Elanco Animal Health Incorporated (NYSE:ELAN) reported fourth-quarter results on Tuesday that came in ahead of analyst expectations, though its shares moved lower in premarket trading as investors reacted to softer margins.
The animal health company posted adjusted earnings per share of $0.13, exceeding the consensus forecast of $0.11. Despite the earnings beat, the stock declined 1.17% before the opening bell as market attention shifted toward profitability trends.
Quarterly revenue totaled $1.14 billion, above analyst estimates of $1.09 billion. Sales increased 12% year-on-year on a reported basis and rose 9% organically in constant currency terms compared with the same period last year. Revenue also climbed from $1.02 billion recorded in the fourth quarter of 2024.
Adjusted EBITDA rose 7% to $189 million; however, the adjusted EBITDA margin narrowed to 16.7%, down from 17.4% a year earlier. The margin contraction appeared to dampen investor enthusiasm despite the company outperforming expectations on both revenue and earnings.
“Elanco delivered significant progress across our strategic priorities of growth, innovation, and cash in 2025,” said Jeff Simmons, President and CEO. “We achieved a strong fourth quarter with 9% organic constant currency revenue growth, marking our 10th consecutive quarter of underlying growth.”
Looking ahead, Elanco guided for fiscal 2026 adjusted EPS of between $1.00 and $1.06, with the midpoint of $1.03 aligning with analyst consensus estimates. The company forecast revenue in the range of $4.95 billion to $5.02 billion, with a midpoint of $4.99 billion slightly ahead of the $4.94 billion consensus projection.
Within its segments, Pet Health revenue grew 11% to $489 million, supported by newer products such as Credelio Quattro and Zenrelia. Farm Animal revenue increased 12% to $640 million, driven by strong demand for Experior in U.S. cattle and continued momentum in poultry sales.
Elanco also lifted its 2026 innovation revenue target to $1.15 billion from $1.1 billion and finished 2025 with a net leverage ratio of 3.6x adjusted EBITDA.