Global pharmaceutical company Eli Lilly (NYSE: LLY) reported Q2 CY2026 results exceeding the market’s revenue expectations, with sales up 47.7% year on year to $22.97 billion. The company’s full-year revenue guidance of $86 billion at the midpoint came in 0.7% above analysts’ estimates. Its non-GAAP profit of $8.38 per share was 27.3% above analysts’ consensus estimates.

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"Lilly's momentum continues, as we delivered 48% revenue growth and raised our full-year guidance," said David A. Ricks, Lilly chair and CEO.

Company Overview

Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE: LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Eli Lilly grew its sales at an excellent 24.4% compounded annual growth rate. Its growth surpassed the average healthcare company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Eli Lilly’s annualized revenue growth of 43.1% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Eli Lilly reported magnificent year-on-year revenue growth of 47.7%, and its $22.97 billion of revenue beat Wall Street’s estimates by 11.4%.

Looking ahead, sell-side analysts expect revenue to grow 13.3% over the next 12 months, a deceleration versus the last two years. We still think its growth trajectory is attractive given its scale and indicates the market is baking in success for its products and services.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Eli Lilly has been a well-oiled machine over the last five years. It demonstrated elite profitability for a healthcare business, boasting an average adjusted operating margin of 34.2%.

Analyzing the trend in its profitability, Eli Lilly’s adjusted operating margin rose by 16.1 percentage points over the last five years, as its sales growth gave it immense operating leverage. This performance was mostly driven by its recent improvements as the company’s margin has increased by 17.7 percentage points on a two-year basis. These data points are very encouraging and show momentum is on its side.

This quarter, Eli Lilly generated an adjusted operating margin profit margin of 39.1%, down 5.8 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 sales through excessive spending on advertising and promotions.

Eli Lilly’s EPS grew at 31.4% compounded annual growth rate over the last five years, higher than its 24.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Eli Lilly’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Eli Lilly’s adjusted operating margin declined this quarter but expanded by 16.1 percentage points over the last five years. Its share count also shrank by 1.8%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

In Q2, Eli Lilly reported adjusted EPS of $8.38, up from $6.31 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Eli Lilly’s full-year EPS to grow 26.5% from $31.49 to $39.84.

Key Takeaways from Eli Lilly’s Q2 Results

It was good to see Eli Lilly beat analysts’ revenue and EPS expectations this quarter. We were also excited that the company raised both its full-year revenue and EPS guidance. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 3.3% to $1,158 immediately following the results.

Eli Lilly may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).