Slides
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D August 7, 2025 2025 Earnings – Second Quarter
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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 2025 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; the impact of increased or decreased sales into our distribution channels resulting in fluctuations in our revenues; 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 goals or meet 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. 2025 | 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 2025 | Q2 Earnings
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` Accelerating Growth Through Delivering Our Diverse Portfolio of Innovation 1Results compared to the midpoint of the company’s second quarter guidance provided May 7, 2025. 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 our prior year divestiture of the aqua business, which was divested July 9, 2024, royalty revenue that was sold to a third party and the impact of foreign exchange rates. Strong Q2 Exceeding Expectations Revenue, Adj. EBITDA, and Adj. EPS all above guidance ranges; 8% organic CC3 revenue growth led by U.S. Pet Health up 11%; 8th consecutive quarter of underlying growth Innovation Tracking Above Expectations H1 innovation revenue contribution of $420M; raising 2025 target to $720- $800M driven by our major innovation products Deleveraging Faster Than Planned Achieved quarter-end net leverage ratio (NLR)2 of 4.0x, enabled by strong Q2 results and working capital discipline, as well as proceeds from the sale of the lotilaner royalty monetization; expect 2025 gross debt paydown of $500-$550M with improved year-end NLR target of 3.8x-4.1x Neutralizing the Potential T ariff Impact Estimated tariff net impact of $10-$14M more than offset by H1 execution; risks balanced by intervention actions and FX tailwind Raising 2025 Revenue, Adj. EBITDA, & Adj. EPS Guidance Increasing organic CC revenue growth to 5%-6% with Adj. EBITDA $850- $890M and Adj. EPS $0.85-$0.91; incorporates current estimate for net tariff impact 2025 | Q2 Earnings 4 Q2 2025 vs Guidance1 Revenue +$56M Adj. EPS2 +$0.07 Adj. EBITDA2 +$28M
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6% Growth FX Rates & CMO Revenue $ millions Int’l Int’lUS 11% Growth 7% Growth 5% Growth US $1,241 $1,184 Q2 2024 Actual Q2 2025 Actual 10% Growth 6% Growth Aqua Divestiture $(49) Q2 2024 to Q2 2025 Revenue Bridge 8% Organic Constant Currency1 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 our prior year divestiture of the aqua business, which was divested July 9, 2024, royalty revenue that was sold to a third party and the impact of foreign exchange rates. 8% Growth $16 Pet Health Farm Animal 2025 | Q2 Earnings 5
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2021 Actual 2022 Actual 2023 Actual 2024 Actual 2025 FY Expectation $72M $133M $275M $461M Farm Animal Pet Health Note: Expected innovation revenue of $720-$800 million is incremental in reference to 2020 sales and does not include the expected impact of cannibalization on the base portfolio. 6 2025 Innovation Sales Target Raised: Now Expected to Deliver an Incremental $720-$800 Million Major innovation early in launch curve with portfolio exceeding the corporate gross margin average H1 Actuals $420M H1 H1 2025 | Q2 Earnings $720-$800M +$60M at midpoint
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Updates on Select Major Innovation Products 2025 | Q2 Earnings • U.S. broad-spectrum endecto market at $1.3B and growing almost 40%2 • Achieved ~14% dollar share of the broad- spectrum sales out of U.S. vet clinics in June1 • Sell-in and sell-out rates at consistent levels relative to each other at quarter-end • Share capture favorable to expectations; switches from competition and new starts representing nearly 70% of sales • Submissions made in Australia, Canada, the EU, the UK, and Japan • Patient market share doubled, from ~2% in March to ~4% in June1 • ~10,000 clinics buying vs. ~8,000 in May; reorder rate nearly 80% vs. ~70% in May • ~50% of Zenrelia prescribing U.S. vets now using as first-line treatment, primarily for new patients or seasonal restarts; 46% of non- prescribing U.S. vets intend to use3 • European Commission and Switzerland approvals; consistent label vs. other int’l mkts • Expect revised U.S. label language in Q4, removing risk language of fatal vaccine- induced disease • Continued robust growth trajectory with Q2 sales up over 60% • Leadership in outside-the-vet channel oral isoxazolines • Strong performance driven by increased DTC investment • Approved and launched in the UK, a key market, in April 2025 • Q2 sales up over 80% vs. tougher compare • Customer retention over 90% • Potential annual U.S. and Canada market size of $350M+ • Heifer clearance expected to continue market expansion opportunity • Focus on increasing access to this life- saving treatment, especially with shelters • Pursuing interventions on pricing to address the cost of the treatment • International expansion after 2030 expected to drive further growth • Strong demand from farmers and CPGs; cows on Bovaer increased 4x since February • Customer retention over 90%; cash flow sourced from CPGs supports long-term product use • Data submitted for expanded claim, enhancing value and user flexibility 1Per Kynetec Q2 data 2Industry figures represent Elanco analysis of Q2 2025 market data and internal estimates for animal health medicines and vaccines. 3Estimated based on responses to Elanco survey 7
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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 Share Gains In U.S. Pet Health markets: para, NSAIDs, derm Zenrelia Approved in the EU with Q3 launch; expect revised U.S. label language in Q4 Continuously Improve Productivity & Cash Flow Improving NLR Expect $500-$550M net debt paydown, following $1.5B reduction in 2024 Elanco Ascend Launching company- wide productivity and capabilities initiative Capex Investments Elwood, Kansas and Ft. Dodge, Iowa expansions on track 2025 | Q2 Earnings 8 Portfolio Value in U.S. Farm Animal demand for livestock sustainability products driving sales growth for Rumensin TruCan Ultra CIV Approval completes U.S. Pet Health vaccine portfolio Credelio Quattro Strong performance continues; market share ahead of expectations OTC Para Growth Continued strength led by Seresto and Adtab Consistent Progress Across Our Strategic Priorities Broad-Based Growth 3 of 4 quadrants contributed to growth in quarter Broad-Based Growth All quadrants positive with a stabilizing base; 3% price contribution Vaccine Portfolio Expansion Launching TruCan CIV enhancing our line of Tru Portfolio vaccines Experior Fast adoption from heifer clearance continuing
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9 Second Quarter 2025 Financial Results
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10 Second Quarter 2025 Impact of Price, Rate, and Volume on Revenue $ Millions Revenue Price FX Rate Organic Volume Aqua Volume Total Organic CC1 Change Pet Health $643 4% 1% 6% 11% 10% Cattle $268 0% 4% 4% Poultry $215 2% 9% 7% Swine $100 1% 11% 10% Aqua $0 (100)% Farm Animal $583 2% 1% 4% (9)% (2)% 6% Contract Mfg. / Other $15 36% Total Elanco $1,241 3% 1% 5% (4)% 5% 8% 2025 | Q2 Earnings Reported revenue in millions. Numbers may not add due to rounding. 1Organic CC growth represents revenue growth excluding the impacts from our prior year divestiture of the aqua business, which was divested July 9, 2024, royalty revenue that was sold to a third party and the impact of foreign exchange rates.
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11 $ Millions 2025 2024 Change (%) Organic CC1 Change (%) US Pet Health $377 $338 11% 11% Int’l Pet Health $266 $241 10% 7% Total Pet Health $643 $579 11% 10% US Farm Animal $215 $206 5% 5% Int’l Farm Animal $368 $388 (5)% 6% Total Farm Animal $583 $594 (2)% 6% Contract Mfg. / Other $15 $11 36% Total Elanco $1,241 $1,184 5% 8% Second Quarter 2025 Revenue by Geography and Species 2025 | Q2 Earnings Reported revenue in millions. Numbers may not add due to rounding. 1Organic CC growth represents revenue growth excluding the impacts from our prior year divestiture of the aqua business, which was divested July 9, 2024, royalty revenue that was sold to a third party and the impact of foreign exchange rates.
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12 Note: Numbers may not add due to rounding. NM – Not meaningful. 1Non-GAAP financial measures. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. 2Comparisons have not been adjusted for the unfavorable impact of the aqua divestiture which was completed on July 9, 2024. Adjusted1 Income Statement Highlights Including Impact from Aqua Divestiture Second Quarter 2025 $ millions, except per share values 2025 2024 Change ($)2 Change (%)2 Revenue $1,241 $1,184 $57 5% Adjusted Gross Profit $709 $689 $20 3% Adjusted Gross Margin 57.3% 58.2% NM (90) bps Operating Expense $492 $443 $49 11% Interest Expense, Net $38 $65 $(27) (42)% Other Expense $12 $4 $8 200% Effective Tax Rate 21.7% 16.9% NM NM Adjusted Net Income $131 $147 $(16) (11)% Adjusted Earnings Per Share Diluted $0.26 $0.30 $(0.04) (13)% Adjusted EBITDA $238 $275 $(37) (13)% Adjusted EBITDA Margin 19.2% 23.2% NM (400) bps 2025 | Q2 Earnings
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Adjusted EBITDA1 and Adjusted EPS1 Drivers Note: Numbers may not add due to rounding and ranges. 1Non-GAAP financial measures. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. 13 Second Quarter 2025 2025 | Q2 Earnings Interest Expense EBITDA Flow Through Q2 2024 Actual Gross Profit Operating Expenses & Other $0.30$275 $0.26$238 ~$(24) Q2 Adjusted EBITDA $ millions Q2 Adjusted EPS ~$(0.04) Aqua Divestiture Aqua Divestiture Q2 2025 Actual Q2 2024 Actual Q2 2025 Actual $(0.03) $(0.01)~$3 FX Tax $0.04~Flat FX $42 $(58)
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14 Debt Balances as of June 30, 2025 $ millions $3,975 $539 $3,436 Gross Debt Cash & Cash Equivalents Net Debt 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. 2DSO calculated as the trailing 12-month average. 3Net leverage ratio calculated as gross debt less cash and cash equivalents and finance lease liabilities on our balance sheet divided by adjusted EBITDA. 1 2025 | Q2 Earnings Q2 Net Leverage Ratio3 4.0x Net debt decreased by ~$500M in the quarter Days Sales Outstanding2 improved to 73 days Year over year decrease of 3 days 2025 Net Leverage Ratio target improves Expect $500-$550M of 2025 gross debt paydown and ending NLR of 3.8x-4.1x Operating Cash Flow (OCF) of $237M Reflects continued focus on working capital discipline and strong business performance 1 Less Finance Lease
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© 2024 Elanco or its affiliates Anticipate Future Capital Allocation Flexibility as Net Leverage Ratio Expected to Move Below 3x 1Based on the company’s 2024 full year results and 2025 guidance as provided on August 7, 2025. Capital Allocation Priorities Debt Paydown Investment in Business Primary use of free cash flow Targeting below 3x over time R&D, manufacturing capex, commercial launches investment expected to drive sustainable topline growth in 2025 and beyond Strengthening Balance Sheet 15 5.6x 2.5 3 3.5 4 4.5 5 5.5 6 Adj. Net Leverage Ratio Substantial Improvement to Net Leverage Ratio 4.3x1 3.8-4.1x1 2023 2024 2025e Consistent Capital Allocation Strategy 2025 | Q2 Earnings
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Financial Guidance 16 Third Quarter and Full Year 2025
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May August Comments Revenue $4,510 - $4,580 $4,570 - $4,620 Expect 5-6% organic CC2 growth; Includes ~$35M FX tailwind vs. May Reported Net Loss $(35) - $(7) $(38) - $(14) Adjusted EBITDA1 $830 - $870 $850 - $890 Includes current est. for net tariff impact Reported Diluted EPS $(0.07) - $(0.01) $(0.08) - $(0.03) Adjusted Diluted EPS1 $0.80 - $0.86 $0.85 - $0.91 Reflects adj. EBITDA flow through and favorable interest 17 2025 Full Year 1Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. 2Organic CC growth represents revenue growth excluding the impacts from our prior year divestiture of the aqua business, which was divested July 9, 2024, royalty revenue that was sold to a third party and the impact of foreign exchange rates. Financial Guidance FX Impact YOY Relative tailwind vs. May guidance, with neutral full-year impact now expected year-over- year $ millions, except per share values Adjusted EBITDA Cadence Now expecting H1 vs H2 Adj. EBITDA cadence closer to historical trends 2025 | Q2 Earnings Lotilaner U.S. Royalties Required under GAAP to recognize as revenue ($4M in Q2) and imputed interest expense ($7M in Q2); excluded from Adj. EBITDA and Adj. EPS
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Raising Adj. EBITDA1 and Adj. EPS1 Guidance 18 2025 Adj. EBITDA 2025 Adj. EPS August Guidance May Guidance Q2 Beat Estimated Pre-Tariff Buying ~$28 August Guidance May Guidance Interest Expense Upside Adj EBITDA Flow Through May Guidance to August Guidance Bridge COR v4 Note: Numbers may not add due to rounding and ranges. Dollars in millions, except per share amounts. 1Non-GAAP financial measures. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. $830- $870 ~$10 $0.85- $0.91 $0.01 $0.80- $0.86 2025 | Q2 Earnings FX Flow Through $850- $890 $15 $0.04 Increased OPEX Investment in Launches and R&D ~$10 August Guidance May Guidance Q2 Beat Pre-Tariff Buying $28 $830- $870 ~$10 FX Flow Through $850- $890 ~$25 ~$15 OPEX Investment ~$10 Macro Uncertainty Flowing through $15M FX benefit; $15M remaining FX benefit not included in Aug. guidance offset by macroeconomic uncertainty
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Current State Expect ~$10M-$14M impact to 2025 Adj. EBITDA as of August 5th, 2025 vs. prior expectation of $16-$20M Expect Q3 normalization of pre-tariff customer buying (~$10M to Adj. EBITDA) Tariff Impacts and Risks Covered by Business Performance and Balanced Approach to Guidance 2025 tariffs related to pharmaceutical products Tariff escalation Moderate economic slowdown Farm trade disruption 2025 | Q2 Earnings Balanced Approach to Guidance Intervention Actions, FX & Business Execution Mitigating Potential T ariff Impacts 19 Potential Risk Scenarios Mitigating Actions Being Implemented Supply chain optimization Inventory management Tactical pricing in select geographies Strategic API sourcing Not including ~$15M Expected FX benefit to Adj. EBITDA in guidance to cover potential risk scenarios
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20 Third Quarter 2025 1Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. 2Organic CC growth represents revenue growth excluding the impacts from our prior year divestiture of the aqua business, which was divested July 9, 2024, royalty revenue that was sold to a third party and the impact of foreign exchange rates. Financial Guidance $ millions, except per share values 2025 | Q2 Earnings Q3 Guidance Comments Revenue $1,080 - $1,110 Expect 4%-6% organic CC2 growth; FX rates reflect end of July with minimal YoY impact Reported Net Loss $(66) - $(45) Adjusted EBITDA1 $160 - $180 Includes operating expenses up ~8% Reported Diluted EPS $(0.13) - $(0.09) Adjusted Diluted EPS1 $0.12 - $0.16 Tax rate expected 27%-29% Seasonal Cadence Reflective of seasonality of Elanco's higher-margin parasiticide products OPEX Investments $10M of incremental support for innovation product launches and key R&D projects Additional Q3 Assumptions Interest expense of ~$40M; ~$55M of cash taxes related to the 2024 aqua divestiture expected to be paid
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Established Foundation Focused on Animal Health Acquisitions for portfolio diversity; Spin-out of Eli Lilly with 2018 IPO; Dedicated sites & systems Balanced Mix & Increased Scale Portfolio diversifying acquisition of Bayer Animal Health increased global scale, with productivity focus Innovation Delivered & Enhanced Capabilities Late-stage pipeline delivered; Strategy streamlined; Launch efforts re- imagined Elanco’s Strategic Trajectory: Powerful Momentum into 2025 Poised for Sustainable Revenue Growth Multiple potential blockbusters in market and a stabilizing base to drive growth Accelerating contribution from innovation, majority already approved, and a stabilizing base business expected to drive sustainable growth. Leveraging the existing cost base allows for expected margin expansion in 2026 and beyond 21 2021-2024 2018-2020 2019-2021 2025 & Beyond
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22 Reference slides and GAAP reported to non-GAAP adjusted reconciliations Appendix
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23 First Half 2025 Impact of Price, Rate, and Volume on Revenue Revenue Price FX Rate Organic Volume Aqua Volume Total Organic CC1 Change Pet Health $1,278 3% 0% 2% 5% 5% Cattle $540 (1)% 8% 9% Poultry $404 (1)% 2% 3% Swine $185 (1)% 6% 7% Aqua $0 (100)% Farm Animal $1,129 3% (1)% 4% (8)% (2)% 7% Contract Manufacturing $27 29% Total Elanco $2,434 3% (1)% 3% (3)% 2% 6% Note: Reported revenue in millions. Numbers may not add due to rounding. 1Organic CC growth represents revenue growth excluding the impacts from our prior year divestiture of the aqua business, which was divested July 9, 2024, royalty revenue that was sold to a third party and the impact of foreign exchange rates. 2025 | Q2 Earnings
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24 Note: Reported revenue in millions. Numbers may not add due to rounding. 1Organic CC growth represents revenue growth excluding the impacts from our prior year divestiture of the aqua business, which was divested July 9, 2024, royalty revenue that was sold to a third party and the impact of foreign exchange rates. 2025 2024 Change Organic CC1 Change US Pet Health $700 $671 $29 4% Int’l Pet Health $578 $547 $31 6% Total Pet Health $1,278 $1,218 $60 5% US Farm Animal $446 $402 $44 11% Int’l Farm Animal $683 $748 $(65) 4% Total Farm Animal $1,129 $1,150 $(21) 7% Contract Manufacturing $27 $21 $6 Total Elanco $2,434 $2,389 $41 6% First Half 2025 Revenue by Geography and Species 2025 | Q2 Earnings
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25 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. 2Comparisons have not been adjusted for the unfavorable impact of the aqua divestiture which was completed on July 9, 2024. Adjusted1 Income Statement Highlights Including Impact from Aqua Divestiture First Half 2025 $ millions, except per share values 2025 2024 Change ($)2 Change (%)2 Revenue $2,434 $2,389 $41 2% Adjusted Gross Profit $1,394 $1,379 $15 1% Adjusted Gross Margin 57.4% 57.7% NM (30) bps Operating Expense $927 $867 $60 7% Interest Expense, Net $78 $131 $(53) (40)% Other Expense $19 $8 $11 138% Effective Tax Rate 14.8% 15.8% NM NM Adjusted Net Income $315 $314 $1 0% Adjusted Earnings Per Share Diluted $0.63 $0.63 $0.00 0% Adjusted EBITDA $514 $569 $(55) (10)% Adjusted EBITDA Margin 21.2% 23.8% NM (260) bps 2025 | Q2 Earnings
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May August T otal Revenue $4,510 – $4,580 $4,570 – $4,620 Adjusted Gross Margin1 54.2% – 54.7% 54.5% – 55.0% Operating Expenses $1,735 – $1,750 $1,760 – $1,770 Adjusted EBITDA1 $830 – $870 $850 – $890 Adjusted EBITDA Margin1 18.4% – 19.0% 18.6% – 19.3% Adjusted Interest Expense, Net Approx. $190 Approx. $180 Tax Rate 21% – 23% 20% – 22% Adjusted Earnings per Share1 $0.80 – $0.86 $0.85 – $0.91 Weighted Average Diluted Share Count Approx. 500 million Approx. 500 million Capital Expenditures $225 – $255 $225 – $255 Cash Taxes Approx. $230 Approx. $230 Cash Interest Approx. $225 Approx. $210 Financial Guidance & Additional Assumptions 26 1Non-GAAP financial measure. See Appendix to this presentation for more information, including GAAP to non-GAAP reconciliations. Full Year 2025 $ millions, except per share values 2025 | Q2 Earnings
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27 Second Quarter 2025 Adjusted EBITDA Reconciliation 2025 2024 Reported Net Income (Loss) $11 $(50) Net Interest Expense $48 $65 Income Tax Expense $14 $18 Depreciation and Amortization $169 $164 EBITDA $242 $197 Non-GAAP Adjustments Asset Impairment, Restructuring, and Other Special Charges $1 $80 Impact of Royalty Revenue on EBITDA $(4) $0 Other Income, Net $(1) $(2) Adjusted EBITDA $238 $275 Adjusted EBITDA Margin 19.2% 23.2% $ millions Note: Numbers may not add due to rounding. 2025 | Q2 Earnings
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28 Second Quarter 2025 Reconciliation of GAAP Reported to Non-GAAP Adjusted Income Statement Items $ millions, except per share values Note: Numbers may not add due to rounding. 2025 | Q2 Earnings 2025 2024 Net Income EPS Net Income EPS GAAP Reported Net Income $11 $0.02 $(50) $(0.10) Amortization of Intangible Assets $136 $0.27 $131 $0.26 Asset Impairment, Restructuring, and Other Special Charges(1) $1 $0.00 $80 $0.16 Sold Royalty Revenue(2) $(4) $(0.01) - - Interest Expense, Net of Capitalized Interest(3) $10 $0.02 - - Other Expense, Net $(1) $0.00 $(2) $0.00 Income Tax Expense(4) (22) $(0.04) (12) $(0.02) Adjusted Net Income $131 $0.26 $147 $0.30
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29 Second Quarter 2025 Details of Adjustments to Certain GAAP Reported Measures For the three months ended June 30, 2025 and 2024: (1) Adjustments of $80 million for the three months ended June 30, 2024, principally included a $53 million impairment charge related to a pet health IPR&D asset (IL-4R) and $10 million of transaction costs associated with the sale of our aqua business. (2) Adjustments of $4 million for the three months ended June 30, 2025, related to recognized royalty revenue that has been sold to a third party. (3) Adjustments of $10 million for the three months ended June 30, 2025, primarily related to imputed interest expense on our liability related to the lotilaner U.S. royalty monetization (liability for sale of future revenue). (4) Adjustments of $22 million and $12 million for the three months ended June 30, 2025 and 2024, respectively, 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. 2025 | Q2 Earnings
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30 First Half 2025 Adjusted EBITDA Reconciliation 2025 2024 Reported Net Income (Loss) $78 $(18) Net Interest Expense $88 $131 Income Tax Expense (Benefit) $7 $(2) Depreciation and Amortization $330 $329 EBITDA $503 $440 Non-GAAP Adjustments Cost of Sales $1 $0 Asset Impairment, Restructuring, and Other Special Charges $10 $126 Impact of Royalty Revenue on EBITDA $(4) $0 Other Expense, Net $4 $3 Adjusted EBITDA $514 $569 Adjusted EBITDA Margin 21.2% 23.8% $ millions Note: Numbers may not add due to rounding. 2025 | Q2 Earnings
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31 First Half 2025 Reconciliation of GAAP Reported to Non-GAAP Adjusted Income Statement Items $ millions, except per share values Note: Numbers may not add due to rounding. 2025 | Q2 Earnings 2025 2024 Net Income EPS Net Income EPS GAAP Reported Net Income $78 $0.16 $(18) $(0.04) Cost of Sales $1 $0.00 - - Amortization of Intangible Assets $264 $0.53 $264 $0.53 Asset Impairment, Restructuring, and Other Special Charges(1) $10 $0.02 $126 $0.25 Sold Royalty Revenue(2) $(4) $(0.01) - - Interest Expense, Net of Capitalized Interest(3) $10 $0.02 - - Other Expense, Net $4 $0.01 $3 $0.01 Income Tax Expense(4) (48) $(0.10) (61) $(0.12) Adjusted Net Income $315 $0.63 $314 $0.63
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32 First Half 2025 Details of Adjustments to Certain GAAP Reported Measures For the six months ended June 30, 2025 and 2024: (1) 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. Adjustments of $126 million for the six months ended June 30, 2024, principally included the above noted $53 million IPR&D asset impairment charge, $43 million of costs associated with our restructuring plan announced in February 2024 and $17 million of transaction costs related to the sale of our aqua business. (2) Adjustments of $4 million for the six months ended June 30, 2025 related to earned royalty revenue that has been sold to a third party. (3) Adjustments of $10 million for the six months ended June 30, 2025 primarily related to imputed interest expense on our liability for sale of future revenue. (4) 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. Adjustments of $61 million for the six months ended June 30, 2024, represented the income tax expense associated with the adjusted items discussed above and $13 million related to the partial release of a valuation allowance attributable to the anticipated sale of our aqua business. 2025 | Q2 Earnings
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33 Full Year 2025 $ millions Reported Net Loss $(38) - $(14) Net Interest Expense Approx. $220 w/ Royalty Monetization Liability Income Tax (Benefit) Expense $(13) - $8 Depreciation and Amortization Approx. $670 EBITDA $836 - $886 Non-GAAP Adjustments Cost of Sales Approx. $2 Asset Impairment, Restructuring, and Other Special Charges Approx. $15 Other Expense, Net Approx. $8 Sold Royalty Revenue Approx. $(15) Adjusted EBITDA $850 - $890 Adjusted EBITDA Margin 18.6% - 19.3% EBITDA Guidance Reconciliation Note: Numbers may not add due to rounding. 2025 | Q2 Earnings
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34 Full Year 2025 Reported Loss per Share $(0.08) - $(0.03) Cost of Sales Approx. $0.00 Amortization of Intangible Assets Approx. $1.08 Asset Impairment, Restructuring, and Other Special Charges $0.02 - $0.04 Other Expense, Net $0.03 - $0.04 Royalty Monetization Approx. $0.03 Subtotal $1.17 - $1.18 Tax Impact of Adjustments $(0.25) - $(0.23) Total Adjustments to Earnings per Share $0.93 - $0.94 Adjusted Earnings per Share1 $0.85 - $0.91 EPS Guidance Reconciliation Note: Numbers may not add due to rounding. 1Adjusted EPS is calculated as the sum of reported EPS and total adjustments to EPS. 2025 | Q2 Earnings
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35 Third Quarter 2025 $ millions EBITDA Guidance Reconciliation 2025 | Q2 Earnings Reported Net Loss $(66) - $(45) Net Interest Expense Approx. $50 w/ Royalty Monetization Liability Income Tax (Benefit) Expense $(6) - $1 Depreciation and Amortization Approx. $170 EBITDA $158 - $182 Non-GAAP Adjustments Asset Impairment, Restructuring, and Other Special Charges Approx. $5 Other Expense, Net Approx. $2 Sold Royalty Revenue Approx. $(6) Adjusted EBITDA $160 - $180 Adjusted EBITDA Margin 14.8% - 16.2% Note: Numbers may not add due to rounding.
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36 Third Quarter 2025 EPS Guidance Reconciliation Note: Numbers may not add due to rounding. 1Adjusted EPS is calculated as the sum of reported EPS and total adjustments to EPS. 2025 | Q2 Earnings Reported Loss per Share $(0.13) - $(0.09) Amortization of Intangible Assets Approx. $0.27 Asset Impairment, Restructuring, and Other Special Charges $0.00 - $0.01 Other Expense, Net Approx. $0.01 Royalty Monetization Approx. $0.01 Subtotal $0.30 - $0.31 Tax Impact of Adjustments $(0.06) - $(0.05) Total Adjustments to Earnings per Share Approx. $0.25 Adjusted Earnings per Share1 $0.12 - $0.16
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