Elanco Animal Health Soars 10.94% on Strong Q1 Earnings

On May 7, 2025, Elanco Animal Health's stock surged by 10.94% in pre-market trading, driven by a strong first-quarter performance and positive outlook for the year.

Elanco Animal Health reported its first-quarter 2025 financial results, highlighting a 4% organic constant currency revenue growth, despite a 1% year-over-year decline in reported revenue to $1.193 billion. The company's reported net income was $67 million, with adjusted net income reaching $184 million. Adjusted EBITDA stood at $276 million, or 23.1% of revenue. The reported EPS was $0.13, while the adjusted EPS was $0.37.

The company's net leverage ratio was 4.4x adjusted EBITDA, with expectations to end the year at 3.9x to 4.3x. Elanco raised its 2025 revenue guidance to $4.510 to $4.580 billion, driven by a foreign exchange tailwind and continued organic growth. The innovation revenue target was also increased to $660 to $740 million. The company expects a gross debt paydown of $450 to $500 million in 2025.

Elanco's diverse portfolio showed strong performance, with the Pet Health segment contributing $635 million in revenue, a 1% increase when excluding foreign exchange impacts. The Farm Animal segment generated $546 million, a 7% increase on an organic constant currency basis. Key products like Credelio Quattro™ and Zenrelia™ continued to perform well, with Credelio Quattro™ achieving approximately 10% dollar share of broad-spectrum sales into U.S. vet clinics in Q1. Zenrelia™ was used in approximately 11,000 U.S. clinics, with strong performance in Brazil, Canada, and Japan.

Elanco's strategic initiatives, including the monetization of certain lotilaner U.S. royalties for $295 million, further strengthened its financial position. The company's disciplined working capital management and favorable foreign exchange rates are expected to support its debt reduction efforts and overall financial health.