Elanco is a global animal health company that spent the last four years digesting the largest acquisition in industry history, and the second quarter of 2026 is the first quarter in which that integration visibly shows up in the P&L. The inflection is real but narrow: it sits in pet health dermatology and parasite control, and the company is using the margin it generates to burn down debt faster than planned.
The tension in the stock is between the innovation engine and the balance sheet. Adjusted EBITDA of $288 million came in well above the prior-year quarter, and the net leverage ratio fell to 3.1x. The company is converting product share gains into free cash flow at a speed the debt stack can absorb.
The quarter's evidence: revenue of $1,368 million and adjusted EPS of $0.34, both ahead of the prior-year print. The question the next two quarters resolve: does the Zenrelia ramp and the AHV integration both show up in the P&L at the same time, or does one of them stall?