Eli Lilly Q2 2025: Mounjaro & Zepbound Fuel 38% Revenue Growth

Pharmaceutical giant Eli Lilly & Co. (LLY) has released its financial results for the second quarter of 2025, and the numbers reveal a company experiencing remarkable growth. We are diving into the company's latest 10-Q filing with the SEC to break down its performance and explore the key factors driving its success. The report highlights explosive revenue growth propelled by a pair of blockbuster drugs that are reshaping the company's financial landscape.

The Mounjaro and Zepbound Juggernaut

Eli Lilly's revenue for the second quarter surged an impressive 38% to $15.6 billion, a significant jump from $11.3 billion in the same quarter last year. The growth was even more pronounced for the first six months of 2025, climbing 41% to $28.3 billion.

This phenomenal growth is almost entirely powered by the company's highly successful cardiometabolic drugs, Mounjaro and Zepbound, which are used to treat diabetes and obesity. Their quarterly performance was striking:

• Mounjaro: Revenue reached $5.2 billion, a 68% increase year-over-year.
• Zepbound: Revenue grew 172% to $3.4 billion.

Combined, these two treatments generated $8.58 billion in the quarter, accounting for approximately 55% of the company's total revenue. This rapid market adoption underscores a successful strategic pivot, as sales of older drugs like Trulicity show signs of decline. The growth was strong across the board, with U.S. revenue up 38% and international revenue up 37%.

Translating Revenue to Profit

This surge in sales has had a powerful effect on the company's profitability. The following flow diagram provides a visual breakdown of how Eli Lilly's revenue is converted into profit after accounting for all costs and expenses.

For the first six months of 2025, net income grew a substantial 62% to $8.4 billion, up from $5.2 billion in the first half of 2024. This translated to a diluted Earnings Per Share (EPS)—a key indicator of profitability for shareholders—of $9.35, a 62% increase from the prior year.

Key takeaways from the company's expenses include:

• Improving Gross Margin: The company’s gross margin as a percentage of revenue improved to 83.5% for the first half of the year, up from 80.8% in 2024. This indicates strong underlying profitability on its products, even as the company reported lower realized prices in the U.S.
• Investing for the Future: Eli Lilly is heavily reinvesting its earnings. Research and development (R&D) expenses increased 16% to $6.1 billion for the first half of the year, while Marketing, Selling, and Administrative costs rose 28% to $5.2 billion. This reflects a dual focus on discovering the next generation of drugs while maximizing the reach of its current blockbusters.

Financial Position and Shareholder Value

A look at the balance sheet shows total assets have expanded to $100.9 billion from $78.7 billion at the end of 2024. Notably, this includes a sharp rise in prepaid expenses, driven by $16.4 billion in prepaid taxes.

The company is also actively returning capital to its investors. In the first six months of 2025, Eli Lilly:

• Paid $2.7 billion in dividends.
• Repurchased $1.9 billion of its own stock.

The Path Forward

Eli Lilly is currently demonstrating exceptional performance, largely due to the phenomenal success of its diabetes and weight-loss treatments. However, this success is not without challenges. The company faces intense competition and is subject to ongoing regulatory scrutiny and legal proceedings, particularly concerning drug pricing, as detailed in the filing.

The heavy reliance on a few key products remains a significant risk, but the company's substantial R&D investments show a clear strategy to diversify and build a robust pipeline for the future. For now, Eli Lilly's results serve as a powerful example of success in the pharmaceutical industry, and stakeholders will be watching closely to see if this impressive momentum can be sustained.