Executive Summary

Q3 2025 was mixed: total revenue rose 20% YoY to $107.8M, driven by resilient GSK royalties and strong IST sales, but operating income fell 20% YoY on a non-recurring R&D expense; net income surged to $89.9M on favorable investment mark-to-market .
Versus S&P Global consensus, revenue beat by ~18% to $107.8M*, but Primary EPS missed (actual $0.38* vs $0.48*), and EBITDA missed ($44.7M* vs $53.9M*); higher R&D spending weighed on profitability despite strong top-line performance (see Estimates Context) .
IST U.S. net product sales grew 52% YoY to $29.9M, with contributions from GIAPREZA ($18.2M), XACDURO ($8.5M), XERAVA ($3.2M), and early ZEVTERA ($0.1M) following the U.S. launch; ex-U.S. product sales accelerated to $17.4M .
Strategic updates add potential stock catalysts: ZEVTERA U.S. launch ramp, zoliflodacin PDUFA date on Dec 15, 2025, and a new $125M share repurchase authorization supported by $476.5M cash; 2025 converts largely exchanged into 11.1M shares, reducing near-term debt .

What Went Well and What Went Wrong

What Went Well
- Durable royalties and IST momentum: “The royalties portfolio reaffirmed its resilience with 5% growth compared to last year, while IST delivered a third consecutive quarter of greater than 50% year-over-year U.S. sales growth” .
- ZEVTERA launch progressing: “We are encouraged by early market receptivity for ZEVTERA following its U.S. launch over the summer” .
- Balance sheet and capital return: New $125M buyback authorization; cash and equivalents of $476.5M; favorable $62.3M change in investment fair values (Armata and others) .
What Went Wrong
- Profitability pressure: Income from operations fell 20% YoY to $34.6M due to a non-recurring R&D expense; EBITDA under-shot consensus (see Estimates Context) .
- Gross margin compression sequentially as cost of products sold rose with scale/mix (gross profit $75.5M on $107.8M revenue; ~70.1% vs ~82.9% in Q2) .
- No formal financial guidance in the release; visibility relies on launch execution and the zoliflodacin decision (Dec 15 PDUFA) rather than explicit outlook .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Total Revenue ($M)	$89.5	$88.6	$100.3	$107.8
Diluted EPS ($)	$0.02	$(0.74)	$0.77	$1.08
Net Income ($M)	$1.2	$(46.6)	$63.7	$89.9
Income from Operations ($M)	$43.2	$41.4	$48.8	$34.6
Gross Profit ($M)	$73.0	$73.3	$83.1	$75.5
Gross Margin (%)	81.6%	82.8%	82.9%	70.1%

Segment revenue mix (oldest → newest):

Revenue Mix ($M)	Q3 2024	Q2 2025	Q3 2025
Royalty revenue, net	$57.1	$63.9	$59.9
Net product sales	$27.8	$35.5	$47.3
License & other	$4.6	$0.9	$0.6
Total Revenue	$89.5	$100.3	$107.8

IST U.S. and ex-U.S. product sales detail:

IST Net Product Sales ($M)	Q1 2025	Q2 2025	Q3 2025
GIAPREZA (U.S.)	$17.4	$17.0	$18.2
XACDURO (U.S.)	$5.8	$8.5	$8.5
XERAVA (U.S.)	$3.2	$3.1	$3.2
ZEVTERA (U.S.)	—	$0.3	$0.1
Total U.S. Net Product	$26.4	$29.0	$29.9
Ex-U.S. Net Product	$3.9	$6.5	$17.4

KPIs and balance sheet highlights:

KPI	Q3 2025
Cash & Cash Equivalents ($M)	$476.5
Royalty & Net Product Receivables ($M)	$93.5
Favorable change in equity/long-term investments ($M)	$62.3
2025 Converts Exchanged (Principal, $M)	$192.5 → 11.1M shares
New Share Repurchase Authorization ($M)	$125.0

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (Revenue, EPS, EBITDA, margins)	FY 2025	Not provided	Not provided	Maintained (no formal guidance in press release)
Zoliflodacin (Regulatory milestone)	PDUFA Dec 15, 2025	Priority Review granted; Dec 15 target noted in Q2	Dec 15, 2025 PDUFA reiterated	Maintained
Share Repurchase Program	N/A	None disclosed	Up to $125M authorization	New

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not available in our document set as of this report date; themes reflect the Q3 press release and prior-quarter communications .

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
IST growth trajectory	IST U.S. net product sales +54% YoY in Q2; U.S. $29.0M Q2; U.S. $26.4M Q1	IST U.S. net product sales +52% YoY to $29.9M; ex-U.S. acceleration to $17.4M	Sustained high growth; expanding ex-U.S.
ZEVTERA launch	U.S. launch in July with early formulary engagement	Early U.S. receptivity noted; initial sales $0.1M; ongoing access efforts	Early ramp; access building
Zoliflodacin (regulatory)	NDA accepted, Priority Review, Dec 15 PDUFA set in Q2	PDUFA date reiterated; additional supportive subgroup data presented at IDWeek	On track; supportive data
Royalty portfolio durability	Q2 royalties stable; “beating expectations” in H1	Q3 gross royalties $63.4M (net $59.9M); +5% YoY	Durable; modest growth
Capital allocation	Emphasis on balanced deployment; strong liquidity	$125M buyback; converts exchanged; selective investments (Armata, Lyndra platform, Beacon)	More shareholder return + portfolio building

Management Commentary

“Innoviva delivered strong third-quarter performance across each area of our business. The royalties portfolio reaffirmed its resilience with 5% growth compared to last year, while IST delivered a third consecutive quarter of greater than 50% year-over-year U.S. sales growth.” — Pavel Raifeld, CEO .
“We are encouraged by early market receptivity for ZEVTERA following its U.S. launch over the summer and look forward to zoliflodacin’s December 15 PDUFA date.” — Pavel Raifeld, CEO .
“The $125 million share repurchase program underscores our confidence in Innoviva’s prospects, supported by the strength of our balance sheet and cashflows.” — Pavel Raifeld, CEO .

Q&A Highlights

A Q3 2025 earnings call transcript was not available in our document set; no Q&A themes to summarize at this time [ListDocuments showed no earnings-call-transcript; release only: 8-K and press release] .

Estimates Context

Metric	Consensus (S&P Global)	Actual (S&P Global)	Surprise
Revenue ($M)	$91.3*	$107.8*	+$16.5M / +18.1% (beat)
Primary EPS ($)	$0.48*	$0.38*	-$0.10 / -20.3% (miss)
EBITDA ($M)	$53.9*	$44.7*	-$9.2M / -17.0% (miss)

Why: Revenue outperformance reflects resilient royalties and IST growth (+52% YoY U.S. net product sales; ex-U.S. step-up), while EPS/EBITDA shortfalls reflect higher R&D (non-recurring item cited) and margin compression; investment fair value gains lifted GAAP net income but are excluded from EBITDA/Primary EPS drivers .
Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Revenue momentum is intact across both pillars (royalties + IST), producing a clear top-line beat; focus near-term on the ZEVTERA launch curve and sustaining ex-U.S. product growth .
Profitability variability stems from R&D timing and mix; management called out a non-recurring R&D expense that reduced operating income YoY, explaining the EBITDA/EPS misses despite strong revenue .
Liquidity and capital returns are supportive: $476.5M cash, $125M buyback authorization, and reduced near-term debt from convert exchanges provide downside protection and flexibility into the PDUFA event path .
Zoliflodacin (Dec 15 PDUFA) is a binary catalyst; supportive subgroup efficacy data at IDWeek reinforces the clinical narrative ahead of the decision .
ZEVTERA is in early U.S. launch; hospital formulary access and usage expansion are key to sequential IST growth into 2026 .
For models: raise revenue (IST + royalty) but trim near-term EBITDA margin assumptions to reflect the R&D step-up and gross margin compression; reassess Primary EPS cadence given expense timing .
Portfolio optionality persists via strategic investments (e.g., Armata mark-to-market upside) and targeted BD; expect continued disciplined capital deployment alongside buybacks .

Supporting Detail: Other Relevant Press Releases in Q3 2025

IST presented new zoliflodacin analyses at IDWeek; high microbiological cure rates across sites and resistance profiles support the differentiation narrative into PDUFA .
Company highlighted six IDWeek presentations including ZEVTERA PK/PD and pediatric programs across portfolio agents, underscoring scientific engagement around the infectious disease franchise .
Additional corporate items disclosed in Q3 release: acquisition of a long-acting oral drug delivery platform from Lyndra; $17.5M Beacon Biosignals investment; $15M Armata term loan; along with the buyback and convert exchange .

Notes on documents reviewed:

Q3 2025 8-K and press release with full financials and corporate updates .
Prior quarter press releases and 8-Ks for Q2 and Q1 2025 for trend analysis .
No Q3 2025 earnings call transcript was available in our document set as of this report date.

Innoviva, Inc. (INVA)·Q3 2025 Earnings Summary