Elanco Raises 2025 Innovation Revenue Outlook to $720M-$800M, Signals Margin Expansion Through New Launches.

Elanco Animal Health raised its 2025 innovation revenue outlook to $720M-$800M, signaling margin expansion through new launches. CEO Jeffrey N. Simmons highlighted the company's 8% organic constant currency growth in Q2 2025, exceeding guidance for revenue, adjusted EBITDA, and adjusted EPS.

Elanco Animal Health Incorporated (NYSE: ELAN) reported its second-quarter 2025 earnings on Thursday, posting adjusted earnings per share (EPS) of $0.26, down 13% year over year. Despite the decline, earnings exceeded both the company’s guidance range of $0.17 to $0.21 and the consensus estimate of $0.20 [1]. Revenue came in at $1.24 billion, surpassing the consensus estimate of $1.19 billion and exceeding management’s guidance of $1.175 billion to $1.195 billion [1]. Sales grew 5% on a reported basis and 8% on an organic constant currency basis [1].

Adjusted EBITDA was $238 million in the second quarter of 2025, a 13.5% decrease [1]. Pet Health revenue was $643 million, an increase of 11% on a reported basis, or 10% on an organic constant currency basis [1]. The increase in pet health revenue included a 4% increase in price. New products primarily drove year-over-year volume increases of 6% [1]. The Advantage Family of products and Seresto contributed revenue of $147 million and $113 million, respectively [1].

Farm Animal revenue was $583 million, a decrease of 2% on a reported basis due to the sale of the aqua business, and a 6% increase on an organic constant currency basis [1]. Volumes were up 4%, driven by increased volumes in U.S. cattle, led by Experior, and increased volumes in international poultry and swine [1]. The business has seen demand recovery for international swine products, while international poultry demand remains strong [1]. Sales of the company’s international farm animal products benefited from accelerated customer purchases, primarily in China, in advance of expected future tariff increases, estimated to have shifted approximately $10 to $20 million of expected future purchases to the second quarter [1].

Elanco raised its 2025 innovation revenue outlook to $720M-$800M, signaling margin expansion through new launches [3]. CEO Jeffrey N. Simmons highlighted the company's 8% organic constant currency growth in Q2 2025, exceeding guidance for revenue, adjusted EBITDA, and adjusted EPS [3]. The company expects a tailwind to revenue of approximately $35 million from the favorable impact of foreign exchange rates compared with the May earnings call [1]. Elanco anticipates a tailwind to revenue of approximately $10 million from the favorable impact of foreign exchange rates compared to the prior year [1].

Elanco has provided a positive outlook for the remainder of 2025, projecting full-year organic constant currency growth of 5-6% [3]. The company expects adjusted EBITDA to range between $850 million and $890 million, with adjusted EPS forecasted at $0.85-$0.91 [3]. Upcoming product launches, including the Advantage collar and IL-31, are anticipated to drive further growth [3]. Elanco's stock surged to a 52-week high of $15.79 following the release of stronger-than-expected financial results for the second quarter of 2025 [1].

References:
[1] https://finance.yahoo.com/news/elanco-animal-health-soars-past-162357289.html
[2] https://www.marketscreener.com/news/elanco-animal-health-incorporated-updates-earnings-guidance-for-the-full-year-2025-ce7c5edfdd8df524
[3] https://ca.investing.com/news/transcripts/earnings-call-transcript-elanco-animal-health-beats-q2-2025-expectations-93CH-4144435