Amneal Pharmaceuticals(AMRX) - 2025 Q1 - Quarterly Results

Q1 2025 Financial Performance Overview First Quarter 2025 Financial Highlights Amneal reported strong Q1 2025 results, with a 5% increase in net revenue to $695 million, achieving a significant turnaround with a net income of $12 million compared to a $92 million loss in the prior-year quarter, largely due to the absence of a 2024 legal settlement charge, while Adjusted EBITDA grew by 12% to $170 million and Adjusted Diluted EPS increased by 50% to $0.21, reflecting broad-based growth across all segments and strong operational execution Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $695 million | $659 million | +5% | | Net Income (Loss) | $12 million | ($92 million) | N/A | | Diluted EPS | $0.04 | ($0.30) | N/A | | Adjusted EBITDA | $170 million | $152 million (est.) | +12% | | Adjusted Diluted EPS | $0.21 | $0.14 | +50% | - Growth was driven by all three business segments: - Affordable Medicines: +6% driven by complex products and new launches - Specialty: +3% driven by key brands like CREXONT® and UNITHROID® - AvKARE: +6% driven by growth in government label sales[3] - The significant improvement in net income from a loss of $92 million loss in Q1 2024 to a profit of $12 million in Q1 2025 was primarily due to a $94 million legal settlement charge recorded in the prior-year period[4] - Management highlighted the strong commercial uptake of CREXONT® for Parkinson's Disease and the positive momentum of recently launched injectable products[2] Full Year 2025 Financial Guidance Amneal has reaffirmed its full-year 2025 financial guidance, projecting net revenue between $3.0 billion and $3.1 billion, with Adjusted EBITDA expected to be in the range of $650 million to $675 million Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Net revenue | $3.0 billion - $3.1 billion | | Adjusted EBITDA | $650 million - $675 million | | Adjusted diluted EPS | $0.65 - $0.70 | | Operating cash flow | $255 million - $285 million | | Capital expenditures | Approx. $100 million | Consolidated Financial Statements Consolidated Statements of Operations For the first quarter of 2025, net revenue increased to $695.4 million from $659.2 million in Q1 2024, with the company reporting operating income of $100.3 million, a substantial recovery from an operating loss of $10.7 million in the prior-year quarter mainly due to the absence of a significant legal charge, resulting in net income attributable to Amneal of $12.2 million, or $0.04 per diluted share Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenue | $695,420 | $659,191 | | Gross profit | $255,891 | $238,060 | | Charges related to legal matters, net | $0 | $94,359 | | Operating income (loss) | $100,347 | ($10,746) | | Net income (loss) attributable to Amneal | $12,195 | ($91,643) | | Diluted income (loss) per share | $0.04 | ($0.30) | Condensed Consolidated Balance Sheets As of March 31, 2025, Amneal's total assets were $3.37 billion, a decrease from $3.50 billion at year-end 2024, with cash and cash equivalents at $59.2 million, down from $110.6 million, and total debt approximately $2.48 billion, while the revolving credit facility balance increased to $290 million from $100 million Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $59,187 | $110,552 | | Total current assets | $1,510,450 | $1,587,806 | | Total assets | $3,365,249 | $3,501,445 | | Revolving credit facility | $290,000 | $100,000 | | Total long-term debt, net | $2,153,979 | $2,161,790 | | Total liabilities | $3,424,638 | $3,545,983 | Consolidated Statements of Cash Flows In Q1 2025, the company generated $7.4 million in cash from operating activities, an improvement from $4.4 million used in Q1 2024, with cash used in investing activities at $17.8 million and cash used in financing activities at $39.2 million primarily due to debt repayments exceeding borrowings on the revolver, resulting in a net decrease in cash of $50.0 million for the quarter Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $7,408 | ($4,410) | | Net cash used in investing activities | ($17,798) | ($19,760) | | Net cash used in financing activities | ($39,166) | ($23,155) | | Net decrease in cash | ($50,026) | ($47,490) | | Cash, cash equivalents, and restricted cash - end of period | $68,394 | $51,617 | Segment Performance Affordable Medicines Segment The Affordable Medicines segment reported a 6% year-over-year increase in net revenue to $414.7 million for Q1 2025, with its non-GAAP gross margin improving to 44.1% from 41.8%, and non-GAAP operating income growing significantly to $124.2 million from $97.6 million in Q1 2024 Affordable Medicines Q1 Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Revenue | $414,708 | $391,294 | | Non-GAAP Gross Profit | $182,950 | $163,640 | | Non-GAAP Gross Margin % | 44.1% | 41.8% | | Non-GAAP Operating Income | $124,169 | $97,608 | Specialty Segment The Specialty segment's net revenue increased by 3% to $108.3 million in Q1 2025, however, its non-GAAP operating income decreased to $48.9 million from $56.8 million in the prior-year quarter, with a slight dip in non-GAAP gross margin to 81.1% Specialty Segment Q1 Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Revenue | $108,297 | $105,234 | | Non-GAAP Gross Profit | $87,854 | $86,412 | | Non-GAAP Gross Margin % | 81.1% | 82.1% | | Non-GAAP Operating Income | $48,898 | $56,820 | AvKARE Segment The AvKARE segment posted net revenue of $172.4 million in Q1 2025, a 6% increase from Q1 2024, with gross margin improving slightly to 16.6%, and operating income growing to $12.9 million from $11.3 million year-over-year AvKARE Segment Q1 Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Revenue | $172,415 | $162,663 | | Gross Profit | $28,602 | $26,254 | | Gross Margin % | 16.6% | 16.1% | | Operating Income | $12,908 | $11,347 | Non-GAAP Financial Measures & Reconciliations Reconciliation of Net Income to Adjusted EBITDA For Q1 2025, Amneal reconciled its GAAP Net Income of $24.6 million to a non-GAAP Adjusted EBITDA of $170.0 million, representing a 12% increase from the $152.4 million Adjusted EBITDA in Q1 2024, with primary adjustments including adding back interest, taxes, depreciation & amortization, and other non-cash or non-recurring items Q1 2025 Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $24,618 | ($81,678) | | Interest, Taxes, D&A | $129,966 | $127,387 | | EBITDA (Non-GAAP) | $154,584 | $45,709 | | Other Adjustments (Legal, Stock Comp, etc.) | $15,394 | $106,642 | | Adjusted EBITDA (Non-GAAP) | $169,978 | $152,351 | Reconciliation of Net Income to Adjusted Net Income & EPS The company adjusted its Q1 2025 GAAP Net Income of $24.6 million to arrive at a non-GAAP Adjusted Net Income of $66.5 million, resulting in an Adjusted Diluted EPS of $0.21, marking a 50% increase from the $0.14 reported in Q1 2024, with key adjustments including amortization, stock-based compensation, and tax-related items Q1 2025 Reconciliation to Adjusted Diluted EPS | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $24,618 | ($81,678) | | Total Adjustments | $41,925 | $126,158 | | Adjusted net income (Non-GAAP) | $66,543 | $44,480 | | Weighted average diluted shares | 323,961 | 316,559 | | Adjusted diluted EPS (Non-GAAP) | $0.21 | $0.14 | Calculation of Net Leverage As of March 31, 2025, Amneal's net debt stood at $2.51 billion, with the company's net leverage ratio at 3.9x, calculated against a last-twelve-months (LTM) Adjusted EBITDA of $645.1 million, remaining unchanged from the end of the 2024 fiscal year Net Leverage Calculation | Metric | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Gross debt | $2,568,158 thousand | $2,584,835 thousand | | Less: Cash and cash equivalents | $59,197 thousand | $110,552 thousand | | Net debt (Non-GAAP) | $2,508,961 thousand | $2,474,283 thousand | | LTM Adjusted EBITDA | $645,069 thousand | $627,442 thousand | | Net leverage (Non-GAAP) | 3.9x | 3.9x |