Sign in

You're signed outSign in or to get full access.

HI

HARROW, INC. (HROW)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $47.8M, up 38% YoY but down sequentially versus Q4’s seasonally strong $66.8M; GAAP EPS was -$0.50, and Adjusted EBITDA was -$2.0M .
  • VEVYE revenue accelerated to $21.5M, +35% QoQ from $16.0M, driven by the late‑March launch of the VEVYE Access for All program (VAFA); management highlighted quadrupling of new prescriptions and prescribers seven weeks post‑launch .
  • TRIESENCE received CMS transitional pass‑through status effective April 1, unlocking separate reimbursement in ASC/HOPD and materially expanding market access; management expects adoption to accelerate through 2025 .
  • Harrow reaffirmed 2025 revenue guidance of “more than $280M,” citing momentum in VEVYE, normalization in IHEEZO buying patterns, and improved TRIESENCE reimbursement; debt refinancing targeted by late summer/early fall 2025 .

What Went Well and What Went Wrong

What Went Well

  • VEVYE momentum and VAFA impact: “Both new prescriptions and weekly VEVYE prescribers at PhilRx have quadrupled” seven weeks post‑launch; refill rates remain strong, with the average covered patient receiving nine refills .
  • Record operating cash flow: Cash flow from operations reached $19.7M in Q1 2025, aided by AR collections from Q4 distributor term extensions .
  • TRIESENCE market access: CMS approved pass‑through (J3300) with ASP+6% reimbursement in ASC/HOPD; management sees accelerated account openings and adoption across retina/cataract use cases beginning in Q2 .

What Went Wrong

  • Seasonal softness and destocking: Sequential decline from Q4’s record results; IHEEZO shipments were impacted by year‑end stocking, with management noting normalization and April units more than doubled vs Q1 monthly average .
  • Specialty Branded volatility: Gross‑to‑net volatility reduced recognizable revenue in Q1; management intends to revisit strategy and expects improvement from the depressed Q1 baseline .
  • Higher OpEx: SG&A rose to $40.5M vs $28.8M in Q1 2024, including ~$3.7M of seasonal audit/special project costs and investments in sales/marketing headcount .

Financial Results

Consolidated Performance vs prior periods (oldest → newest)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$34.6 $49.3 $66.8 $47.8
GAAP EPS ($)-0.38 -0.12 0.24 -0.50
Adjusted EBITDA ($USD Millions)$0.23 $8.81 $22.49 -$1.99
Gross Margin (%)69% 76% 79% 68%
Core Gross Margin (%)76% 80% 84% 75%

Segment and Product Revenue

MetricQ1 2024Q4 2024Q1 2025
VEVYE ($USD Millions)$2.60 $16.0 $21.52
IHEEZO ($USD Millions)$2.32 $23.0 $5.22
Branded Revenue, net ($USD Millions)$13.87 —$27.78
ImprimisRx Revenue, net ($USD Millions)$20.72 —$20.05
Total Revenue, net ($USD Millions)$34.59 $66.83 $47.83

Notes:

  • IHEEZO Q1 shipments were impacted by Q4 stocking; April unit sales more than doubled vs Q1 monthly average, indicating normalization and strengthening demand .
  • Branded “Other” declined YoY on gross‑to‑net dynamics, while VEVYE/IHEEZO both surpassed 10% threshold and were disclosed individually .

KPIs and Costs

KPIQ1 2024Q1 2025
Cash from Operations ($USD Millions)-$4.63 $19.67
Cash & Equivalents ($USD Millions)$68.54 $66.73
SG&A ($USD Millions)$28.81 $40.51
R&D ($USD Millions)$2.15 $3.03
AR ($USD Millions)—$77.1 (commentary)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025“More than $280M” (3/17) “More than $280M” (5/8) Maintained
Directional outlook: VEVYEFY 2025N/APoised to be first 9‑figure product; strong VAFA momentum New qualitative detail
Directional outlook: IHEEZOFY 2025N/A“Over $50M” expected, QoQ increases as inventory normalizes New qualitative detail
Directional outlook: TRIESENCEFY 2025N/AGreater contribution in H2 with ASC/HOPD pass‑through New qualitative detail
Directional outlook: ImprimisRxFY 2025N/A“More than $80M” anticipated New qualitative detail

Earnings Call Themes & Trends

TopicQ3 2024 (Q‑2)Q4 2024 (Q‑1)Q1 2025Trend
VEVYE access/affordabilityBuilding payer access; refill rates >90% reported; inventory cap mid‑Sept Launched VAFA; targeting $0–$59 access; exiting IQVIA reporting 7 weeks post‑VAFA: new Rxs and prescribers +4x; ASP to moderate then stabilize attractively Strongly improving
IHEEZO retina pivotPivot initiated to focus on intravitreal injections Q4 unit demand +43% QoQ; $23M revenue Q1 destocking; April units >2x vs Q1 avg; pipeline top‑10 ~80k incremental units Recovering post‑destock
TRIESENCE reimbursementRelaunch; positive MAC reimbursement indications Strategic supply/dev agreement; life‑cycle plans (NDA by end‑2027) CMS pass‑through effective Apr 1; ASP+6%; adoption across ASC/HOPD; accounts doubled since Jan Accelerating
Tariffs/macroNot highlightedMinimal expected tariff impact (analysis ongoing) Estimated 0.52% gross margin impact on 2024; even more muted in 2025 Minimal headwind
Debt/capital structureNot discussedPositive lender dialogue; refi planned Active discussions; target late summer/early fall; lower cost of capital Progressing
Compounding to branded (Project Beagle)Not discussedSet‑up for conversions (e.g., MELT) Transition Klarity‑C (~25k patients) to VEVYE; profit per script >2x at $59 cash pay Executing

Management Commentary

  • “We are very well positioned to achieve—and hopefully exceed—our 2025 directional revenue guidance of more than $280 million.”
  • “Both new prescriptions and weekly VEVYE prescribers at PhilRx have quadrupled… These are still early days, but the VAFA program’s early momentum is surpassing our expectations.”
  • “In April, [IHEEZO] unit sales more than doubled compared to the monthly average in the first quarter… indicating strengthening demand as downstream inventory levels rebalance.”
  • “TRIESENCE… pass‑through status… effectively unlocking about 40% of the overall market; the number of accounts ordering TRIESENCE has more than doubled since the beginning of the year.”
  • “We expect to finalize [debt refinancing] by late summer or early fall… delivering a lower cost of capital and increased financial flexibility.”

Q&A Highlights

  • Pricing: “We did not do much for price increases… IHEEZO list price stayed the same.”
  • Project “Beagle/Eagle”: Transition of Klarity‑C patients to VEVYE—“even at $59 cash pay, profit would be more than 2x Klarity‑C,” with broader pipeline of compounding‑to‑branded opportunities; no plan to exit compounding .
  • IHEEZO normalization: Destocking from Q4 impacted Q1; April shipments more than doubled vs Q1 monthly average; focus on managing ASP compliantly .
  • TRIESENCE adoption: Early ASC/HOPD use with reimbursement outside bundled fee; “dabblers” becoming dense users over 2025 .
  • VEVYE ASP: Expected to moderate from Q1 levels and stabilize “at a very attractive level”; NRx growth and refills are the key drivers .
  • Tariffs: Internal analysis estimates ~50 bps gross margin impact; muted going forward as mix shifts to branded and inputs diversify .
  • Debt refi: Active lender discussions; targeted completion late summer/early fall 2025 .

Estimates Context

MetricQ1 2025 EstimateQ1 2025 Actual
Revenue ($USD)$56,998,800*$47,831,000
Primary EPS ($)-0.046*GAAP: -0.50 ; Primary EPS (S&P actual): -0.38*
  • Result vs estimates: Revenue missed by ~$9.2M; EPS missed meaningfully on a GAAP basis; management points to seasonality, Q4 stocking, and VAFA’s late‑quarter start (with strong early Q2 momentum) to explain the setup .
  • Disclaimer: Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • VEVYE is the principal upside driver in 2025; VAFA appears to deliver both access and economics, with accelerating scripts and durable refill behavior—watch Q3/Q4 for compounding revenue effects .
  • IHEEZO’s Q1 headwinds were transitory; April rebound and robust pipeline suggest unit growth resumption—monitor ASP and reorder rates .
  • TRIESENCE’s pass‑through is a structural positive, unlocking ASC/HOPD demand; expect sequential growth through H2 as accounts scale .
  • Operating leverage should improve as revenue ramps; SG&A includes one‑time items; cash generation was strong in Q1 .
  • Debt refinancing is a near‑term catalyst; lower cost of capital and flexibility could support acquisitions and growth initiatives .
  • Risk flags: Removal of IQVIA reporting may reduce third‑party visibility on VEVYE scripts; gross‑to‑net volatility in Specialty Branded; leverage sensitivity until refi completes .
  • Near‑term trade: Positive skew from VAFA adoption data points and TRIESENCE reimbursement ramp; medium‑term thesis anchored on VEVYE’s trajectory to 9‑figure annual revenue and retina penetration for IHEEZO .