Investor Contact Tiffany Kanaga (765) 740-0314 or tiffany.kanaga elancoah.com Media Contact Colleen Parr Dekker (317) 989-7011 or colleen.dekker elancoah.com Elanco Animal Health Reports Second Quar

Investor Contact Tiffany Kanaga (765) 740-0314 or tiffany.kanaga elancoah.com

Media Contact Colleen Parr Dekker (317) 989-7011 or colleen.dekker elancoah.com

Elanco Animal Health Reports Second Quarter 2025 Results

Raising Full Year Outlook and Innovation Target, Improving Year-End Net Leverage Ratio Target

Second Quarter 2025 Financial Results

Revenue of $1,241 million, an increase of 5% year-over-year 8% organic constant currency growth

Reported Net Income of $11 million, Adjusted Net Income of $131 million

Adjusted EBITDA of $238 million Adjusted EBITDA Margin of 19.2%

Reported EPS of $0.02, Adjusted EPS of $0.26

Net leverage ratio of 4.0x Adjusted EBITDA

Full Year 2025 Guidance

Raising revenue guidance to $4,570 to $4,620 million expect accelerating organic constant currency revenue growth of 5% to 6% vs. 3% in 2024

Raising 2025 innovation revenue target by $60 million to $720 to $800 million

Reported Net Loss of $(38) to $(14) million, raising guidance for Adjusted EBITDA to $850 to $890 million

Reported Loss Per Share of $(0.08) to $(0.03), raising guidance for Adjusted EPS to $0.85 to $0.91

Outlook incorporates current estimate for net tariff impact and dynamic landscape, more than offset by a strong first half performance and foreign exchange tailwinds to revenue versus prior expectations

Increasing expected gross debt paydown range to $500 to $550 million in 2025

2025 year-end net leverage ratio target improved to 3.8x to 4.1x, enabled by year-to-date execution and disciplined working capital management

GREENFIELD, Ind (August 7, 2025) - Elanco Animal Health Incorporated (NYSE ELAN) today reported financial results for the second quarter of 2025, provided guidance for the third quarter of 2025, and updated guidance for the full year 2025.

I'd like to thank our global Elanco team for delivering our 8th straight quarter of growth, driving results beyond expectations," said Jeff Simmons, President and CEO of Elanco. "Our diverse portfolio of innovation fueled accelerating organic constant currency revenue growth of 8%, led by U.S. Pet Health at 11%. We have once again increased our innovation revenue target, reflecting contributions by Credelio Quattro, Experior, AdTab, and Zenrelia, which also are stabilizing our base portfolio. We are delevering faster than expected, reaching 4.0x at quarter-end, and have improved our 2025 net leverage ratio target. With our strong first half performance and consistent execution, we are raising our full-year outlook, even while recognizing a highly dynamic landscape with a mix of opportunities and challenges. We enter the balance of the year well-positioned to deliver our commitments, transform animal care, and create long-term shareholder value. Elanco is focused on executing with high engagement and discipline, which we expect to drive sustained growth, innovation, and cash.

Select Business Highlights Since the Last Earnings Call

Credelio Quattro achieved approximately 14% dollar share of broad-spectrum sales out of U.S. vet clinics in June**, with sell-in and sell-out rates at relatively consistent levels to each other at quarter-end

Zenrelia approved by the European Commission and launching in EU countries in Q3 2025, with a label consistent with other markets outside the U.S. where the product has already been approved received notification from FDA for revised U.S. label language in Q4 2025, removing risk language of fatal vaccine-induced disease

Experior Q2 sales up more than 80% year over year AdTab continued robust growth trajectory with Q2 sales up over 60% year over year

Cows on Bovaer quadrupled since February

TruCan Ultra CIV, approved by the USDA in July, enhancing Elanco's extensive line of Tru Portfolio vaccines launched in the U.S. in July

Monetization of certain lotilaner U.S. royalties and milestones from Q2 2025 through Q3 2033 for $295 million, with proceeds used for debt paydown

Launch of Elanco Ascend, a company-wide productivity and capability initiative expected to drive added value in 2026 and beyond

Robert (Bob) VanHimbergen appointed Executive Vice President and Chief Financial Officer, effective July 7, following an extensive and competitive search, to guide the continuation of sustainable value creation

The company released its 2024 Impact Report, introducing a new strategic framework and celebrating Elanco's culture of 'Going Beyond' for animals, customers, society and its people

** Per Kynetec Q2 data

(1) Organic 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.

(2) Primarily represents revenue from arrangements in which the company manufactures products on behalf of a third party and royalty revenue. In May 2025, we entered into an agreement to monetize certain lotilaner U.S. royalties, among other potential future cash flows, to a third party for proceeds of $295 million. While we are no longer entitled to these qualifying royalties, we are required under GAAP to continue recognizing them as revenue. For the three months ended June 30, 2025, royalty revenue associated with this arrangement, which is reflected within the Contract Manufacturing and Other line in the table above, totaled $4 million.

Numbers may not add due to rounding.

In the second quarter of 2025, revenue was $1,241 million, an increase of 5% on a reported basis, or 8% on an organic constant currency basis, which excludes the impacts from our prior year aqua business divestiture, royalty revenue sold to a third party in May 2025 and favorable foreign exchange rates, compared to the second quarter of 2024.

Pet Health revenue was $643 million, an increase of 11% on a reported basis, or 10% on an organic constant currency basis. The increase in pet health revenue included a 4% increase from price, compared to the second

quarter of 2024. Year over year volume increases of 6% in the second quarter were primarily driven by new products, including Credelio Quattro, AdTab and Zenrelia. The Advantage Family of products and Seresto contributed revenue of $147 million and $113 million, respectively.

Farm Animal revenue was $583 million, a decrease of 2% on a reported basis due to the sale of the aqua business, and a 6% increase on an organic constant currency basis. Farm animal organic constant currency revenue growth included a 2% increase from price, compared to the second quarter of 2024. Second quarter volumes were up 4%, driven by increased volumes in U.S. cattle, led by Experior, and increased volumes in international poultry and swine. The business has seen demand recovery for international swine products, while international poultry demand remains strong. Sales of the company's international farm animal products benefited from accelerated customer purchases, primarily in China, in advance of expected future tariff increases, estimated to have shifted approximately $10 to $20 million of expected future purchases to the second quarter.

Gross profit was $713 million and gross margin percentage was 57.5% in the second quarter of 2025, a decrease of 75 basis points compared to the second quarter of 2024. On an adjusted basis, gross profit was $709 million and gross margin percentage was 57.3% in the second quarter of 2025, a 90 basis point decrease compared to the second quarter of 2024. The decreases in gross margin percentage on both a reported and adjusted basis were primarily driven by inflation and the higher manufacturing costs associated with owning the Speke facility, partly offset by favorable price and volume, and beneficial product mix driven by U.S. pet health performance.

Total operating expenses were $492 million for the second quarter of 2025, an increase of 11%. Marketing, selling and administrative expenses increased 13% to $400 million, driven by the company's previously announced strategic investments in the global launches of new products. Research and development expenses increased 3% to $92 million driven by higher employee-related expenses and project costs.

Asset impairment, restructuring and other special charges were $1 million in the second quarter of 2025, compared to $80 million in the second quarter of 2024. Charges recorded in the second quarter of 2024 primarily related to an impairment charge related to a pet health IPR D asset (IL-4R) and transaction costs associated with the sale of the aqua business.

Reported net interest expense was $48 million in the second quarter of 2025, a decrease of $17 million compared to the second quarter of 2024. The decrease was driven by lower outstanding debt balances given recent debt paydown activities, partially offset by $7 million of imputed interest on the company's liability related to the lotilaner U.S. royalty monetization. Adjusted net interest expense, which excludes this imputed interest, was $38 million in the second quarter of 2025, a decrease of $27 million compared to the second quarter of 2024.

The reported effective tax rate was 55.4% in the second quarter of 2025, which differed from the statutory tax rate primarily due to the tax impact from the jurisdictional mix of projected income and losses in non-U.S. jurisdictions and the impacts of discrete tax expenses during the quarter, including the remeasurement of certain deferred tax positions due to a foreign tax rate change. The adjusted effective tax rate was 21.7% in the second quarter of 2025, compared to 16.9% in the second quarter of 2024.

Net income for the second quarter of 2025 was $11 million, or $0.02 per diluted share on a reported basis, compared with a net loss of $50 million, or $0.10 per diluted share for the same period in 2024. On an adjusted basis, net income for the second quarter of 2025 was $131 million, or $0.26 per diluted share, a 13.3% decrease compared with the same period in 2024. The decrease in adjusted net income was largely due to the year-over-year increase in selling and marketing expenses supporting the company's global launches discussed above and the impact from the prior year divestiture of the aqua business, partially offset by increased adjusted gross profit and decreased adjusted interest expense.

Adjusted EBITDA was $238 million in the second quarter of 2025, a 13.5% decrease compared to the second quarter of 2024. Adjusted EBITDA margin was 19.2% compared with 23.2% for the second quarter of 2024. The decrease in adjusted EBITDA was also largely driven by the increased selling and marketing expenses supporting our global launches and the impact from the prior year divestiture of our aqua business. Partially offsetting these impacts was the increase in adjusted gross profit, which benefited from the accelerated customer purchases discussed above.

Working Capital and Balance Sheet

Cash provided by operations was $237 million in the second quarter of 2025 compared to cash provided by operations of $200 million in the second quarter of 2024.

As of June 30, 2025, Elanco's net leverage ratio was 4.0x adjusted EBITDA, a decrease of 0.3x compared to December 31, 2024, driven by debt paydown efforts during the second quarter of 2025 with strong cash generation and the lotilaner U.S. royalty monetization. The company now expects to end the year with a net leverage ratio of 3.8x to 4.1x.

Elanco is updating financial guidance for the full year 2025, summarized in the following table.

I am thrilled to be part of the Elanco team as the company is entering its next era of growth, said Bob VanHimbergen, Executive Vice President and CFO of Elanco Animal Health. We are raising our 2025 full-year guidance for our strong second quarter execution and more favorable foreign exchange rates, more than offsetting incremental investments to fuel our innovation launches. I'm confident in our ability to execute on our plans, and my initial agenda is focused on driving value creation through a continuation of our productivity and cash generation efforts.

Elanco anticipates a tailwind to revenue of approximately $35 million from the favorable impact of foreign exchange rates compared with the May earnings call. Excluding the impact of foreign exchange rates, royalty revenue sold to a third party, and the aqua divestiture, the company now expects revenue growth of 5% to 6% versus 4% to 6% previously.

Elanco now expects adjusted gross margin of 54.5% to 55.0%, up 30 basis points vs. the prior range, and now expects operating expenses to increase approximately 7% year over year in constant currency, versus 6% previously, with incremental strategic investment in the global launches of the innovation portfolio. Full year adjusted EBITDA includes a current estimate for net tariff impact of $10 to $14 million versus $16 to $20 million previously.

Additionally, the company is providing guidance for the third quarter of 2025, as summarized in the following table

In the third quarter, Elanco expects a tailwind to revenue of approximately $10 million from the favorable impact of foreign exchange rates compared to prior year. Excluding the impacts of foreign exchange rates and royalty revenue sold to a third party, the company expects 4% to 6% organic constant currency revenue growth. The company anticipates growth to be impacted by approximately $15 million in revenue and approximately $10 million in Adjusted EBITDA of pre-tariff customer buying accelerated into the second quarter, primarily in China. The company expects operating expenses up approximately 8% year over year in constant currency with strategic investment in the global launches of the innovation portfolio.

The 2025 full year and third quarter financial guidance reflects foreign exchange rates as of the end of July. Further details on guidance, including GAAP reported to non-GAAP adjusted reconciliations, are included in the financial tables of this press release and will be discussed on the company's conference call this morning.

WEBCAST CONFERENCE CALL DETAILS

Elanco will host a webcast and conference call at 8 00 a.m. Eastern Time today, during which company executives will review second quarter financial and operational results, discuss third quarter and full year 2025 financial guidance, and respond to questions from analysts. Investors, analysts, members of the media and the public may access the live webcast and accompanying slides by visiting the Elanco website at https investor.elanco.com and selecting Events and Presentations. A replay of the webcast will be archived and made available a few hours after the event on the company's website, at https investor.elanco.com events-and-presentations default.aspx#module-event-upcoming.

Elanco Animal Health Incorporated (NYSE ELAN) is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets, creating value for farmers, pet owners, veterinarians, stakeholders and society as a whole. With 70 years of animal health heritage, we are committed to breaking boundaries and going beyond to help our customers improve the health of animals in their care, while also making a meaningful impact on our local and global communities. At Elanco, we are driven by our vision of Food and Companionship Enriching Life and our purpose - all to Go Beyond for Animals, Customers, Society and Our People. Learn more at www.elanco.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release 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 and 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