Eli Lilly and Company (NYSE: LLY) shares climbed 5.95% to $1,364.98, adding $76.68 during the trading session, after the pharmaceutical company reported third-quarter 2026 revenue of $24.4 billion, a 39% increase year over year. Strong demand for Mounjaro and Zepbound supported the quarterly growth, and management raised its full-year revenue guidance. The report underscores how central the company's diabetes and obesity treatments have become to its overall growth, and the updated outlook now sets the benchmark for whether that momentum carries into the final quarter of the year.

Mounjaro and Zepbound Drive Revenue Growth

Eli Lilly generated $24.397 billion in third-quarter revenue, up from $17.601 billion in the same period of 2025. Growth reflected a 53% increase in sales volume, partially offset by a 15% decline in realized prices. Mounjaro and Zepbound remained the primary growth drivers as demand expanded across major markets. Both treatments contain the same active ingredient, tirzepatide, placing Lilly at the center of the fast-growing market for injectable diabetes and obesity therapies, and the quarter's numbers show growth coming from broader patient uptake rather than higher net pricing.

In the United States, revenue increased 34% to $15.1 billion, supported by a 41% rise in volume, while realized prices declined 7%, primarily due to Zepbound pricing and adjustments to rebate and discount estimates. Outside the United States, revenue climbed 47% to $9.3 billion as volume grew 76%, mainly on the strength of Mounjaro sales.

The quarter also included $410 million in Jardiance sales-based milestone payments recorded through the company's collaboration with Boehringer Ingelheim, alongside favorable adjustments to rebate and discount estimates. Meanwhile, revenue from key products across immunology, oncology, and neuroscience doubled compared with the third quarter of 2025, indicating that Lilly's expansion now reaches beyond its two flagship injections.

Higher Earnings Despite Acquisition Charges

Eli Lilly reported third-quarter net income of $6.45 billion, up 16% from $5.58 billion a year earlier. Reported earnings per share increased 16% to $7.22, compared with $6.21 in the corresponding 2025 quarter. Acquired in-process research and development charges weighed significantly on the company's reported results.

On a non-GAAP basis, net income rose 6% to $6.68 billion from $6.31 billion in the prior year, and adjusted earnings per share increased 7% to $7.48 from $7.02. Both reported and adjusted earnings included $4.57 per share in acquired research and development charges, compared with $0.71 previously.

Gross margin increased 40% to $20.5 billion, with the gross margin percentage improving to 83.9%. Better product mix and lower production costs supported the improvement, although lower realized prices limited some of the gains. Research and development expenses rose 23% to $4.2 billion as the company continued funding its drug development pipeline.

2026 Guidance Raised Following Strong Quarter

Eli Lilly increased its 2026 revenue guidance by $5.5 billion at the midpoint, setting a new range of $91 billion to $92 billion. The company also raised its underlying full-year non-GAAP earnings guidance by $4.07 per share at the midpoint. However, acquisition-related research and development charges offset that improvement, leaving the updated earnings guidance at $35 to $36 per share. The updated figures now serve as the yardstick for the company's fourth-quarter report, where readers can check whether volume-led growth continued to outweigh the drag from lower realized prices.

Regulatory Approvals and Pipeline Progress

Regulatory developments included United States approvals for Mounjaro's cardiovascular risk reduction indication in adults with type 2 diabetes. The company also secured approvals for Onswik, Inluriyo in combination with Verzenio, and an expanded Jaypirca indication, decisions that broadened its commercial opportunities across diabetes, oncology, and other treatment areas.

Pipeline progress included positive Phase 3 results for retatrutide, an investigational therapy still in clinical testing, against Ozempic 2 mg (Novo Nordisk) in adults with type 2 diabetes. Eli Lilly also reported clinical results for Ebglyss in hand and foot atopic dermatitis and for EloraTZP in adults with obesity and type 2 diabetes.

The company completed its AtaiBeckley acquisition during the quarter and subsequently closed its acquisition of Merida Biosciences, moves that expand its presence in mental health, autoimmune, and allergic disease treatments. Together with the quarter's new approvals, these moves give the company additional revenue opportunities beyond its core diabetes and obesity franchise.