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 nine months ended September 30, 2025, the volume increase and the lower realized prices were driven by Zepbound and Mounjaro.

Outside the U.S. for the three and nine months ended September 30, 2025, the volume increase was primarily driven by Mounjaro. The volume increase outside the U.S. for the three and nine months ended September 30, 2025 was also driven by $200.0 million and $570.0 million, respectively, in one-time benefits for Jardiance. See Note 4 to the consolidated condensed financial statements for additional information.

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

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

Revenue of Mounjaro increased 49 percent and 50 percent in the U.S. during the three and nine months ended September 30, 2025, respectively, reflecting strong demand, partially offset by lower realized prices. Revenue outside the U.S. during the three and nine months ended September 30, 2025 was $2.97 billion and $6.05 billion, respectively, compared to $728.0 million and $1.69 billion during the three and nine months ended September 30, 2024, respectively, primarily driven by volume growth.

Revenue of Zepbound in the U.S. during the three and nine months ended September 30, 2025 was $3.57 billion and $9.25 billion, respectively, compared to $1.26 billion and $3.02 billion during the three and nine months ended September 30, 2024, respectively, primarily driven by increased demand, partially offset by lower realized prices.

Revenue of Verzenio was relatively flat in the U.S. during the three months ended September 30, 2025, reflecting an increase in volume which was offset by lower realized prices. Revenue of Verzenio increased 4 percent in the U.S. during the nine months ended September 30, 2025 reflecting an increase in volume, partially offset by lower realized prices. Revenue outside the U.S. increased 20 percent during the three and nine months ended September 30, 2025, primarily driven by volume growth and, to a lesser extent, favorable impact on foreign exchange rates.

Gross Margin, Costs, and Expenses

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

Gross margin as a percent of revenue for the three months ended September 30, 2025 increased 1.9 percentage points, primarily driven by favorable product mix, partially offset by lower realized prices. Gross margin as a percent of revenue for the nine months ended September 30, 2025 increased 2.4 percentage points, primarily driven by favorable product mix and improved cost of production, partially offset by lower realized prices.

Research and development expenses increased 27 percent and 20 percent for the three and nine months ended September 30, 2025, respectively, driven by continued investments in our early and late-stage portfolio.

Marketing, selling, and administrative expenses increased 31 percent and 29 percent for the three and nine months ended September 30, 2025, respectively, primarily driven by promotional efforts supporting ongoing and future launches.

Acquired IPR&D charges for the three months ended September 30, 2025 were primarily related to the acquisition of SiteOne. Acquired IPR&D charges for the nine months ended September 30, 2025 were primarily related to the acquisitions of Scorpion's PI3Kα inhibitor program STX-478 and of SiteOne. Acquired IPR&D charges for the three and nine months ended September 30, 2024 were primarily related to the acquisition of Morphic. See Note 3 to the consolidated condensed financial statements for additional information.

Asset impairment, restructuring, and other special charges for the three and nine months ended September 30, 2025 were primarily related to a litigation charge, as well as acquisition and integration costs associated with the closing of our acquisition of Verve. Asset impairment, restructuring, and other special charges for the nine months ended September 30, 2024 were primarily related to a litigation charge. See Notes 5 and 10 to the consolidated condensed financial statements for additional information.

The effective tax rates were 22.8 percent and 19.8 percent for the three and nine months ended September 30, 2025, respectively, compared to 38.9 percent and 19.1 percent for the three and nine months ended September 30, 2024, respectively, primarily driven by unfavorable tax impacts of non-deductible acquired IPR&D charges, with a larger impact occurring in 2024. As a result of the OBBBA, the effective tax rates for the three and nine months ended September 30, 2025 were unfavorably impacted by incremental tax expense recognized in these periods. See Note 8 to the consolidated condensed financial statements for additional information.

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