Eli Lilly & Co (LLY) 10-K 2025: AI Summary

Summary

Full summary

The Print

positive

Revenue rose 32% to $45.0B and net income more than doubled to $10.6B, with diluted EPS of $11.71, as management attributed the increase primarily to Mounjaro, Zepbound, and Verzenio, partially offset by Trulicity.

Revenue increased 32% to $45.0B in 2024, which management states was driven by increased volume and, to a lesser extent, higher realized prices, primarily driven by Mounjaro, Zepbound, and Verzenio, partially offset by Trulicity. Net income and earnings per share increased, which management attributes primarily to higher gross margin, partially offset by increased research and development expenses, marketing, selling, and administrative expenses, and asset impairment, restructuring, and other special charges.

Revenue $45.0B (+32% YoY) and net income $10.6B (+102% YoY); diluted EPS $11.71 versus $5.80.
Gross margin as a percent of revenue was 81.3%, up 2.1 percentage points, which management attributed primarily to favorable product mix and higher realized prices.
Net cash provided by operating activities rose to $8.8B from $4.2B; capital expenditures were $5.06B versus $3.45B.
Total debt was $33.64B as of December 31, 2024, an increase of $8.42B compared with $25.23B at December 31, 2023.

Results That Matter

Revenue
Current period
$45.0B
Prior period
$34.1B
Change
+32.0%
Management states revenue increased in 2024 driven by increased volume and, to a lesser extent, higher realized prices, primarily driven by Mounjaro, Zepbound, and Verzenio, partially offset by Trulicity.
Net income
Current period
$10.6B
Prior period
$5.2B
Change
+102.1%
Management attributes the increase primarily to higher gross margin, partially offset by increased research and development expenses, marketing, selling, and administrative expenses, and asset impairment, restructuring, and other special charges.
Earnings per share - diluted
Current period
$11.7
Prior period
$5.8
Change
+101.9%
Diluted EPS moved with net income; the filing states net income and earnings per share increased primarily due to higher gross margin, partially offset by increased research and development expenses, marketing, selling, and administrative expenses, and asset impairment, restructuring, and other special charges.
Gross margin as a percent of revenue
Current period
81.3%
Prior period
79.2%
Change
+2.1 ppts
Management states the increase was primarily driven by favorable product mix and higher realized prices.
Research and development
Current period
$11.0B
Prior period
$9.3B
Change
+18.0%
Management states the increase was primarily driven by continued investments in the early and late-stage portfolio.
Marketing, selling, and administrative
Current period
$8.6B
Prior period
$7.4B
Change
+16.1%
Management states the increase was primarily driven by promotional efforts supporting ongoing and future launches.
Acquired in-process research and development
Current period
$3.3B
Prior period
$3.8B
Change
−13.7%
Management states acquired IPR&D charges recognized in 2024 primarily related to the acquisition of Morphic, while 2023 charges primarily related to acquisitions of DICE Therapeutics, Inc., Versanis Bio, Inc., Emergence Therapeutics AG, and Mablink Biosciences SAS and from a business development transaction with Beam Therapeutics Inc.
Effective tax rate
Current period
16.5%
Prior period
20.1%
Change
−3.6 ppts
Management states the effective tax rates for 2024 and 2023 were both unfavorably impacted by non-deductible acquired IPR&D charges, with a larger impact occurring in 2023.

Financial highlights: current period, prior period, change, and investor takeaway per metric
Metric	Current Period	Prior Period	Change	Investor Takeaway
Revenue	$45.0B	$34.1B	+32.0%	Management states revenue increased in 2024 driven by increased volume and, to a lesser extent, higher realized prices, primarily driven by Mounjaro, Zepbound, and Verzenio, partially offset by Trulicity.
Net income	$10.6B	$5.2B	+102.1%	Management attributes the increase primarily to higher gross margin, partially offset by increased research and development expenses, marketing, selling, and administrative expenses, and asset impairment, restructuring, and other special charges.
Earnings per share - diluted	$11.7	$5.8	+101.9%	Diluted EPS moved with net income; the filing states net income and earnings per share increased primarily due to higher gross margin, partially offset by increased research and development expenses, marketing, selling, and administrative expenses, and asset impairment, restructuring, and other special charges.
Gross margin as a percent of revenue	81.3%	79.2%	+2.1 ppts	Management states the increase was primarily driven by favorable product mix and higher realized prices.
Research and development	$11.0B	$9.3B	+18.0%	Management states the increase was primarily driven by continued investments in the early and late-stage portfolio.
Marketing, selling, and administrative	$8.6B	$7.4B	+16.1%	Management states the increase was primarily driven by promotional efforts supporting ongoing and future launches.
Acquired in-process research and development	$3.3B	$3.8B	−13.7%	Management states acquired IPR&D charges recognized in 2024 primarily related to the acquisition of Morphic, while 2023 charges primarily related to acquisitions of DICE Therapeutics, Inc., Versanis Bio, Inc., Emergence Therapeutics AG, and Mablink Biosciences SAS and from a business development transaction with Beam Therapeutics Inc.
Effective tax rate	16.5%	20.1%	−3.6 ppts	Management states the effective tax rates for 2024 and 2023 were both unfavorably impacted by non-deductible acquired IPR&D charges, with a larger impact occurring in 2023.

Earnings Quality & Cash Conversion

Reported net income of $10,590.0M includes asset impairment, restructuring, and other special charges of $860.6M, which the filing states were primarily related to a $435.0M litigation charge and an intangible asset impairment for Vitrakvi, driven by expected commercial projections. Acquired IPR&D of $3,280.4M was recognized as a separate operating expense line. The filing does not define an adjusted or ex-item earnings total.

Red flag

Inventories increased to $7,589.2M from $5,772.8M, and the cash flow statement shows an inventory increase of $2,507.4M, larger than the prior-year increase of $1,425.0M.

Red flag

Prepaid expenses and other assets increased $3,331.2M on the cash flow statement, following a $3,453.4M increase in 2023.

Value Drivers & Capital Allocation

“Dividends of $5.20 per share and $4.52 per share were paid in 2024 and 2023, respectively. The quarterly dividend was increased to $1.50 per share effective for the dividend to be paid in the first quarter of 2025, resulting in an indicated annual rate for 2025 of $6.00 per share.”
— Filing statement

“Capital expenditures were $5.06 billion during 2024, compared to $3.45 billion in 2023. We are making investments in global facilities to manufacture existing and future products.”
— Filing statement

“Our board authorized a $15.00 billion share repurchase program in December 2024. No shares were repurchased under this new program as of December 31, 2024.”
— Filing statement

“In May 2024, we acquired all outstanding membership interests of NexPharm Parent HoldCo, LLC and Isopro Holdings, LLC, which together own the assets of a manufacturing site in Wisconsin, for a purchase price of $924.7 million, net of cash acquired.”
— Filing statement

Return on equity was 74.6% (prior 48.6%) (period net income / period-end equity, not annualized); return on assets 13.5% (prior 8.2%) (period net income / period-end assets, not annualized).

Forward Signals

The filing provides no quantitative revenue or EPS guidance. Management states that capital expenditures will result in meaningfully higher capital expenditures over the next several years and that additional tirzepatide manufacturing capacity is expected to be operational over the next several years.

Known trends

In August 2023, HHS selected Jardiance, which is part of our collaboration with Boehringer Ingelheim, as one of the first ten medicines subject to government-set prices in Medicare effective in 2026.
Trulicity will lose significant patent and remaining data protections in the next few years.
At various times during 2024, demand for our incretin medicines exceeded production.

Subsequent events

In February 2025, we issued $6.5 billion of fixed-rate notes.
In 2025, Phase 2 trial was discontinued based on clinical data readout for volenrelaxin.

“We expect to use the net cash proceeds from the offering to fund potential business development activities, as well as general business purposes, including the repayment of outstanding commercial paper.”
— Eli Lilly and Company (Item 7, MD&A)

“Production increases will continue, and additional capacity is expected to be operational over the next several years.”
— Eli Lilly and Company (Item 7, MD&A)

Risks

5 source-verified filing excerpts. Selected excerpts are not a complete risk inventory.

Filing excerpt 1

EvidenceIn particular, Mounjaro, Trulicity, and Zepbound accounted for 48 percent of our total revenues in 2024 and we expect cardiometabolic health products to represent a significant and growing portion of our business, revenues, and prospects.

Filing excerpt 2

EvidenceIn August 2024, HHS announced the government-set prices for these first ten medicines with Jardiance subject to a 66% discount compared to the 2023 U.S. calendar year list price for a 30-day supply and discounts for the other nine medicines ranging from approximately 38% to 79% below list price.

Filing excerpt 3

EvidenceFor example, Trulicity will lose significant patent and remaining data protections in the next few years.

Filing excerpt 4

EvidenceThe executed agreements could, under certain circumstances, require us to pay up to approximately $14 billion if we do not purchase specified amounts of goods or services primarily related to our incretin medicines, including medicines in development, over the durations of the agreements, which are generally up to 8 years.

Filing excerpt 5

EvidenceWe have seen an increase in the production, marketing, and sale of counterfeit, misbranded, adulterated, and compounded incretins.

Balance Sheet & Liquidity

Leverage: Identified debt as of 2024-12-31: reported debt balance of unestablished maturity scope of $28.5B. The concept behind this balance does not establish which maturities it covers. Total debt, net debt and debt-to-equity are therefore not stated.

Liquidity: Cash and cash equivalents of $3.27B plus total investments of $3.37B; the filing states $8.45B of unused committed bank credit facilities, $8.00B of which is available to support the commercial paper program.

Cash flow: Cash flow — operating $8.8B, investing $-9.3B, financing $1.2B.

Working capital: Current assets $32.7B vs. current liabilities $28.4B (current ratio 1.15x). Prior reported balance sheet as of 2023-12-31: $25.7B vs. $27.3B (0.94x).

Maturities & covenants

In February 2025, we issued $6.5 billion of fixed-rate notes.
As of December 31, 2024, all of our total long-term debt is at a fixed rate. We have converted approximately 5 percent of our long-term fixed-rate notes to floating rates through the use of interest rate swaps.

Notable Footnotes

Item	Impact
Sales return, rebate, and discount accruals	As of December 31, 2024, a 5 percent change in the consolidated sales return, rebate, and discount liability would result in a change in revenue of approximately $600 million.
Acquired IPR&D charges	Acquired IPR&D charges were $3.28 billion, $3.80 billion, and $908.5 million for 2024, 2023, and 2022, respectively; the 2024 charge primarily related to the Morphic acquisition.
Asset impairment, restructuring, and other special charges	Charges were $860.6 million in 2024, primarily related to a $435.0 million litigation charge and an intangible asset impairment for Vitrakvi.
Uncertain tax positions and valuation allowance sensitivity	As of December 31, 2024, a 5 percent change in the amount of uncertain tax positions and the valuation allowance would result in a change in net income of $131.3 million and $48.2 million, respectively.

Ask LLY’s 10-K anything

Get plain-English answers, each cited to the exact filing text. Try a starter question:

AI-generated. Informational only, not investment advice. May be incomplete or contain errors. The authoritative source is always the original SEC filing.