The Eli Lilly Q2 2026 earnings report delivered exactly what investors have come to expect from the Indianapolis drugmaker lately: enormous top-line growth, a raised outlook, and a deal spree large enough to complicate the bottom line. Revenue climbed 48% to $23.0 billion for the quarter, and management pushed full-year revenue guidance higher on the strength of it.

Headline Numbers

Second-quarter revenue reached $22.97 billion, up from $15.56 billion a year earlier. Reported net income came in at $7.1 billion, translating to earnings per share of $7.94 — a 26% increase. On a non-GAAP basis, EPS reached $8.38, up 33%.

Those EPS figures carry an important asterisk. Both include $3.03 per share in acquired in-process research and development charges tied to the quarter’s dealmaking, compared with just $0.14 in the same period last year. Strip that out and the underlying earnings picture looks considerably stronger.

Chair and CEO David A. Ricks framed the quarter around momentum and reinvestment, pointing to the company’s next-generation weight-loss candidate retatrutide, expanding manufacturing capacity, and a wave of new pipeline assets acquired through business development. After 150 years in operation, he argued, the company’s outlook has never looked better.

Where the Growth Came From

The revenue story is overwhelmingly a volume story. Global volume rose 60%, offset partially by a 13% decline in realized prices.

In the United States, revenue grew 33% to $14.4 billion. Volume was up 37%, driven by Zepbound and Mounjaro, while realized prices slipped 3%. That price figure benefited from favorable adjustments to rebate and discount estimates — without them, U.S. pricing would have fallen roughly 9%.

International performance was even more dramatic. Revenue outside the U.S. surged 80% to $8.6 billion on a 113% volume increase, with prices down 36%. The steep price decline stems largely from Mounjaro’s addition to China’s National Reimbursement Drug List, a classic trade of margin for access. Jardiance results outside the U.S. also included a $250 million sales-based milestone from Lilly’s Boehringer Ingelheim collaboration.

The Two Drugs Carrying the Quarter

Mounjaro generated $9.9 billion globally, a 91% jump. U.S. sales rose 45% to $4.8 billion, while international revenue tripled to $5.2 billion — a 172% increase.

Zepbound brought in $4.9 billion in the U.S., up 44%, despite previously announced cuts to cash-pay pricing.

Together the two tirzepatide products account for well over half of total company revenue, a concentration that is both the source of Lilly’s current strength and its most obvious structural risk.

Newer products showed encouraging traction. Ebglyss more than doubled to $201 million. Jaypirca rose 56% to $192 million. Kisunla reached $167 million against $49 million a year ago. Foundayo, the newly launched oral GLP-1, contributed $98 million in its first quarter on the market. Collectively, key products across immunology, oncology and neuroscience grew 121% year over year.

Margins and Spending

Gross margin expanded 50% to $19.7 billion, reaching 85.8% of revenue — an improvement of 1.5 percentage points. Better production costs and a favorable product mix drove the gain, partly offset by weaker pricing.

Research and development spending rose 14% to $3.8 billion, or 17% of revenue. Marketing, selling and administrative costs increased 25% to $3.4 billion as the company supported active and upcoming launches.

Two line items stand out. Acquired IPR&D charges hit $2.8 billion, up from $154 million, mostly from the Orna Therapeutics and Ajax Therapeutics deals. Asset impairment and restructuring charges of $703 million related largely to accelerated equity vesting and integration costs from the Kelonia and Centessa acquisitions.

The tax rate climbed to 23.3% from 16.5%, primarily because acquired IPR&D charges are not deductible.

Guidance: Up, Then Partly Offset

Lilly lifted full-year revenue guidance to a range of $85.0 billion to $87.0 billion, up from $82 billion to $85 billion. Performance margin guidance also improved, moving to 49.0% to 50.5% from the prior 47.0% to 48.5%.

The EPS picture is more nuanced. Underlying business strength added $2.78 per share at the midpoint — but the $3.03 in acquired IPR&D charges more than consumed that gain. The result is a narrowed range of $35.50 to $36.50, versus $35.50 to $37.00 previously.

In plain terms: the operating business outperformed, and the company spent the upside on acquisitions.

Pipeline and Regulatory Progress

Retatrutide, Lilly’s triple agonist, posted positive results in three additional Phase 3 obesity trials during the quarter. The company now says its clinical data package is complete to support global registration across obesity, obstructive sleep apnea and knee osteoarthritis pain, with a Biologics License Application planned for the FDA in the first quarter of 2027.

Other notable developments included:

FDA approval of Ebglyss for eight-week maintenance dosing in moderate-to-severe atopic dermatitis
European Commission approval of Jaypirca as a monotherapy for chronic lymphocytic leukemia across all lines of therapy
U.S. submission of orforglipron for type 2 diabetes
Breakthrough Therapy designation for olomorasib in previously treated KRAS G12C-mutant advanced pancreatic cancer
Retevmo data showing an 83% reduction in recurrence or death risk as adjuvant therapy in early-stage RET fusion-positive lung cancer
Jaypirca reducing progression or death risk by 45% when added to a time-limited venetoclax regimen

Buying the Future

The quarter’s acquisitions were substantial: Orna Therapeutics, Ajax Therapeutics, Centessa Pharmaceuticals and Kelonia Therapeutics all closed within the period. After quarter end, Lilly completed three more deals to assemble an infectious disease portfolio and agreed to acquire AtaiBeckley, targeting treatment-resistant depression and other mental health conditions.

On the physical side, the company committed an additional $4.5 billion to expand its Indiana manufacturing footprint and opened its first dedicated genetic medicine facility.

The Read-Through

Lilly is converting extraordinary GLP-1 demand into capacity, pipeline breadth and therapeutic diversification — quickly. The reported EPS growth looks modest next to 48% revenue expansion, but that gap is a spending choice, not a demand problem.

The open questions are familiar ones: how much pricing erosion the incretin franchise absorbs as competition and government reimbursement pressure build, and whether the acquired assets eventually justify their cost. For now, the operating engine is running hot enough to fund the experiment.