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AP

Amneal Pharmaceuticals, Inc. (AMRX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered mixed headline results: revenue grew 5% YoY to $695.4M but came in below S&P Global consensus, while adjusted diluted EPS of $0.21 beat by a wide margin; management affirmed full-year 2025 guidance . EPS beat revenue miss vs S&P Global: Adjusted EPS $0.21 vs $0.147 consensus (beat), revenue $695.4M vs $715.5M consensus (miss)*. Values retrieved from S&P Global.
  • Margin expansion and expense leverage drove 12% YoY growth in adjusted EBITDA to $170.0M; CFO cited adjusted gross margin of 43.1%, +120 bps YoY, on favorable mix and new launches .
  • CREXONT adoption and coverage accelerated: payer coverage roughly doubled from ~30% at YE’24 to ~60% of U.S. covered lives by the call; Specialty revenue rose 3% to $108.3M, with CREXONT adding ~$9M in Q1 .
  • Balance sheet stable but levered: net leverage remained 3.9x LTM; revolver draw increased to $290M and cash ended at $59.2M .

What Went Well and What Went Wrong

  • What Went Well

    • EPS and profitability outperformance: adjusted diluted EPS rose 50% YoY to $0.21; adjusted EBITDA up 12% to $170.0M; adjusted gross margin 43.1% (+120 bps YoY) on mix/new launches . “We’re incredibly proud… delivering growth of 5% revenue, 12% adjusted EBITDA and 50% growth in adjusted EPS” – CFO .
    • Specialty traction led by CREXONT: Specialty revenue +3% YoY to $108.3M; CREXONT added ~$9M; payer coverage ~60% of U.S. lives, on track to >3% share by year-end per management .
    • Broad-based segment growth: Affordable Medicines +6% YoY to $414.7M on complex launches; AvKARE +6% YoY to $172.4M on government channel growth .

  • What Went Wrong

    • Revenue below consensus (estimate $715.5M vs actual $695.4M)*; AvKARE softness in lower‑margin distribution channel partly offset government strength, per CFO . Values retrieved from S&P Global.
    • Working capital drag and lower cash: cash declined to $59.2M; significant payables outflow ($112.6M) constrained operating cash flow to $7.4M .
    • Leverage still elevated: net leverage 3.9x LTM; revolver balance up to $290.0M; long-term debt net $2.154B .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$702.468 $730.518 $695.420
GAAP Diluted EPS ($)$0.00 $(0.10) $0.04
Adjusted Diluted EPS ($)$0.16 $0.12 $0.21
Adjusted EBITDA ($USD Millions)$157.623 $155.257 $169.978

Consensus vs Actual (S&P Global; Q/Q chronology)

MetricQ3 2024Q4 2024Q1 2025
Revenue Consensus Mean ($USD Millions)$693.731*$708.068*$715.486*
Revenue Actual ($USD Millions)$702.468 $730.518 $695.420
Primary EPS Consensus Mean ($)$0.1353*$0.1521*$0.1467*
Adjusted Diluted EPS Actual ($)$0.16 $0.12 $0.21

Values retrieved from S&P Global.

Segment Breakdown

SegmentQ1 2024 Revenue ($M)Q1 2025 Revenue ($M)YoYQ1 2025 Non‑GAAP Gross Margin %
Affordable Medicines$391.294 $414.708 +6% 44.1%
Specialty$105.234 $108.297 +3% 81.1%
AvKARE$162.663 $172.415 +6% 16.6%

KPIs

KPIQ1 2025
Adjusted Gross Margin %43.1% (+120 bps YoY)
CREXONT revenue contribution~$9M
Unithroid revenue contribution~$4M
Net leverage (LTM)3.9x
Weighted avg diluted shares323.961M

Guidance Changes

MetricPeriodPrevious Guidance (2/28/25)Current Guidance (5/2/25)Change
Net revenueFY 2025$3.0B – $3.1B $3.0B – $3.1B Maintained
Adjusted EBITDAFY 2025$650M – $675M $650M – $675M Maintained
Adjusted diluted EPSFY 2025$0.65 – $0.70 $0.65 – $0.70 Maintained
Operating cash flowFY 2025$255M – $285M $255M – $285M Maintained
OCF excl. discreteFY 2025$280M – $310M $280M – $310M Maintained
Capital expendituresFY 2025~ $100M ~ $100M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24 and Q4’24)Current Period (Q1’25)Trend
CREXONT adoption & accessQ3’24 launch highlighted; Specialty +19% YoY; 2024 momentum . Q4’24 Specialty +16% YoY; CREXONT cited as a key driver .Coverage expanded from ~30% YE’24 to ~60% of U.S. covered lives; on track to >3% share by YE’25; ~$9M Q1 contribution .Accelerating access and uptake.
Injectables12 injectable launches in 2024; pipeline expansion .Continued expansion; 4 ready‑to‑use 505(b)(2) launches over the last year; additional 10–12 programs in dev. .Robust launch cadence sustained.
BiosimilarsFirst 3 biosimilars $125M in 2024 revenue .2025 biosimilar revenue targeted ~$150–$160M; Alymsys ~$90–$100M; pursuing vertical integration options by late 2025/early 2026 .Larger 2025 contribution; strategic vertical integration.
GLP‑1/MetseraStrategic collaboration announced Q3’24 .Phase IIb for lead program expected mid‑year; Amneal building peptide and sterile fill‑finish capacity; multi‑pronged value creation plan .Execution progressing; medium‑term growth vector.
Tariffs/macroNot a focus in Q3’24 PR [49].CFO detailed mitigation: large U.S. mfg base, inventory actions, API alternatives, potential customer pricing support; forecasts include modest tariff impact .Proactive risk management.
RegulatoryOngoing approvals (CREXONT, injectables) .No FDA delays; goal dates intact; all plants in good standing .Stable execution.
AvKAREQ3’24 +21% YoY; Q4’24 +14% YoY .Growth in government channel offset partial distribution softness; 2027 revenue view >$900M .Consistent growth; mix-dependent.

Management Commentary

  • Strategic positioning: “Amneal delivered another strong quarter… We are very pleased with the commercial uptake of CREXONT and the momentum of our recently launched injectable products… confident in our ability to deliver sustainable growth and value creation in 2025 and beyond.” – Co‑CEOs Chirag and Chintu Patel .
  • Profitability drivers: “Q1 adjusted gross margins of 43.1%, up 120 bps year‑over‑year… driven by favorable product and channel mix, new product launches and higher efficiencies at the plant level.” – CFO Anastasios Konidaris .
  • CREXONT trajectory and access: Coverage doubled to ~60% of U.S. lives (VA, UnitedHealthcare, CVS, Cigna), market share surpassed 1% with target >3% by YE’25; patient and KOL feedback cited as strong; peak U.S. sales target $300–$500M . Expanded coverage PR earlier in the quarter noted >50% coverage milestone .
  • Pipeline catalysts: DHE autoinjector goal date in May with 2025 launch targeted; injectables and biosimilars pipelines advancing; five biosimilar regulatory filings in 2025 targeting 2026–27 launches .

Q&A Highlights

  • Biosimilars contribution and strategy: 2025 biosimilars revenue expected ~$150–$160M; Alymsys ~$90–$100M. Vertical integration decision targeted by late 2025/early 2026 to scale development and U.S./India manufacturing .
  • Injectables focus: Pursuing both complex and volume opportunities; 505(b)(2), microspheres, liposomes, and drug‑device combinations; ~22 injectable lines across 3–4 locations; evaluating U.S. manufacturing expansion .
  • AvKARE/government: Federal cuts not expected to impact pharmaceuticals; VA/DoD volume growth; continued channel expansion .
  • Regulatory cadence: No observed FDA approval delays; goal dates not impacted; facilities in good standing .
  • Tariffs: Amneal can leverage U.S. capacity (including an idle oral solids plant if economically viable); discussions with large customers suggest willingness to share tariff cost if needed; forecasts already include modest tariff effects .

Estimates Context

  • Q1 2025 vs S&P Global: Adjusted EPS $0.21 vs $0.1467 consensus (beat); revenue $695.4M vs $715.5M consensus (miss)*. Values retrieved from S&P Global.
  • Prior quarters context: Q4 2024 adjusted EPS $0.12 vs $0.1521 consensus (miss); revenue $730.5M vs $708.1M consensus (beat). Q3 2024 adjusted EPS $0.16 vs $0.1353 consensus (beat); revenue $702.5M vs $693.7M consensus (beat). Values retrieved from S&P Global. Company actuals: Q4 2024 EPS and revenue ; Q3 2024 EPS and revenue .

Key Takeaways for Investors

  • Profitability over delivery: Despite a top‑line miss vs consensus, favorable mix drove margin expansion, a 12% adjusted EBITDA increase, and a strong EPS beat—supportive for near‑term sentiment, especially with guidance affirmed .
  • Specialty optionality building: CREXONT’s rapid access gains and accelerating adoption underpin Specialty growth; near‑term DHE autoinjector launch adds an additional branded catalyst .
  • Durable multi‑vector growth: Affordable Medicines (complex, injectables) and AvKARE growth continue to diversify revenue; biosimilars contribution (~$150–$160M 2025) and vertical integration plans point to medium‑term earnings power .
  • Tariff resilience: Large U.S. manufacturing footprint (2/3 of Affordable Medicines and Specialty revenues) plus mitigation levers (inventory, API alternatives, pricing dialogues) reduces macro risk .
  • Balance sheet watch items: Net leverage steady at 3.9x and higher revolver usage warrant monitoring; sustained EBITDA growth and operating cash conversion are key to de‑lever path in 2025 .
  • Estimate revisions: Expect upward EPS revisions for Q1 beat but potentially modest revenue trims given top‑line miss; full‑year guide reaffirmation should anchor street models near prior ranges .
  • Trading setup: Narrative favors profitability/mix, Specialty momentum, and pipeline catalysts; watch execution on injectables/biosimilars launches and CREXONT coverage-driven volume ramps as near‑term stock drivers .

Notes:

  • All S&P Global consensus values marked with an asterisk (*) are Values retrieved from S&P Global.
  • Company results and commentary sourced from the Q1 2025 8‑K/press release and earnings call transcript as cited.