Eli Lilly (LLY) Q3 2025 Earnings Call Transcript

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DATE

Thursday, October 30, 2025 at 10 a.m. ET

CALL PARTICIPANTS

Chairman and Chief Executive Officer — David A. Ricks

Chief Financial Officer — Lucas E. Montarce

Chief Scientific Officer and President, Lilly Immunology — Dr. Daniel M. Skovronsky

President, Lilly Neuroscience — Anne White

President, Lilly USA and Global Customer Capabilities — Ilya Yuffa

President, Lilly Oncology — Jacob Van Naarden

President, Lilly International — Patrik Jonsson

President, Lilly Cardiometabolic Health — Kenneth L. Custer

Senior Vice President, Investor Relations — Mike Czapar

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TAKEAWAYS

Revenue -- Revenue grew 54% year-over-year in Q3 2025, driven by key products, with U.S. revenue up 45% and European revenue increased by over 100% in constant currency.

Gross Margin -- Gross margin was 83.6%, an increase of 1.4 percentage points year-over-year, supported by favorable product mix and partially offset by lower realized prices.

Research & Development Expenses -- R&D expenses (non-GAAP) increased 27% due to investment in the portfolio and Sixteen new phase three programs have started since the beginning of 2024.

Non-GAAP Performance Margin -- Performance margin (non-GAAP) reached 48.3%, up more than eight percentage points from the prior year.

Earnings Per Share (Non-GAAP) -- EPS increased to $7.02, including $0.71 of acquired IPR&D charges, compared to $1.18 with $3.08 of IPR&D charges in Q3 2024.

U.S. Price Decline -- U.S. price declined 15%, driven primarily by comparisons against a favorable base period adjustment in Q3 2024 (non-GAAP); excluding this, price declined by high-single digits in the U.S.

One-time Revenue Benefit -- Excluding this impact, revenue grew 81% in Europe in constant currency.

Key Product Revenue -- Key products delivered $12 billion in revenue; main contributors included Mounjaro, Zepan, Verzenio, and Kisunla.

Mounjaro International Uptake -- Mounjaro was launched in 55 countries, with 75% of international revenue from self-pay obesity patients and rapid share gains.

Zepan U.S. Growth -- Zepan U.S. prescription volume tripled year-over-year, and ending the period with a 71% share of new prescriptions.

Mounjaro U.S. Performance -- Mounjaro U.S. prescriptions grew over 60%, capturing four percentage points of incremental share in the type two diabetes incretin market sequentially compared to Q2 2025.

Kisunla Prescription Growth -- Kisunla total prescriptions increased 50% sequentially compared to Q2 2025, supported by recent EU marketing authorization and active reimbursement discussions.

Orforglipron Milestones -- Three type two diabetes trials, enabling global regulatory submissions to begin imminently.

Product Approvals -- FDA approved omelumestrant (Inlureo) for advanced breast cancer; EU approved Kisunla for early Alzheimer's disease.

Manufacturing Expansion -- Plans announced to build two new U.S. facilities for active pharmaceutical ingredients and to expand a Puerto Rico site, directly supporting pipeline scale-up.

Financial Guidance Raised -- Full-year revenue guidance (non-GAAP) increased to $63.0-$63.5 billion; expected non-GAAP EPS range lifted to $23.23-$23.70.

Shareholder Returns -- $1.3 billion distributed in dividends and approximately $700 million in share repurchases.

International Obesity Market -- About 75% of Mounjaro’s ex-U.S. revenue is from patients paying out of pocket for obesity therapy (as stated during the Q3 2025 earnings call).

Pipeline Advancement -- Retrutide, a triple agonist, entered multiple phase three trials targeting deep weight loss, and movalaplin advanced to phase three for cardiovascular risk reduction.

Label and Access Initiatives -- New FDA submission for longer-interval lebrikizumab dosing (eight weeks) to reduce patient burden in dermatitis.

SUMMARY

Eli Lilly and Company (NYSE:LLY) reported accelerated revenue growth and notable margin expansion on a non-GAAP basis in Q3 2025, reflecting exceptional uptake across its incretin and obesity portfolios. Management raised annual non-GAAP financial guidance, supported by robust volume increases and new product introductions. International launches of Mounjaro and continued success of Zepan and Kisunla contributed to global market share gains. Strategic investments in manufacturing capacity and R&D underpin future scalability and innovation, as new phase three pipeline data sets the stage for broader regulatory filings and potential expansion into new indications.

Lucas E. Montarce stated, "We have initiated 16 new phase three programs since the start of 2024," indicating rapid progression of the late-stage R&D portfolio.

David A. Ricks described the company as following an "I think investors can expect us to be pursuing an all the above strategy to get the medicine out more quickly," signaling aggressive regulatory and commercial push for new launches.

Kenneth L. Custer highlighted the market opportunity for orforglipron with, "we tend to think at a different magnitude about the opportunity here," referencing the potential to reach hundreds of millions globally.

Approximately two-thirds of new U.S. incretin prescriptions now use Lilly medicines, indicating continuing share gains in the market.

Management identified high elasticity and strong willingness to pay among international obesity patients, as shown by out-of-pocket purchases accounting for approximately 75% of non-U.S. Mounjaro sales.

Regulatory momentum was demonstrated by recent approvals for omelumestrant (Inlureo) and Kisunla, with launches occurring across multiple major markets.

Combination studies and new indications, such as stress urinary incontinence and osteoarthritis pain for orforglipron, are progressing toward data readouts that may expand addressable patient populations.

INDUSTRY GLOSSARY

Incretin Analogs: Medicines that mimic gut hormones to promote insulin secretion and regulate blood glucose, central to type two diabetes and obesity therapy.

IPR&D Charges: In-process research and development expenses related to acquired pipeline assets, impacting reported non-GAAP earnings.

GLP-1: Glucagon-like peptide-1 receptor agonists used for glycemic control and weight loss.

Dual/Triple Agonist: Drugs targeting two or three metabolic hormone pathways (GLP-1, GIP, glucagon) for enhanced efficacy in metabolic diseases.

SERD: Selective estrogen receptor degrader, a class of therapies for certain forms of breast cancer.

Lp(a): Lipoprotein(a), a cardiovascular risk biomarker targeted by emerging therapies such as movalaplin.

Full Conference Call Transcript

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Eli Lilly and Company Q3 2025 Earnings Conference. At this time, all participants are in a listen-only mode. Instructions will be given at that time. Should you request assistance during the call, please press 0 and an operator will assist you offline. I would now like to turn the conference over to your host, Mike Czapar, Senior Vice President of Investor Relations. Please go ahead.

Mike Czapar: Good morning. Thank you for joining us for Eli Lilly and Company's Q3 2025 earnings call. I'm Mike Czapar, Vice President of Investor Relations. Joining me on today's call are David A. Ricks, Chairman and CEO; Lucas E. Montarce, Chief Financial Officer; Dr. Daniel M. Skovronsky, Chief Scientific Officer and President of Lilly Immunology; Anne White, President of Lilly Neuroscience; Ilya Yuffa, President of Lilly USA and Global Customer Capabilities; Jacob Van Naarden, President of Lilly Oncology; Patrik Jonsson, President of Lilly International; and Kenneth L. Custer, President of Lilly Cardiometabolic Health. We're also joined by Mark Kieman, Susan Hedgeland, and Wes Paul of the investor relations team.

During this call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to several factors, including those listed on slide four.

Additional information concerning factors that could cause actual results to differ materially is contained in our latest Form 10-K and subsequent filings with the SEC. The information we provide about our products and pipeline is for the benefit of the investment community. It is not intended to be promotional and is not sufficient for prescribing decisions. As we transition to our prepared remarks, please note that our commentary will focus on non-GAAP financial measures. Now I'll turn the call over to Dave. Dave, we'll turn the call over to you.

David A. Ricks: Thanks, Mike. Appreciate it. Q3 was another strong quarter for Eli Lilly and Company. We made progress across all our strategic deliverables. We delivered compelling financial results, advanced our pipeline, and achieved key milestones to expand our manufacturing footprint. This is all shown on Slide six. In Q3, revenue grew 54% compared to the same period last year. Revenue from key products more than doubled as our medicines continued to increase their global impact. In the U.S., Lilly gained market share in the incretin analogs market for the fifth consecutive quarter. Lilly medicines account for nearly six out of 10 prescriptions within this large and growing class. Outside the U.S., Mounjaro performance accelerated driven by robust uptake around the world.

As a result of our strong financial performance, we raised our revenue and earnings per share guidance. Lucas will cover this in more detail later in the call.

Since our last earnings call, we achieved several key milestones, including U.S. FDA approval for omelumestrant under the brand name Inlureo for HR-positive HER2-negative, ESR1-mutated, advanced, or metastatic breast cancer. We also received EU approval for Kisunla for early symptomatic Alzheimer's disease. Positive results from a phase three trial of JADE PERCA in treatment-naive CLL and positive overall survival data for Verzenio in high-risk early breast cancer were also achieved. Additionally, we saw positive results from the second phase three trial of orforglipron in obesity, enabling global submissions to begin later this year. Positive results from three phase three trials of orforglipron in type two diabetes, including one trial that demonstrated head-to-head superiority versus oral semaglutide, were also announced.

We also made good progress executing our manufacturing expansion agenda, announcing plans to build two new U.S. facilities that will make active pharmaceutical ingredients and the expansion of an existing facility in Puerto Rico. The new facility in Virginia will support our bioconjugate and monoclonal antibody portfolio, and the new facility in Texas and expansion in Puerto Rico will support our small molecule portfolio, including orforglipron. We plan to announce updates on our two remaining new U.S. manufacturing facilities in the coming months. During the quarter, we distributed $1.3 billion in dividends and executed approximately $700 million in share repurchases. Now I'll turn the call over to Lucas to review the Q3 financials.

Lucas E. Montarce: Thanks, Dave. As shown on Slide seven, Q3 was another strong quarter of financial performance. Revenue grew 54% compared to Q3 2024 driven by our key products. Gross margin as a percentage of revenue was 83.6% in Q3, an increase of 1.4 percentage points versus the same quarter last year. This improvement was driven by favorable product mix partially offset by lower realized prices. Research and development expenses increased 27%, driven by continued investments in our portfolio. We have initiated 16 new phase three programs since the start of 2024 and continue to advance our pipeline. Marketing, selling, and administrative expenses increased 31% as we continue to increase investment to support ongoing and future launches across the areas and geographies.

Our non-GAAP performance margin, which we define as gross margin less R&D, marketing, selling, and administrative expenses, as a percentage of revenue was 48.3%. Performance margin increased by more than eight percentage points from Q3 2024 driven by revenue growth. At the bottom line, earnings per share increased to $7.02 inclusive of 71¢ of acquired IPR&D charges. This compares to $1.18 in Q3 2024, which included $3.08 of acquired IPR&D charges. On slide eight, we quantify the effect of price, rate, and volume on revenue growth. U.S. revenue increased 45% in Q3 driven by strong volume growth of Zepan and Mounjaro, partially offset by a 15% decline in price.

Price was negatively impacted by a favorable one-time adjustment to estimates for rebates and discounts in Q3 2024. Excluding this base period effect, U.S. price declined by high single digits. In Europe, revenue increased by over 100% in constant currency, reflecting the strong uptake of Mounjaro. Revenue was positively impacted by a $103.18 billion one-time benefit related to Amylstol payment and business development. Excluding this impact, revenue grew 81% in constant currency. Japan, China, and the rest of the world delivered constant currency revenue growth of 24%, 22%, and 51%, respectively, driven by Mounjaro volume growth. On slide nine, we provide an update on the performance of our key products, which accounted for $12 billion of revenue within the quarter.

Beginning with immunology, Evolus delivered strong performance in atopic dermatitis, as U.S. total prescriptions increased by 41% compared to Q2 2025. We saw increased use in the first-line setting, which now accounts for more than 50% of new at least patients. Ombo continued a steady uptake, and the newly published four-year data in ulcerative colitis show long-term safety and efficacy benefits. Within oncology, Chiperica continued to build momentum, both in the marketplace and with new data from phase three trials. Dan will talk more about this later during the R&D update. Verzenio remains the market leader in the U.S. for the node-positive high-risk early breast cancer population, reflective of its position as standard of care in this setting.

In the U.S., prescription grew by 3% compared to Q3 2024, and international volume grew by 14%. In neuroscience, Kisunla total prescription grew by 50% compared to Q2 2025 and continued to increase share of market versus the competition. We also recently received marketing authorization by the European Commission, and we are in active reimbursement discussions across Europe and expect launches beginning this quarter and throughout 2026. Finally, moving to cardiometabolic health, Zepan and Mounjaro both posted strong global performance. Beginning outside the U.S., Mounjaro performance was robust. We have now launched in 55 countries and all major markets. We have seen a strong reception globally and have gained significant share in most major markets as a result.

While obesity reimbursement remains limited internationally, we are encouraged by the strong uptake. Approximately 75% of Mounjaro revenue outside the U.S. is coming from people with obesity paying out of pocket, demonstrating a high level of clinical need and high willingness to pay. Moving to the U.S., Zepan prescription tripled in Q3 2025 compared to the same period last year. While the impact of the CVS template formulary change was disruptive to patients and physicians, the impact on Zepan performance was modest. Share of total U.S. prescription in the branded anti-obesity market declined by approximately two percentage points compared to Q2 2025. However, performance is back to Q2 levels, and Zepan exited Q3 with 71% share of new prescriptions.

We saw strong uptake of sebumin in vials, which comprised approximately 30% of total U.S. Zepan prescriptions and over 45% of new prescriptions in Q3. Mounjaro posted robust Q3 in the U.S. as total prescriptions grew by over 60%. Mounjaro also gained share of market in the type two diabetes incretin analog market, increasing by four percentage points compared to Q2 2025. Mounjaro is the most widely prescribed incretin for people with type two diabetes in the U.S. As shown on slide 10, the combined U.S. Synchrony Nanalog market growth was strong, increasing by 36% in Q3 compared to the same period in 2024.

Lilly incretins gained share of market compared to Q2 2025, and approximately two out of every three new prescriptions in the incretin analog market is a Lilly medicine. On slide 11, we provide an update on capital allocation. Moving to slide 12, we share our updated expectations for Lilly's 2025 financial results. Based on strong underlying performance and the favorable impact of foreign exchange rates, we are increasing the midpoint of our revenue range by over $2 billion. I now anticipate our full-year revenue will be between $63 and $63.5 billion.

Given our updated expectations for revenue growth and performance margin over the first nine months of the year, we now expect non-GAAP performance margin to be between 45-46% of revenue. At the bottom line, we have increased our outlook for non-GAAP earnings per share and expect EPS of $23.23 to $23.70. Now I will turn the call over to Dan to highlight our progress on R&D.

Daniel M. Skovronsky: Thanks, Lucas. Lilly R&D had another productive quarter. I'll summarize progress by therapeutic area. Beginning with cardiometabolic health. Since our last call, we announced results from four additional positive Phase III trials for orforglipron. Of note, one of those trials was attained too, in people with both obesity and type two diabetes. As a reminder, patients with obesity and type two diabetes are less responsive to weight loss on GLP-1 monotherapy than those without type two diabetes. For example, in the step two clinical trial of people with obesity and type two diabetes, semaglutide at 2.4 milligrams and 1 milligram resulted in 10.6% weight loss and 7.6% weight loss, respectively.

As shown on slide 13, attain two demonstrated 10.5% weight loss and 7.8% weight loss at the 36 milligram and 24 milligram doses of orforglipron, respectively. Aligned with our goal to deliver efficacy similar to injectable GLP-1 monotherapy in an easy-to-use daily pill. This trial completed the clinical package required to initiate global regulatory submissions for the treatment of obesity. These submissions are beginning imminently, and we anticipate launching orforglipron in the U.S. for treatment of obesity next year. We also made great progress on orforglipron for type two diabetes since the last call, with positive results from ACHIEVE two and ACHIEVE three.

Orforglipron demonstrated superior glycemic control and weight loss compared to dapagliflozin in achieved two, and compared to oral semaglutide in Achieve three. As shown on slide 14, in a CHEEV3, both the 12 milligram and 36 milligram doses of orforglipron were superior to the highest available dose of oral semaglutide on both a1c and on weight loss. People taking orapagliptin saw an average a1c reduction of 2.2% from baseline and lost nearly 20 pounds on the highest dose of We also announced results from Achieve five which demonstrated that orforglipron has the potential to provide benefit as an add-on therapy to titrated insulin glargine.

With four positive phase three diabetes trials now completed, we believe orfagliptron has the potential to be a foundational treatment for type two diabetes. We now await results from a two four which will trigger submission of orfagliptron for treatment of type two diabetes anticipated in the 2026. With data from over 8,000 participants across six completed phase three orfaglifron trials, We've observed benefits across multiple cardiometabolic health measures. As well as consistent safety and tolerability. Overall, orforglipron has delivered a profile consistent with our goal. Of developing an oral, and scalable small molecule GLP-1 with efficacy safety, and tolerability comparable to injectable monotherapy GLP-1s for treatment of obesity and type two diabetes.

Outside of the core registrational programs for these two important indications, we have several additional ongoing phase three orforglipron trials shown on slides fifteen and sixteen including new phase three starts for treatment of osteoarthritis pain, and for treatment of stress urinary incontinence, a new indication that we think could benefit from weight loss seen with orfaglifron. The next study to read out will be a tain maintain the phase three study of weight loss maintenance. This study is the first of its kind. It's designed to measure the impact of switching from injectable semaglutide or injectable tirzepatide to oral or Forglipron.

Our goal in this novel trial is to measure what level of weight loss patients can maintain after switching from an injectable incretin to orfroglipron. Since the patients in this trial were previously escalated to a maximal tolerated dose of semaglutide or tirzepatide. And treated for seventy two weeks This is a very ambitious trial, For those people switching from tirzepatide maintaining weight loss after switching to orfrogliptron is a high bar given the strong efficacy of tirzepatide as a dual incretin agonist. As this trial includes moving patients off of an active therapy onto a placebo maintenance arm. PetainMaintain allows patients who are randomized to placebo to switch to orforglipron as a rescue therapy.

If weight regain exceeds a specified threshold. in the coming months. This will be a rich data package, and we look forward to seeing the results either late this year or early next year. Moving to retitrutide. Our GIP GLP-one glucagon triple agonist. We expect results from up to six phase three studies by the 2026 to support the obesity and related complications program. Called triumph and the type two diabetes program called Transcend. With its first of a kind triple acting mechanism, We expect retreotide can deliver deeper and more rapid weight loss than existing obesity medicines. Even more than tirzepatide. Of course, not all patients may need this potentially very high level of efficacy.

We believe retreutide will likely be best suited for patients with a very high BMI or with obesity related complications that require a high degree of weight loss. While the global development program for Red retrutide includes people with a broad range of BMIs, spanning across overweight and obesity, We anticipate we'll be focused on the clinical profile of this medicine in patients where the clinical needs are at the highest. The first trial to read out, TRiM four, compares retreotide to placebo in patients with obesity, and knee osteoarthritis pain.

This sixty eight week study is designed primarily as a pain relief study to support an indication for treatment of knee osteoarthritis pain in combination with other trials in the triumph program. We look forward to sharing top line results from Triumph four later this year. Given this is the first phase three trial for retrutide, we'll be cautious not to over extrapolate from these results. We have seven more phase three trials reading out in 2026 and 2027. And we'll likely need to see data from at least a few of these before we more fully understand the profile of this medicine. Across a wide range of patients.

For the obesity indication specifically, we look forward to results from three additional phase three studies in the 2026. Moving now to mulvalaplin, which is our once daily oral small molecule inhibitor of lipoprotein a or LPA. LPA is a biomarker associated with increased cardiovascular risk. In phase two, movalaplin demonstrated over eighty five percent reduction of this biomarker at the highest dose compared to placebo. Based on these data, we've now initiated a phase three study in people with elevated LPA levels and atherosclerotic cardiovascular disease. Known as the Move LPA trial. Move allaplin is the first small molecule approach to LPA and our second program in phase three development. Against this important target.

In other updates from cardiometabolic health, we submitted our once weekly insulin called insulin epsotora alpha in The US for treatment of type two diabetes and we announced plans to initiate two phase three trials with baricitinib in type one diabetes. From the early phase portfolio, we look forward to presenting phase two data from our selective amylin agonist oloralintide, at obesity week in November. Moving to oncology. We're very pleased to have received US FDA approval of under the brand name Inlureo as a monotherapy for ER positive HER two negative ESR one mutated metastatic breast cancer.

Imlunestrant is also being studied in an ongoing phase three trial called EMBER four which compares in line estrin to the standard of care endocrine therapy in high risk early breast cancer. This 8,000 patient trial is the largest oncology trial we've ever conducted. And it is on track to be fully enrolled by early twenty six. The positive results in the metastatic setting provide an important signal that Imranestra could have a role in early breast cancer. Where we believe an oral SERD could have the largest patient impact. Also in oncology, we top line the study readout from the third positive phase three trial pirtobrutinib. In the Bruin CLL development program.

In Bruin CLL three thirteen, the trial of pirtobrutinib compared to chemo immunotherapy in treatment naive CLL, SLL. Firtobrutinib demonstrated a highly statistically significant and clinically meaningful improvement in progression free survival. Pirtobrutinib demonstrated the most compelling effect size ever observed for a single BTK inhibitor in a treatment naive CLL study compared to this. Comparator. Look forward to sharing these data at an upcoming medical meeting. As we continue to build evidence supporting the potential role for pirtobrutinib in treatment naive CLL. We expect these data in combination with Bruin CLL three one four to form the basis of regulatory submissions globally.

We also presented updates from our early stage oncology portfolio at the recent European Society for Medical Oncology meeting including data on our mutant selective p I three kinase alpha inhibitor, for people with invest advanced breast cancer and p I three kinase alpha mutations, Our folate receptor alpha antibody drug conjugate for treatment of ovarian cancer and vefibratinib, our FGFR three selective inhibitor for fGFR three altered metastatic bladder cancer. We continue to be encouraged by the emerging clinical profiles we've observed across each. Of these three programs. And we plan to initiate phase three trials for these medicines in 2026 if not sooner.

In neuroscience, we received the EU marketing authorization for Kisunla, Importantly, this approval came with a modified titration dosing in the label. Which is also approved in The US and now approved in Japan. The modified dosing schedule is thus approved in most major geographies, and we're pleased that it's being used to further lower the risk of ARIA. Our phase three trial with oremcaratide is also progressing well, and we've now completed enrollment in trail runner ALS three. Which is evaluating subcutaneous rimtanatog in treatment of preclinical Alzheimer's disease.

With a similar time to event design, as we are pursuing with the ongoing TRAILblazer three OWLS trial for Separately, we're pleased to announce that we've initiated our phase three program in alcohol use disorder. With brenipatide the GIP GLP-one dual agonist that we believe could have the optimal properties for neuroscience indications. Growing evidence from real world clinical studies suggest that incretin therapies may reduce cravings An observation that is supported by nonclinical studies that show decreased dopamine release in reward pathways after treatment with incretin therapy. Given the data we've observed thus far with brinepatide, we believe it has the potential to treat a range of diseases.

We expect to initiate several additional phase two and phase III trials in the coming months. Including testing this medicine in important but extremely challenging unmet medical needs. Such as opioid use disorder. In addition to neuroscience applications, we will test for nepotide in immunologic disease, including a phase two trial in asthma. Which has recently begun enrolling patients. Also in immunology, new data were presented for lebrikizumab at the twenty five fall clinical dermatology conference.

Lebrikizumab delivered durable disease control, in people with moderate to severe atopic dermatitis when dosing was reduced from once every four weeks to once every eight weeks, Reducing the number of maintenance doses to as few as six doses per year could provide flexibility and reduce the treatment burden on patients. We've now submitted these data to the FDA a potential label update and continue to explore opportunities for even less frequent dosing. Of this medicine. For people with atopic dermatitis. While we continue to pursue innovative modalities across several immunological disorders, we're also developing combination therapies with the potential to deliver differentiated efficacy.

We recently began two new studies combining mirikizumab with In people with ulcerative colitis and people with Crohn's disease. These two new studies complement the previously initiated together studies ofixekizumab plus tirzepatide in people with psoriasis and psoriatic arthritis. We expect the first data from the together trials to read out in the next six months. Slide 16 shows additional milestones and updates. To our clinical portfolio. It has been a very productive period since our last earnings call, and we still have an ambitious r and d agenda for the last two months of 2025. Slide 17 shows the remaining list of potential key events that expected yet this year.

I'll now turn the call back to Dave for some closing remarks.

David A. Ricks: Thanks a lot, Dan. A lot to talk about there in the pipeline. We're pleased with all the progress in 2025. And we've had another quarter of really strong execution. Both in driving the business results and making investments that will help us discover and develop new Lilly medicines to help more people around the world. Now I'll turn the call over to Mike, who will moderate our Q&A session.

Mike Czapar: Yes. Thanks, Dave. We'd like to take questions from as many callers as possible. So consistent with prior quarters, we will respond to one question per caller. And end the call promptly by eleven. If you have more than one question, you can reenter the queue, and we will get to you as time allows. Paul, please provide instructions for the Q&A, and then we're ready for the first caller.

Operator: Certainly. At this time, we will be conducting a question and answer session. If you have any questions, please press 1 on your phone at this time. We ask that participants limit themselves to one question on today's call. If you do have a follow-up question, please rejoin the queue by pressing 1 at any time. We also ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. And the first question today is coming from Terence Flynn from Morgan Stanley. Terence, your line is live.

Terence Flynn: Thanks so much for taking the question. I really appreciate it, and congrats on the quarter. A lot of focus obviously on orfaglipron and path to market. I was surprised that it wasn't on the first list of the commissioner's national priority review voucher program. So maybe you could just comment on kind of if you guys are seeking that voucher and then if not, why not? And then how to think about timelines for launch and some of the puts and takes as we think about maybe consensus expectations for 2026? Thank you.

David A. Ricks: Great. Thanks for the question, Terrence. We'll go to Dave to talk a bit about orforglipron. Yeah. Hi. Thanks, Terence, for the call. I think as we've said before, we're interested in getting orfagliptron to as many patients around the world as fast as we can, including those in the U.S. So without commenting on specific vehicles, I think investors can expect us to be pursuing an all the above strategy to get the medicine out more quickly. Also, I'd point out that, you know, if you look at this new voucher program, I think orfaglipron checks at least three or four of the boxes laid out. So yeah, we'll see.

It's obviously a government decision about which pathway they choose and the review time itself. But we're focused on speed here, and we're ready to launch. So the package will go in the quarter, and we hope to get approval as soon as we can after that.

Operator: Great. Thank you, Dave. Are we ready for the next question, Paul?

Operator: The next question is coming from Chris Schott from JPMorgan. Chris, your line is live.

Chris Schott: Great. Thanks so much for the question. I just wanted to touch base a bit more on the Mounjaro International ramp. It's obviously had a pretty impressive step up in sales these past two quarters. Can you just elaborate a little bit more on how some of these new country launches are trending relative to your expectations? How to think about growth off of this new hire base? And is there any meaningful stocking as we kind of look at these numbers? Just a little bit more color on what's been driving this big step up. Thank you.

Patrik Jonsson: Thank you very much, Chris. I think we are very encouraged by what we're seeing outside the U.S. And the business that we shared earlier is 75% out of pocket and 25% type two diabetes. What we have seen is, of course, initial stocking in both markets where we launched, and we refer to the big ones being in Q2 in China, Brazil, Mexico, and India. Since then, we have seen a lift in the performance also in those markets in Q3, and a continued very strong performance globally. Looking forward, I think the major opportunity is number one in side two.

We have reimbursement currently in eight markets, and we'll continue those efforts across all of the U.S. markets, but that's going to take some time. And secondly, the big opportunity when it comes to obesity is really about patient activation. And we will lean in on all of those efforts also in 2026. When you look at international, it's important to while it's one line in the income statement, we are referring to more than 55 countries. And our different market dynamics, different buying patterns, so as we have seen over the last several quarters, it's not going to be a straight line. But there are significant opportunities outside of U.S. also moving forward.

Across type two and chronic weight management.

Operator: Thank you, Patrick. We'll go to the next question, Paul.

Operator: The next question will be from Seamus Fernandez from Guggenheim. Seamus, your line is live.

Seamus Fernandez: Oh, thanks so much for taking the question. So mine is actually on some of the behaviors that we're seeing in the market. Around M&A and how the competitors dynamics are playing out and how you Dave and Dan, see the market evolving from here. You've commented on Retrutide, perhaps segmenting the heavier patient population with greater comorbidities. You have orfagliptron potentially targeting a maintenance and lower end portion of the market. That's massively scalable. And you also have tirzepatide kind of blowing the numbers out and potentially cornering the competitor to some degree. In other markets.

Just wanted to get a sense of if that behavior would be concerning to you, if you don't really spend much time thinking about it because you're so focused on your own business. Or if there are other considerations as you work to further segment the market. And take the deeper leadership position? Thanks so much.

Daniel M. Skovronsky: Yeah. Sure. Thanks, Seamus, for the good question. You know, of course, Lilly's been focused on the obesity opportunity for quite some time. We have a very strong R&D engine behind it. I think when you look at where the science leads us and sort of every kind of reasonable or logical track target to pursue, we have robust programs against those targets. In nearly every case. I think we have either a best molecule or first molecule or both, actually. So I like our portfolio. It clearly, the late-stage clinical molecules that the street is paying attention to, that we like where they are. But behind it, I can assure you there's a robust pipeline that we like.

No surprise then that every probably just about every other company in this industry looks at that and wants to improve their own position. So that doesn't surprise us. We watch that, and of course, pay attention. But we haven't seen anything that changes our view about the competitiveness of our portfolio or the lead that we have in this space, which we intend to maintain through robust investments just in research and development, but as you've seen today, in multiple phase three trials and new indications.

David A. Ricks: Maybe just to add, I think that's a great answer. I think for a long time, we've all been saying we're focused on every logical target and pursuing, you know, the full extent of what these medicines can do for various conditions. I mean, today's call highlights that with some of the new studies Dan highlighted. But it's also important to note, in addition to innovation, you need to execute. This is a highly scaled business. And reaching, you know, potentially tens or hundreds of millions of people, and here also, you know, I think Lilly is really done well. It's a combination of those two things that I think, built the lead we have.

And we are very focused on both of them. Both innovation Dan talked about, but also executing with manufacturing build-out in market performance, new ways to reach consumers. Of course, everybody would like to be in our position, but we're focused on defending it. And mostly just executing the play we have. So it's a good question. We'll probably see more dynamics and noise from other pharmaceutical manufacturers. That's normal. What we need to do is run the strategy out that we've outlined. Thanks for the question.

Operator: Great. Thank you, Dave. Thank you, Dan. Paul, ready for the next question.

Operator: The next question will be from James Shin from Deutsche Bank. James, your line is live.

James Shin: Good morning. Thank you for the question. I got one for David. Cigna recently announced drug rebates would be replaced with GPO fees. So does that suggest greater GTN pressure? Than what we normally have with the rebates? Does this make clinical profiles more relevant to form, like, positioning or access? Like, what kind of changes should we expect?

David A. Ricks: Yeah. I think you're talking about the Cigna move, and there's also point out you know, increasing share in, large employer market from kinda nontraditional PBMs, I guess, we call them. I applaud this. I think it's a it's a good move for innovators. It's a good move for patients. It's a good move for payers, for the commercial payers. And probably smart of Cigna to make this first move to you know, recoup market share, gain market share, I think that everyone wants more transparency and lower out of pocket for patients. And this kind of model will produce both of those.

And what we want is to make the basis of competition one of clinical differentiation that doctors and patients both appreciate. In a way, the, you know, non transparent rebates and other behind the scenes activities that determine which medicine a patient gets is not in our interest. So as an innovator, probably the leading spender on innovation in the sector coming up, We're we're for this. I think David and his team at Cigna did a good thing here. And we hope others follow in the market in The US can rapidly transition to such a system.

I don't think that per se that reads through to some pricing effect What I hope is that more valuable medicines will have you know, that value recognized in pricing and less valuable medicines will have a harder time competing now because you can't just rebate away some number and find formulary position ahead of a better medicine. So we're for this, and again, it's a good move. Hats off to David Cordani and the team, and hopefully others rapidly follow.

Operator: Great. Dave. Next question, please, Paul.

Operator: The next question will be from Geoffrey Christopher Meacham from Citi. Geoff, your line is live.

Geoffrey Christopher Meacham: Morning, guys. Thanks so much for the question. Just had another one on orfagliptron. When you guys think about commercial strategy, would you characterize it as more consumer centric through Lilly Direct? Should we think about it as a more typical pharma launch with you know, PBM and payer negotiations being really critical on day one, and I guess the puts and takes of both of those Thank you.

Ilya Yuffa: Sure, Jeff. Thanks for the question. Obviously, we're excited about the profile of orforglipron and how to commercialize it in The US. And outside The US as well. Obviously, we think about this similarly to how we've viewed Zepbound where we need to drive great commercial overall access for patients for accessibility, but we also recognize that there's significant demand in the consumer segment related to finding ways to get outside some of the frictions in the health care system. And so we see both looking at broad coverage as well as looking at expanding how we do our direct to consumer platform and ensuring that every patient has the ability to access medicines across the portfolio.

Operator: Great. Thanks, Ilya. Next question, please, Paul.

Operator: The next question will be from Stephen Michael Scala from TD Count. Steve, your line is live.

Stephen Michael Scala: Oh, thank you so much. I know it's Lilly's policy not to comment on interims, but it's also a bit unusual for Lilly to speak about them in some detail. And Lilly has spoken in some detail about the Trailblazer l three interim on both the Q1 twenty five and Q4 twenty four calls. And likely other forms as well. So with that said, has the Trailblazer ALLS three interim already been taken? The initiation of return a tug in some in the same setting would not seem the best sign for tanonumab in Alzheimer's prevention. Thank you.

Anne White: Great. Well, thanks, Steve, and thanks for the question on Alzheimer's. We'll go to Anne to talk about some of our other clinical trials in early Alzheimer's. Yes. I think we're all looking forward to these results. As you know, we tend not to comment on interims. As we've shared previously, we have completed enrollment in Treblazer three, so now it just continues to be a matter of reaching the sufficient number of events. And this is an event-based trial. In clinicaltrials.gov, we list the date, excuse me, of 2027, so it could be earlier than that. We are pleased, though, and this is what I think we comment on to see momentum and awareness in space.

I think that was really evidenced by the enthusiastic enrollment in our remturnitub preclinical study as well. And as Dan mentioned, what have the opportunity there is to innovate with a subcu dosing formulation as well as a monthly dosing in a and, again, in a fixed duration dosing paradigm. So we continue to innovate in the Alzheimer's space, and you'll see us continue to commit to that. Even as we build on the foundation of a very strong Kasumma performance. There's a couple things that we're doing right now to make sure that we're ready for this readout, I will mention, in preclinical because it does require a few fundamental shifts.

It requires awareness and education on the importance of treating in that earlier stage of disease and the need to be proactive, really around green health. And very importantly, it requires a simple and accessible blood test to make the diagnosis in the preclinical. Space. Is also referred to as stage one and two. So there's quite a bit to do. So you'll hear us continue to talk about the readiness work that we need to do to get ready for this readout, but more to come in the future.

Operator: Great. You, Anne. And next question, please, Paul.

Operator: Next question will be from Mohit Bansal from Wells Fargo. Mohit, your line is live.

Mohit Bansal: Great. Thank you very much for taking my question, and congrats on all the progress. I would love to understand or think around evo trial and GLP GIPs. In general for Alzheimer's disease. How do you think about this space evolving and could benepatide new GLP GIP be a drug for Alzheimer's given that this has neural properties? Thank you.

Daniel M. Skovronsky: Yeah. Thanks, Rohit. Obviously, we follow the space close. I think we are leaders in Alzheimer's disease and also leaders in incretin therapy. You correctly point out that the burnapatide is it got some of the attributes that make us excited about it. For use for CNS. Indications that could be inclusive of Alzheimer's disease, although we haven't laid out any plans there yet. We're sort of, you know, on the verge of seeing, I believe, Evoke data. That'll be very informative. I think given our strength in our portfolio, almost regardless of that, outcome, we have opportunities to build there and create something that could potentially be more meaningful for patients. So we'll wait.

We'll see that, and then you can expect us to talk in more detail about our next steps.

Operator: Thanks, Dan. Next question, please, Paul.

Operator: The next question will be from Courtney Breen from AllianceBernstein. Courtney, your line is live.

Courtney Breen: Hi, guys. Thank you so much for taking the question today. Wanted to loop back to all of the which I know on. You seem to be preparing for a very large scale launch. And by our calculations on the basis of some of common survey, you couldn't have enough doses to support at least 5,000,000 patients for the full year based on the inventory built. For all. Can you help us understand kind of potential for extension in the market? With ortho? And should we expect to with slowdown in getting our new start? During the initial

Kenneth L. Custer: Sure, Courtney. Thanks for the question. Now with six phase three studies in hand, I think we really understand the profile of this emerging medicine. It continues to recapitulate the efficacy and safety of injectable GLP-1s. In fact, Dan recaps some of that during the early part of the call. Recapping that attained two data, which seemed very consistent with step two, as well as the ATCHEEVE three data showing superiority versus oral semaglutide. We think this is a great profile. You're getting glucose benefits, weight benefits, improvements in blood pressure, lipids, inflammatory markers. All that, and a simple once daily pill with no restrictions on food and water and, of which we can manufacture. And distribute at scale.

So we tend to think at a different magnitude about the opportunity here than historically what we've done with AnchorTons, you know, in The United States there's probably eight or eight and a half million people on incretins out of maybe a 170,000,000 who might benefit. And globally, that's a much bigger number probably measured in the hundreds of millions or even billions. So this is now, I think, the generational opportunity to figure out how to get an incur 10 to a much larger group. Of people. We can do that through the simplicity of the profile, which is also easier to manufacture. And distribute. So, really, our plan will be about accomplishing that.

At international level, getting it out there as quickly as possible. Course, we're also developing glucagon in a lot of other settings beyond obesity. And diabetes, Dan, recap some of those new Nilex that we've announced. And, of course, just to recap as well. We see an opportunity not just as a starter here with orcazepron, but also something that could potentially even use for patients to continue the success they've had with the drug like Wegovy. Or ZEPFound. We're assessing that now in the attainmentain study. Look forward to sharing those data later this year.

Operator: Great. Thank you, Ken. We're ready for the next question, please.

Operator: The next question will be from Asad Haider from Goldman Sachs. Asad, your line is live.

Asad Haider: Great. Thanks for taking the question, and congrats on all the ongoing progress. Just sticking with opicapiron, maybe given its importance, just high-level question on pricing and volume dynamics ahead of the launch. So the cash pay channel is where you're continuing to see the most rapid growth in the obesity market. Zepbound files are now almost 40% of news scripts. And related on ex US price analysis. You saw a shift in volumes in The UK when Mounjaro prices increased. So I guess, what are the learnings from this for the ofagliflozin ramp next year as it relates to the last elasticity of demand. Across the price points.

And I guess my question is specifically related to how you're thinking about US versus OUS volume unlocks for oclipiran as launches as it launches in a world potential MFN equilibrium prices. Thank you.

Ilya Yuffa: Yeah. Thank you for that question. Obviously, we have experienced significant growth overall in the total market. So we've seen even sequential growth in the covered overall sequential growth is 15%, but we're seeing significant more volume go through a direct to consumer platform with WillyDirect. Which says a lot about one, what consumers and patients as well as providers see as a benefit of Zepbound in particular. And also the ability to remove some of the friction and the ability to have a accessibility to medicine. So we see this channel as a significant channel now and into the future.

And then as part of that, obviously, having more offerings, whether you include being able to pick up your Zepbound vial at a local Walmart, which we announced yesterday, or expanding the offering on having another treatment like orfagliflozin. That's an important element for us to expand the ability for patients to get treated. That is the main goal that we have is to improve overall health outcomes, and we have multiple medicines. And different platforms to achieve that.

Patrik Jonsson: Maybe just a few additions from an OUS perspective. I think first and foremost, in The UK, with the recent price was a effective September 1, I think we learned pretty much what we expected to learn. What we did was just to take The UK price at the level of rated to the level of a European price. And even if there were regulations in The UK, we actually saw exports of medicines out of UK to other markets. So that has probably stopped with intervention we did put in place. Secondly, we're also learning something about consumer pricing elasticity. So that exists. But most importantly, think of ObiPron will meet a slightly different need of a market place.

We know that obesity is a heterogeneus. Disease. And for people with a BMI below thirty five and that might not need the weight loss of their sepatide, we believe that it's a significant opportunity OUS. And also driven by the other features that Ken referred to earlier, the opportunity to scale here and to reach other patient populations and with no need of refrigeration, etcetera. So we see both as being very complementary in the OUS business setting as well.

Operator: Thank you both. Next question, please, Paul.

Operator: Next question will be from Timothy Minton Anderson from Bank of America. Tim, your line is live.

Timothy Minton Anderson: Oh, thank you. I have a question on GLP one pricing. So with Novo's Sema, we get an IRA negotiated price within the next month. My sense from talking to some industry folks is that negotiated price may be more favorable than the investment community expecting. Meaning less degradation the current net price, net course, would be good for everyone in the space. What is Lilly picking up on this? And whatever that level of discount ends up being, would you agree that it quite like the has a direct impact on pricing of Lilly's own products in 2027? Or do you think some of the negotiated price just won't translate across?

Ilya Yuffa: Sure. Thanks, Tim, for the question. Obviously, we're we're don't know the price being negotiated at the same time. There are several things that are important to note. One, that it only applies to SEMA in part d beginning in 2027. Overall, if you take a look at our volumes, Medicare Part D is a small proportion of our overall one. Obviously, predominantly in type two diabetes, and there's lack of coverage in obesity. Probably the most important element include here is that tirzepatide had demonstrated superior efficacy versus sema in head to head trials. Which is a strong foundation for any value-based discussions that we have with payers.

Not only in our data, but you see that as well in provider preference as well as patient preference. That you see in the market.

David A. Ricks: I think he covered it well. I would maybe just one thing because we've been talking about forgopron, and it's upcoming launch. You know, we think about single act GLP-1s as one category and double and triple acting as others. And probably both weight loss and clinical value will be quite different between these medicines. And, of course, we're paying close attention to the SEMA but as Ilya said, it's a it's a part d only channel. So let's let it all play out. I think we're in a good position because we have so many options.

Operator: Great. Thank you both. And next caller call?

Operator: The next question will be from Alexandria Janet Hammond from Wolfe Research. Alex, your line is live.

Alexandria Janet Hammond: Thanks for taking the question. Can you walk us through the importance of the upcoming attain, maintain trial to orfagliflozin's commercial opportunity? Is there an outcome that might meaningfully change your view on how quickly of the GLP-one launch may scale?

Kenneth L. Custer: Sure. Thanks for the question, Alex, on attainmentain. This is a really first of its kind study, and we're looking forward to these data later this year. We took advantage of the opportunity to rerandomize patients for this amount five study, who were maximally tolerated on either semaglutide or tirzepatide randomized them to orfaglutide placebo, and we're gonna measure the percentage of the weight that they lost over the course of seventy two weeks that they keep off. While taking orfagliflozin. Course, this is a first of its kind study. We don't know exactly what the results will be.

But we're hopeful that will provide a simple once daily oral option that lets patients keep the majority of their weight off. And so we think this is really an opportunity to expand the market even further for orfagoprost. Of course, we have very bullish expectations for it as a as a first line starter in creatine, but also this is an opportunity to continue to grow that. I don't think as we think about our program, we don't think about sort that way.

This is an opportunity to grow the market at a very different rate, and we think the data from attainmentain could be really just a exciting boost and allow us to have some information to disseminate to physicians about how they can help patients switch from drugs like Wegovy and Zepbound. But, of course, we also know that all we management drugs are, of course, indicated for maintenance. So these are just data to help HCPs and patients guide between these medicines.

Operator: Excellent. Thanks, Ken. Next question, please.

Operator: The next question will be from Umer Raffat from Evercore. Umer, your line is live.

Umer Raffat: I just wanted to touch up on Glip pricing. And on the one hand, there's a lot of commentary on some of the expectations you've laid out on orfagliptin pricing framework. If you could expand on that. But then also on the other hand, there's a lot of actions and changes that your main competitor over the last few months and I almost wonder do you think they will stay a mature player from a pricing front, or would that no longer be a base case for us? Thank you.

Lucas E. Montarce: Yeah. You for the question, Umar. Maybe just thinking about the pricing dynamics. When you actually unpack our Q3 performance, you see that actually that we're pricing continue to perform as what we expected. Right? So I think it's a good data point after the CVS move. That we didn't see again, a significant price erosion, but actually was very much in line to what we said early in the year for the full year as well. So maybe just a good data point that you can take from that perspective.

And thinking more broadly about the competition in the marketplace, again, we always pay close attention on the competition in the marketplace, but also how we differentiate Ilya, Dan, Ken mentioned it about it and you see that in the marketplace. So if you take, for example, a good that for me is really direct, we have been priced over the last maybe six months already at that starting point at $3.49 going we don't see materially changing the dynamics that we see from that perspective. And as we continue to penetrate the market and mobilize patients to seek more K.

Operator: Lucas. Next question, please, Paul.

Operator: The next question will be from Akash Tewari from Jefferies. Akash, your line is live.

Akash Tewari: Hey. Thanks so much. So at the All In Summit, Dave, you noted if Orca was priced at a $100 a month, there'd be no incentive for new medicines in that category. To kinda create the next best thing. A few weeks later in Chicago, you mentioned how Lilly's already made billing the doses for Orfo. And it could have an impact on human health at a global level. Can Lilly achieve both goals of kind of preserving continuous innovation in obesity and having Orpho be a drug for hundreds of millions of patients with the parity pricing model between The US and rest of the world? Thanks so much.

David A. Ricks: Yeah. Thanks, and thanks for tuning in to all my podcasts. And public event. So, I mean, yes, our strategy is to is to bridge both. We think, as you're pointing out, that flatter pricing between US and other developed countries is important. But there's, like, three ways that this works. And I think one important thing here that just to point out on all these pricing questions, that is different in this GLP one category is the consumer self pay channel. We haven't really seen that as scale in other categories. And it certainly is a channel here. Partly because of under insurance, but partly because the benefits of these medicines manifest so consistently.

There really aren't that many nonresponders at all, and produce a very desirable short term effect in addition to enhancing long term health benefits. It really is a unique situation. So we have seen price elasticity as was mentioned, and that it's, on the one hand, inter in our interest to offer consumers a compelling price that where they can afford to self pay. It's also in our interest to continue to build out indications for chronic disease as Ken and Dan were outlining earlier.

And we are committed to doing both, having a strong compete consumer offering, but also proving the health benefit And that should not compete for consumer dollars, but for health care dollars, either government or, from private payers. So, it's a both and, and I do think these can bridge because we have so much evidence coming of long term benefit we should compete with other classes of medicines in chronic diseases or even create whole new classes. And at the same time, we'll probably continue to see consumer self pay demand whether it be for prevention, or there are other needs. So I think it's entirely possible to do both.

And I think Ken mentioned earlier some of the numbers. We are literally just scratching the surface of global treatment here. And there's a there really is a tremendous opportunity to reach tens or even hundreds of millions of more people in the coming years, and that's our goal.

Operator: Right. Thanks, Dave. Paul, I'll try and squeeze in at least one more quick one.

Operator: The next question is coming from Evan Seigerman from BMO Capital Markets. Evan, your line is live.

Evan Seigerman: Hi, guys. Thank you so much for taking my question. Dan, you recently commented that you were super excited about your presymptomatic Alzheimer's program. Appreciate that you wanna comment on an interim look, but could you expand on what drives this to you and how it has changed since the initiation of the program?

Anne White: Yeah. Well, thanks for having us. Our Sorry. Sorry. I need to take it. Apologies. No. No. Please, Annie. Go ahead. Okay. Yeah. Thanks, Evan. I apologize I didn't say super excited on this call. I'm still super excited about the Alzheimer's opportunity here to treat in the preclinical space. The reasons for my excitement go back to the data that we saw actually in trailblazer one and trailblazer two. In both of those trials where we're treating symptomatic patients, we saw the largest treatment effect on patients who were the earliest in their disease course, whether you meant measured early in disease course by symptoms or pathology, etcetera. That's where the drug had the biggest effect.

And in fact, we looked at prevention of progression as an outcome that trial in those patients we had really profound results I actually expect the same in Troublazer three. As well as Trailrunner three, which is the trial with remtarenotag. So it I mean, extremely excited No change here. At all to my level of enthusiasm or confidence. And success.

Operator: Great. Thanks. With that, we'll close the Q&A. And Dan, go Dave to you for a couple of closing remarks.

David A. Ricks: Hey, thanks, Mike, and thanks to everyone who called in today and for the excellent questions from the sell-side community. We appreciate everyone's participation here. And as always, follow-up with our excellent IR team if you have questions that didn't get answered today. And have a great rest of your day. Take care.

Operator: Thank you. Ladies and gentlemen, this does conclude our conference for today. This conference will be made available for replay beginning at 1 PM today running through December 4 at midnight. You may access the replay system at any time by dialing 803326854 and entering the access code 797327. International dialers can call (973) 528-0005. Again, those numbers are 803326854 and (973) 528-0005 with the access code 797327. Thank you for your participation. You may now disconnect your lines.

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