Global pharmaceutical company Eli Lilly (NYSE: LLY) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 42.6% year on year to $19.29 billion. The company’s full-year revenue guidance of $81.5 billion at the midpoint came in 5.1% above analysts’ estimates. Its non-GAAP profit of $7.54 per share was 8.7% above analysts’ consensus estimates.

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"2025 was an important year for Lilly," said David A. Ricks, Lilly's 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

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Eli Lilly’s sales grew at an excellent 21.6% compounded annual growth rate over the last five years. Its growth surpassed the average healthcare company and shows its offerings resonate with customers, a great starting point for our analysis.

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 38.2% 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 42.6%, and its $19.29 billion of revenue beat Wall Street’s estimates by 7.4%.

Looking ahead, sell-side analysts expect revenue to grow 19.7% over the next 12 months, a deceleration versus the last two years. Still, this projection is eye-popping given its scale and suggests the market is forecasting success for its products and services.

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Operating Margin

Eli Lilly has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average operating margin of 29.4%.

Looking at the trend in its profitability, Eli Lilly’s operating margin rose by 17.9 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 21.4 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 operating margin profit margin of 43.4%, up 5.4 percentage points year on year. This increase was a welcome development and shows it was more efficient.

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 an astounding 29% compounded annual growth rate over the last five years, higher than its 21.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of Eli Lilly’s earnings can give us a better understanding of its performance. As we mentioned earlier, Eli Lilly’s operating margin expanded by 17.9 percentage points over the last five years. On top of that, its share count shrank by 1.6%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

In Q4, Eli Lilly reported adjusted EPS of $7.54, up from $5.32 in the same quarter last year. This print beat analysts’ estimates by 8.7%. Over the next 12 months, Wall Street expects Eli Lilly’s full-year EPS of $24.21 to grow 39.8%.

Key Takeaways from Eli Lilly’s Q4 Results

We were impressed by how significantly Eli Lilly blew past analysts’ revenue expectations this quarter. We were also glad its full-year revenue guidance trumped Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 8.5% to $1,089 immediately after reporting.

Eli Lilly had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. 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).