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AP

Amneal Pharmaceuticals, Inc. (AMRX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid execution but a mixed print versus consensus: net revenue was $724.5M (+3% YoY) with adjusted diluted EPS at $0.25; revenue missed Street while EPS beat on margin strength and FX . Consensus for Q2 was revenue $744.6M*, EPS $0.1749*.
  • Adjusted EBITDA was $184.0M, outpacing Street ($175.0M*) on favorable mix and efficiency initiatives .
  • Management raised 2025 guidance for adjusted EBITDA ($665–$685M from $650–$675M), adjusted diluted EPS ($0.70–$0.75 from $0.65–$0.70) and operating cash flow (raised by $20M), with revenue held at $3.0–$3.1B .
  • A comprehensive refinancing (oversubscribed) reduces annual interest expense by >$33M and extends maturities to 2032, de-risking the balance sheet and supporting cash flow; near-term catalysts include CREXONT® uptake, Brekiya® FDA approval and government-channel wins .

What Went Well and What Went Wrong

What Went Well

  • Specialty momentum: Specialty net revenue rose 23% YoY on CREXONT®, RYTARY® and UNITHROID®; CREXONT® uptake exceeded expectations, with management confident on its peak sales trajectory (“highly confident that Trexon [CREXONT®] will achieve U.S. peak sales of $300–$500M”) .
  • Margin strength and EPS beat: Adjusted EPS grew 56% YoY to $0.25, supported by top-line, higher gross margins and favorable FX (“adjusted EPS growth of 56%... driven by higher adjusted EBITDA, favorable foreign exchange and lower interest expense”) .
  • Balance sheet optimization: Completed refinancing ($2.1B Term Loan B + $600M senior secured notes) and reduced net leverage to 3.7x; refinancing was “oversubscribed many times over” and cuts interest costs by >$33M annually .

What Went Wrong

  • Revenue miss vs Street: Q2 net revenue of $724.5M came in below consensus ($744.6M*), with Affordable Medicines growth tempered by supply timing and facility upgrades; AvKARE revenue declined 4% YoY .
  • AvKARE mix headwind: AvKARE revenues decreased YoY (−4%), though margins improved; distribution channel softness weighed, offset by government label growth .
  • Tariff uncertainty: Management highlighted potential industry disruption from extreme tariff proposals; while pharma is currently exempt, visibility remains limited (“it’s still unknown… as of now, pharma is exempted from all tariffs”) .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Net Revenue ($USD Millions)$730.5 $695.4 $724.5
GAAP Diluted EPS ($)$(0.10) $0.04 $0.07
Adjusted Diluted EPS ($)$0.12 $0.21 $0.25
Adjusted EBITDA ($USD Millions)$155.3 $170.0 $183.7
Gross Profit ($USD Millions)$262.9 $255.9 $286.3

YoY Comparison

MetricQ2 2024Q2 2025
Net Revenue ($USD Millions)$701.8 $724.5
GAAP Diluted EPS ($)$0.02 $0.07
Adjusted Diluted EPS ($)$0.16 $0.25
Adjusted EBITDA ($USD Millions)$162.2 $183.7

Actual vs Consensus (Q2 2025)

MetricActualConsensusBeat/Miss
Net Revenue ($USD Millions)$724.5 $744.6*Miss
Adjusted Diluted EPS ($)$0.25 $0.1749*Beat
Adjusted EBITDA ($USD Millions)$183.7 $175.0*Beat

Values with asterisks (*) retrieved from S&P Global.

Segment Breakdown (YoY)

SegmentQ2 2024 Net Revenue ($USD Millions)Q2 2025 Net Revenue ($USD Millions)ChangeQ2 2024 Margin (%)Q2 2025 Margin (%)
Affordable Medicines$427.3 $433.4 +1% 41.6 (Adj. GM) 44.3 (Adj. GM)
Specialty$104.0 $128.0 +23% 80.6 (Adj. GM) 82.1 (Adj. GM)
AvKARE$170.4 $163.0 −4% 15.0 (GM) 20.4 (GM)

KPIs

KPIQ2 2025
Net Leverage (LTM)3.7x
Cash from Operations (H1 2025) ($USD Millions)$91.2
Cash and Equivalents ($USD Millions, 6/30/25)$71.5
Gross Debt ($USD Millions, 6/30/25)$2,553.5
Net Debt ($USD Millions, 6/30/25)$2,481.9
Weighted-Average Diluted Shares (Q2) (Millions)322.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenueFY 2025$3.0B–$3.1B $3.0B–$3.1B Maintained
Adjusted EBITDAFY 2025$650M–$675M $665M–$685M Raised
Adjusted Diluted EPSFY 2025$0.65–$0.70 $0.70–$0.75 Raised
Operating Cash FlowFY 2025$255M–$285M $275M–$305M Raised
Operating Cash Flow (excl. discrete)FY 2025$280M–$310M $300M–$330M Raised
Capital ExpendituresFY 2025≈$100M ≈$100M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Specialty product performanceCREXONT® launch and double-digit Specialty growth in 2024; 2025 guidance initiated CREXONT® uptake exceeding expectations; Specialty revenue +23% YoY; RYTARY® +19%, UNITHROID® +12% Accelerating
Supply chain/manufacturing2024 investment and execution; diverse U.S. footprint Facility upgrades completed; improved capacity; U.S. manufacturing footprint cited Improving
Tariffs/macroGeneric competition and tariff risks disclosed in filings Visibility limited; pharma currently exempt; proposing solutions to avoid disruption Watchlist
Regulatory/legal2024 opioid settlement charges; legal matters resolution Expect BLA submission for Xolair biosimilar in Q4 2025 Pipeline progressing
GLP‑1 partnership (Metsera)Strategic focus areas highlighted for 2025 Partnership advancing; economics potentially superior to typical CDMO; emerging markets commercialization; 2026 revenue sizing Building
AI/technologyRisk factor includes cybersecurity and AI risks AI risks re-iterated in forward-looking statements Stable risk disclosure

Management Commentary

  • “Amneal delivered another quarter of solid growth, strong profitability, and we are pleased to raise our full year 2025 guidance… debt refinancing… will yield substantial interest cost savings while extending maturities.” — Chirag and Chintu Patel, Co-CEOs .
  • “Q2 adjusted gross margins were very strong at 45.6%, up 470 bps year over year… adjusted EPS growth of 56%… and lower interest expense.” — Tasos Konidaris, CFO .
  • “We refinanced $2.7B of debt… achieved long-term interest cost reduction of more than $33M annually and extended maturity to 2032 versus 2028.” — CFO .
  • “CREXONT®… uptake has been very strong… we are highly confident that [it] will achieve U.S. peak sales of $300–$500M.” — Co-CEO .

Q&A Highlights

  • H2 revenue drivers: Continued momentum from 2024/2025 launches, a few remaining 2025 launches in Q3/Q4, and capacity uplift following facility upgrades; distribution channel stabilization and government wins expected .
  • Tariffs: Management engaged with policymakers; warned extreme tariffs would be disruptive; pharma currently exempt; U.S. manufacturing and tech transfers provide mitigation levers .
  • Biosimilars strategy/capital allocation: Vertical integration pursued with discipline; refinancing increases flexibility without altering deleveraging focus; ambition to build 30–35-product pipeline with U.S./India manufacturing .
  • GLP‑1 (Metsera): Partnership structure aims for higher-than-CDMO margins given upfront risk; large emerging-markets opportunity with pricing references; commercialization rights in ~20 markets .
  • AvKARE: Mix shift away from lower-margin distribution toward VA/DoD opportunities; one to two large gov’t opportunities anticipated in H2 .

Estimates Context

  • Q2 2025 comparison to consensus: Revenue $724.5M vs $744.6M* (miss); Adjusted EPS $0.25 vs $0.1749* (beat); Adjusted EBITDA $183.7M vs $175.0M* (beat). Margin mix and FX drove the EPS/EBITDA outperformance, while revenue reflected timing/supply and AvKARE distribution softness .
  • Forward consensus (for context): Q3 2025 revenue $773.8M*, EPS $0.1383*, EBITDA $160.1M*; Q4 2025 revenue $808.1M*, EPS $0.1801*, EBITDA $169.1M*. Management’s stronger H2 outlook suggests potential upside risk to Specialty and Affordable Medicines if supply cadence and government-channel launches execute as planned .

Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

  • EPS/EBITDA beat on robust mix and efficiency despite a top-line miss; margin durability and FX tailwinds supported the beat .
  • Guidance raised for adjusted EBITDA, EPS, and operating cash flow; revenue unchanged, signaling confidence in margin profile and cash generation for H2 .
  • Debt refinancing reduces interest burden by >$33M annually and extends maturities to 2032; deleveraging trajectory intact (net leverage 3.7x), improving equity value capture .
  • Specialty growth catalysts (CREXONT®, Brekiya® launch in H2) and expected government-channel wins at AvKARE position H2 for sequential acceleration .
  • Watch tariff headlines; pharma currently exempt, but prolonged uncertainty could impact industry pricing/supply—Amneal’s U.S. footprint and tech transfer experience are mitigants .
  • Near-term estimate revisions likely skew positive for EPS/EBITDA given margin momentum and interest savings; revenue revisions hinge on execution of H2 launches and government wins .
  • Trading lens: Favorable setup into H2 on catalysts (Brekiya rollout, gov’t opportunities, biosimilar pipeline disclosure); any tariff clarity removing overhang could be incremental upside .