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Eli Lilly & Co. (NYSE:LLY)

Common-Size Income Statement
Quarterly Data

Eli Lilly & Co., common-size consolidated income statement (quarterly data)

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3 months ended: Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Revenue 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -14.22 -18.07 -17.48 -17.09 -15.73 -17.47 -17.76 -18.98 -19.20 -19.09 -19.12 -19.58 -21.74 -23.37 -21.20 -22.75 -22.05 -26.53 -25.63 -21.13 -28.98 -27.60
Gross margin 85.78% 81.93% 82.52% 82.91% 84.27% 82.53% 82.24% 81.02% 80.80% 80.91% 80.88% 80.42% 78.26% 76.63% 78.80% 77.25% 77.95% 73.47% 74.37% 78.87% 71.02% 72.40%
Research and development -16.62 -17.73 -19.71 -19.69 -21.44 -21.48 -22.33 -23.90 -23.99 -28.77 -27.40 -25.36 -28.35 -28.52 -27.33 -25.97 -27.46 -20.62 -23.73 -25.18 -24.55 -24.57
Marketing, selling, and administrative -14.93 -14.82 -16.23 -15.57 -17.70 -19.40 -17.92 -18.36 -18.73 -22.27 -20.58 -18.99 -23.16 -25.13 -22.50 -23.25 -25.05 -19.95 -19.90 -23.30 -25.01 -23.16
Acquired in-process research and development -12.08 -2.95 -2.74 -3.73 -0.99 -12.35 -1.40 -24.71 -1.37 -1.26 -6.66 -31.32 -1.17 -1.51 -3.29 -0.90 -6.79 -2.12 -5.47 -2.62 -0.64 -4.58
Asset impairment, restructuring, and other special charges -3.06 -1.41 -0.44 -2.07 0.00 -0.27 -2.54 -0.71 -3.85 0.00 -0.72 0.00 0.00 0.00 -0.52 -2.97 0.00 0.00 -1.31 0.00 0.00 -3.11
Operating income 39.08% 45.03% 43.41% 41.85% 44.14% 29.03% 38.05% 13.34% 32.87% 28.62% 25.53% 4.74% 25.57% 21.47% 25.15% 24.15% 18.65% 30.78% 23.97% 27.78% 20.82% 16.98%
Other, net, income (expense) 1.17 -0.33 -0.56 -0.76 -0.58 -1.88 -0.81 0.54 -1.75 0.31 1.29 -0.24 -0.44 0.51 3.56 -1.60 -1.84 -4.49 -0.97 -9.39 2.83 4.72
Income before income taxes 40.25% 44.70% 42.85% 41.09% 43.56% 27.15% 37.23% 13.89% 31.12% 28.92% 26.82% 4.50% 25.13% 21.98% 28.71% 22.55% 16.81% 26.29% 23.00% 18.39% 23.65% 21.69%
Income taxes -9.37 -7.34 -8.44 -9.37 -7.17 -5.47 -4.65 -5.40 -4.87 -3.34 -3.41 -5.10 -3.92 -2.66 -2.17 -1.64 -2.13 -1.93 -1.42 -2.00 -3.02 -1.78
Net income (loss) 30.88% 37.36% 34.41% 31.72% 36.38% 21.68% 32.59% 8.48% 26.25% 25.58% 23.41% -0.60% 21.21% 19.32% 26.54% 20.91% 14.68% 24.36% 21.58% 16.39% 20.63% 19.91%

Based on: 10-Q (reporting date: 2026-06-30), 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).

The financial trajectory over the analyzed period demonstrates a significant expansion in overall profitability and operational efficiency. There is a clear trend of margin expansion, driven by a reduction in the cost of sales and a gradual decline in the relative weight of operating expenses as a percentage of revenue.

Gross Profitability
A consistent improvement in gross margin is observed, rising from 72.40% in March 2021 to 85.78% by June 2026. This growth is primarily attributed to the steady decline in the cost of sales, which dropped from 27.60% to 14.22% of revenue over the same period, indicating enhanced production efficiency or a shift toward higher-margin product mixes.
Operating Expense Trends
Research and development (R&D) expenditures showed initial volatility, peaking at 28.52% in March 2023 before trending downward to 16.62% by June 2026. Similarly, marketing, selling, and administrative expenses decreased from a range of 23-25% in 2021 to approximately 14.93% by mid-2026. This simultaneous reduction in R&D and SG&A as a percentage of revenue suggests strong operating leverage as revenue growth outpaces the growth of fixed operating costs.
Inorganic Investment and Special Charges
The income statement reflects periodic and significant investments in acquired in-process research and development (IPR&D), characterized by sharp spikes. Notable instances occurred in September 2023 (-31.32%), September 2024 (-24.71%), and June 2026 (-12.08%). These episodic charges created temporary contractions in operating income but indicate a strategic focus on inorganic pipeline expansion.
Operating and Net Income Performance
Operating income margins exhibited a general upward trend, moving from 16.98% in March 2021 to a peak of 45.03% in March 2026, despite the aforementioned IPR&D volatility. Net income margins followed a similar trajectory, starting at 19.91% and reaching 37.36% by March 2026. This growth in net profitability persisted despite a rise in the effective tax rate as a percentage of revenue, which increased from approximately 1-3% in the early periods to between 7-9% in the later periods.

In summary, the organization has transitioned toward a more profitable cost structure, characterized by expanding gross margins and disciplined operating expense management, allowing for substantial increases in net income while maintaining a capacity for large-scale strategic acquisitions.

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