Global pharmaceutical company Eli Lilly (NYSE: LLY) reported Q3 2026 results beating Wall Street’s revenue expectations, with revenue up 38.6% year on year to $24.4 billion. The company’s full-year revenue guidance of $91.5 billion at the midpoint came in 3.3% above analysts’ consensus estimates. Its non-GAAP profit of $7.48 per share was 13.2% above analysts’ consensus estimates.

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"Lilly had another strong quarter, exceeding our prior expectations and allowing us to raise our full-year outlook," said David A. Ricks, Lilly chair and CEO. "Revenue growth was driven by broad global consumer demand for Mounjaro and Zepbound, the global launches of Foundayo, expanded U.S. coverage for obesity care and a doubling in our newest products in oncology, immunology and neuroscience. To drive durable long-term growth, we continue to invest in our drug-making and technology capabilities, with multiple business development deals and partnerships signed and closed, and with new manufacturing expansions in Texas and Virginia. Lilly is executing well across the value chain, and our potential for impact on human health continues to expand."

Revenue growth

A company’s long-term revenue performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Eli Lilly’s revenue grew at a strong 25.5% compounded annual growth rate over the last five years. Its growth surpassed the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Eli Lilly’s annualized revenue growth of 45.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Eli Lilly reported year-on-year revenue growth of 38.6%, and its $24.4 billion of revenue exceeded Wall Street’s consensus estimates by 7.9%.

Looking ahead, sell-side analysts expect revenue to grow 13.2% over the next 12 months, according to S&P, a deceleration versus the last two years. Its growth trajectory remains attractive given its scale, and the outlook implies the market sees success for its products and services.

Adjusted operating margin

Eli Lilly has performed well over the last five years. It demonstrated high profitability for a healthcare business, with an average adjusted operating margin of 34.9%.

Looking at the trend in its profitability, Eli Lilly’s adjusted operating margin rose by 14.3 percentage points over the last five years, as its revenue growth gave it operating leverage. The company’s two-year trajectory shows its performance was mostly driven by its recent improvements. These trends are encouraging and show momentum in profitability.

This quarter, Eli Lilly generated an adjusted operating margin of 35.3%, down 9.3 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings per share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth. For example, a company could inflate its revenue through excessive spending on advertising and promotions.

Eli Lilly’s EPS grew at a 30.5% compounded annual growth rate over the last five years, higher than its 25.5% annualized revenue growth. This indicates the company became more profitable on a per-share basis as it expanded.

A closer look at Eli Lilly’s earnings helps explain its performance. As mentioned earlier, Eli Lilly’s adjusted operating margin declined this quarter but expanded by 14.3 percentage points over the last five years. Its share count also shrank by 1.9%, and these factors together are positive signs for shareholders because improving profitability and share buybacks boost EPS growth relative to revenue growth.

In Q3, Eli Lilly reported adjusted EPS of $7.48, up from $7.02 in the same quarter last year. This comfortably beat analysts’ consensus estimates, a positive result for shareholders. Over the next 12 months, Wall Street expects Eli Lilly’s full-year EPS to grow 38.3% from $31.95 to $44.20, according to S&P.

Key takeaways from Eli Lilly’s Q3 results

We were impressed by how significantly Eli Lilly blew past analysts’ revenue expectations this quarter, leading to a convincing EPS beat. We were also glad its full-year revenue guidance was raised and trumped Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 4.2% to $1,343 immediately after reporting.

Eli Lilly reported solid earnings, but one quarter doesn’t necessarily make the stock a buy. The latest quarter matters, but longer-term business quality and valuation matter more when deciding whether to invest. For more on Eli Lilly, read our full research report here (it’s free).