Elanco Animal Health (ELAN) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 15% year-over-year to $1.371 billion, with 10% organic constant currency growth, exceeding guidance for revenue, adjusted EBITDA, and adjusted EPS.

• Growth was driven by both price and volume across all geographies and species, with strong innovation product performance and notable launches such as Zenrelia and Credelio Quattro.

• Innovation revenue contributed $287 million in Q1, prompting an increase in the 2026 innovation revenue target to $1.2 billion.

• Net leverage ratio improved to 3.5x at quarter-end, with a year-end target of 3.0x–3.2x.

• Full-year guidance was raised for revenue, adjusted EBITDA, and adjusted EPS, reflecting strong momentum and confidence in continued growth.

Financial highlights

• Q1 2026 revenue was $1.371 billion, up 15% year-over-year; adjusted EBITDA was $334 million (+21%); adjusted net income was $204 million (+11%).

• Adjusted EPS was $0.40, up 8% year-over-year; reported EPS was $0.11.

• Adjusted gross margin was 57.0%, down 40 bps due to inflation and product mix; gross profit was $785 million.

• Net debt at quarter-end was $3.335 billion, with a net leverage ratio of 3.5x.

• Cash and cash equivalents stood at $428 million as of March 31, 2026.

Outlook and guidance

• Full-year 2026 revenue guidance raised to $5,010–$5,085 million, with 5%–7% organic constant currency growth expected.

• Adjusted EBITDA guidance increased to $975–$1,005 million; adjusted EPS guidance raised to $1.03–$1.09.

• Q2 2026 revenue expected at $1.3–$1.325 billion, with 4%–6% organic growth.

• Net leverage ratio target improved to 3.0x–3.2x by year-end, with a long-term goal of 2.0x–2.5x.

• AHV International acquisition expected to accelerate farm animal product growth, with greater impact in 2027.