Eli Lilly's Q3 earnings smashed Wall Street forecasts on Thursday, as the diabetes drug Mounjaro and the obesity injection Zepbound powered revenue 39% higher to $24.4 billion and the Indianapolis drugmaker raised its full-year sales outlook by $5.5 billion at the midpoint. The result extends one of the most remarkable runs in modern pharmaceuticals, with Lilly's weight-loss and diabetes franchise now generating more in a single quarter than most drug companies earn in a year.
Shares rose about 3.3% in premarket trading to $1,331 after the release, as investors welcomed a beat that came despite a $4.2 billion charge for acquired research and development. Revenue of $24.397 billion topped the $22.61 billion analysts had expected, according to LSEG data cited by Reuters, while adjusted earnings of $7.48 a share beat the $6.26 consensus. The company now expects 2026 revenue of $91 billion to $92 billion, up from $85 billion to $87 billion, a forecast that would put Lilly within sight of a $100 billion sales year.
Lilly reported its third-quarter results before the US market opened on Thursday, October 29, and the release read like a victory lap for its tirzepatide franchise. Worldwide revenue rose to $24.4 billion from $17.6 billion a year earlier, driven by a 53% increase in sales volume that more than offset a 15% fall in realised prices. Reported net income climbed 16% to $6.45 billion, or $7.22 a share, up from $5.58 billion, or $6.21 a share, in the same quarter of 2025.
On the adjusted basis that analysts track most closely, net income was $6.68 billion and earnings were $7.48 a share, up 7% from $7.02 a year earlier. Both figures absorbed $4.57 a share in acquired in-process research and development charges, against just $0.71 a share a year earlier, mostly tied to the acquisitions of AtaiBeckley and Curevo. Without those charges, the underlying profit beat would have been larger still, which is why Lilly was able to raise its underlying profit guidance even as its headline profit range came down.
The quarter also included about $900 million of benefits, mainly $410 million in milestones tied to the diabetes drug Jardiance under Lilly's collaboration with Boehringer Ingelheim, plus favourable adjustments to rebate and discount estimates. Lilly said no further Jardiance milestones remain, so that particular tailwind will not repeat. Even stripping it out, however, the core business grew strongly: revenue in the United States rose 34% to $15.1 billion, and revenue outside the US rose 47% to $9.3 billion, with Mounjaro driving the international surge.
Five years ago, Lilly was a diversified drugmaker best known for insulin, cancer medicines and immunology drugs. Today it is, above all, a tirzepatide company. Mounjaro, approved for type 2 diabetes, and Zepbound, the same molecule sold for obesity, together brought in $16.1 billion in the third quarter alone, roughly two-thirds of the company's total revenue. For the first nine months of 2026, Mounjaro sales reached $29.3 billion, up 89% from a year earlier, while Zepbound reached $14.4 billion, up 56%.
The growth has come with a trade-off that investors have watched closely: prices are falling even as volumes explode. In the third quarter, US volume rose 41% while realised prices fell 7%, and outside the US, volume surged 76% while prices fell 29%. The international price drop was driven largely by Mounjaro's inclusion on China's National Reimbursement Drug List in the first quarter of 2026, which cut the price Chinese patients and insurers pay but opened the drug to a far larger market. A similar tension is playing out in the US, where a $50-a-month price tag for Medicare recipients has raised fears of severe price erosion, even as volumes climb.
So far, volume is winning. Analysts at Bernstein noted that Lilly captured about 70% of the 700,000 Medicare patients who recently started treatment with a GLP-1 medicine, a sign that the lower Medicare price is expanding the market rather than simply shrinking Lilly's takings. The second quarter set the pattern: revenue rose 47.7% to $22.97 billion, and management raised 2026 guidance for the second time, to $85 billion to $87 billion. Thursday's third raise, to $91 billion to $92 billion, suggests that momentum has not faded.
Beyond tirzepatide, Lilly's newer products are starting to contribute. Jaypirca, a blood-cancer drug, grew 59% to $228 million; Ebglyss, for eczema, grew 59% to $202 million; Kisunla, for Alzheimer's disease, jumped 175% to $193 million; and Omvoh, for ulcerative colitis and Crohn's disease, grew 76% to $114 million. Lilly said revenue from its key products in immunology, oncology and neuroscience doubled in the quarter, and total revenue for the first nine months of 2026 reached $67.2 billion, up 46% from a year earlier.
Mounjaro remains the single biggest drug in the world by quarterly sales. Its $10.72 billion in the third quarter beat the $10.16 billion analysts had expected, according to LSEG, with US sales of $5.0 billion, up 41% on strong demand, and international sales of $5.7 billion, up 93% on volume growth. Zepbound, sold only in the US in this reporting line, brought in $5.35 billion, up 48%, against a $5.09 billion consensus, again on demand rather than price.
The numbers matter because they answer the question hanging over every GLP-1 maker: can demand keep growing fast enough to outrun falling prices? In the third quarter, the answer was yes, emphatically. Gross margin rose 40% to $20.5 billion, or 83.9% of revenue, up a full percentage point from a year earlier, as a favourable product mix and lower production costs offset the price declines. Research spending rose 23% to $4.2 billion, or 17% of revenue, and marketing and administrative spending rose 14% to $3.1 billion as Lilly promoted its ongoing and planned launches.
Foundayo, the oral GLP-1 pill Lilly hopes will extend its franchise to patients who dislike injections, was the exception. Its $184 million in quarterly sales missed the $231.2 million estimate, a reminder that a new launch takes time even for a company on a hot streak. Lilly highlighted instead that Foundayo showed cardiovascular safety alongside sustained blood-sugar reduction and weight loss in its largest and longest type 2 diabetes study, data it will need to persuade doctors and insurers to embrace a daily pill over a weekly injection.
Lilly chair and chief executive David A. Ricks struck a confident note in the release. "Lilly had another strong quarter, exceeding our prior expectations and allowing us to raise our full-year outlook," he said. "Revenue growth was driven by broad global consumer demand for Mounjaro and Zepbound, the global launches of Foundayo, expanded U.S. coverage for obesity care and a doubling in our newest products in oncology, immunology and neuroscience. To drive durable long-term growth, we continue to invest in our drug-making and technology capabilities, with multiple business development deals and partnerships signed and closed, and with new manufacturing expansions in Texas and Virginia. Lilly is executing well across the value chain, and our potential for impact on human health continues to expand."
The market's first verdict was positive. Shares rose 3.3% in premarket trading to $1,331, according to the Wall Street Journal, after earlier reports put the gain at about 4%. Analysts focused less on the headline profit guidance cut, which was fully explained by the $4.57 a share in acquired research charges, and more on the revenue raise and the underlying profit improvement of $4.07 a share at the midpoint. The charges, Lilly said, related mainly to its AtaiBeckley and Curevo deals, and they are the kind of one-off cost investors typically look through when the underlying business is growing at nearly 40%.
The regulatory news in the quarter gave investors further reasons for confidence. The US Food and Drug Administration approved Mounjaro to reduce cardiovascular risk in adults with type 2 diabetes, approved Onswik, a once-weekly basal insulin, for adults with type 2 diabetes, and approved Inluriyo in combination with Verzenio for adults with advanced or metastatic breast cancer carrying specific mutations. It also expanded Jaypirca's use in previously untreated chronic lymphocytic leukaemia and small lymphocytic lymphoma, and approved Olumiant for children aged 12 and older with severe hair loss from alopecia areata.
Lilly's quarter matters well beyond one company's share price, because it is the clearest test yet of the economics of the GLP-1 boom. These drugs have gone from niche diabetes treatments to a defining health story of the decade, reshaping food, fitness, airlines, fashion and, now, public health budgets. If Lilly can grow revenue 39% while cutting prices for Medicare patients and Chinese buyers, the model that seemed fragile a year ago, in which price cuts would swamp volume gains, looks far more durable.
It also matters for the competitive race. Novo Nordisk, the Danish maker of Ozempic and Wegovy, has struggled with slower growth and leadership turmoil, and Lilly's widening lead, now reflected in a market value of about $1.2 trillion, gives it the cash to do what smaller rivals cannot: buy pipeline assets, build factories and fund the next generation of obesity drugs. Lilly completed its acquisition of AtaiBeckley in the quarter to advance treatments for treatment-resistant depression and other mental health conditions, and completed the Merida Biosciences acquisition after the quarter ended to advance treatments for serious autoimmune and allergic diseases. It also broke ground in Richmond, Virginia, as part of a build-out of 10 new US manufacturing sites.
For patients, the stakes are more direct. Cheaper access through Medicare and national reimbursement lists means more people can get drugs that, a few years ago, cost more than $1,000 a month in the US. But it also raises questions about supply, about whether health systems can absorb millions of new patients, and about what happens when today's injections are replaced by pills like Foundayo and by still more potent experimental drugs. Lilly's pipeline offers a glimpse: its triple-agonist retatrutide delivered greater blood-sugar reduction and more than double the weight loss of the highest approved dose of Ozempic in a head-to-head Phase 3 trial, and its EloraTZP combination beat tirzepatide itself on weight loss and blood-sugar control in Phase 2, with Phase 3 trials starting in the fourth quarter.
The immediate focus shifts to Amazon's earnings after the closing bell on Thursday, which will test whether the broader corporate earnings season can match Lilly's strength, and to Friday's trading, when investors will judge whether the premarket gain holds. For Lilly itself, the next milestones are the Phase 3 programme for EloraTZP, further data on retatrutide, and the commercial ramp for Foundayo, which needs to prove it can convert injection users and attract needle-shy patients in larger numbers.
Management will also face questions about the profit outlook. The updated adjusted earnings range of $35 to $36 a share is slightly below the previous $35.50 to $36.50, but only because the $4.57 in deal charges outweighs the $4.07 underlying improvement. If Lilly closes no further large deals in the fourth quarter, the underlying trend points to a stronger 2027. If it keeps buying, investors will want to see the acquired assets, like AtaiBeckley and Curevo, turn into approved medicines rather than just charges on the income statement.
Longer term, the question is how long 40%-plus growth can last. Mounjaro's international surge will slow as the China reimbursement effect annualises, and US price pressure will not disappear. But with nine-month revenue already at $67.2 billion and full-year guidance at $91 billion to $92 billion, Lilly has given itself a high bar for 2027, and the market will expect it to clear it. The next earnings report, in early 2027, will show whether the GLP-1 engine is still accelerating, or whether the third quarter was its peak.
Revenue rose 39% to $24.4 billion, reported net income rose 16% to $6.45 billion, and reported earnings were $7.22 a share. Adjusted earnings were $7.48 a share, beating the $6.26 analysts had expected.
Mounjaro sales jumped 65% to $10.72 billion and Zepbound sales rose 49% to $5.35 billion, both ahead of estimates, as surging volumes more than offset falling prices in the US and abroad.
It raised underlying profit guidance by $4.07 a share at the midpoint, but $4.57 a share in acquired research charges from the AtaiBeckley and Curevo deals more than offset that, leaving a headline range of $35 to $36 a share, slightly below the previous $35.50 to $36.50.
Foundayo is Lilly's oral GLP-1 pill, an alternative to weekly injections. It generated $184 million in the quarter, below the $231.2 million expected, as the launch is still building, though Lilly highlighted strong cardiovascular safety and weight-loss data from its largest diabetes study.
Investors will watch the Phase 3 programme for EloraTZP, further retatrutide data, the Foundayo ramp, and whether Lilly can sustain growth into 2027 after raising 2026 revenue guidance to $91 billion to $92 billion.
Related coverage on US News Pulse: Microsoft's earnings beat as Azure jumps 48%, Alphabet's Q3 miss sends shares down 10%, and Amazon's Q3 earnings preview ahead of Thursday's close.
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