Halozyme's Q4 Earnings Miss, Higher Royalties Drive Y/Y Revenues

Core Insights - Halozyme Therapeutics (HALO) reported a fourth-quarter 2025 adjusted loss of 24 cents per share, significantly below the Zacks Consensus Estimate of earnings of $2.15, and down from adjusted earnings of $1.26 per share in the same quarter last year [1][6] - The decline in earnings was primarily attributed to a $2.42 per share unfavorable impact from acquired IPR&D expenses related to the Surf Bio acquisition [1] Revenue Performance - Total revenues for the fourth quarter increased by 52% year over year to $451.8 million, surpassing the Zacks Consensus Estimate of $449 million [2] - The growth in revenue was driven by increased product sales and higher royalty payments, with royalty revenues totaling $258 million, up 51% from the previous year [4][6] Product Sales and Royalties - Product sales reached $122.7 million in the fourth quarter, reflecting a 54.5% increase year over year, although it fell short of the model estimate of $123.2 million [7] - Revenues under collaborative agreements were $71.1 million, marking a 47.5% year-over-year increase [7] Financial Metrics - Adjusted EBITDA for the quarter was $21.9 million, a significant decrease from $195.8 million in the same quarter last year [8] - As of December 31, 2025, the company had cash, cash equivalents, and marketable securities totaling $145.4 million, down from $702 million as of September 30, 2025 [8] Full-Year Results and Guidance - For the full year 2025, Halozyme generated revenues of $1.39 billion, a 38% increase year over year, with adjusted earnings of $4.15 per share, down from $4.23 per share in the previous year [9] - The company expects total revenues for 2026 to be between $1.71 billion and $1.81 billion, indicating year-over-year growth of 22% to 30% [10] - Royalty revenues for 2026 are anticipated to be in the range of $1.13 billion to $1.17 billion, reflecting a year-over-year growth of 30% to 35% [10] Future Expectations - Adjusted EBITDA for 2026 is projected to be between $1.125 billion and $1.205 billion, representing a year-over-year increase of 71% to 83% [11] - Adjusted earnings per share for 2026 are expected to be in the range of $7.75 to $8.25, indicating growth of 87% to 99% year over year [11] - Management anticipates a 5% to 10% decrease in royalty revenues for the first quarter of 2026 compared to the fourth quarter of 2025 due to annual contract rate adjustments [12]