LLY · 10-Q · 2026Q2 · Full report

Gross Margin Drivers

ELI LILLY & Co · 2026-08-05 · Importance 69 · Surprise 64 · From source text

Gross margin increased to $19,706 million in the second quarter and $35,928 million in the first six months of 2026, from $13,110 million and $23,614 million, respectively, in the comparable 2025 periods. Gross margin as a percentage of revenue rose 1.5 percentage points to 85.8% in the quarter and 0.5 percentage points to 84.0% year to date. Improved production costs drove the margin expansion in both periods. Favorable product mix aided the quarterly improvement, while lower realized prices partially offset gains.

Key facts

• Gross margin for the three months ended June 30, 2026: $19,706 million, compared with $13,110 million for the three months ended June 30, 2025. source
• Gross margin as a percent of revenue for the three months ended June 30, 2026: 85.8%, compared with 84.3% for the three months ended June 30, 2025. source
• Gross margin as a percent of revenue for the six months ended June 30, 2026: 84.0%, compared with 83.5% for the six months ended June 30, 2025. source
• Gross margin as a percent of revenue for the three months ended June 30, 2026 increased 1.5 percentage points primarily driven by improved cost of production and favorable product mix, partially offset by lower realized prices. source

Impact estimates