Elanco Animal Health (ELAN) Q4 2025 earnings summary

Executive summary

• Achieved 12% reported and 9% organic constant currency revenue growth in Q4 2025, outperforming guidance for revenue, Adjusted EBITDA, and Adjusted EPS, with strong U.S. Farm Animal (+17%) and U.S. Pet Health (+10%) performance.

• Innovation revenue reached $892 million in 2025, surpassing targets; all 'Big 6' products delivered, and 2026 innovation revenue target raised to $1.15 billion.

• Achieved 10th consecutive quarter of underlying growth; 9 of top 10 countries and top 5 product franchises posted organic CC revenue growth in 2025.

• Entered 2026 with strong momentum and improved net leverage ratio to 3.6x, ahead of target, with further deleveraging expected.

Financial highlights

• Q4 2025 revenue was $1,144M (+12% reported, +9% organic CC); adjusted EBITDA was $189M (margin 16.7%); adjusted EPS was $0.13.

• Full year 2025 revenue reached $4,715M (+6% reported, +7% organic CC); adjusted EBITDA was $901M (margin 19.2%); adjusted EPS was $0.94.

• Adjusted gross margin for 2025 was 54.9%, flat year-over-year; Q4 gross margin was 51.2%, up 30 bps.

• Q4 2025 reported net loss was $276M due to restructuring and impairment charges; adjusted net income was $64M.

• Operating cash flow for Q4 was $108M; net debt at year-end was $3,245M.

Outlook and guidance

• 2026 guidance: organic constant currency revenue growth of 4%-6%, revenue of $4,950M–$5,020M; adjusted EBITDA of $955M–$985M (8% growth at midpoint); adjusted EPS of $1.00–$1.06 (10% growth at midpoint).

• Innovation revenue target raised to $1.15B for 2026.

• Q1 2026 guidance: revenue of $1,280M–$1,305M, adjusted EBITDA of $290M–$310M, adjusted EPS of $0.33–$0.36.

• Net leverage targeted at 3.1x–3.3x by end of 2026, with a path to sub-3x in 2027.

• Gross margin expected to expand by 40 bps; OpEx to rise 7% as investments continue in launches and R&D.