Executive Summary

Halozyme delivered record Q3 with total revenue $354.3M (+22% YoY) and royalties $236.0M (+52% YoY), driving GAAP EPS $1.43 and Non‑GAAP EPS $1.72 . Against consensus, revenue and EPS were both beats. Revenue $354.3M vs $339.1M*; Non‑GAAP EPS $1.72 vs $1.61*; GAAP EPS $1.43 reported; management highlights royalty outperformance from Darzalex SC, Phesgo, and Vyvgart Hytrulo .
Estimates source: S&P Global.
Guidance raised: FY25 total revenue to $1.30–$1.375B, royalties to $850–$880M, adjusted EBITDA to $885–$935M, and Non‑GAAP EPS to $6.10–$6.50 .
Strategic catalysts: completion of Elektrofi acquisition (Hypercon high‑concentration platform; royalties expected from 2030) ; new ENHANZE deal with Merus for subcutaneous petosemtamab ; FDA approval of Darzalex Faspro for high‑risk SMM (first U.S. treatment) .
Capital structure actions: priced $1.3B of new converts due 2031/2032 to refinance 2027/2028 notes and fund capped calls; potential note repurchases approx. $1.02B . CFO transition announced; search underway .

What Went Well and What Went Wrong

What Went Well
- Royalty engine outperformed: royalties +52% YoY to $236.0M on momentum from Darzalex SC, Phesgo, and Vyvgart Hytrulo . “Record royalty revenue of $236 million… 52% increase YoY” .
- Guidance raised across all core metrics (revenue, royalties, adj. EBITDA, Non‑GAAP EPS), reflecting sustained strength of ENHANZE portfolio .
- Platform expansion: Elektrofi acquisition closed; Hypercon expected to enable at‑home autoinjector‑friendly volumes with initial partner programs entering clinic by YE26 and royalty contributions from 2030 . New Merus ENHANZE deal expands pipeline breadth .
What Went Wrong
- Collaboration revenue declined YoY in Q3 ($24.0M vs $48.4M) due to milestone timing .
- Higher SG&A partly from litigation (Merck patent case) and M&A diligence costs ; litigation and M&A expenses were excluded in non‑GAAP results .
- CFO transition introduces some leadership continuity noise, though not tied to control or accounting issues .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Total Revenue ($M)	$290.1	$325.7	$354.3
Royalties ($M)	$155.1	$205.6	$236.0
Product Sales, net ($M)	$86.7	$81.5	$94.2
Collaboration Revenue ($M)	$48.4	$38.6	$24.0
Operating Income ($M)	$163.2	$202.4	$217.9
Net Income ($M)	$137.0	$165.2	$175.2
GAAP Diluted EPS ($)	$1.05	$1.33	$1.43
Non‑GAAP Diluted EPS ($)	$1.27	$1.54	$1.72
EBITDA ($M)	$183.6	$222.9	$238.3
Adjusted EBITDA ($M)	$183.6	$225.5	$248.2

Vs. estimates (Q3 2025):

Metric	Actual	Consensus	Surprise
Revenue ($M)	$354.3	$339.1*	Beat
Non‑GAAP EPS ($)	$1.72	$1.61*	Beat

Values with * from S&P Global.

Revenue mix:

Revenue Mix	Q3 2024 ($M)	Q2 2025 ($M)	Q3 2025 ($M)
Royalties	155.1	205.6	236.0
Product Sales	86.7	81.5	94.2
Collaboration	48.4	38.6	24.0
Total	290.1	325.7	354.3

KPIs and other items:

KPI	Q3 2025	Prior-year / Notes
Royalty Revenue YoY Growth	52%	Driven by Darzalex SC, Phesgo, Vyvgart Hytrulo
Adjusted EBITDA YoY Growth	35%	Operating leverage from royalty model
GAAP Diluted EPS YoY Growth	36%
Non‑GAAP Diluted EPS YoY Growth	35%
Cash & Marketable Securities	$702.0M (9/30/25)	$596.1M (12/31/24)
Net debt / EBITDA	0.9x at Q3 end

Non‑GAAP adjustments (Q3): add‑backs included $12.2M SBC, $17.8M intangible amort., $3.9M M&A transaction costs and $6.0M IP litigation costs, net of ($10.1M) tax effect .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY 2025	$1,275–$1,355M	$1,300–$1,375M	Raised
Royalty Revenue	FY 2025	$825–$860M	$850–$880M	Raised
Adjusted EBITDA	FY 2025	$865–$915M	$885–$935M	Raised
Non‑GAAP Diluted EPS	FY 2025	$6.00–$6.40	$6.10–$6.50	Raised
Product Sales	FY 2025	—	$340–$365M (management outlook)	—
Collaboration Revenue	FY 2025	—	$110–$130M (management outlook)	—

Management states guidance excludes Elektrofi accounting treatment impacts; EPS guidance excludes potential future buybacks .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Royalty growth drivers	Darzalex SC, Phesgo, Vyvgart Hytrulo cited as core engines; multiple EU/US approvals supporting growth	Same trio led royalty +52% YoY; Vyvgart Hytrulo largest dollar growth driver	Strengthening
Platform expansion / BD	Intent to add drug‑delivery platforms via disciplined M&A	Elektrofi acquisition completed; Hypercon royalties targeted 2030; two programs to clinic by YE26	Expanding
New deals	Expected to sign an ENHANZE deal in 2025	Confident a new ENHANZE deal will be signed this year (now also Merus deal announced in Nov)	On track
Capital allocation / leverage	Share repurchase program; net leverage ~1x (Q1)	Delever quickly post‑Elektrofi; comfortable up to ~3x for right M&A; YTD buybacks $342M	Balanced
Regulatory / legal	Filed patent suit vs Merck; PGR viewed as sideshow; no impact on ENHANZE guidance	IP litigation costs added to SG&A and excluded in non‑GAAP	Ongoing
Tariffs/macro	Minimal direct tariff exposure; agreements imply no royalty impact if pharma tariffs implemented	No new changes discussed	Stable
Auto‑injectors	First high‑volume AI development deal signed; small‑volume AI entering Phase 1 with partner	AIs positioned to pair with Hypercon for at‑home use; economics: device price plus potential royalties for HVAI	Advancing
Product performance (new launches)	Ocrevus SC, Opdivo SC, Tecentriq SC, Rybrevant SC early launch stages	Ocrevus SC patients >12,500; Opdivo Quantage Q3 sales $67M (vs $30M in Q2)	Accelerating

Management Commentary

“Record royalty revenue of $236 million… The continued success of our three established ENHANZE‑enabled blockbuster therapies, DARZALEX SC, Phesgo, and VYVGART Hytrulo, highlights the strength of our royalty driven business model.”
“We are pleased to raise our guidance ranges… Royalty revenue growth of approximately 50% for the full year.”
On Elektrofi: “By bringing together… ENHANZE, our autoinjectors, and HyperCon, we will create a new commercial opportunity for our partners and further strengthen Halozyme’s role as a partner of choice.”
On capital allocation: “We do expect to… delever very quickly… balanced approach going forward.”

Q&A Highlights

Capital allocation and leverage: management targets quick deleveraging post‑Elektrofi; willing to go up to ~3x net leverage for the right M&A; no second acquisition expected this year .
Elektrofi monitoring: success tracked by first‑in‑human starts (two by YE26), streamlined development plans, and additional partner nominations/deals .
Guidance drivers: upside driven by royalties, with Vyvgart Hytrulo and Darzalex new indications contributing; product sales and collaboration mix timing reiterated .
Ocrevus SC adoption: rapid growth with ~12,500 patients on SC globally; U.S. permanent J‑code aiding uptake .
ENHANZE pipeline and deals: continued confidence a new ENHANZE agreement will be signed in 2025; no partner pauses due to litigation .

Estimates Context

Q3 2025: Revenue $354.3M vs consensus $339.1M* (beat); Non‑GAAP EPS $1.72 vs $1.61* (beat) . Values with * from S&P Global.
FY 2025: Consensus revenue $1.342B* and EPS $6.14*; guidance of $1.30–$1.375B and $6.10–$6.50 brackets consensus . Values with * from S&P Global.
Implications: Street likely to lift royalty and EPS estimates given guidance raise and continued partner momentum (Darzalex SMM approval in U.S.; Opdivo SC acceleration; Ocrevus SC scaling) .

Key Takeaways for Investors

The royalty flywheel is accelerating; beat and guidance raise were driven by core ENHANZE blockbusters, with newer SC launches beginning to contribute meaningfully .
Strategic platform breadth expanded with Elektrofi (Hypercon) now closed; positions HALO for durable royalty growth into the 2030s and potential AI‑enabled at‑home delivery solutions .
Litigation and M&A diligence costs are transient and excluded in non‑GAAP; core operating leverage remains intact (adj. EBITDA +35% YoY) .
Capital structure optimized via low‑coupon converts and capped calls, largely refinancing 2027/2028 notes; expect deleveraging supported by robust FCF .
Near‑term catalysts: incremental ENHANZE deal flow (Merus announced), continued adoption of Ocrevus SC/Opdivo SC/Tecentriq SC, and royalty mix skew to Vyvgart Hytrulo and Darzalex SMM .
For trading: positive estimate revisions and platform expansion should support multiple; watch integration updates on Elektrofi and additional BD as sentiment drivers .
Medium‑term: broadened platform and pipeline suggest sustained revenue/EPS CAGR, with royalties extending into the 2040s across multiple franchises .

HALOZYME THERAPEUTICS, INC. (HALO)·Q3 2025 Earnings Summary