ELANCO ANIMAL HEALTH INC, 10-Q filed on 5/6/2026
Quarterly Report
v3.26.1
Cover Page - shares
 3 Months Ended
Mar. 31, 2026
May 01, 2026
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2026  
Document Transition Report false  
Entity File Number 001-38661  
Entity Registrant Name Elanco Animal Health Incorporated  
Entity Incorporation, State or Country Code IN  
Entity Tax Identification Number 82-5497352  
Entity Address, Address Line One 450 ELANCO CIRCLE  
Entity Address, City or Town INDIANAPOLIS  
Entity Address, State or Province IN  
Entity Address, Postal Zip Code 46221  
City Area Code 877  
Local Phone Number 352-6261  
Title of 12(b) Security Common stock, no par value  
Trading Symbol ELAN  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding (in shares)   499,449,583
Amendment Flag false  
Document Fiscal Year Focus 2026  
Document Fiscal Period Focus Q1  
Entity Central Index Key 0001739104  
Current Fiscal Year End Date --12-31  
v3.26.1
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Income Statement [Abstract]    
Revenue $ 1,371 $ 1,193
Cost of sales 586 509
Gross profit 785 684
Research and development 97 94
Marketing, selling and administrative 381 341
Amortization of intangible assets 138 128
Asset impairment, restructuring and other special charges 16 9
Interest expense, net of capitalized interest 57 40
Other expense, net 9 12
Income before income taxes 87 60
Income tax expense (benefit) 30 (7)
Net income $ 57 $ 67
Earnings per share:    
Basic (usd per share) $ 0.11 $ 0.14
Diluted (usd per share) $ 0.11 $ 0.13
Weighted-average shares outstanding:    
Basic (in shares) 497.7 495.1
Diluted (in shares) 506.0 499.1
v3.26.1
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Statement of Comprehensive Income [Abstract]    
Net income $ 57 $ 67
Other comprehensive (loss) income:    
Cash flow hedges, net of taxes 12 (29)
Foreign currency translation, net of taxes (99) 218
Defined benefit plans, net of taxes (5) (1)
Other comprehensive (loss) income, net of taxes (92) 188
Comprehensive (loss) income $ (35) $ 255
v3.26.1
Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Mar. 31, 2026
Dec. 31, 2025
Current Assets    
Cash and cash equivalents $ 428 $ 545
Accounts receivable, net 1,084 873
Other receivables 70 67
Inventories 1,717 1,737
Prepaid expenses and other 285 236
Total current assets 3,584 3,458
Noncurrent Assets    
Property and equipment, net 1,395 1,409
Goodwill 4,723 4,779
Other intangibles, net 3,225 3,408
Other noncurrent assets 295 304
Total assets 13,222 13,358
Current Liabilities    
Accounts payable 372 368
Sales rebates and discounts 400 416
Current portion of long-term debt and finance lease liability 73 74
Other current liabilities 817 739
Total current liabilities 1,662 1,597
Noncurrent Liabilities    
Long-term debt and finance lease liability 3,918 3,943
Liability for sale of future revenue 309 304
Deferred taxes 366 382
Other noncurrent liabilities 467 585
Total liabilities 6,722 6,811
Commitments and Contingencies
Equity    
Preferred stock, 1,000,000,000 shares authorized, no par value; none issued 0 0
Common stock, no par value, 5,000,000,000 shares authorized, 499,381,644 and 496,975,154 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 0 0
Additional paid-in capital 8,858 8,870
Accumulated deficit (2,125) (2,182)
Accumulated other comprehensive loss (233) (141)
Total equity 6,500 6,547
Total liabilities and equity $ 13,222 $ 13,358
v3.26.1
Condensed Consolidated Balance Sheets (Parenthetical) - shares
Mar. 31, 2026
Dec. 31, 2025
Statement of Financial Position [Abstract]    
Preferred stock, shares authorized (in shares) 1,000,000,000 1,000,000,000
Preferred stock, shares issued (in shares) 0 0
Common stock, shares authorized (in shares) 5,000,000,000 5,000,000,000
Common stock, shares issued (in shares) 499,381,644 496,975,154
Common stock, shares outstanding (in shares) 499,381,644 496,975,154
v3.26.1
Condensed Consolidated Statements of Equity (Unaudited) - USD ($)
$ in Millions
Total
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Cash Flow Hedges
Foreign Currency Translation
Defined Benefit Plans
Balance at beginning of period (in shares) at Dec. 31, 2024   494,400,000            
Balance at beginning of period at Dec. 31, 2024 $ 6,096 $ 0 $ 8,817 $ (1,950) $ (771) $ 37 $ (866) $ 58
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 67     67        
Other comprehensive income (loss), net of tax 188       188 (29) 218 (1)
Stock-based compensation activity, net (in shares)   2,100,000            
Stock-based compensation activity, net 2   2          
Balance at end of period (in shares) at Mar. 31, 2025   496,500,000            
Balance at end of period at Mar. 31, 2025 $ 6,353 $ 0 8,819 (1,883) (583) 8 (648) 57
Balance at beginning of period (in shares) at Dec. 31, 2025 496,975,154 497,000,000.0            
Balance at beginning of period at Dec. 31, 2025 $ 6,547 $ 0 8,870 (2,182) (141) (12) (219) 90
Increase (Decrease) in Stockholders' Equity [Roll Forward]                
Net income 57     57        
Other comprehensive income (loss), net of tax (92)       (92) $ 12 (99) (5)
Stock-based compensation activity, net (in shares)   2,400,000            
Stock-based compensation activity, net $ (12)   (12)          
Balance at end of period (in shares) at Mar. 31, 2026 499,381,644 499,400,000            
Balance at end of period at Mar. 31, 2026 $ 6,500 $ 0 $ 8,858 $ (2,125) $ (233)   $ (318) $ 85
v3.26.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Cash Flows from Operating Activities    
Net income $ 57 $ 67
Adjustments to reconcile net income to cash flows from operating activities:    
Depreciation and amortization 172 161
Stock-based compensation expense 21 15
Sold portion of royalty revenue (9) 0
Interest on liability for sale of future revenue 14 0
Changes in operating assets and liabilities, net of divestitures (263) (237)
Other non-cash operating activities, net 21 (10)
Net Cash Provided by (Used for) Operating Activities 13 (4)
Cash Flows from Investing Activities    
Net purchases of property and equipment and software (51) (65)
Proceeds from divestitures 0 9
Other investing activities, net (9) (2)
Net Cash Used for Investing Activities (60) (58)
Cash Flows from Financing Activities    
Repayments of long-term borrowings (16) (13)
Shares repurchased for employee tax withholdings (34) (13)
Other financing activities, net (15) (7)
Net Cash (Used for) Provided by Financing Activities (65) 52
Effect of exchange rate changes on cash and cash equivalents (5) 29
Net (decrease) increase in cash and cash equivalents (117) 19
Cash and cash equivalents – beginning of period 545 468
Cash and cash equivalents – end of period 428 487
Revolving Credit Facility    
Cash Flows from Financing Activities    
Proceeds from facility 0 125
Repayments of facility 0 (125)
Securitization Facility    
Cash Flows from Financing Activities    
Proceeds from facility 0 125
Repayments of facility $ 0 $ (40)
v3.26.1
Basis of Presentation and Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies
Note 1. Basis of Presentation and Summary of Significant Accounting Policies
We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the SEC requirements for interim reporting. As permitted under those rules, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. (GAAP) have been condensed or omitted. The information included in this Form 10-Q should be read in conjunction with our consolidated financial statements and accompanying notes for the year ended December 31, 2025, included in our 2025 Form 10-K. The significant accounting policies set forth in Note 2 to the consolidated financial statements in our 2025 Form 10-K and the footnotes herein appropriately represent, in all material respects, the current status of our accounting policies.
In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for fair presentation of the results of operations for the periods shown. The preparation of financial statements in accordance with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates. In addition, results for interim periods should not be considered indicative of results for any other interim period or for the full year ending December 31, 2026, or any other future period.
v3.26.1
New Financial Accounting Pronouncements
 3 Months Ended
Mar. 31, 2026
Accounting Changes and Error Corrections [Abstract]  
New Financial Accounting Pronouncements
Note 2. New Financial Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed and disaggregated information about significant expense categories, such as purchases of inventory, employee compensation, depreciation and amortization and selling expenses. This standard, including related updates, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. We are currently assessing the impact ASU 2024-03 will have on our consolidated financial statements, including our footnote disclosures.
v3.26.1
Revenue
 3 Months Ended
Mar. 31, 2026
Revenue from Contract with Customer [Abstract]  
Revenue
Note 3. Revenue
The following table summarizes the activity in our global sales rebates and discounts liability:
Three Months Ended March 31,
20262025
Beginning balance$416 $332 
Reduction of revenue284 228 
Payments(296)(245)
Foreign currency translation adjustments(4)4 
Ending balance$400 $319 
Adjustments to revenue recognized as a result of changes in estimates during the three months ended March 31, 2026 and 2025, for product shipped in previous periods were not material. Actual global product returns were approximately 1% of net revenue for the three months ended March 31, 2026 and 2025.
Disaggregation of Revenue
The following table summarizes our revenue disaggregated by product category:
Three Months Ended March 31,
20262025
Pet Health$710 $635 
Farm Animal:
Cattle316 272 
Poultry230 189 
Swine96 85 
Total Farm Animal642 546 
Contract Manufacturing and Other (1)
19 12 
Revenue$1,371 $1,193 
(1)Represents revenue from arrangements in which we manufacture products on behalf of a third party and royalty revenue. Royalty revenue sold to a third party in May 2025 totaled $9 million for the three months ended March 31, 2026. While we are no longer entitled to these royalties, we are required under GAAP to continue recognizing them as revenue. See Note 10. Liability for Sale of Future Revenue for additional information.
The following table summarizes our revenue disaggregated by geographic area:
Three Months Ended March 31,
20262025
United States$605 $554 
International766 639 
Revenue$1,371 $1,193 
We have a single customer that accounted for approximately 11% and 12% of revenue for the three months ended March 31, 2026 and 2025, respectively. Product sales with this customer resulted in accounts receivable of $117 million and $107 million at March 31, 2026 and December 31, 2025, respectively.
v3.26.1
Acquisitions and Divestitures
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions and Divestitures
Note 4. Acquisitions and Divestitures
Acquisitions
AHV International: On April 30, 2026, we completed the previously announced acquisition of 100% of the outstanding equity interests of AHV International B.V. (AHV), along with selected assets of AHV's affiliates necessary for the on-going operations of the business. AHV is an innovative, farm animal health company incorporated in the Netherlands focused on solutions to improve animal welfare and productivity, while reducing the need for antibiotics. The acquisition of AHV is expected to accelerate our strategy to grow our industry leadership in farm animal products, particularly for cattle, by expanding our product portfolio, primarily throughout Europe and the U.S.
Upon closing, we paid $76 million, inclusive of working capital adjustments. Remaining aggregate consideration for this acquisition includes (1) $100 million of guaranteed payments due through 2030 and (2) up to $140 million of contingent payments due upon the achievement of significant performance-based and time-limited milestones through 2032. The initial accounting for this acquisition is incomplete, pending valuation of contingent consideration, and identification and measurement of the assets acquired and liabilities assumed.
Divestitures
New Zealand manufacturing facility: In February 2025, we sold our manufacturing facility in Manukau, New Zealand, to a third party for cash proceeds of $9 million. Assets divested included property and equipment related to the facility and inventory. Additionally, approximately 50 individuals were transferred to the new owners as part of the divestiture. This transaction did not result in a material gain or loss on divestiture.
v3.26.1
Asset Impairment, Restructuring and Other Special Charges
 3 Months Ended
Mar. 31, 2026
Restructuring and Related Activities [Abstract]  
Asset Impairment, Restructuring and Other Special Charges
Note 5. Asset Impairment, Restructuring and Other Special Charges
In recent years, we have incurred substantial costs associated with restructuring programs and cost-reduction initiatives. Restructuring activities have primarily included charges associated with business and facility rationalizations and workforce reductions. We have also incurred costs associated with executing acquisitions, divestitures and other significant transactions and related integration and/or separation activities. Components of asset impairment, restructuring and other special charges were as follows:
Three Months Ended March 31,
20262025
Restructuring charges:
Cash-based severance$(1)$1 
Other non-cash charges (1)
15 — 
Other items (2)
2 8 
Total expense$16 $9 
(1)Other non-cash restructuring charges in 2026 related to $15 million of non-cash shut-down costs for the animal studies portion of our R&D facilities in Monheim, Germany.
(2)Amounts recorded in 2025 primarily consisted of upfront payments made in relation to new licensing arrangements.
The following table summarizes the activity in our reserves established in connection with restructuring activities:
Balance at December 31, 2025$124 
Charges(1)
Cash paid and other (1)
(21)
Balance at March 31, 2026$102 
(1)Includes foreign currency translation adjustments
The timing of payment of restructuring reserve obligations varies due to country-specific negotiations and regulations. As of March 31, 2026, approximately $90 million of our restructuring reserve was classified within other current liabilities on our condensed consolidated balance sheet, with the remainder classified within other noncurrent liabilities.
v3.26.1
Inventories
 3 Months Ended
Mar. 31, 2026
Inventory Disclosure [Abstract]  
Inventories
Note 6. Inventories
Inventories consisted of the following:
March 31, 2026December 31, 2025
Finished products$879 $871 
Work in process800 837 
Raw materials and supplies112 104 
Total1,791 1,812 
Decrease to LIFO cost(74)(75)
Inventories$1,717 $1,737 
v3.26.1
Debt and Finance Lease Liability
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Debt and Finance Lease Liability
Note 7. Debt and Finance Lease Liability
Our long-term debt and finance lease liability consisted of the following:
March 31, 2026December 31, 2025
Term Loan B due 2032$1,097 $1,100 
Euro Term Loan due 2029450 470 
Incremental Term Facility due 2028338 339 
Incremental Term Facility due 2029171 171 
Incremental Term Facility due 2031320 321 
Incremental Term Facility due 2032537 539 
Revolving Credit Facility (1)
— — 
Securitization Facility (2)
100 100 
Senior Notes due 2028 (3)
750 750 
Unamortized debt issuance costs(27)(28)
Total debt3,736 3,762 
Finance lease liability255 255 
3,991 4,017 
Less current portion of long-term debt and finance lease liability73 74 
Total long-term debt and finance lease liability$3,918 $3,943 
(1)Our Revolving Credit Facility provides up to $750 million in borrowing capacity, bears interest at Term SOFR plus a spread dependent on our Net Total Leverage Ratio, as defined within the agreement, which was 1.50% at March 31, 2026, and matures in July 2029.
(2)On April 22, 2026, we borrowed $50 million on our Securitization Facility for general corporate purposes and to complete the acquisition of AHV (see Note 4. Acquisitions and Divestitures for further information). Our Securitization Facility is secured and collateralized by our U.S. Net Eligible Receivables Balance, bears interest at Term SOFR plus 1.25% and matures in June 2028. Our borrowing capacity under our Securitization Facility is subject to monthly fluctuation based on the level of our borrowing base as reported to the lender.
(3)Our Senior Notes due 2028 are subject to interest rate adjustments based on credit rating agency actions. A rating upgrade in the fourth quarter of 2025 reduced the applicable interest rate, and as of March 31, 2026, these notes bear interest at a rate of 6.40%.
As of March 31, 2026, approximately 80% of our long-term indebtedness, excluding our finance lease liability, bore interest at a fixed rate, including variable-rate debt converted to fixed-rate through the use of interest rate swaps (see Note 8. Financial Instruments for additional information). We were in compliance with all of our debt covenants as of March 31, 2026.
v3.26.1
Financial Instruments
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments
Note 8. Financial Instruments
To manage our exposure to market risks, such as changes in foreign currency exchange rates and variable interest rates, we have entered into various derivative transactions. We do not offset derivative assets and liabilities on our condensed consolidated balance sheets. Our outstanding positions are discussed below.
Derivatives Not Designated as Hedges
We may enter into foreign currency exchange forward or option contracts to reduce the effects of fluctuating foreign currency exchange rates. As of March 31, 2026 and December 31, 2025, we had outstanding foreign currency exchange contracts with aggregate notional amounts of $1,219 million and $1,090 million, respectively. The amounts of net (losses) gains on derivative instruments not designated as hedging instruments, recorded in other expense, net were as follows:
Three Months Ended March 31,
20262025
Foreign exchange forward contracts (1)
$(1)$15 
(1)These amounts were substantially offset in other expense, net by the effect of changing exchange rates on the underlying foreign currency exposures.
Derivatives Designated as Hedges – Net investment hedges
At March 31, 2026 and December 31, 2025, we had a series of cross-currency fixed interest rate swaps to help mitigate the impact of foreign currency fluctuations on our operations in Switzerland with a combined 1,000 million CHF notional amount with tenors in 2026 and 2027. These instruments were determined to be, and were designated as, effective economic hedges of net investments in our CHF denominated net assets.
The amounts of gains (losses) on net investment hedges, net of tax, recorded in accumulated other comprehensive loss were as follows:
Three Months Ended March 31,
20262025
Cross-currency fixed interest rate swaps$8 $(24)
During the three months ended March 31, 2026 and 2025, these instruments also generated $11 million of interest income, which was included as a contra interest expense, net of capitalized interest in our condensed consolidated statements of operations.
Derivatives Designated as Hedges – Interest rate swaps
We had outstanding interest rate swaps with aggregate notional amounts of $2,300 million as of both March 31, 2026 and December 31, 2025, which have scheduled maturities in August 2026. As of March 31, 2026 and December 31, 2025, we also had forward-starting interest rate swap agreements with a combined notional amount of $850 million, which will become effective on August 1, 2026, and have scheduled maturities between 2028 and 2031.
The amounts of gains (losses) on interest rate swaps, net of tax, recorded in accumulated other comprehensive loss were as follows:
Three Months Ended March 31,
20262025
Interest rate swaps$7 $(16)
The amounts of (losses) gains reclassified out of accumulated other comprehensive loss and recognized into earnings through interest expense, net of capitalized interest were as follows:
Three Months Ended March 31,
20262025
Interest rate swaps$(5)$13 
Over the next 12 months, we expect to reclassify a loss of $9 million out of accumulated other comprehensive loss and into interest expense, net of capitalized interest related to our interest rate swaps, although the actual amounts reclassified may vary as a result of future changes in market conditions.
As of March 31, 2026, when factoring in the impact from our interest rate swaps, the weighted-average effective interest rate on our outstanding indebtedness, excluding our finance lease liability, was 5.72%.
v3.26.1
Fair Value
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value
Note 9. Fair Value
Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a framework that utilizes the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. Level 1 fair value measurements are based on quoted prices in active markets for identical assets or liabilities. We determine our Level 2 fair value measurements based on a market approach using quoted market values or significant other observable inputs for identical or comparable assets or liabilities. Our Level 3 fair value measurements are based on unobservable inputs based on little or no market activity.
The following table summarizes the fair value information at March 31, 2026 and December 31, 2025, for assets and liabilities measured at fair value on a recurring basis in the respective balance sheet line items, as well as long-term debt, excluding our finance lease liability, for which fair value is disclosed on a recurring basis:
  Fair Value Measurements Using 
Financial statement line itemCarrying
Amount		Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant
Other Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Fair
Value
March 31, 2026
Recurring fair value measurements
Prepaid expenses and other - derivative instruments$23 $— $23 $— $23 
Other noncurrent assets - derivative instruments8 — 8 — 8 
Other current liabilities - derivative instruments(180)— (180)— (180)
Other current liabilities - contingent consideration(18)— — (18)(18)
Financial instruments not carried at fair value
Long-term debt, excluding finance lease liability(3,763)— (3,773)— (3,773)
December 31, 2025
Recurring fair value measurements
Prepaid expenses and other - derivative instruments$20 $— $20 $— $20 
Other current liabilities - derivative instruments(111)— (111)— (111)
Other current liabilities - contingent consideration(29)— — (29)(29)
Other noncurrent liabilities - derivative instruments(73)— (73)— (73)
Financial instruments not carried at fair value
Long-term debt, excluding finance lease liability(3,790)— (3,809)— (3,809)
Cash and cash equivalents include cash on hand and all highly liquid investments with original maturities at the time of purchase of three months or less. The carrying values of cash and cash equivalents, accounts and other receivables, accounts payable and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these assets and liabilities.
Contingent consideration liabilities presented relate to our past acquisition of NutriQuest, LLC. Contingent consideration for this acquisition remains payable to the extent certain specific development, sales and geographic
milestones are achieved, as outlined in the purchase agreement. The fair value of these liabilities was estimated using a Monte Carlo simulation model, consisting of inputs not observable in the market, including estimates relating to revenue forecasts, discount rates and volatility. We also had investments without readily determinable fair values which were classified as other noncurrent assets on our condensed consolidated balance sheets totaling $13 million and $15 million as of March 31, 2026 and December 31, 2025, respectively. These investments are not recorded at fair value on a recurring basis, and as such, are not included in the fair value table above.
v3.26.1
Liability for Sale of Future Revenue
 3 Months Ended
Mar. 31, 2026
Liability For Sale Of Future Revenue [Abstract]  
Liability for Sale of Future Revenue
Note 10. Liability for Sale of Future Revenue
In May 2025, we executed a Purchase and Sale Agreement (PSA) with funds affiliated with Blackstone Life Sciences and Blackstone Credit & Insurance (collectively, Blackstone). Pursuant to the PSA, we received a cash payment of $295 million from Blackstone for the rights to the proceeds from (a) the future royalties we are owed from net sales in the U.S. of XDEMVY® (lotilaner ophthalmic solution) 0.25%, a medical treatment for Demodex blepharitis in humans, by Tarsus Pharmaceuticals, Inc. (Tarsus) and (b) certain future sales milestone payments we are owed based on global net sales of XDEMVY, both of which are pursuant to the terms of a previously executed license agreement with Tarsus (the qualifying royalties and milestones). These payments are made by Tarsus to Blackstone through a third-party escrow account and, therefore, do not represent cash inflows or outflows within our condensed consolidated statements of cash flows. The PSA applies to net sales of XDEMVY in the U.S. from April 1, 2025 through August 24, 2033. We retain the rights to all royalty payments on net sales outside the U.S. and any royalties due on U.S. net sales after August 24, 2033. We also retain the rights to any future royalties or milestones earned due to the future expansion of lotilaner in other human health applications. Given our continuing involvement with the generation of the qualifying royalties and milestones, the payment received in exchange for the qualifying royalties and milestones, net of transaction costs, was recorded as a liability for sale of future revenue.
GAAP also requires us to impute interest expense associated with the liability for sale of future revenue. Our imputed interest rate is calculated based on the rate we expect would enable the liability to be amortized in full over the life of the agreement and may vary throughout the term of the arrangement depending on the amount and timing of forecasted qualifying royalties and milestones, which will affect the timing and amount of reductions to the liability.
Further, although we will no longer receive the proceeds from the qualifying future royalties and milestones, we are required under GAAP to continue recognizing these amounts within our condensed consolidated statements of operations.
The following table summarizes the activity related to our liability for sale of future revenue:
Balance at December 31, 2025
$304 
Royalty revenue(9)
Imputed interest expense14 
Balance at March 31, 2026
$309 
Effective interest rate18.3 %
v3.26.1
Income Taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
Note 11. Income Taxes
Three Months Ended March 31,
20262025
Income tax expense (benefit)$30 $(7)
Effective tax rate34.6 %(12.2)%
For the three months ended March 31, 2026 and 2025, we recognized income tax expense and a benefit of $30 million and $7 million, respectively. Our effective tax rate for the three months ended March 31, 2026, of 34.6% differed from the statutory income tax rate primarily due to the tax impact from the jurisdictional mix of projected earnings and the accrual of global minimum taxes under current law. Our effective tax rate of (12.2)% for the three months ended March 31, 2025, differed from the statutory income tax rate primarily due to the tax impact from the jurisdictional mix of projected income and losses in non-U.S. jurisdictions and the utilization of net operating losses and a valuation allowance release in the U.S.
We were included in Eli Lilly and Company's (Lilly's) U.S. tax examinations by the Internal Revenue Service through the full separation date of March 11, 2019. Pursuant to the tax matters agreement we executed with Lilly in connection with our initial public offering (IPO), the potential liabilities or potential refunds attributable to pre-IPO periods in which Elanco was included in a Lilly consolidated or combined tax return remain with Lilly. The U.S. examination of tax years 2016 to 2018 began in 2019 and remains ongoing. Final resolution of certain matters is dependent upon several factors, including the potential for formal administrative proceedings.
v3.26.1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2026
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Note 12. Commitments and Contingencies
Legal Matters
We are party to various legal actions that oftentimes arise in the normal course of business. The most significant of these matters are described below. Under GAAP, loss contingency provisions are recorded when we deem it probable that we will incur a loss and are able to formulate a reasonable estimate of that loss. For the legal matters discussed below, we either believe material loss is not probable or are unable to reasonably estimate the possible loss or range of loss, if any. The process of resolving these matters is inherently uncertain and may develop over an extended period of time; therefore, at this time, the ultimate resolutions cannot be predicted. As of March 31, 2026 and December 31, 2025, we had no material liabilities established related to the legal matters discussed below.
On October 7, 2024, a putative securities class action lawsuit captioned Joseph Barpar v. Elanco Animal Health Inc., et al. (Barpar) was filed in the U.S. District Court for the District of Maryland against Elanco and two of its executives. Barpar alleged claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act) and specifically alleged that Elanco and the two executives made materially false and/or misleading statements and/or failed to disclose certain facts about the safety of and labeling for our Zenrelia® product, as well as the approval and launch timelines for Zenrelia and our Credelio Quattro™ product. The plaintiff purported to represent purchasers of Elanco securities between November 7, 2023 and June 26, 2024. On March 21, 2025, plaintiff filed an amended complaint that extended the time period for which the plaintiff purported to represent purchasers of Elanco securities to between May 9, 2023 and June 26, 2024. The amended complaint also removed allegations concerning the approval and launch timelines for our Credelio Quattro product. On May 20, 2025, we filed a motion to dismiss this case, and on March 26, 2026, the court granted our motion to dismiss the amended complaint in its entirety with prejudice and entered judgment in our favor. Plaintiffs have appealed this decision to the U.S. Court of Appeals for the Fourth Circuit, and the appeal is currently pending.
Following the filing of Barpar, several derivative cases were filed, all of which have been stayed pending the outcome of the Barpar matter. These derivative actions are expected to remain stayed pending final resolution of Barpar, including any applicable appeal periods. On November 1, 2024, a shareholder derivative action captioned Lawrence Hollin v. Lawrence E. Kurzius, et al. (Hollin) was filed in the U.S. District Court for the District of Maryland against current members of Elanco's Board of Directors and senior management, alleging claims under Sections 10(b) and 20(a) of the Exchange Act and state law claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment and waste of corporate assets, based on allegations substantially similar to the allegations in the putative class action complaint in Barpar. On March 11, 2025, a shareholder derivative action captioned James Habermehl v. Jeffrey N. Simmons, et al. was filed in Hancock County Circuit Court of Indiana, against the same parties named in Hollin, alleging claims under Indiana state law for breach of fiduciary duty and unjust enrichment, based on allegations substantially similar to the allegations in the putative class action complaint in Barpar. On April 28, 2025, a shareholder derivative action captioned Christopher Dougherty v. Elanco Animal Health, Inc., et al. (Dougherty), was filed in the District of Maryland, naming certain Elanco executives and 13 Elanco Board members as defendants. Dougherty alleges the defendants engaged in conspiratorial and individually culpable conduct based on materially false or misleading statements and omissions alleged in, referenced or related to, in large part, the putative class action complaint in Barpar, as well as breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and as to the certain executives, contribution under Section 15, U.S.C. § 78j(b) and Section 21D of the Exchange Act. On June 11, 2025, a shareholder derivative action captioned Mike Sexton v. Jeffrey N. Simmons, et al. (Sexton) was filed in Hancock County Circuit Court of Indiana against largely the same parties as in Hollin, alleging claims under Indiana state law for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement and waste of corporate assets. We are vigorously defending our positions in connection with each of these actions.
On May 20, 2020, a shareholder class action lawsuit captioned Hunter v. Elanco Animal Health Inc., et al. (Hunter) was filed in the U.S. District Court for the Southern District of Indiana against Elanco and certain executives. On September 3, 2020, the court appointed a lead plaintiff, and on November 9, 2020, the lead plaintiff filed an amended complaint adding additional claims against Elanco, certain executives and other individuals. The lawsuit alleged, in part, that Elanco and certain of its executives made materially false and/or misleading statements and/or failed to disclose certain facts about Elanco’s supply chain, inventory, revenue and projections. The lawsuit sought unspecified monetary damages and purports to represent purchasers of Elanco securities between September 30, 2018 and May 6, 2020, and purchasers of Elanco common stock issued in connection with Elanco's acquisition of Aratana Therapeutics, Inc. On January 13, 2021, we filed a motion to dismiss, and on August 17, 2022, the Court issued an order granting our motion to dismiss the case without prejudice. On October 14, 2022, the plaintiffs filed a motion for leave to amend the complaint. On December 7, 2022, we filed an opposition to the plaintiffs' motion, and on September 27, 2023, the court denied the plaintiffs' motion for leave, issuing final judgment in favor of Elanco. On October 25, 2023, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Seventh Circuit. We intend to continue to vigorously defend our position.
On October 16, 2020, a shareholder class action lawsuit captioned Safron Capital Corporation v. Elanco Animal Health Inc., et al. was filed in the Marion Superior Court of Indiana against Elanco, certain executives and other individuals and entities. On December 23, 2020, the plaintiffs filed an amended complaint adding an additional plaintiff. The lawsuit alleged, in part, that Elanco and certain of its executives made materially false and/or misleading statements and/or failed to disclose certain facts about Elanco’s relationships with third-party distributors and revenue attributable to those distributors within the registration statement on Form S-3 dated January 21, 2020, and accompanying prospectus filed in connection with Elanco’s public offering which closed on or about January 27, 2020. The lawsuit sought unspecified monetary damages and purported to represent purchasers of Elanco common stock or tangible equity units issued in connection with the public offering. On June 8, 2023, the plaintiffs filed a motion for leave to file a second amended complaint, which became the operative complaint. We filed a motion to dismiss the second amended complaint on August 7, 2023, which was granted on April 17, 2024. On or about October 4, 2024, the plaintiffs appealed the dismissal to the Indiana Court of Appeals, which affirmed the trial court’s order granting our motion to dismiss on August 1, 2025. On October 23, 2025, the plaintiff appealed dismissal to the Indiana Supreme Court, and on February 26, 2026, the Indiana Supreme Court denied plaintiff's appeal, which resolved this case in final form in Elanco's favor.
In the third quarter of 2019, Tevra Brands, LLC (Tevra) filed a complaint in the U.S. District Court of the Northern District of California, alleging that Bayer Animal Health (acquired by us in August 2020) had been involved in unlawful, exclusive dealing and tying of its flea and tick products Advantage, Advantix and Seresto™ and maintained a monopoly in the market. The complaint was amended in March 2020 and then dismissed in September 2020 with leave to amend. A second amended complaint was filed in March 2021 and realleged claims of unlawful exclusive dealing related to Advantage and Advantix and monopoly maintenance. A motion to dismiss the second amended complaint was denied in January 2022. Tevra’s demands included both actual and treble damages. On April 16, 2024, the court granted our motion for summary judgment to exclude all damages subsequent to our acquisition of Bayer Animal Health in August 2020. A jury trial was held in July 2024, and on August 1, 2024, the jury returned a verdict in favor of Bayer Animal Health. In January 2025, Tevra's motion for a new trial was denied, and in February 2025, Tevra filed its notice of appeal. Following the initial Tevra trial, three additional matters have been filed against us, both in the Northern District of California and in the Southern District of Indiana, most recently in January 2025: Tracy Spradlin v. Elanco Animal Health, Inc. (Spradlin), Tevra Brands, LLC v. Elanco Animal Health, Inc. (Tevra v. Elanco), and Susan Kraus-Silfen v. Elanco Animal Health, Inc. et. al. (Kraus-Silfen). While there are substantive and statutory differences, the allegations underpinning these matters are similar in some respects to the initial Tevra matter including, but not limited to, the family of pet health products and sales tactics and agreements alleged to drive a monopoly within the market. Spradlin and Kraus-Silfen are putative class actions, and all three of these additional matters seek injunctive relief and an unspecified amount of monetary relief. On March 31, 2025, our motion to dismiss Tevra v. Elanco was granted by the court without prejudice to plaintiff's right to file an amended claim. On February 18, 2026, we reached a settlement in principle with the Kraus-Silfen and Spradlin plaintiffs, including the potential payment by Elanco of a non-material amount, which remains subject to execution of definitive documentation and court approval. Additionally, this proposed settlement does not constitute an admission of liability. We continue to vigorously defend against each of the remaining claims in the two Tevra matters.
v3.26.1
Earnings Per Share
 3 Months Ended
Mar. 31, 2026
Earnings Per Share [Abstract]  
Earnings Per Share
Note 13. Earnings Per Share
We compute basic earnings (loss) per share by dividing net income (loss) by the weighted-average number of common shares outstanding for the reporting period. Elanco has variable common stock equivalents relating to certain equity awards in stock-based compensation arrangements. Diluted earnings per share reflects the potential dilution that could have occurred if holders of the unvested equity awards converted their holdings into common stock. The weighted-average number of potentially dilutive shares outstanding was calculated using the treasury stock method. Potential common shares that would have had the effect of increasing diluted earnings per share (or reducing loss per share) were considered to be anti-dilutive and as such, these shares were not included in the calculation of diluted earnings (loss) per share.
Basic and diluted weighted-average shares outstanding were as follows:
Three Months Ended March 31,
20262025
Basic weighted-average common shares outstanding497.7 495.1 
Assumed conversion of dilutive common stock equivalents (1)
8.3 4.0 
Diluted weighted-average shares outstanding506.0 499.1 
(1)For the three months ended March 31, 2026 and 2025, approximately 1.5 million and 3.7 million, respectively, of potential common shares were excluded from the calculation of diluted weighted-average shares outstanding because their effect was anti-dilutive.
v3.26.1
Business Segment Information
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Business Segment Information
Note 14. Business Segment Information
We operate our business as a single segment engaged in the development, manufacturing, marketing and sales of animal health products for both pets and farm animals. Consistent with our operational structure, our Chief Executive Officer (CEO), as the chief operating decision maker, makes resource allocation and business process decisions globally across our consolidated business. Strategic and resource allocation decisions are managed globally, with global functional leaders responsible for determining significant costs and investments and with regional leaders responsible for overseeing the execution of our global strategy. Managing and allocating resources at the global corporate level enables our CEO to assess the overall level of resources available and how to best deploy these resources across functions, product types, regional commercial organizations and R&D projects in line with our overarching long-term, corporate-wide strategic goals, rather than on a product or geographic basis. Consistent with this decision-making process, our CEO considers consolidated net income (loss), which is our single segment’s principal measure of segment profit and loss, when evaluating performance. Our CEO also considers these measures, as well as other factors, such as an assessment of a new product’s future market potential, when determining how to allocate company-wide resources.
Significant segment expenses are amounts that are regularly provided to our CEO and included in consolidated net income (loss), our primary measure of our single segment’s profit or loss. Our CEO regularly reviews reported consolidated revenue, gross profit, other significant segment expenses and consolidated net income (loss), in addition to forecasted revenue, significant segment expenses and net income (loss) amounts for future periods. A summary of our consolidated net income for the three months ended March 31, 2026 and 2025 is as follows, including the significant segment expenses provided to and regularly reviewed by our CEO, as well as other expenses, which are included in consolidated net income, but are not regularly provided to and/or reviewed by our CEO:
Three Months Ended March 31,
20262025
Revenue$1,371 $1,193 
Cost of sales586 509 
Gross profit785 684 
Other significant segment expenses:
Research and development97 94 
Marketing and selling256 225 
General and administrative125 116 
Interest expense, net of capitalized interest57 40 
Other expense, net9 12 
Income tax expense (benefit)30 (7)
Total other significant segment expenses574 480 
Other expenses (1)
154 137 
Net income$57 $67 
(1)Other expenses include amortization of intangible assets and asset impairment, restructuring and other special charges.
Depreciation expense related to property and equipment and amortization expense related to software for the three months ended March 31, 2026 and 2025, respectively, were as follows:
Three Months Ended March 31,
20262025
Depreciation expense
$28 $24 
Amortization of software
6 9 
Given our single reporting segment structure, we manage our assets on a total company basis. Cash paid for acquisitions, intangible assets and property and equipment and software, and cash proceeds from divestitures, are all summarized in the Investing Activities section of our condensed consolidated statements of cash flows.
v3.26.1
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2026
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.26.1
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2026
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with the SEC requirements for interim reporting. As permitted under those rules, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. (GAAP) have been condensed or omitted. The information included in this Form 10-Q should be read in conjunction with our consolidated financial statements and accompanying notes for the year ended December 31, 2025, included in our 2025 Form 10-K. The significant accounting policies set forth in Note 2 to the consolidated financial statements in our 2025 Form 10-K and the footnotes herein appropriately represent, in all material respects, the current status of our accounting policies.
In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for fair presentation of the results of operations for the periods shown. The preparation of financial statements in accordance with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates. In addition, results for interim periods should not be considered indicative of results for any other interim period or for the full year ending December 31, 2026, or any other future period.
New Financial Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed and disaggregated information about significant expense categories, such as purchases of inventory, employee compensation, depreciation and amortization and selling expenses. This standard, including related updates, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. We are currently assessing the impact ASU 2024-03 will have on our consolidated financial statements, including our footnote disclosures.
v3.26.1
Revenue (Tables)
 3 Months Ended
Mar. 31, 2026
Revenue from Contract with Customer [Abstract]  
Schedule of Activity in Sales Rebates and Discounts Liability
The following table summarizes the activity in our global sales rebates and discounts liability:
Three Months Ended March 31,
20262025
Beginning balance$416 $332 
Reduction of revenue284 228 
Payments(296)(245)
Foreign currency translation adjustments(4)4 
Ending balance$400 $319 
Schedule of Revenue Disaggregated by Product Category
The following table summarizes our revenue disaggregated by product category:
Three Months Ended March 31,
20262025
Pet Health$710 $635 
Farm Animal:
Cattle316 272 
Poultry230 189 
Swine96 85 
Total Farm Animal642 546 
Contract Manufacturing and Other (1)
19 12 
Revenue$1,371 $1,193 
(1)Represents revenue from arrangements in which we manufacture products on behalf of a third party and royalty revenue. Royalty revenue sold to a third party in May 2025 totaled $9 million for the three months ended March 31, 2026. While we are no longer entitled to these royalties, we are required under GAAP to continue recognizing them as revenue. See Note 10. Liability for Sale of Future Revenue for additional information.
Schedule of Revenue Disaggregated by Geographic Area
The following table summarizes our revenue disaggregated by geographic area:
Three Months Ended March 31,
20262025
United States$605 $554 
International766 639 
Revenue$1,371 $1,193 
v3.26.1
Asset Impairment, Restructuring and Other Special Charges (Tables)
 3 Months Ended
Mar. 31, 2026
Restructuring and Related Activities [Abstract]  
Schedule of Asset Impairment, Restructuring and Other Special Charges Components of asset impairment, restructuring and other special charges were as follows:
Three Months Ended March 31,
20262025
Restructuring charges:
Cash-based severance$(1)$1 
Other non-cash charges (1)
15 — 
Other items (2)
2 8 
Total expense$16 $9 
(1)Other non-cash restructuring charges in 2026 related to $15 million of non-cash shut-down costs for the animal studies portion of our R&D facilities in Monheim, Germany.
(2)Amounts recorded in 2025 primarily consisted of upfront payments made in relation to new licensing arrangements.
Schedule of Activity in Reserves
The following table summarizes the activity in our reserves established in connection with restructuring activities:
Balance at December 31, 2025$124 
Charges(1)
Cash paid and other (1)
(21)
Balance at March 31, 2026$102 
(1)Includes foreign currency translation adjustments
v3.26.1
Inventories (Tables)
 3 Months Ended
Mar. 31, 2026
Inventory Disclosure [Abstract]  
Schedule of Inventories
Inventories consisted of the following:
March 31, 2026December 31, 2025
Finished products$879 $871 
Work in process800 837 
Raw materials and supplies112 104 
Total1,791 1,812 
Decrease to LIFO cost(74)(75)
Inventories$1,717 $1,737 
v3.26.1
Debt and Finance Lease Liability (Tables)
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Schedule of Long-term Debt
Our long-term debt and finance lease liability consisted of the following:
March 31, 2026December 31, 2025
Term Loan B due 2032$1,097 $1,100 
Euro Term Loan due 2029450 470 
Incremental Term Facility due 2028338 339 
Incremental Term Facility due 2029171 171 
Incremental Term Facility due 2031320 321 
Incremental Term Facility due 2032537 539 
Revolving Credit Facility (1)
— — 
Securitization Facility (2)
100 100 
Senior Notes due 2028 (3)
750 750 
Unamortized debt issuance costs(27)(28)
Total debt3,736 3,762 
Finance lease liability255 255 
3,991 4,017 
Less current portion of long-term debt and finance lease liability73 74 
Total long-term debt and finance lease liability$3,918 $3,943 
(1)Our Revolving Credit Facility provides up to $750 million in borrowing capacity, bears interest at Term SOFR plus a spread dependent on our Net Total Leverage Ratio, as defined within the agreement, which was 1.50% at March 31, 2026, and matures in July 2029.
(2)On April 22, 2026, we borrowed $50 million on our Securitization Facility for general corporate purposes and to complete the acquisition of AHV (see Note 4. Acquisitions and Divestitures for further information). Our Securitization Facility is secured and collateralized by our U.S. Net Eligible Receivables Balance, bears interest at Term SOFR plus 1.25% and matures in June 2028. Our borrowing capacity under our Securitization Facility is subject to monthly fluctuation based on the level of our borrowing base as reported to the lender.
(3)Our Senior Notes due 2028 are subject to interest rate adjustments based on credit rating agency actions. A rating upgrade in the fourth quarter of 2025 reduced the applicable interest rate, and as of March 31, 2026, these notes bear interest at a rate of 6.40%.
v3.26.1
Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Gain (Loss), Net of Tax The amounts of net (losses) gains on derivative instruments not designated as hedging instruments, recorded in other expense, net were as follows:
Three Months Ended March 31,
20262025
Foreign exchange forward contracts (1)
$(1)$15 
(1)These amounts were substantially offset in other expense, net by the effect of changing exchange rates on the underlying foreign currency exposures.
The amounts of gains (losses) on net investment hedges, net of tax, recorded in accumulated other comprehensive loss were as follows:
Three Months Ended March 31,
20262025
Cross-currency fixed interest rate swaps$8 $(24)
The amounts of gains (losses) on interest rate swaps, net of tax, recorded in accumulated other comprehensive loss were as follows:
Three Months Ended March 31,
20262025
Interest rate swaps$7 $(16)
The amounts of (losses) gains reclassified out of accumulated other comprehensive loss and recognized into earnings through interest expense, net of capitalized interest were as follows:
Three Months Ended March 31,
20262025
Interest rate swaps$(5)$13 
v3.26.1
Fair Value (Tables)
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Information
The following table summarizes the fair value information at March 31, 2026 and December 31, 2025, for assets and liabilities measured at fair value on a recurring basis in the respective balance sheet line items, as well as long-term debt, excluding our finance lease liability, for which fair value is disclosed on a recurring basis:
  Fair Value Measurements Using 
Financial statement line itemCarrying
Amount		Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant
Other Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Fair
Value
March 31, 2026
Recurring fair value measurements
Prepaid expenses and other - derivative instruments$23 $— $23 $— $23 
Other noncurrent assets - derivative instruments8 — 8 — 8 
Other current liabilities - derivative instruments(180)— (180)— (180)
Other current liabilities - contingent consideration(18)— — (18)(18)
Financial instruments not carried at fair value
Long-term debt, excluding finance lease liability(3,763)— (3,773)— (3,773)
December 31, 2025
Recurring fair value measurements
Prepaid expenses and other - derivative instruments$20 $— $20 $— $20 
Other current liabilities - derivative instruments(111)— (111)— (111)
Other current liabilities - contingent consideration(29)— — (29)(29)
Other noncurrent liabilities - derivative instruments(73)— (73)— (73)
Financial instruments not carried at fair value
Long-term debt, excluding finance lease liability(3,790)— (3,809)— (3,809)
v3.26.1
Liability for Sale of Future Revenue (Tables)
 3 Months Ended
Mar. 31, 2026
Liability For Sale Of Future Revenue [Abstract]  
Schedule of Sale of Future Revenue Activity
The following table summarizes the activity related to our liability for sale of future revenue:
Balance at December 31, 2025
$304 
Royalty revenue(9)
Imputed interest expense14 
Balance at March 31, 2026
$309 
Effective interest rate18.3 %
v3.26.1
Income Taxes (Tables)
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Schedule of Provision for Taxes on Income
Three Months Ended March 31,
20262025
Income tax expense (benefit)$30 $(7)
Effective tax rate34.6 %(12.2)%
v3.26.1
Earnings Per Share (Tables)
 3 Months Ended
Mar. 31, 2026
Earnings Per Share [Abstract]  
Schedule of Basic And Diluted Weighted-average Shares Outstanding
Basic and diluted weighted-average shares outstanding were as follows:
Three Months Ended March 31,
20262025
Basic weighted-average common shares outstanding497.7 495.1 
Assumed conversion of dilutive common stock equivalents (1)
8.3 4.0 
Diluted weighted-average shares outstanding506.0 499.1 
(1)For the three months ended March 31, 2026 and 2025, approximately 1.5 million and 3.7 million, respectively, of potential common shares were excluded from the calculation of diluted weighted-average shares outstanding because their effect was anti-dilutive.
v3.26.1
Business Segment Information (Tables)
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment A summary of our consolidated net income for the three months ended March 31, 2026 and 2025 is as follows, including the significant segment expenses provided to and regularly reviewed by our CEO, as well as other expenses, which are included in consolidated net income, but are not regularly provided to and/or reviewed by our CEO:
Three Months Ended March 31,
20262025
Revenue$1,371 $1,193 
Cost of sales586 509 
Gross profit785 684 
Other significant segment expenses:
Research and development97 94 
Marketing and selling256 225 
General and administrative125 116 
Interest expense, net of capitalized interest57 40 
Other expense, net9 12 
Income tax expense (benefit)30 (7)
Total other significant segment expenses574 480 
Other expenses (1)
154 137 
Net income$57 $67 
(1)Other expenses include amortization of intangible assets and asset impairment, restructuring and other special charges.
Depreciation expense related to property and equipment and amortization expense related to software for the three months ended March 31, 2026 and 2025, respectively, were as follows:
Three Months Ended March 31,
20262025
Depreciation expense
$28 $24 
Amortization of software
6 9 
v3.26.1
Revenue - Schedule of Activity in Sales Rebates and Discounts Liability (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Change In Contract With Customer, Liability [Roll Forward]    
Beginning balance $ 416 $ 332
Reduction of revenue 284 228
Payments (296) (245)
Foreign currency translation adjustments (4) 4
Ending balance $ 400 $ 319
v3.26.1
Revenue - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Dec. 31, 2025
Concentration Risk [Line Items]      
Accounts receivable, net $ 1,084   $ 873
Product Sales      
Concentration Risk [Line Items]      
Accounts receivable, net $ 117   $ 107
Product Return Concentration Risk | Net revenue | Global Customers      
Concentration Risk [Line Items]      
Concentration risk 1.00% 1.00%  
Customer Concentration Risk | Revenue | Single Customer      
Concentration Risk [Line Items]      
Concentration risk 11.00% 12.00%  
v3.26.1
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Disaggregation of Revenue [Line Items]    
Revenue $ 1,371 $ 1,193
Royalty revenue 9 0
United States    
Disaggregation of Revenue [Line Items]    
Revenue 605 554
International    
Disaggregation of Revenue [Line Items]    
Revenue 766 639
Blackstone Life Sciences and Blackstone Credit & Insurance    
Disaggregation of Revenue [Line Items]    
Royalty revenue 9  
Pet Health    
Disaggregation of Revenue [Line Items]    
Revenue 710 635
Farm Animal:    
Disaggregation of Revenue [Line Items]    
Revenue 642 546
Cattle    
Disaggregation of Revenue [Line Items]    
Revenue 316 272
Poultry    
Disaggregation of Revenue [Line Items]    
Revenue 230 189
Swine    
Disaggregation of Revenue [Line Items]    
Revenue 96 85
Contract Manufacturing and Other    
Disaggregation of Revenue [Line Items]    
Revenue $ 19 $ 12
v3.26.1
Acquisitions and Divestitures (Details)
$ in Millions
 1 Months Ended 3 Months Ended
Apr. 30, 2026
USD ($)
Feb. 28, 2025
USD ($)
individual
Mar. 31, 2026
USD ($)
Mar. 31, 2025
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Proceeds from divestitures     $ 0 $ 9
Disposal Group, Disposed of by Sale, Not Discontinued Operations | New Zealand Manufacturing Facility        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Proceeds from divestitures   $ 9    
Number of employees transferred | individual   50    
AHV International B.V | Subsequent Event        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Purchase agreement to acquire percentage 100.00%      
Cash consideration $ 76      
Guaranteed consideration 100      
Contingent payments $ 140      
v3.26.1
Asset Impairment, Restructuring and Other Special Charges - Schedule of Component of Asset Impairment, Restructuring and Other Special Charges (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Restructuring and Related Activities [Abstract]    
Cash-based severance $ (1) $ 1
Other non-cash charges 15 0
Other items 2 8
Total expense $ 16 $ 9
v3.26.1
Asset Impairment, Restructuring and Other Special Charges - Schedule of Activity in Reserves (Details)
$ in Millions
 3 Months Ended
Mar. 31, 2026
USD ($)
Restructuring Reserve [Roll Forward]  
Balance at beginning of period $ 124
Charges (1)
Cash paid and other (21)
Balance at end of period $ 102
v3.26.1
Asset Impairment, Restructuring and Other Special Charges - Narrative (Details) - USD ($)
$ in Millions
Mar. 31, 2026
Dec. 31, 2025
Restructuring Cost and Reserve [Line Items]    
Restructuring reserve $ 102 $ 124
Other Current Liabilities    
Restructuring Cost and Reserve [Line Items]    
Restructuring reserve $ 90  
v3.26.1
Inventories (Details) - USD ($)
$ in Millions
Mar. 31, 2026
Dec. 31, 2025
Inventory Disclosure [Abstract]    
Finished products $ 879 $ 871
Work in process 800 837
Raw materials and supplies 112 104
Total 1,791 1,812
Decrease to LIFO cost (74) (75)
Inventories $ 1,717 $ 1,737
v3.26.1
Debt and Finance Lease Liability - Long-term Debt (Details) - USD ($)
$ in Millions
 3 Months Ended
Apr. 22, 2026
Mar. 31, 2026
Mar. 31, 2025
Dec. 31, 2025
Debt Instrument [Line Items]        
Unamortized debt issuance costs   $ (27)   $ (28)
Total debt   3,736   3,762
Finance lease liability   255   255
Total debt   3,991   4,017
Less current portion of long-term debt and finance lease liability   73   74
Total long-term debt and finance lease liability   3,918   3,943
Securitization Facility        
Debt Instrument [Line Items]        
Proceeds from facility   0 $ 125  
Line of Credit | Secured Debt | Term Loan B due 2032        
Debt Instrument [Line Items]        
Long-term debt, gross   1,097   1,100
Line of Credit | Secured Debt | Euro Term Loan due 2029        
Debt Instrument [Line Items]        
Long-term debt, gross   450   470
Line of Credit | Secured Debt | Incremental Term Facility due 2028        
Debt Instrument [Line Items]        
Long-term debt, gross   338   339
Line of Credit | Secured Debt | Incremental Term Facility due 2029        
Debt Instrument [Line Items]        
Long-term debt, gross   171   171
Line of Credit | Secured Debt | Incremental Term Facility due 2031        
Debt Instrument [Line Items]        
Long-term debt, gross   320   321
Line of Credit | Secured Debt | Incremental Term Facility due 2032        
Debt Instrument [Line Items]        
Long-term debt, gross   537   539
Line of Credit | Secured Debt | Securitization Facility        
Debt Instrument [Line Items]        
Long-term debt, gross   100   100
Line of Credit | Secured Debt | Securitization Facility | Subsequent Event        
Debt Instrument [Line Items]        
Basis spread on variable rate 1.25%      
Proceeds from facility $ 50      
Line of Credit | Revolving Credit Facility        
Debt Instrument [Line Items]        
Long-term debt, gross   0   0
Borrowing capacity   $ 750    
Basis spread on variable rate   1.50%    
Senior Notes | Senior Notes due 2028        
Debt Instrument [Line Items]        
Long-term debt, gross   $ 750   $ 750
Effective interest rate   6.40%    
v3.26.1
Debt and Finance Lease Liability - Narrative (Details)
Mar. 31, 2026
Debt Disclosure [Abstract]  
Percentage of long term debt bearing fixed interest 80.00%
v3.26.1
Financial Instruments - Narrative (Details)
SFr in Millions, $ in Millions
 3 Months Ended
Mar. 31, 2026
USD ($)
Mar. 31, 2025
USD ($)
Mar. 31, 2026
CHF (SFr)
Dec. 31, 2025
USD ($)
Dec. 31, 2025
CHF (SFr)
Derivative Instruments, Gain (Loss) [Line Items]          
Unrealized losses expected to be reclassified over the next 12 months $ 9        
Weighted Average          
Derivative Instruments, Gain (Loss) [Line Items]          
Effective interest rate 5.72%   5.72%    
Cross-currency fixed interest rate swap | Not Designated as Hedging Instrument          
Derivative Instruments, Gain (Loss) [Line Items]          
Notional amount $ 1,219     $ 1,090  
Cross-currency fixed interest rate swap | Designated as Hedging Instrument | Net Investment Hedging          
Derivative Instruments, Gain (Loss) [Line Items]          
Notional amount | SFr     SFr 1,000   SFr 1,000
Investment income interest 11 $ 11      
Interest rate swaps | Designated as Hedging Instrument          
Derivative Instruments, Gain (Loss) [Line Items]          
Notional amount 2,300     2,300  
Derivatives not yet effective $ 850     $ 850  
v3.26.1
Financial Instruments - Schedule of Net Losses/Gains on Derivative Instruments (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Foreign Exchange Contract | Not Designated as Hedging Instrument    
Derivative Instruments, Gain (Loss) [Line Items]    
Net (losses) gains on derivative instruments $ (1) $ 15
Foreign Exchange Contract | Designated as Hedging Instrument | Net Investment Hedging    
Derivative Instruments, Gain (Loss) [Line Items]    
Gains (losses) on net of tax 8 (24)
Interest rate swaps | Designated as Hedging Instrument | Cash Flow Hedging    
Derivative Instruments, Gain (Loss) [Line Items]    
Gains (losses) on net of tax 7 (16)
Reclassification from accumulated other comprehensive income, current period, net of tax $ (5) $ 13
v3.26.1
Fair Value - Schedule of Fair Value Information (Details) - USD ($)
$ in Millions
Mar. 31, 2026
Dec. 31, 2025
Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset, current $ 0 $ 0
Derivative asset, noncurrent 0  
Derivative liability, current 0 0
Contingent consideration, current 0 0
Derivative liability, noncurrent   0
Long-term debt, excluding finance lease liability 0 0
Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset, current 23 20
Derivative asset, noncurrent 8  
Derivative liability, current (180) (111)
Contingent consideration, current 0 0
Derivative liability, noncurrent   (73)
Long-term debt, excluding finance lease liability (3,773) (3,809)
Significant Unobservable Inputs (Level 3)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset, current 0 0
Derivative asset, noncurrent 0  
Derivative liability, current 0 0
Contingent consideration, current (18) (29)
Derivative liability, noncurrent   0
Long-term debt, excluding finance lease liability 0 0
Carrying Amount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset, current 23 20
Derivative asset, noncurrent 8  
Derivative liability, current (180) (111)
Contingent consideration, current (18) (29)
Derivative liability, noncurrent   (73)
Long-term debt, excluding finance lease liability (3,763) (3,790)
Fair Value    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative asset, current 23 20
Derivative asset, noncurrent 8  
Derivative liability, current (180) (111)
Contingent consideration, current (18) (29)
Derivative liability, noncurrent   (73)
Long-term debt, excluding finance lease liability $ (3,773) $ (3,809)
v3.26.1
Fair Value - Narrative (Details) - USD ($)
$ in Millions
Mar. 31, 2026
Dec. 31, 2025
Fair Value Disclosures [Abstract]    
Equity method investments $ 13 $ 15
v3.26.1
Liability for Sale of Future Revenue - Narrative (Details) - Blackstone Life Sciences and Blackstone Credit & Insurance
$ in Millions
 1 Months Ended
May 31, 2025
USD ($)
Revenue Recognition, Milestone Method [Line Items]  
Proceeds from sale of future revenue $ 295
Royalties from net sales (as a percent) 0.0025
v3.26.1
Liability for Sale of Future Revenue - Schedule of Sale of Future Revenue Activity (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Liability For Sale Of Future Revenue [Line Items]    
Royalty revenue $ (9) $ 0
Imputed interest expense 14 $ 0
Blackstone Life Sciences and Blackstone Credit & Insurance    
Liability For Sale Of Future Revenue [Line Items]    
Balance at December 31, 2025 304  
Royalty revenue (9)  
Imputed interest expense 14  
Balance at March 31, 2026 $ 309  
Effective interest rate 18.30%  
v3.26.1
Income Taxes - Schedule of Provision for Taxes on Income (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Income Tax Disclosure [Abstract]    
Income tax expense (benefit) $ 30 $ (7)
Effective tax rate 34.60% (12.20%)
v3.26.1
Income Taxes - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Income Tax Disclosure [Abstract]    
Income tax expense (benefit) $ 30 $ (7)
Effective tax rate 34.60% (12.20%)
v3.26.1
Commitments and Contingencies (Details)
Apr. 28, 2025
board_member
Oct. 07, 2024
executive
Mar. 31, 2026
USD ($)
Feb. 18, 2026
claim
Dec. 31, 2025
USD ($)
Jan. 31, 2025
claim
Loss Contingencies [Line Items]            
Liabilities related to litigation | $     $ 0   $ 0  
Joseph Barpar v. Elanco Animal Health Inc.            
Loss Contingencies [Line Items]            
Number of executives named in lawsuit | executive   2        
Christopher Dougherty v. Elanco Animal Health, Inc.            
Loss Contingencies [Line Items]            
Number of board members named in lawsuit | board_member 13          
Tracy Spradlin, Tevra Brands, LLC, And Susan Kraus-Silfen v Elanco Animal Health, Inc            
Loss Contingencies [Line Items]            
Number of pending claims | claim       2   3
v3.26.1
Earnings Per Share (Details) - shares
shares in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Earnings Per Share [Abstract]    
Basic weighted-average common shares outstanding (in shares) 497.7 495.1
Assumed conversion of dilutive common stock equivalents (in shares) 8.3 4.0
Diluted weighted-average shares outstanding (in shares) 506.0 499.1
Potential common shares excluded from calculation (in shares) 1.5 3.7
v3.26.1
Business Segment Information - Narrative (Details)
 3 Months Ended
Mar. 31, 2026
segment
Segment Reporting [Abstract]  
Number of operating segments 1
Number of reportable segments 1
v3.26.1
Business Segment Information - Schedule of Segment Reporting Information (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Segment Reporting Information [Line Items]    
Revenue $ 1,371 $ 1,193
Cost of sales 586 509
Gross profit 785 684
Other significant segment expenses:    
Research and development 97 94
Interest expense, net of capitalized interest 57 40
Other expense, net 9 12
Income tax expense (benefit) 30 (7)
Net income 57 67
Reportable Segment    
Segment Reporting Information [Line Items]    
Revenue 1,371 1,193
Cost of sales 586 509
Gross profit 785 684
Other significant segment expenses:    
Research and development 97 94
Marketing and selling 256 225
General and administrative 125 116
Interest expense, net of capitalized interest 57 40
Other expense, net 9 12
Income tax expense (benefit) 30 (7)
Total other significant segment expenses 574 480
Other expenses 154 137
Net income $ 57 $ 67
v3.26.1
Business Segment Information - Schedule of Depreciation and Amortization (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2026
Mar. 31, 2025
Segment Reporting [Abstract]    
Depreciation expense $ 28 $ 24
Amortization of software $ 6 $ 9