ELI LILLY & Co

RESULTS OF OPERATIONS

Revenue

The following table summarizes our revenue activity by region:

The following are components of the change in revenue compared with the prior year:

In the U.S. for the three and six months ended June 30, 2025, the volume increase and the lower realized prices were driven by Zepbound and Mounjaro.

Outside the U.S. for the three and six months ended June 30, 2025, the volume increase was primarily driven by Mounjaro. The volume increase outside the U.S. for the six months ended June 30, 2025 was also driven by Jardiance revenue that included a one-time benefit of $370.0 million associated with an amendment to our collaboration with Boehringer Ingelheim. Pursuant to the amendment, we and Boehringer Ingelheim adjusted commercialization responsibilities for Jardiance within certain markets.

The following table summarizes our revenue, including net product revenue and collaboration and other revenue, by product for the three months ended June 30, 2025 and 2024:

The following table summarizes our revenue, including net product revenue and collaboration and other revenue, by product for the six months ended June 30, 2025 and 2024:

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Revenue of Mounjaro increased 37 percent and 51 percent in the U.S. during the three and six months ended June 30, 2025, respectively, reflecting strong demand, partially offset by lower realized prices. Revenue outside the U.S. during the three and six months ended June 30, 2025 was $1.90 billion and $3.08 billion, respectively, compared to $677.2 million and $963.4 million during the three and six months ended June 30, 2024, respectively, primarily driven by volume growth, including from entry into new markets.

Revenue of Zepbound in the U.S. during the three and six months ended June 30, 2025 was $3.38 billion and $5.69 billion, respectively, compared to $1.24 billion and $1.76 billion during the three and six months ended June 30, 2024, respectively, primarily driven by increased demand, partially offset by lower realized prices.

Revenue of Verzenio increased 8 percent and 6 percent in the U.S. during the three and six months ended June 30, 2025, respectively, primarily driven by volume growth. Revenue outside of the U.S. increased 19 percent and 20 percent during the three and six months ended June 30, 2025, respectively, primarily driven by volume growth.

Gross Margin, Costs, and Expenses

The following table summarizes our gross margin, costs, and expenses:

NM - not meaningful

Gross margin as a percent of revenue for the three and six months ended June 30, 2025 increased 3.5 percentage points and 2.7 percentage points compared with the three and six months ended June 30, 2024, respectively, primarily driven by improved cost of production and favorable product mix, partially offset by lower realized prices.

Research and development expenses increased 23 percent and 16 percent for the three and six months ended June 30, 2025, respectively, driven by continued investments in our early and late-stage portfolio.

Marketing, selling, and administrative expenses increased 30 percent and 28 percent for the three and six months ended June 30, 2025, respectively, primarily driven by promotional efforts supporting ongoing and future launches.

Acquired IPR&D charges for the six months ended June 30, 2025 were primarily related to the acquisition of Scorpion's PI3Kα inhibitor program STX-478. See Note 3 to the consolidated condensed financial statements for additional information.

Asset impairment, restructuring, and other special charges for the three and six months ended June 30, 2024 related to a $435.0 million litigation charge. See Notes 5 and 10 to the consolidated condensed financial statements for additional information.

The effective tax rates were 16.5 percent and 17.7 percent for the three and six months ended June 30, 2025, respectively, compared to 15.6 percent and 13.9 percent for the three and six months ended June 30, 2024, respectively. The effective tax rate for the six months ended June 30, 2025 included the unfavorable tax impact of a non-deductible acquired IPR&D charge. The effective tax rates for the three and six months ended June 30, 2024 reflected the favorable tax impact of asset impairment, restructuring and other special charges.

For additional information for other-net, (income) expense, see Note 12 to the consolidated condensed financial statements.