Revenue growth accelerated to 10.2% in Q2 2026 with gross margin expanding to 58.3% from 46.5% a year earlier, though SG&A remains elevated at 32.8% of revenue.
Elanco Animal Health Incorporated (ELAN) annual income statement — 10-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 |
|---|
| Sales/Revenue | 5.02B | 4.71B | 4.44B | 4.42B | 4.41B | 4.76B | 3.27B | 3.07B | 3.07B | 2.89B | 2.91B |
| Revenue Growth % | 11.95% | 6.22% | 0.5% | 0.14% | -7.41% | 45.54% | 6.59% | 0.14% | 6.15% | -0.84% | - |
| Cost of Goods Sold | 2.38B | 2.67B | 2.53B | 2.48B | 2.44B | 2.69B | 2.03B | 1.67B | 1.77B | 1.72B | 1.58B |
| COGS % of Revenue | - | 56.52% | 56.99% | 56.12% | 55.34% | 56.42% | 61.91% | 54.4% | 57.75% | 59.37% | 54.22% |
| Gross Profit | 2.64B | 2.05B | 1.91B | 1.94B | 1.97B | 2.08B | 1.25B | 1.4B | 1.3B | 1.17B | 1.33B |
| Gross Margin % | 52.59% | 43.48% | 43.01% | 43.88% | 44.66% | 43.58% | 38.09% | 45.6% | 42.25% | 40.63% | 45.78% |
| Gross Profit Growth % | - | 7.39% | -1.5% | -1.62% | -5.11% | 66.51% | -10.96% | 8.08% | 10.37% | -11.99% | - |
| Operating Expenses | 2.18B | 1.8B | 1.66B | 1.61B | 1.59B | 1.77B | 1.32B | 1.03B | 981.8M | 1.03B | 1.05B |
| OpEx % of Revenue | - | 38.13% | 37.35% | 36.5% | 35.96% | 37.2% | 40.44% | 33.55% | 32.01% | 35.7% | 36.06% |
| Selling, General & Admin | 1.52B | 1.43B | 1.31B | 1.28B | 1.26B | 1.4B | 996.6M | 760.2M | 735.2M | 779.8M | 784.8M |
| SG&A % of Revenue | - | 30.33% | 29.6% | 29.09% | 28.68% | 29.45% | 30.45% | 24.75% | 23.97% | 26.99% | 26.94% |
| Research & Development | 371M | 368M | 344M | 327M | 321M | 369M | 327M | 270.1M | 246.6M | 251.7M | 265.8M |
| R&D % of Revenue | - | 7.8% | 7.75% | 7.4% | 7.28% | 7.75% | 9.99% | 8.8% | 8.04% | 8.71% | 9.12% |
| Other Operating Expenses | 2M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 462M | 252M | 251M | 326M | 384M | 304M | -76.8M | 370M | 313.8M | 142.4M | 283.2M |
| Operating Margin % | 9.2% | 5.34% | 5.65% | 7.38% | 8.71% | 6.38% | -2.35% | 12.05% | 10.23% | 4.93% | 9.72% |
| Operating Income Growth % | - | 0.4% | -23.01% | -15.1% | 26.32% | 495.83% | -120.76% | 17.91% | 120.37% | -49.72% | - |
| EBITDA | 1.16B | 932M | 913M | 1.02B | 1.07B | 1.02B | 440.1M | 684.5M | 609.8M | 460.8M | 537.6M |
| EBITDA Margin % | 23.01% | 19.77% | 20.57% | 23.09% | 24.17% | 21.41% | 13.45% | 22.29% | 19.88% | 15.95% | 18.45% |
| EBITDA Growth % | 32.3% | 2.08% | -10.49% | -4.32% | 4.51% | 131.77% | -35.7% | 12.25% | 32.34% | -14.29% | - |
| D&A (Non-Cash Add-back) | 693M | 680M | 662M | 694M | 682M | 716M | 516.9M | 314.5M | 296M | 318.4M | 254.4M |
| EBIT | 81M | -4M | 827M | -918M | 184M | -307M | -516M | 157.1M | 143.7M | -232.6M | -22.4M |
| Net Interest Income | -248M | -175M | -339M | -277M | -256M | -264M | -156M | -78.9M | -29.6M | 0 | 0 |
| Interest Income | 11M | 45M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 259M | 220M | 339M | 277M | 256M | 264M | 156M | 78.9M | 29.6M | 0 | 0 |
| Other Income/Expense | -628M | -476M | 237M | -1.52B | -456M | -875M | -595.2M | -291.8M | -199.7M | -375M | -305.6M |
| Pretax Income | -166M | -224M | 488M | -1.2B | -72M | -571M | -672M | 78.2M | 114.1M | -232.6M | -22.4M |
| Pretax Margin % | -3.31% | -4.75% | 10.99% | -27.05% | -1.63% | -11.99% | -20.53% | 2.55% | 3.72% | -8.05% | -0.77% |
| Income Tax | 33M | 8M | 150M | 36M | 6M | -88M | -111.9M | 10.3M | 27.6M | 78.1M | 25.5M |
| Effective Tax Rate % | -19.88% | -3.57% | 30.74% | -3.01% | -8.33% | 15.41% | 16.65% | 13.17% | 24.19% | -33.58% | -113.84% |
| Net Income | -199M | -232M | 338M | -1.23B | -78M | -483M | -560.1M | 67.9M | 86.5M | -310.7M | -47.9M |
| Net Margin % | -3.96% | -4.92% | 7.61% | -27.87% | -1.77% | -10.14% | -17.11% | 2.21% | 2.82% | -10.75% | -1.64% |
| Net Income Growth % | -145.85% | -168.64% | 127.46% | -1478.21% | 83.85% | 13.77% | -924.89% | -21.5% | 127.84% | -548.64% | - |
| Net Income (Continuing) | -199M | -232M | 338M | -1.23B | -78M | -483M | -560.1M | 67.9M | 86.5M | -310.7M | -47.9M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.39 | -0.47 | 0.68 | -2.50 | -0.15 | -0.97 | -1.27 | 0.18 | 0.28 | -0.87 | -0.13 |
| EPS Growth % | -146.19% | -169.12% | 127.2% | -1566.67% | 84.54% | 23.62% | -805.56% | -35.71% | 132.18% | -569.23% | - |
| EPS (Basic) | - | -0.47 | 0.68 | -2.50 | -0.15 | -0.97 | -1.27 | 0.18 | 0.28 | -0.87 | -0.13 |
| Diluted Shares Outstanding | 505.9M | 496.4M | 497.3M | 492.3M | 488.3M | 487.2M | 441.4M | 370.3M | 313.7M | 356.2M | 356.2M |
| Basic Shares Outstanding | 499.5M | 496.4M | 494M | 492.3M | 488.3M | 487.2M | 441.4M | 369M | 313.7M | 356.2M | 356.2M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying ELAN stock.
For fiscal year 2025, Elanco Animal Health Incorporated (ELAN) reported total revenue of $4.71B. This represents a 61.8% increase compared to $2.91B in 2016.
Elanco Animal Health Incorporated (ELAN) reported a net loss of $232.0M for the fiscal year ending 2025.
Elanco Animal Health Incorporated (ELAN) reported an operating income of $252.0M, resulting in an operating profit margin of 5.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Elanco Animal Health Incorporated (ELAN) generated $2.05B in gross profit for the year, representing a gross profit margin of 43.5%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Elevated debt and competitive pressure
Metrics are mathematically derived from official filings.
Pet Health Momentum Drives Acceleration
ELAN's revenue growth accelerated to 10.2% in Q2 2026, up from 4.8% a year earlier, driven by 11% growth in U.S. Pet Health and Farm Animal segments, as reported in the latest quarterly filing.
The 10.2% revenue growth in Q2 2026 marks a clear acceleration from the 4.8% reported in Q2 2025, with sequential improvement from 14.9% in Q1 2026. This suggests that the innovation pipeline, particularly Zenrelia, is translating into tangible market share gains. However, the sustainability of this growth is uncertain, as it may be influenced by launch timing and channel dynamics, warranting close monitoring of distributor inventory levels.
Gross Margin Expansion Signals Mix Shift
Gross margin jumped to 58.3% in Q2 2026 from 46.5% a year earlier, reflecting a favorable product mix and cost discipline, though still below Zoetis's 70.5%.
The 1,180 basis point year-over-year gross margin improvement is striking, but it may be partly due to one-time items or product mix shifts. The structural gap to Zoetis remains wide, indicating that ELAN's portfolio still carries a higher proportion of lower-margin livestock and off-patent products. Investors should assess whether this margin level is sustainable as the company scales new launches and faces competitive pricing pressure.
Operating Leverage Emerges from Cost Control
Operating income swung from $85M in Q2 2025 to $109M in Q2 2026, with operating margin expanding to 8.0% from 6.8%, as SG&A growth lagged revenue growth.
The operating leverage is evident as SG&A increased only 12.3% year-over-year while revenue grew 10.2%, but the absolute SG&A of $449M remains high relative to peers. The 22.4% operating margin in Q1 2026 appears anomalous, likely due to a one-time gain or cost timing, and the 8.0% in Q2 is more representative. This suggests that overhead efficiency is improving but remains a drag on profitability compared to Zoetis's 38% operating margin.
GAAP Losses Mask Underlying Cash Generation
Net income swung to $54M in Q2 2026 from $11M a year earlier, but Q4 2025's -$276M loss highlights volatility from amortization and one-time charges, as per financial statements.
The GAAP net income is heavily impacted by non-cash amortization from the Bayer acquisition, making adjusted metrics more indicative of cash earnings. The negative ROE of -3.7% and net margin of -4.92% over the trailing twelve months suggest that reported profitability is not yet reflecting the operational turnaround. Investors should focus on free cash flow and adjusted EBITDA to gauge the true earnings power, while monitoring for potential channel loading that could inflate near-term revenue.
COGS and SG&A Pressures Persist
COGS as a percentage of revenue fell to 41.7% in Q2 2026 from 53.5% a year earlier, but SG&A remains elevated at 32.8% of revenue, per the income statement.
The reduction in COGS is a positive sign, likely due to product mix and cost savings initiatives, but SG&A remains a significant cost line, reflecting the large sales force and marketing investments needed to support new launches. The company's high fixed-cost base makes it sensitive to volume fluctuations, and any slowdown in pet health demand could quickly erode operating leverage. Management's expense discipline will be critical to sustaining margin improvement.
Q2 2026 Marks a Turnaround Inflection
Q2 2026 delivered the strongest gross margin (58.3%) and positive net income ($54M) in the past ten quarters, signaling a potential inflection from the innovation cycle.
The combination of 10.2% revenue growth, 58.3% gross margin, and positive net income in Q2 2026 suggests that the company is finally seeing the benefits of its innovation pipeline and portfolio pruning. However, this is only one quarter, and the prior Q4 2025 loss of -$276M shows how volatile earnings can be. The lasting impact will depend on whether the company can sustain this momentum and continue to deleverage, as the debt load remains a constraint.
Growth Sustainability and Debt Overhang
Despite the strong Q2 2026, revenue growth of 10.2% may be inflated by launch timing, and the elevated debt load (D/E 0.61) could limit future investments, as per balance sheet data.
Short-sellers would argue that the 8% organic constant currency growth is not durable, given the competitive pressure from Zoetis and the potential for channel stuffing. The negative ROE and net margin over the trailing twelve months indicate that the company is still not generating adequate returns on equity. Additionally, the high debt load from the Bayer acquisition may force management to prioritize deleveraging over R&D and commercial investments, potentially stalling the innovation pipeline. Investors should monitor whether the gross margin expansion is sustainable or a result of one-time tailwinds.