Slides
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2026 Earnings - Second Quarter August 5 , 2026 Elanco
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2 Notices and Disclaimers Forward-Looking Statements. This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements concerning product launches and revenue from such products, our 2026 full year and third quarter guidance, long-term expectations, our expectations regarding debt levels, and expectations regarding our industry and our operations, performance and financial condition, and including, in particular, statements relating to our business, growth strategies, distribution strategies, product development efforts and future expenses. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important risk factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including but not limited to the following: operating in a highly competitive industry; the success of our research and development (R&D), regulatory approval and licensing efforts; the impact of disruptive innovations and advances in veterinary medical practices, animal health technologies and alternatives to animal-derived protein; competition from generic products that may be viewed as more cost-effective; changes in regulatory restrictions on the use of antibiotics in farm animals; an outbreak of infectious disease carried by farm animals; risks related to the evaluation of animals; consolidation of our customers and distributors; an increased use of alternative distribution channels or changes within existing distribution channels; our dependence on the success of our top products; our ability to complete acquisitions and divestitures and to successfully integrate the businesses we acquire; our ability to implement our business strategies or achieve targeted cost efficiencies and gross margin improvements; manufacturing problems and capacity imbalances, including at our contract manufacturers; fluctuations in inventory levels in our distribution channels; risks related to the use of artificial intelligence in our business; our dependence on sophisticated information technology systems and infrastructure, including the use of third-party, cloud-based technologies, and the impact of outages or breaches of the information technology systems and infrastructure we rely on; the impact of weather conditions, including those related to climate change, and the availability of natural resources; demand, supply and operational challenges associated with the effects of a human disease outbreak, epidemic, pandemic or other widespread public health concern; the loss of key personnel or highly skilled employees; adverse effects of labor disputes, strikes and/or work stoppages; the effect of our substantial indebtedness on our business, including restrictions in our debt agreements that limit our operating flexibility and changes in our credit ratings that lead to higher borrowing expenses and restrict access to credit; changes in interest rates that adversely affect our earnings and cash flows; risks related to the write-down of goodwill or identifiable intangible assets; the lack of availability or significant increases in the cost of raw materials; risks related to foreign and domestic economic, political, legal and business environments; risks related to foreign currency exchange rate fluctuations; risks related to underfunded pension plan liabilities; our current plan not to pay dividends and restrictions on our ability to pay dividends; the potential impact that actions by activist shareholders could have on the pursuit of our business strategies; risks related to tax expense or exposures; actions by regulatory bodies, including as a result of their interpretation of studies on product safety; the possible slowing or cessation of acceptance and/or adoption of our farm animal sustainability initiatives; the impact of increased regulation or decreased governmental financial support related to the raising, processing or consumption of farm animals; risks related to tariffs, trade protection measures or other modifications of foreign trade policy; the impact of litigation, regulatory investigations and other legal matters, including the risk to our reputation and the risk that our insurance policies may be insufficient to protect us from the impact of such matters; challenges to our intellectual property rights or our alleged violation of rights of others; misuse, off-label or counterfeiting use of our products; unanticipated safety, quality or efficacy concerns and the impact of identified concerns associated with our products; insufficient insurance coverage against hazards and claims; compliance with privacy laws and security of information; risks related to environmental, health and safety laws and regulations; and inability to achieve aspirations or meet the expectations of stakeholders with respect to environmental, social and governance matters. For additional information about the factors that could cause actual results to differ materially from forward-looking statements, please see the company’s latest Form 10-K and Form 10-Qs filed with the Securities and Exchange Commission. We undertake no duty to update forward-looking statements. Non-GAAP Financial Measures. This presentation contains non-GAAP financial measures, such as organic constant currency (CC) revenue growth, adjusted gross profit, adjusted gross margin, adjusted net income, adjusted earnings per share (EPS), EBITDA, adjusted EBITDA and adjusted EBITDA margin and net debt and net debt leverage, which we use to assess and analyze our operational results and trends. Reconciliation of non-GAAP financial measures and reported GAAP financial measures are included in the tables in the appendix to this presentation and are posted on our website at www.elanco.com. These non-GAAP measures are not, and should not be viewed as, substitutes for U.S. GAAP reported measures. 2026 | Q2 Earnings
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3 On Today’s Call Jeff Simmons Elanco Animal Health President and Chief Executive Officer Bob VanHimbergen Elanco Animal Health Executive Vice President, Chief Financial Officer 2026 | Q2 Earnings
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Elanco as a Consistent, Reliable Growth Company Delivering Our Diverse Portfolio of Innovation 4 2026 | Q2 Earnings Q2 2026 vs Guidance1 Revenue +$56M Adj. EPS2 +$0.08 Adj. EBITDA2 +$38M Strong Q2 Exceeding Expectations Revenue, Adj. EBITDA, and Adj. EPS all above guidance; 8% organic CC3 revenue growth led by U.S. Pet Health and U.S. Farm Animal each up 11%; strong contributions from price (+2%) and volume (+6%); stable base Market Share Gains in Animal Health Durable Growth Sector Share gains across U.S. Pet Health categories and channels, through International Pet Health launches, and building on leadership in U.S. Farm Animal; expecting consistent MSD animal health industry annual growth with global pets and protein fundamental drivers Raising Our Innovation T arget Q2 innovation revenue contribution of $340M; raising 2026 target to $1.25B driven by our major innovation products, market share gains, and customer response Improved 2026 Net Leverage Ratio T arget Achieved quarter-end net leverage ratio (NLR)2 of 3.1x from 3.5x at Q1 end, enabled by strong Q2 results; improved year-end 2026 NLR target to approximately 3.0x Raising 2026 Revenue, Adj. EBITDA, & Adj. EPS Guidance Increasing organic CC revenue growth to 6%-7% with Adj. EBITDA $1,010- $1,035M (13% growth at midpoint) and Adj. EPS $1.10-$1.16 (20% growth at midpoint) 1Results compared to the midpoint of the company’s second quarter guidance provided May 6, 2026. 2Non-GAAP financial measures. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. 3Organic CC growth represents revenue growth excluding the impacts from royalty revenue that was sold to a third party, foreign exchange rates, and acquisitions and divestitures.
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2% Growth CMO, Royalty, & Acquisition Revenue $ millions Int’l Int’lU.S. 11% Growth 9% Growth 11% Growth U.S. $1,368 $1,241 Q2 2025 Actual Q2 2026 Actual 11% Growth 5% Growth Q2 2025 to Q2 2026 Revenue Bridge 8% Organic CC1 Revenue Growth Numbers may not add due to rounding. All growth rates noted are organic constant currency. 1Organic CC growth represents revenue growth excluding the impacts from royalty revenue that was sold to a third party, foreign exchange rates, and acquisitions and divestitures. 5 8% Growth $10 Pet Health Farm Animal 2026 | Q2 Earnings FX $16
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2023 2024 2025 2026E $275M $461M $892M $1.25B Big 6 Remaining Innovation Pet Health Farm Animal Prior Guidance: $1.2B 2026 | Q2 Earnings Note: Innovation revenue is incremental in reference to 2020 sales and does not include the expected impact of cannibalization on the base portfolio Q2 Innovation Revenue Contribution of $340M Raising 2026 Innovation Revenue Target to $1.25B 6
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Updates on Big 6 Major Innovation Products 7 • Share up 4 points vs Q11, represents accelerating share gains of broad-spectrum dispensing sales from U.S. clinics in Q2 • Penetrated over 50% of the U.S. clinic base, up 10 points, or ~3,000 clinics, vs. Q1 • Highest puppy index vs. other broad- spectrum endectos4 • Newly published data again showing faster speed of black-legged tick kill than leading competitors • Launched in Australia, Japan, and Canada • Achieved blockbuster status with July YTD sales >$100M • U.S. JAK market share up 9 points YoY with gains vs. Q1; clinic penetration ~18,000, or ~60%; reorder rate >80%1 • First-line treatment use in >40% of U.S. users6 • Up to 40%+ JAK market share in key European markets, outperforming the competitive entrant2 • Built on JAK market leading position in Brazil; achieved market leadership in France in Q1 2 • Strong performance in competitor study comparing efficacy of incumbent and new entrant JAK inhibitors in a laboratory model • Continued robust growth trajectory with Q2 sales up over 30% • Fastest-growing brand in the $600M OTC ecto category in Europe2 • Consumer repurchase rate at 80%3 • Achieved more than 50% oral OTC market share; became #1 in less than two years on the market2 • Q2 sales up double-digits • Continued growth opportunity with extending days of use, continued adoption, and price • Growth trajectory moderating with challenging comparisons • Ramping capacity to meet high customer demand 2x above expectations, with weekly increases in supply • Commercial product already shipped to nearly 1,400 U.S. clinics to date • Differentiation on convenience, value, efficacy • Effectively reduces itch for at least six weeks • 83% of surveyed veterinarians are likely to use Befrena, especially in seasonal cases5 • CPG demand supports relatively consistent cattle numbers on Bovaer • Continued investment in enhanced value and user flexibility expected to drive long- term adoption growth • Expect a measured sales ramp in a dynamic market backdrop 1Per Kynetec 2Internal estimates based on multiple data sources 3Per IT, FR, ES, NL, DE May 2026, Kadence 4Kynetec Puppy Index, June YTD 5Estimated based on responses to Elanco survey with a close proxy of the approved label 6Elanco conducted survey of 490 vets; March 2026 2026 | Q2 Earnings
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© 2024 Elanco or its affiliates IPP Innovation, Portfolio, Productivity Recent Highlights Innovation Portfolio Productivity Customer Veterinarian Farmer Pet Owner Deliver Consistent, High-Impact Innovation Optimize Our Diverse Portfolio to Grow Share Strong Price Contribution Q2 contribution +2%; expect full year acceleration vs. 2025 Continuously Improve Productivity & Cash Flow Strengthening Balance Sheet ~$95M H1 FCF increase YoY; improved 2026 NLR target of ~3.0x Gross Margin Expansion +80 bps in Q2 benefitting from mix and price; expect full year +50 bps Elanco Ascend On track to $200- $250M in Adj. EBITDA savings target (2030); actions underway to drive multi-year margin expansion 8 Consistent Progress Across Our Strategic Priorities Global Ruminants Fastest growing Elanco species: +12% organic cc, +17% with AHV and FX Corporate Account Growth Added 300 new U.S. corporate clinics YTD OTC & Vaccines U.S. OTC innovation under Advantage brand; three U.S. vaccine approvals in 12 months 1Non-risk-adjusted, excluding cannibalization 2026 | Q2 Earnings No Attrition in Next Wave 5-6 blockbuster- potential innovations expected through 2031; >$2B peak sales potential1 Establishing Elanco Ventures Corporate venture platform to accelerate innovation; $25M multi-year commitment
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9 Second Quarter 2026 Financial Results
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10 Second Quarter 2026 Impact of Price, Rate, and Volume on Revenue $ Millions Revenue Price FX Rate Organic Volume Acquisition Total Organic CC1 Change Pet Health $718 2% 1% 9% 12% 11% Cattle $313 2% 3% 17% 12% Poultry $223 2% 4% 2% Swine $97 1% (3)% (4)% Farm Animal $633 2% 2% 3% 1% 9% 5% Contract Mfg. / Other2 $17 13% Total Elanco $1,368 2% 1% 6% 1% 10% 8% 2026 | Q2 Earnings Reported revenue in millions. Numbers may not add due to rounding. 1Organic CC growth represents revenue growth excluding the impacts from royalty revenue that was sold to a third party, foreign exchange rates, and acquisitions and divestitures. 2Inclusive of $9M in sold royalty revenue for the quarter.
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11 $ Millions 2026 2025 Change (%) Organic CC1 Change (%) US Pet Health $420 $377 11% 11% Int’l Pet Health $298 $266 12% 9% Total Pet Health $718 $643 12% 11% US Farm Animal $243 $215 13% 11% Int’l Farm Animal $390 $368 6% 2% Total Farm Animal $633 $583 9% 5% Contract Mfg. / Other2 $17 $15 13% Total Elanco $1,368 $1,241 10% 8% Second Quarter 2026 Revenue by Geography and Species 2026 | Q2 Earnings Reported revenue in millions. Numbers may not add due to rounding. 1Organic CC growth represents revenue growth excluding the impacts from royalty revenue that was sold to a third party, foreign exchange rates, and acquisitions and divestitures. 2Inclusive of $9M in sold royalty revenue for the quarter.
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12 Adjusted1 Income Statement Highlights Second Quarter 2026 $ millions, except per share values 2026 2025 Change ($)4 Change (%)4 Revenue $1,368 $1,241 $127 10% Adjusted Gross Profit $789 $709 $80 11% Adjusted Gross Margin2 58.1% 57.3% NM 80 bps Operating Expense $541 $492 $49 10% Interest Expense, Net $44 $38 $6 16% Other (Income) Expense, Net $(8) $12 NM NM Effective Tax Rate 17.8% 21.7% NM NM Adjusted Net Income $174 $131 $43 33% Adjusted Earnings Per Share Diluted $0.34 $0.26 $0.08 31% Adjusted EBITDA $288 $238 $50 21% Adjusted EBITDA Margin3 21.2% 19.2% NM 200 bps 2026 | Q2 Earnings Note: Numbers may not add due to rounding. 1Non-GAAP financial measures. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. 2We define adjusted gross margin as adjusted gross profit divided by total revenue, excluding royalty revenue sold to a third party. 3We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue, excluding royalty revenue sold to a third party. 4Comparisons have not been adjusted for the impact of the AHV acquisition which was completed on April 30, 2026. 4fdfasdfsdf
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Adjusted EBITDA1 and Adjusted EPS1 Drivers 13 Second Quarter 2026 Interest & Tax EBITDA Flow Through Q2 2025 Actual Gross Profit Operating Expenses & Other $0.26 $238 $0.34$288 ~$4 Q2 Adjusted EBITDA $ millions Q2 Adjusted EPS +$46 vs. Prior Year Excluding FX Q2 2026 Actual Q2 2025 Actual Q2 2026 Actual $0.06 FX $0.01 ~$0.01 FX 2026 | Q2 Earnings Note: Numbers may not add due to rounding. 1Non-GAAP financial measures. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations.
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© 2025 Elanco or its affiliates $3,689 $530 $3,159 Gross Debt Cash & Cash Equivalents Net Debt 1 Less Finance Lease 1 Key Balance Sheet and Cash Flow Metrics Note: Numbers may not add due to rounding. 1Net debt is a non-GAAP measure calculated as gross debt, excluding finance lease liabilities, less cash and cash equivalents on our balance sheet. Gross debt is the sum of current portion of long-term debt and long-term debt and excludes unamortized debt issuance costs. 2Net leverage ratio calculated as gross debt less cash and cash equivalents and finance lease liabilities on our balance sheet divided by adjusted EBITDA. Cash and Debt Balances as of June 30, 2026 $ millions 14 2026 | Q2 Earnings Capital Allocation Priorities Debt Paydown Strategic Investment in Business Primary use of free cash flow Targeting <3.0x in 2027 and 2.0x-2.5x over time R&D, manufacturing capex, commercial launches, bolt- on M&A investment expected to drive sustainable topline growth Net Leverage Ratio2 = 3.1x
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Financial Guidance 15 Third Quarter and Full Year 2026
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16 2026 Full Year Financial Guidance Accelerating Price Contribution YoY Reflecting our latest innovation and the value of our portfolio to customers $ millions, except per share values Adj. EBITDA Margin Expansion Led by Elanco Ascend program, with G&A savings more front- loaded over the 5-year period Contributions from M&A AHV International acquisition expected to contribute 1% to reported growth for the full year 2026 | Q2 Earnings 1Revenue guidance excludes royalty revenue that was sold to a third party. 2Organic CC growth represents revenue growth excluding the impacts from royalty revenue that was sold to a third party, foreign exchange rates, and acquisitions and divestitures. 3Non-GAAP financial measure May August Comments Revenue1 $5,010 - $5,085 $5,090 - $5,140 6%-7% organic CC2 growth Adjusted EBITDA3 $975 - $1,005 $1,010 - $1,035 13% growth at midpoint Adjusted Diluted EPS3 $1.03 - $1.09 $1.10 - $1.16 20% growth at midpoint
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Raising Adj. EBITDA1 and Adj. EPS1 Guidance 17 2026 Adj. EBITDA 2026 Adj. EPS August Guidance May Guidance Business Performance August Guidance May Guidance Interest Expense TaxAdj EBITDA Flow Through May Guidance to August Guidance Bridge $975- $1,005 ~$38 $1.10- $1.16 ~Flat $1.03- $1.09 Launch Investments $1,010- $1,035 ~$0.07~$(6) 2026 | Q2 Earnings Note: Numbers may not add due to rounding. 1Non-GAAP financial measures. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. ~Flat
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18 2026 | Q2 Earnings Considerations for 2026 Guidance Range Potential Drivers to the High-End of Guidance Potential Drivers to the Low-End of Guidance • Accelerating innovation-led growth • Base business growth • Ability to leverage our diverse portfolio • Favorable macroeconomic backdrop • Rapid progress on Elanco Ascend initiatives • Heightened competitive pressure, including generics • Consumer/macroeconomic pressure • Incremental investment in innovation product launches Guidance Continues Our Prudent, Balanced Approach in a Dynamic Macro Environment
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19 Third Quarter 2026 Financial Guidance $ millions, except per share values Q3 Guidance Comments Revenue1 $1,195 - $1,220 5%-7% organic CC2 growth Adjusted EBITDA3 $200 - $215 Includes opex up ~11% CC with incremental support for innovation products Adjusted Diluted EPS3 $0.19 - $0.22 Effective tax rate expected in line with full-year rate 2026 | Q2 Earnings 1Revenue guidance excludes royalty revenue that was sold to a third party 2Organic CC growth represents revenue growth excluding the impacts from royalty revenue that was sold to a third party, foreign exchange rates, and acquisitions and divestitures 3Non-GAAP financial measure Revenue Growth Pet health continues strong growth trajectory as farm animal moderates from challenging comparisons Adj. EBITDA Margin Gross margin tailwind from price, volume, and manufacturing savings offset by strategic commercial investments Inorganic Drivers AHV International acquisition expected to contribute 1% to reported growth; FX neutral to prior year
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20 2026 | Q2 Earnings Drivers of U.S. Pet Health Revenue Acceleration Expecting At Least High-Single Digit Full-Year 2026 Revenue Growth for U.S. Pet Health • Continued momentum for Zenrelia and Credelio Quattro • Befrena launch • Corporate account growth • Does not assume improving vet visit volumes, given continued consumer spending shift to omnichannel Key H2 Revenue Growth Drivers Q1 2026 Q2 2026 H2 2026 Q1 +6% Q2 +11% HSD-LDD Growth
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21 Shifting Consumer Behaviors in the Attractive & Growing Omnichannel U.S. Pet Health Industry 1Internal estimates based on multiple data sources 2Elanco May 2026 survey results 3Nielsen IQ data 2026 | Q2 Earnings Industry Growth 5% industry growth in 20251 January/February weather impacted U.S. vet channel; strong rebound starting in March Omnichannel consumer behaviors and growth at retail Vet channel revenue +LSD YTD Generally stable pet ownership Durable PriceResilient Pet Owner Spend Strong willingness to pay for “best medicine” blockbuster innovation Elanco U.S. Pet Health price accelerated in Q2 Elanco full-year pricing expected to accelerate vs. 2025 Implemented our largest price increase to U.S. vet clinics in five years Differentiation driving our accelerating market gains ✓ ✓ ✓ Pets at the center of the family Protected budget item: 95% of owners would not cut pet health spend; 90% expect to maintain or increase spend over the next year2 40% of pet care spend via subscriptions3 Convenience driving compliance Consistent consumer trends in monthly retail sales and credit card data
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22 Animal Health Is a Compelling, Durable Growth Sector $60B Projected Industry Value Into the Next Decade, Reflecting Consistent MSD Annual Growth 1$40B Industry Value Today 7% Growth in 20255% 20-Year CAGR Consistently Positive Growth 2026 | Q2 Earnings Sustainable growth through fundamental drivers in pets & protein 1Internal estimates based on multiple data sources
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23 2026 | Q2 Earnings Early-Stage Big 6 Globalization Increasing Pipeline Confidence Accelerating Cash and Margins Balanced Business Profile U.S. Vet Clinic Elanco: Key drivers of long-term value creation A compelling investment opportunity U.S. Retail Int’l 57% 43% 48% 52% U.S. Farm Animal Pet Health 51% 49% Innovation engine stronger than ever Pipeline progressing without attrition 5-6 blockbuster-potential innovations by 2031 Focused on consistent innovation flow Accelerating cash flow Runway of margin expansion Rapid net leverage reduction Elanco Ascend tracking $200-$250M adj. EBITDA net savings by 2030
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24 Reference slides and GAAP reported to non-GAAP adjusted reconciliations Appendix
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25 First Half 2026 Impact of Price, Rate, and Volume on Revenue Revenue Price FX Rate Organic Volume Acquisition Total Organic CC1 Change Pet Health $1,428 2% 3% 7% 12% 9% Cattle $629 2% 1% 16% 13% Poultry $453 4% 12% 8% Swine $193 2% 4% 2% Farm Animal $1,275 2% 3% 7% 1% 13% 9% Contract Mfg. / Other2 $36 33% Total Elanco $2,739 2% 3% 7% 1% 13% 9% 2026 | Q2 Earnings Reported revenue in millions. Numbers may not add due to rounding. 1Organic CC growth represents revenue growth excluding the impacts from royalty revenue that was sold to a third party, foreign exchange rates, and acquisitions and divestitures. 2Inclusive of $18M in sold royalty revenue year to date.
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26 2026 2025 Change (%) Organic CC1 Change US Pet Health $761 $700 9% 9% Int’l Pet Health $667 $578 15% 9% Total Pet Health $1,428 $1,278 12% 9% US Farm Animal $507 $446 14% 13% Int’l Farm Animal $768 $683 12% 7% Total Farm Animal $1,275 $1,129 13% 9% Contract Mfg. / Other2 $36 $27 33% Total Elanco $2,739 $2,434 13% 9% First Half 2026 Revenue by Geography and Species 2026 | Q2 Earnings Reported revenue in millions. Numbers may not add due to rounding. 1Organic CC growth represents revenue growth excluding the impacts from royalty revenue that was sold to a third party, foreign exchange rates, and acquisitions and divestitures. 2Inclusive of $18M in sold royalty revenue year to date.
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27 Adjusted1 Income Statement Highlights First Half 2026 $ millions, except per share values 2026 2025 Change ($)4 Change (%)4 Revenue $2,739 $2,434 $305 13% Adjusted Gross Profit $1,565 $1,394 $171 12% Adjusted Gross Margin2 57.5% 57.4% NM 10 bps Operating Expense $1,019 $927 $92 10% Interest Expense, Net $87 $78 $9 12% Other (Income) Expense, Net $(12) $19 NM NM Effective Tax Rate 19.7% 14.8% NM NM Adjusted Net Income $378 $315 $63 20% Adjusted Earnings Per Share Diluted $0.75 $0.63 $0.12 19% Adjusted EBITDA $622 $514 $108 21% Adjusted EBITDA Margin3 22.9% 21.2% NM 170 bps 2026 | Q2 Earnings Note: Numbers may not add due to rounding. 1Non-GAAP financial measures. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. 2We define adjusted gross margin as adjusted gross profit divided by total revenue, excluding royalty revenue sold to a third party. 3We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue, excluding royalty revenue sold to a third party. 4Comparisons have not been adjusted for the impact of the AHV acquisition which was completed on April 30, 2026. 4fdfasdfsdf
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May August T otal Revenue1 $5,010 – $5,085 $5,090 – $5,140 Adjusted Gross Margin2 55.1% – 55.5% 55.2% – 55.6% Operating Expenses $1,925 – $1,945 $1,950 – $1,965 Adjusted EBITDA2 $975 – $1,005 $1,010 – $1,035 Adjusted EBITDA Margin2 19.5% – 19.8% 19.8% – 20.1% Adjusted Interest Expense, Net2 Approx. $165 Approx. $165 Tax Rate 21% – 22% Approx. 21% Adjusted Earnings per Share2 $1.03 – $1.09 $1.10 – $1.16 Weighted Average Diluted Share Count Approx. 508 million Approx. 507 million Capital Expenditures Approx. $185 Approx. $185 Cash Taxes Approx. $110 Approx. $120 Cash Interest Approx. $175 Approx. $175 Financial Guidance & Additional Assumptions 28 Full Year 2026 $ millions, except per share values 2026 | Q2 Earnings 1Revenue guidance excludes royalty revenue that was sold to a third party 2Non-GAAP financial measure
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29 Second Quarter 2026 Adjusted EBITDA Reconciliation 2026 2025 Reported Net Income $54 $11 Net Interest Expense $59 $48 Income Tax Expense $2 $14 Depreciation and Amortization $171 $169 EBITDA $286 $242 Non-GAAP Adjustments Asset Impairment, Restructuring, and Other Special Charges $9 $1 Sold Royalty Revenue $(9) $(4) Other (Income) Expense, Net $2 $(1) Adjusted EBITDA $288 $238 Adjusted EBITDA Margin 21.2% 19.2% $ millions 2026 | Q2 Earnings Note: Numbers may not add due to rounding.
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30 Second Quarter 2026 Reconciliation of GAAP Reported to Non-GAAP Adjusted Income Statement Items $ millions, except per share values Note: Numbers may not add due to rounding. 2026 2025 Net Income EPS Net Income EPS GAAP Reported Net Income and EPS $54 $0.11 $11 $0.02 Amortization of Intangible Assets $139 $0.27 $136 $0.27 Asset Impairment, Restructuring, and Other Special Charges (1) $9 $0.02 $1 $0.00 Sold Royalty Revenue $(9) $(0.02) $(4) $(0.01) Interest Expense, Net of Capitalized Interest (2) $15 $0.03 $10 $0.02 Other (Income) Expense, Net $2 $0.00 $(1) $0.00 Income Tax Expense (3) $(36) $(0.07) $(22) $(0.04) Adjusted Net Income and EPS $174 $0.34 $131 $0.26 2026 | Q2 Earnings
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31 Second Quarter 2026 Details of Adjustments to Certain GAAP Reported Measures For the three months ended June 30, 2026 and 2025: (1) Adjustments of $9 million for the three months ended June 30, 2026, primarily related to our 2025 restructuring plan ($3 million) as well as costs associated with our acquisition of AHV ($2 million). (2) Adjustments of $15 million and $10 million for the three months ended June 30, 2026 and 2025, respectively, related to imputed interest expense on our liability for sale of future revenue. (3) Adjustments of $36 million for the three months ended June 30, 2026, primarily represented the income tax expense associated with the adjusted items discussed above. Adjustments of $22 million for the three months ended June 30, 2025, primarily represented the income tax expense associated with the adjusted items discussed above and the discrete tax impact from the remeasurement of certain deferred tax positions due to a foreign tax rate change. 2026 | Q2 Earnings
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32 First Half 2026 Adjusted EBITDA Reconciliation 2026 2025 Reported Net Income $111 $78 Net Interest Expense $116 $88 Income Tax Expense $32 $7 Depreciation and Amortization $341 $330 EBITDA $600 $503 Non-GAAP Adjustments Cost of Sales $0 $1 Asset Impairment, Restructuring, and Other Special Charges $25 $10 Sold Royalty Revenue $(18) $(4) Other Expense, Net $15 $4 Adjusted EBITDA $622 $514 Adjusted EBITDA Margin 22.9% 21.2% $ millions 2026 | Q2 Earnings Note: Numbers may not add due to rounding.
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33 First Half 2026 Reconciliation of GAAP Reported to Non-GAAP Adjusted Income Statement Items $ millions, except per share values Note: Numbers may not add due to rounding. 2026 2025 Net Income EPS Net Income EPS GAAP Reported Net Income and EPS $111 $0.22 $78 $0.16 Cost of Sales Adjustments - - $1 $0.00 Amortization of Intangible Assets $277 $0.55 $264 $0.53 Asset Impairment, Restructuring, and Other Special Charges (1) $25 $0.05 $10 $0.02 Sold Royalty Revenue $(18) $(0.04) $(4) $(0.01) Interest Expense, Net of Capitalized Interest (2) $29 $0.06 $10 $0.02 Other Expense, Net (3) $15 $0.03 $4 $0.01 Income Tax Expense (4) $(61) $(0.12) $(48) $(0.10) Adjusted Net Income and EPS $378 $0.75 $315 $0.63 2026 | Q2 Earnings
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34 First Half 2026 Details of Adjustments to Certain GAAP Reported Measures For the six months ended June 30, 2026 and 2025: (1) Adjustments of $25 million for the six months ended June 30, 2026, primarily related to $18 million of restructuring charges ($15 million of which was non-cash shut-down costs for the animal studies portion of our R&D facilities in Monheim, Germany) associated with our 2025 Restructuring Plan, as well as costs associated with our acquisition of AHV ($2 million). Adjustments of $10 million for the six months ended June 30, 2025, primarily included $7 million of upfront payments made in relation to new licensing arrangements. (2) Adjustments of $29 million and $10 million for the six months ended June 30, 2026 and 2025, respectively, related to imputed interest expense on our liability for sale of future revenue. (3) Adjustments of $15 million for the six months ended June 30, 2026, primarily related to currency translation losses reclassified from accumulated other comprehensive loss in conjunction with the substantial liquidation of a dormant legal entity, a litigation settlement, and mark-to-market adjustments on equity investments. (4) Adjustments of $61 million for the six months ended June 30, 2026, primarily represented the income tax expense associated with the adjusted items discussed above. Adjustments of $48 million for the six months ended June 30, 2025, primarily represented the income tax expense associated with the adjusted items discussed above and the discrete tax impact from the remeasurement of certain deferred tax positions due to a foreign tax rate change, partially offset by a $35 million benefit related to a discrete tax item recognized during the first quarter of 2025. 2026 | Q2 Earnings
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© 2025 Elanco or its affiliates