Elanco’s Q3 2025 Earnings Call Highlights Strong Growth

Elanco Animal Health ((ELAN)) has held its Q3 earnings call. Read on for the main highlights of the call.

Elanco Animal Health’s recent earnings call highlighted a positive sentiment, driven by strong financial results for Q3 2025. The company reported significant revenue growth across both its farm and pet health segments, with notable success in its innovation products, particularly Credelio Quattro. Despite some challenges in pricing growth and slower-than-expected adoption of Bovaer, the overall sentiment remained optimistic due to strategic achievements and robust performance.

Strong Organic Revenue Growth

Elanco achieved an impressive 9% organic constant currency revenue growth in Q3 2025, surpassing the high end of its guidance for revenue, adjusted EBITDA, and adjusted EPS. This growth underscores the company’s ability to effectively execute its strategic plans and capitalize on market opportunities.

U.S. Farm and Pet Health Growth

The U.S. Farm Animal segment saw a remarkable 20% growth, while the U.S. pet health segment grew by 9%. This marks the ninth consecutive quarter of underlying total growth, highlighting the sustained demand and successful market penetration in these segments.

Innovation Revenue Increase

Innovation products have been a significant driver of Elanco’s success, with year-to-date revenue reaching $655 million. This performance has led to an increase in full-year guidance by $100 million, reflecting the company’s strong pipeline and effective commercialization strategies.

Credelio Quattro Success

Credelio Quattro emerged as a standout product, achieving blockbuster status with $100 million in sales in less than eight months. This success is attributed to strong demand and the product’s differentiation in the market.

Improved Leverage Ratio

Elanco has made significant strides in improving its financial health, reducing its net leverage ratio to 3.7x by the end of Q3 2025. This improvement was achieved faster than planned, with expectations to maintain a leverage ratio between 3.7x and 3.8x by year-end.

Refinancing of Term Loan B

The company successfully refinanced its $2.1 billion Term Loan B facility, extending maturities through 2032. This move enhances Elanco’s capital structure, providing greater financial flexibility for future growth initiatives.

Flat Pricing Growth

Elanco experienced flat pricing growth in Q3 2025, with variations in customer and product mix impacting its pricing strategy. This highlights the challenges the company faces in maintaining pricing power amidst changing market dynamics.

Bovaer Growth Challenges

The adoption of Bovaer has been slower than anticipated, with growth remaining tempered in the near term. This indicates a longer adoption curve than initially projected, posing a challenge for Elanco’s growth strategy.

Interest Expense Increase Expected

Elanco anticipates an increase in interest expenses by approximately $15 million in 2026 due to the expiration of a favorable interest rate swap amortization benefit. This forecast highlights potential future financial pressures the company may face.

Forward-Looking Guidance

Looking ahead, Elanco projects organic constant currency growth of 6%-6.5% for the full year, with adjusted EBITDA expected to be between $880-$900 million and adjusted EPS ranging from $0.91-$0.94. The company remains focused on innovation, with full-year expectations for innovative products revised upward to $840-$880 million. Despite potential tariff risks, Elanco has mitigation strategies in place to manage a net impact of $10-$14 million in 2025.

In summary, Elanco Animal Health’s Q3 2025 earnings call reflected a positive outlook, driven by strong revenue growth and strategic achievements. While challenges in pricing and product adoption were noted, the company’s robust performance in innovation and financial management positions it well for future success.