also focusing on expanding sales efforts and marketing strategies to support new launches. Key factors investors should monitor include the successful scaling of production capabilities and continued expansion of market access for Mounjaro and Zepbound.