ELAN · Elanco Animal Health Incorporated

Elanco Animal Health demonstrated strong operational momentum in the first quarter of 2026, with total revenue increasing 15% to $1,371 million, or 10% on an organic constant currency basis. This performance was driven by growth across all major species, with notable contributions from the company's innovation portfolio. Pet Health revenue grew 12% (7% organic constant currency), benefiting from new products and the addition of retail customers like Costco and Dollar General. Farm Animal revenue surged 18% (13% organic constant currency), led by strong demand in poultry and ruminants. The company highlighted that Zenrelia achieved trailing four-quarter blockbuster status and Credelio Quattro accelerated market share gains, underscoring the success of its innovation-led strategy.

Profitability metrics showed significant improvement. Adjusted EBITDA increased 21% to $334 million, driving margin expansion of 140 basis points to 24.5%. Adjusted net income rose to $204 million, resulting in Adjusted EPS of $0.40, an 8% increase year-over-year. While reported gross margin remained flat at 57.3%, adjusted gross margin decreased 40 basis points to 57.0%, primarily due to product mix shifts towards Farm Animal and the timing of inflationary costs, partially offset by price and volume benefits. Operating expenses increased 10%, driven by strategic investments in global product launches and higher compensation costs.

Management raised full-year 2026 guidance across all key metrics, reflecting confidence in sustained execution. Revenue guidance was increased to a range of $5,010 million to $5,085 million, implying 5% to 7% organic constant currency growth. Adjusted EBITDA guidance was raised to $975 million to $1,005 million, representing 10% growth at the midpoint. Adjusted EPS guidance was lifted to $1.03 to $1.09, a 13% increase at the midpoint. The company also improved its year-end net leverage ratio target to 3.0x to 3.2x, down from 3.5x at the end of Q1, indicating a focus on debt reduction and financial strengthening. The acquisition of AHV International, closed on April 30th, and the continued rollout of Befrena are expected to provide additional growth drivers.