Elanco Animal Health Incorporated · NYSE:ELAN
Elanco Animal Health — Q2 2025 Earnings Presentation
37 slides from Elanco Animal Health's earnings presentation, Aug 7, 2025
Slide 1: 2025 Earnings – Second Quarter
2025 Earnings – Second Quarter D August 7, 2025
Slide 2: Notices and Disclaimers
2025 | Q2 Earnings Notices and Disclaimers Forward-Looking Statements. This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements concerning product launches and revenue from such products, our 2025 full year and
Slide 3: On Today’s Call
2025 | Q2 Earnings On Today’s Call Jeff Simmons Bob VanHimbergen Elanco Animal Health Elanco Animal Health President and Executive Vice President, Chief Executive Officer Chief Financial Officer 3
Slide 4: Accelerating Growth Through Delivering Our Diverse Portfolio
2025 | Q2 Earnings Accelerating Growth Strong Q2 Exceeding Expectations Through Delivering Revenue, Adj. EBITDA, and Adj. EPS all above guidance ranges; 8% Our Diverse Portfolio organic CC3 revenue growth led by U.S. Pet Health up 11%; 8th consecutive quarter of underlying growth of Innovation Innov
Slide 5: 8% Organic Constant Currency Revenue Growth
2025 | Q2 Earnings Q2 2024 to Q2 2025 Revenue Bridge 8% Organic Constant Currency1 Revenue Growth Revenue 8% 6% $ millions 10% Growth Growth Growth 6% 5% Growth 7% Growth 11% Growth $1,241 $(49) Growth $1,184 $16 Q2 2024 Aqua FX Rates Q2 2025 Actual Divestiture & CMO US Int’l US Int’l Actual Numbers
Slide 6: 2025 Innovation Sales Target Raised: Now Expected to Deliver an Incremental $720-$800 Million
2025 | Q2 Earnings 2025 Innovation Sales Target Raised: $720-$800M +$60M at midpoint Now Expected to H1 Actuals Deliver an Incremental $420M $720-$800 Million $461M H1 Pet Health Major innovation early in launch $275M curve with portfolio $133M exceeding the Farm $72M H1 Animal corporate gross margi
Slide 7: Updates on Select Major Innovation Products
2025 | Q2 Earnings Updates on Select Major Innovation Products • Patient market share doubled, from ~2% in • U.S. broad-spectrum endecto market at • Continued robust growth trajectory with March to ~4% in June1 $1.3B and growing almost 40%2 Q2 sales up over 60% • ~10,000 clinics buying vs. ~8,000 in
Slide 8: Deliver Consistent, High-Impact Innovation
2025 | Q2 Earnings Deliver Consistent, High-Impact Innovation Credelio Quattro Experior Zenrelia Strong performance Fast adoption from Approved in the EU continues; market heifer clearance with Q3 launch; expect share ahead of continuing revised U.S. label expectations language in Q4 IPP Po Innovati
Slide 9: Financial Results
Financial Results Second Quarter 2025 9
Slide 10: Impact of Price, Rate, and Volume on Revenue
2025 | Q2 Earnings Second Quarter 2025 Impact of Price, Rate, and Volume on Revenue Organic Aqua Organic CC1 $ Millions Revenue Price FX Rate Volume Volume Total Change Pet Health $643 4% 1% 6% 11% 10% Cattle $268 0% 4% 4% Poultry $215 2% 9% 7% Swine $100 1% 11% 10% Aqua $0 (100)% Farm Animal $583 2
Slide 11: Revenue by Geography and Species
2025 | Q2 Earnings Second Quarter 2025 Revenue by Geography and Species Organic CC1 $ Millions 2025 2024 Change (%) Change (%) US Pet Health $377 $338 11% 11% Int’l Pet Health $266 $241 10% 7% Total Pet Health $643 $579 11% 10% US Farm Animal $215 $206 5% 5% Int’l Farm Animal $368 $388 (5)% 6% Total
Slide 12: Adjusted Income Statement Highlights
2025 | Q2 Earnings Second Quarter 2025 Adjusted1 Income Statement Highlights Including Impact from Aqua Divestiture $ millions, except per share values 2025 2024 Change ($)2 Change (%)2 Revenue $1,241 $1,184 $57 5% Adjusted Gross Profit $709 $689 $20 3% Adjusted Gross Margin 57.3% 58.2% NM (90) bps
Slide 13: Adjusted EBITDA and Adjusted EPS Drivers
2025 | Q2 Earnings Second Quarter 2025 Adjusted EBITDA1 and Adjusted EPS1 Drivers Q2 Adjusted EBITDA Q2 Adjusted EPS $ millions $42 $(58) ~$(0.04) ~$(24) ~$3 $0.30 $275 $0.04 $(0.01) ~Flat $(0.03) $238 $0.26 Q2 2024 Aqua FX Gross Operating Q2 2025 Q2 2024 Aqua FX EBITDA Interest Tax Q2 2025 Actual D
Slide 14: Key Balance Sheet and Cash Flow Metrics
2025 | Q2 Earnings Key Balance Sheet and Cash Flow Metrics Debt Balances as of June 30, 2025 Q2 Net Leverage Ratio3 4.0x $ millions Net debt decreased by ~$500M in the quarter Operating Cash Flow (OCF) of $237M Reflects continued focus on working capital $3,975 $539 discipline and strong business pe
Slide 15: Consistent Capital Allocation Strategy
2025 | Q2 Earnings Consistent Capital Allocation Strategy Capital Allocation Priorities Strengthening Balance Sheet Substantial Improvement to Net Leverage Ratio Primary use of free cash flow 6 5.6x 5.5 Targeting below 3x over time Adj. Net Leverage Ratio Debt Paydown 5 4.5 4.3x1 3.8-4.1x1 4 3.5 R&D
Slide 16: Financial Guidance
Financial Guidance Third Quarter and Full Year 2025 16
Slide 17: Financial Guidance
2025 | Q2 Earnings 2025 Full Year Financial May August Comments Guidance Revenue $4,510 - $4,580 $4,570 - $4,620 Expect 5-6% organic CC2 growth; Includes ~$35M FX tailwind vs. May Reported Net Loss $(35) - $(7) $(38) - $(14) $ millions, except per share values Adjusted EBITDA1 $830 - $870 $850 - $89
Slide 18: Raising Adj. EBITDA and Adj. EPS Guidance
2025 | Q2 Earnings May Guidance to August Guidance Bridge Raising Adj. EBITDA1 and Adj. EPS1 Guidance Flowing through $15M FX benefit; $15M remaining FX benefit not 2025 Adj. EBITDA included in Aug. guidance offset by 2025 Adj. EPS macroeconomic uncertainty ~$28 $15 $0.04 $0.01 $0.85- ~$10 $850- $0.
Slide 19: Balanced Approach to Guidance: Mitigating Potential Tariff Impacts
2025 | Q2 Earnings Balanced Approach to Guidance Intervention Actions, FX & Business Execution Mitigating Potential Tariff Impacts Mitigating Actions Current State Potential Risk Scenarios Being Implemented Expect ~$10M-$14M impact to 2025 2025 tariffs related to Supply chain optimization Adj. EBI
Slide 20: Financial Guidance: Third Quarter 2025
2025 | Q2 Earnings Third Quarter 2025 Financial Q3 Guidance Comments Guidance Revenue $1,080 - $1,110 Expect 4%-6% organic CC2 growth; FX rates reflect end of July with minimal YoY impact Reported Net Loss $(66) - $(45) $ millions, except Adjusted EBITDA1 $160 - $180 Includes operating expenses up ~
Slide 21: Elanco’s Strategic Trajectory: Powerful Momentum into 2025
Elanco’s Strategic Trajectory: Powerful 2025 & Beyond Momentum into 2025 2021-2024 Poised for Sustainable Revenue Growth Innovation Delivered & Multiple potential blockbusters Enhanced in market and a stabilizing base 2019-2021 Capabilities to drive growth Balanced Mix & Accelerating contribution fr
Slide 22: Appendix
Appendix Reference slides and GAAP reported to non-GAAP adjusted reconciliations 22
Slide 23: Impact of Price, Rate, and Volume on Revenue
2025 | Q2 Earnings First Half 2025 Impact of Price, Rate, and Volume on Revenue Organic Aqua Organic CC1 Revenue Price FX Rate Volume Volume Total Change Pet Health $1,278 3% 0% 2% 5% 5% Cattle $540 (1)% 8% 9% Poultry $404 (1)% 2% 3% Swine $185 (1)% 6% 7% Aqua $0 (100)% Farm Animal $1,129 3% (1)% 4%
Slide 24: Revenue by Geography and Species
2025 | Q2 Earnings First Half 2025 Revenue by Geography and Species Organic CC1 2025 2024 Change Change US Pet Health $700 $671 $29 4% Int’l Pet Health $578 $547 $31 6% Total Pet Health $1,278 $1,218 $60 5% US Farm Animal $446 $402 $44 11% Int’l Farm Animal $683 $748 $(65) 4% Total Farm Animal $1,12
Slide 25: Adjusted Income Statement Highlights
2025 | Q2 Earnings First Half 2025 Adjusted1 Income Statement Highlights Including Impact from Aqua Divestiture $ millions, except per share values 2025 2024 Change ($)2 Change (%)2 Revenue $2,434 $2,389 $41 2% Adjusted Gross Profit $1,394 $1,379 $15 1% Adjusted Gross Margin 57.4% 57.7% NM (30) bps
Slide 26: Financial Guidance Full Year 2025
2025 | Q2 Earnings Full Year 2025 Financial May August Guidance Total Revenue $4,510 – $4,580 $4,570 – $4,620 & Additional Adjusted Gross Margin1 54.2% – 54.7% 54.5% – 55.0% Assumptions Operating Expenses $1,735 – $1,750 $1,760 – $1,770 Adjusted EBITDA1 $830 – $870 $850 – $890 $ millions, except Adj
Slide 27: Adjusted EBITDA Reconciliation
2025 | Q2 Earnings Second Quarter 2025 Adjusted 2025 2024 EBITDA Reported Net Income (Loss) $11 $(50) Reconciliation Net Interest Expense $48 $65 Income Tax Expense $14 $18 $ millions Depreciation and Amortization $169 $164 EBITDA $242 $197 Non-GAAP Adjustments Asset Impairment, Restructuring, and O
Slide 28: Reconciliation of GAAP Reported to Non-GAAP Adjusted
2025 | Q2 Earnings Second Quarter 2025 Reconciliation 2025 2024 of GAAP Net Income EPS Net Income EPS Reported to Non-GAAP GAAP Reported Net Income $11 $0.02 $(50) $(0.10) Adjusted Amortization of Intangible $136 $0.27 $131 $0.26 Assets Income Asset Impairment, Statement Items Restructuring, and Oth
Slide 29: Details of Adjustments to Certain GAAP Reported Measures
2025 | Q2 Earnings Second Quarter 2025 Details of For the three months ended June 30, 2025 and 2024: Adjustments to (1) Adjustments of $80 million for the three months ended June 30, 2024, principally included a $53 Certain GAAP million impairment charge related to a pet health IPR&D asset (IL-4R) a
Slide 30: Adjusted EBITDA Reconciliation
2025 | Q2 Earnings First Half 2025 Adjusted 2025 2024 EBITDA Reported Net Income (Loss) $78 $(18) Reconciliation Net Interest Expense $88 $131 Income Tax Expense (Benefit) $7 $(2) $ millions Depreciation and Amortization $330 $329 EBITDA $503 $440 Non-GAAP Adjustments Cost of Sales $1 $0 Asset Impai
Slide 31: Reconciliation of GAAP Reported to Non-GAAP Adjusted
2025 | Q2 Earnings First Half 2025 Reconciliation 2025 2024 of GAAP Net Income EPS Net Income EPS Reported to GAAP Reported Net Income $78 $0.16 $(18) $(0.04) Non-GAAP Adjusted Cost of Sales $1 $0.00 - - Income Amortization of Intangible Assets $264 $0.53 $264 $0.53 Statement Items Asset Impairment,
Slide 32: Details of Adjustments to Certain GAAP Reported Measures
2025 | Q2 Earnings First Half 2025 Details of For the six months ended June 30, 2025 and 2024: Adjustments to (1) Adjustments of $10 million for the six months ended June 30, 2025, primarily included $7 million of Certain GAAP upfront payments made in relation to new licensing arrangements. Adjustme
Slide 33: EBITDA Guidance Reconciliation
2025 | Q2 Earnings Full Year 2025 EBITDA Reported Net Loss $(38) - $(14) Guidance Approx. $220 w/ Royalty Reconciliation Net Interest Expense Monetization Liability Income Tax (Benefit) Expense $(13) - $8 $ millions Depreciation and Amortization Approx. $670 EBITDA $836 - $886 Non-GAAP Adjustments C
Slide 34: EPS Guidance Reconciliation
2025 | Q2 Earnings Full Year 2025 EPS Guidance Reported Loss per Share $(0.08) - $(0.03) Reconciliation Cost of Sales Approx. $0.00 Amortization of Intangible Assets Approx. $1.08 Asset Impairment, Restructuring, and Other Special Charges $0.02 - $0.04 Other Expense, Net $0.03 - $0.04 Royalty Moneti
Slide 35: EBITDA Guidance Reconciliation
2025 | Q2 Earnings Third Quarter 2025 EBITDA Guidance Reported Net Loss $(66) - $(45) Reconciliation Approx. $50 w/ Royalty Net Interest Expense Monetization Liability $ millions Income Tax (Benefit) Expense $(6) - $1 Depreciation and Amortization Approx. $170 EBITDA $158 - $182 Non-GAAP Adjustments
Slide 36: EPS Guidance Reconciliation
2025 | Q2 Earnings Third Quarter 2025 EPS Guidance Reconciliation Reported Loss per Share $(0.13) - $(0.09) Amortization of Intangible Assets Approx. $0.27 Asset Impairment, Restructuring, and Other Special Charges $0.00 - $0.01 Other Expense, Net Approx. $0.01 Royalty Monetization Approx. $0.01 Sub
Slide 37: © 2025 Elanco or its affiliates
© 2025 Elanco or its affiliates