Elanco Animal Health IncELAN

Elanco Animal Health Inc Revenue Disclosure

10-KFiled Feb 24, 20262 min read
Note 3. Revenue
The following table summarizes the activity in our global sales rebates and discounts liability for the years ended December 31:
20252024
Beginning balance$332 $367 
Reduction of revenue969 799 
Payments(901)(824)
Foreign currency translation adjustments16 (10)
Ending balance$416 $332 
Adjustments to revenue recognized as a result of changes in estimates during the years ended December 31, 2025, 2024 and 2023, for product shipped in previous periods were not material. Actual global product returns approximated 1% of net revenue in each of the years ended December 31, 2025, 2024 and 2023.
Disaggregation of Revenue
The following table summarizes our revenue disaggregated by product category for the years ended December 31:
202520242023
Pet Health$2,300 $2,143 $2,104 
Farm Animal:
Cattle1,125 1,007 949 
Poultry858 796 765 
Swine379 366 382 
Aqua (1)
— 81 175 
Total Farm Animal2,362 2,250 2,271 
Contract Manufacturing and Other (2)
53 46 42 
Revenue$4,715 $4,439 $4,417 
(1)On July 9, 2024, we sold our aqua business to a subsidiary of Merck Animal Health (see Note 4. Acquisitions and Divestitures for further details).
(2)Represents revenue from arrangements in which we manufacture products on behalf of a third party and royalty revenue. In May 2025, we entered into an agreement to sell certain qualifying royalties, among other potential future cash flows, to a third party for proceeds of $295 million in cash. While we are no longer entitled to these qualifying royalties, we are required under GAAP to continue recognizing them as revenue. For the year ended December 31, 2025, royalty revenue associated with this arrangement, which is reflected within Contract Manufacturing and Other in the table above, totaled $19 million. See Note 10. Liability for Sale of Future Revenue for additional information.
The following table summarizes our revenue disaggregated by geographic area for the years ended December 31:
202520242023
United States$2,234 $2,036 $1,983 
International2,481 2,403 2,434 
Revenue$4,715 $4,439 $4,417 
We have a single customer that accounted for approximately 12%, 11% and 10% of revenue for the years ended December 31, 2025, 2024 and 2023, respectively. Product sales with this customer resulted in accounts receivable of $107 million and $90 million as of December 31, 2025 and 2024, respectively.

Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 25, 2025
2023Feb 26, 2024
2022Mar 1, 2023
2021Feb 28, 2022
2020Mar 1, 2021
2019Feb 28, 2020
2018Feb 20, 2019

About Revenue Disclosures

Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.

Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.

Other Available Disclosures

Income TaxesEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock CompensationNew Standards