Elanco's Q1 2025 Earnings Call: Contradictions on Zenrelia's Market Share, Innovation Growth, and Investment Strategy

Zenrelia market share and penetration, innovation revenue growth expectations, innovation sales expectations, Zenrelia's label and market response, investment cadence and impact on 2025 are the key contradictions discussed in Elanco Animal Health's latest 2025Q1 earnings call.



Revenue and Earnings Outperformance:
- Elanco exceeded first quarter guidance for revenue, adjusted EBITDA, and adjusted EPS.
- The growth was driven by 4% organic constant currency revenue growth, evenly driven by price and volume, and the contribution of new products.

Innovation and Product Revenue:
- Elanco reported $198 million in innovation revenue for the first quarter, with expected full-year innovation revenue raised to $660 million to $740 million.
- This increase was driven by strong performance from new products such as Credelio Quattro and Zenrelia.

Tariff Mitigation and Impact:
- Elanco estimates the total net impact of tariffs on 2025 adjusted EBITDA as $16 million to $20 million, primarily from U.S. and China tariffs.
- The company is implementing strategies like supply chain optimization and price adjustments to mitigate the impact.

Geographic and Segment Performance:
- International pet health achieved 5% organic constant currency revenue growth, with contributions from products like AdTab and Zenrelia.
- U.S. pet health business rebounded with 13% growth in March, driven by better consumer engagement post-cold weather, and strong sales from Zenrelia and Credelio Quattro.