Elanco Reports $67 Million Net Income in Q1 2025, Revenue Declines 1% to $1.193 Billion

Elanco Animal Health Incorporated reported a net income of $67 million for the first quarter of 2025, a significant increase from $32 million in the same period of the previous year. The company's total revenue for the quarter was $1.193 billion, reflecting a slight decline of 1% compared to $1.205 billion in Q1 2024. This decrease was attributed to foreign currency exchange rate impacts and the divestiture of its aqua business, which had generated $31 million in revenue during the prior year. The gross profit margin remained stable at 57%, despite a $6 million decrease in gross profit year-over-year.

In terms of operational changes, Elanco's revenue from its pet health segment decreased by 1% to $635 million, while farm animal revenue fell by 2% to $546 million. The decline in farm animal revenue was primarily due to the impact of the aqua business divestiture and unfavorable foreign currency movements, although there was a 4% increase in volumes driven by strong demand in the U.S. cattle market. The company also reported a 20% increase in revenue from contract manufacturing and other services, totaling $12 million.

Elanco has been active in strategic developments, including the acquisition of a manufacturing facility in Speke, U.K., for $36 million, aimed at minimizing supply disruptions for its farm animal product lines. The company also launched several new products, including Zenrelia, a JAK inhibitor for dogs, and Credelio Quattro, a comprehensive parasite treatment for dogs, which are expected to contribute positively to future revenues. Additionally, Elanco executed a Purchase and Sale Agreement with Blackstone in May 2025, receiving $295 million for future royalties related to its product XDEMVY, further enhancing its liquidity position.

The company’s cash flow from operating activities showed a net outflow of $4 million for the quarter, a decline from a positive cash flow of $2 million in Q1 2024. Cash used in investing activities increased significantly to $58 million, primarily due to higher capital expenditures related to facility expansions. However, cash provided by financing activities improved to $52 million, driven by net borrowings on its Securitization Facility. As of March 31, 2025, Elanco had cash and cash equivalents of $487 million and unused borrowing capacity of approximately $750 million, indicating a solid liquidity position.

Looking ahead, Elanco remains focused on its growth strategy through product innovation and market expansion. The company is closely monitoring the impacts of macroeconomic factors, including trade policies and currency fluctuations, on its operations. With a strong pipeline of new products and ongoing investments in its manufacturing capabilities, Elanco aims to enhance its market position and drive future revenue growth.