Elanco Animal Health Incorporated (NYSE:ELAN) reported second-quarter 2025 results on Thursday, posting adjusted earnings per share of 26 cents, down 13% year over year.
Despite the decline, earnings exceeded both the company’s guidance range of 17 cents to 21 cents and the consensus estimate of 20 cents.
Revenue came in at $1.24 billion, surpassing the consensus estimate of $1.19 billion and exceeding management’s guidance of $1.175 billion to $1.195 billion. Sales grew 5% on a reported basis and 8% on an organic constant currency basis.
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Adjusted EBITDA was $238 million in the second quarter of 2025, a 13.5% decrease.
Pet Health revenue was $643 million, an increase of 11% on a reported basis, or 10% on an organic constant currency basis.
The increase in pet health revenue included a 4% increase in price. New products primarily drove year-over-year volume increases of 6%.
The Advantage Family of products and Seresto contributed revenue of $147 million and $113 million, respectively.
Farm Animal revenue was $583 million, a decrease of 2% on a reported basis due to the sale of the aqua business, and a 6% increase on an organic constant currency basis.
Farm animal organic constant currency revenue growth included a 2% increase from price. Volumes were up 4%, driven by increased volumes in U.S. cattle, led by Experior, and increased volumes in international poultry and swine.
The business has seen demand recovery for international swine products, while international poultry demand remains strong.
Sales of the company’s international farm animal products benefited from accelerated customer purchases, primarily in China, in advance of expected future tariff increases, estimated to have shifted approximately $10 to $20 million of expected future purchases to the second quarter.
Commenting on Elanco’s earnings, William Blair said, “Elanco’s second-quarter deck has some positive key product updates for Zenrelia (label update in the U.S.), Quattro (increased sell-through in the second quarter), AdTab (60% growth), and Experior/Bovaer (continued momentum).”
Analyst Brandon Vazquez of William Blair said the solid second-quarter update reinforced the belief that Elanco is on track for a multi-year period of improving growth and margins.
Full-Year Guidance
“We are raising our 2025 full-year guidance for our strong second quarter execution and more favorable foreign exchange rates, more than offsetting incremental investments to fuel our innovation launches…,” said Bob VanHimbergen, Executive Vice President and CFO of Elanco Animal Health.
Elanco anticipates a tailwind to revenue of approximately $35 million from the favorable impact of foreign exchange rates compared with the May earnings call.
The company raised fiscal 2025 revenue guidance from $4.51 billion-$4.58 billion to $4.57 billion-$4.62 billion versus the consensus of $4.54 billion.
Elanco also increased its 2025 adjusted EPS from 80-86 cents to 85-91 cents versus the consensus of 84 cents.
Full year adjusted EBITDA includes a current estimate for net tariff impact of $10 to $14 million versus $16 to $20 million previously.
Third-Quarter Guidance
Elanco expects a tailwind to revenue of approximately $10 million from the favorable impact of foreign exchange rates compared to the prior year.
Excluding the impacts of foreign exchange rates and royalty revenue sold to a third party, the company expects a growth of 4%-6% in organic constant currency revenue.
Elanco forecasts third-quarter adjusted earnings of 12-16 cents per share versus the consensus of 13 cents, with sales of $1.08 billion-$1.11 billion compared to the Wall Street estimate of $1.083 billion.
The company anticipates growth to be impacted by approximately $15 million in revenue and approximately $10 million in Adjusted EBITDA of pre-tariff customer buying accelerated into the second quarter, primarily in China.
Price Action: ELAN stock surged to a 52-week high of $15.79 following the release of stronger-than-expected financial results for the second quarter of 2025. The stock is trading higher by 17.1% to $16.34 at last check Wednesday.
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