Elanco Animal Health | 8-K: FY2026 Q2 Revenue Beats Estimate at USD 1.368 B

Revenue: As of FY2026 Q2, the actual value is USD 1.368 B, beating the estimate of USD 1.313 B.

EPS: As of FY2026 Q2, the actual value is USD 0.11, beating the estimate of USD 0.0133.

EBIT: As of FY2026 Q2, the actual value is USD 115 M.

Overall Performance

Elanco Animal Health Incorporated reported a total revenue of $1,368 million for the second quarter of 2026, marking a 10% increase year-over-year, or 8% organic constant currency growth. Reported Net Income was $54 million, while Adjusted Net Income reached $174 million. Adjusted EBITDA stood at $288 million, with an Adjusted EBITDA Margin of 21.2%. The net leverage ratio was 3.1x Adjusted EBITDA as of June 30, 2026.

Segment Revenue

Pet Health

Revenue for Pet Health was $718 million, an increase of 12% on a reported basis and 11% on an organic constant currency basis compared to the second quarter of 2025. This growth was driven by strong demand for Zenrelia and Credelio Quattro, contributing to a 9% year-over-year volume increase. The Advantage® Family of products generated $154 million in revenue, and Seresto® contributed $117 million.

Farm Animal

Farm Animal revenue was $633 million, representing a 9% increase on a reported basis and 5% on an organic constant currency basis. Volumes in this segment increased by 3%, mainly due to strong demand across the global ruminant portfolio. Cattle revenue was $313 million (up 17% reported, 12% organic constant currency), Poultry revenue was $223 million (up 4% reported, 2% organic constant currency), and Swine revenue was $97 million (down -3% reported, -4% organic constant currency).

Contract Manufacturing and Other

This segment generated $17 million in revenue, an increase of 13% compared to the prior year.

Operational Metrics

Gross Profit

Gross profit for the quarter was $798 million, a 12% increase from $713 million in the second quarter of 2025. The reported gross margin percentage was 58.3%. Adjusted gross profit was $789 million, with an adjusted gross margin percentage of 58.1%, an 80 basis point increase compared to 57.3% in the second quarter of 2025.

Operating Expenses

Total operating expenses amounted to $541 million, a 10% increase year-over-year. Marketing, selling, and administrative expenses rose by 12% to $449 million, while Research and development expenses remained flat at $92 million.

Asset Impairment, Restructuring, and Other Special Charges

These charges totaled $9 million, up from $1 million in the second quarter of 2025, primarily related to the 2025 restructuring plan ($3 million) and costs associated with the AHV acquisition ($2 million).

Net Interest Expense

Reported net interest expense was $59 million, an $11 million increase from $48 million in the second quarter of 2025. Adjusted net interest expense, excluding imputed interest, was $44 million, an increase of $6 million.

Effective Tax Rate

The reported effective tax rate was 3.3%, a significant decrease from 55.4% in the second quarter of 2025. The adjusted effective tax rate was 17.8%, down from 21.7% in the prior year.

Adjusted Net Income and EBITDA

Adjusted net income was $174 million, reflecting a 31% increase from $131 million in the second quarter of 2025. Adjusted EBITDA increased by 21% to $288 million from $238 million in the second quarter of 2025, with the Adjusted EBITDA margin improving to 21.2% from 19.2%.

Cash Flow and Balance Sheet

Operating Cash Flow

Cash provided by operations was $277 million in the second quarter of 2026, compared to $237 million in the second quarter of 2025.

Net Debt and Leverage

As of June 30, 2026, Elanco Animal Health Incorporated’s net debt was $3,159 million, and its net leverage ratio was 3.1x adjusted EBITDA, a 0.5x decrease from December 31, 2025.

Outlook / Guidance

Elanco Animal Health Incorporated has raised its full-year 2026 outlook, increasing the innovation revenue target to $1.25 billion and revenue guidance to $5.09 billion to $5.14 billion, representing 6% to 7% organic constant currency growth. The company also raised its Adjusted EBITDA guidance to $1.01 billion to $1.035 billion and improved its year-end net leverage ratio target to approximately 3.0x Adjusted EBITDA. For the third quarter of 2026, the company expects revenue between $1,195 million and $1,220 million, Adjusted EBITDA between $200 million and $215 million, and Adjusted Earnings per Share between $0.19 and $0.22.