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Keros Therapeutics, Inc. (KROS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a sharp improvement versus prior year, with revenue of $14.26M and diluted EPS of -$0.18, driven by $10.0M of license revenue from Takeda and $4.26M of service revenue; net loss narrowed to $7.3M from $53.0M in Q3 2024 .
  • Consensus estimates were materially beaten: EPS (-$0.92) vs actual (-$0.18) and revenue ($4.22M) vs actual ($14.26M); the outsized beat was primarily tied to Takeda-related revenues in the quarter (values from S&P Global estimates)* .
  • Cash and cash equivalents were $693.5M; the Board reaffirmed a $375.0M excess capital return, executed ~$181M in negotiated repurchases at $17.75/share, and commenced a tender offer up to $194.4M at $17.75/share, with a stated plan to distribute 25% of any net Takeda proceeds received by Dec 31, 2028 to shareholders .
  • Strategic and pipeline updates: Takeda plans to advance elritercept to Phase 3 in first-line MDS; KER-065 remains on track for Phase 2 start in Q1 2026, subject to regulatory interactions—key near-term catalysts alongside the tender offer and capital return execution .

What Went Well and What Went Wrong

What Went Well

  • Revenue quality and mix: $10.0M of license revenue recognized plus $4.26M of service revenue produced a step-up from prior periods and enabled a significantly narrower net loss quarter-over-quarter and year-over-year .
  • Operating leverage: R&D expense fell to $19.5M (from $49.2M YoY) as elritercept costs transitioned to Takeda; G&A held relatively stable ($10.1M vs $9.8M YoY), supporting improved operating results .
  • Strategic clarity and shareholder returns: Executed ~$181M negotiated repurchases at $17.75/share and initiated a tender offer up to $194.4M; management emphasized confidence in the outlook and KER-065’s prospects: “With a more focused and streamlined organization… we are moving forward fully focused on the execution of our clinical strategy” .

What Went Wrong

  • Core profitability remains negative: diluted EPS was -$0.18 and net loss -$7.3M, reflecting ongoing R&D investment and only partial offset from collaboration-related revenue .
  • Limited revenue visibility ex-licensing: Q2’s license revenue was zero and service revenue must scale to sustain non-dilutive funding; revenue performance remains tied to milestones and partner-related services .
  • Organizational transitions: Director resignations associated with the repurchase agreements and standstill/voting commitments reflect governance changes that may prompt investor scrutiny of board composition and long-term strategic oversight .

Financial Results

Quarterly Actuals (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$211.25 $18.17 $14.26
Diluted EPS ($USD)$3.62 -$0.76 -$0.18
Net Income ($USD Millions)$148.45 -$30.70 -$7.28
Net Income Margin (%)70.27%*-168.96%*-51.04%*
Cash & Equivalents ($USD Millions)$720.54 $690.22 $693.47

Values marked with * retrieved from S&P Global.

Q3 2025 vs Prior Quarter and Prior Year (oldest → newest)

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$0.39 $18.17 $14.26
Diluted EPS ($USD)-$1.41 -$0.76 -$0.18
Net Income ($USD Millions)-$53.00 -$30.70 -$7.28

Revenue Composition (oldest → newest)

ComponentQ1 2025Q2 2025Q3 2025
License Revenue ($USD Millions)$195.36 $0.00 $10.00
Service & Other Revenue ($USD Millions)$15.89 $18.17 $4.26
Total Revenue ($USD Millions)$211.25 $18.17 $14.26

Operating Expenses (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
R&D Expense ($USD Millions)$48.71 $43.50 $19.52
G&A Expense ($USD Millions)$10.50 $14.48 $10.13

Margins (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
EBITDA Margin (%)72.14%*-217.12%*-105.10%*
Net Income Margin (%)70.27%*-168.96%*-51.04%*

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayMulti-yearInto 2029 (Q1 2025) Into H1 2028, after returning $375.0M excess capital (Q2/Q3) Lowered timeframe due to capital return (from 2029 to H1 2028)
Excess Capital ReturnNear-termBoard determined to return $375.0M (Q2) Executed ~$181M negotiated repurchases at $17.75/share; commenced tender offer up to $194.4M at $17.75/share (Q3) Implemented program; tender launched
Takeda Proceeds DistributionThrough 2028Not stated previouslyPlan to distribute 25% of any net cash proceeds received on/before Dec 31, 2028 New shareholder return commitment
KER-065 Phase 2 StartQ1 2026 targetQ1 2026 anticipated (Q1/Q2) Q1 2026 start, subject to regulatory interaction (reiterated) Maintained timing
Elritercept Development (Takeda)2025–2026Transitioned R&D to Takeda (ongoing) Takeda plans Phase 3 in first-line MDS Raised development commitment by partner

Earnings Call Themes & Trends

Note: No Q3 2025 earnings call transcript was available in our document catalog; a call was scheduled on Nov 5, 2025 at 7:00 AM ET .

TopicPrevious Mentions (Q1/Q2)Current Period (Q3)Trend
Strategic review / capital returnStrategic alternatives under review; cash runway into 2029 (Q1) ; Board concluded review; determined $375M return (Q2) Executed ~$181M repurchases; launched $194.4M tender; announced 25% distribution of net Takeda proceeds Accelerated execution, expanded shareholder returns
Partnership with TakedaMajor license revenue recognized (Q1) Takeda plans elritercept Phase 3 in first-line MDS Strengthening partner-led development
Pipeline prioritization (KER-065)Preparing for Phase 2, Q1 2026 target (Q1) ; reiterated (Q2) Advancing toward Phase 2 start; focus on execution Consistent execution narrative
Cost structure / R&D transitionR&D elevated (Q1/Q2) R&D materially lowers with Takeda transition; G&A steady Improving opex trajectory
Governance changesN/A (Q1)Pontifax directors resigned concurrent with repurchase agreements Board composition evolving

Management Commentary

  • “We are excited that our partner Takeda plans to advance elritercept into a Phase 3 clinical trial to evaluate elritercept in the first-line setting in myelodysplastic syndromes.” — Jasbir S. Seehra, Ph.D., President & CEO .
  • “We are moving forward fully focused on the execution of our clinical strategy… We continue to target a first quarter 2026 start of the Phase 2 clinical trial of KER-065…” — Jean‑Jacques Bienaimé, Chair of the Board .
  • “The second quarter marked an important point for Keros, as Keros’ Board of Directors completed its comprehensive strategic review.” — Jasbir S. Seehra, Ph.D., Chair & CEO (Q2) .
  • “We are pleased to present additional data that highlights the broad therapeutic potential of KER-065, including its robust bone anabolic activity.” — Jasbir S. Seehra, Ph.D. (ASBMR presentation) .

Q&A Highlights

  • Transcript unavailable; earnings call was scheduled for Nov 5, 2025 at 7:00 AM ET .
  • No public transcript-found clarifications; management’s press release emphasized Takeda’s Phase 3 intent and the capital return execution .

Estimates Context

Consensus vs Actual (S&P Global; oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Primary EPS Consensus Mean ($)$0.01*-$1.13*-$0.92*
Primary EPS Actual ($)$3.62 -$0.76 -$0.18
EPS Beat/MissBeat*Beat*Beat*
Revenue Consensus Mean ($USD Millions)$56.65*$4.21*$4.22*
Revenue Actual ($USD Millions)$211.25 $18.17 $14.26
Revenue Beat/MissBeat*Beat*Beat*
Primary EPS – # of Estimates8*6*8*
Revenue – # of Estimates11*10*9*

Values marked with * retrieved from S&P Global.

Context: Beats across Q1–Q3 were driven by license and service revenue from the Takeda agreement (e.g., $195.36M license in Q1; $10.0M license plus $4.26M services in Q3), offsetting ongoing R&D investment .

Key Takeaways for Investors

  • Persistent estimate beats reflect Takeda-related revenue recognition and service work; without milestone/license timing, core revenue visibility remains limited and EPS volatility high .
  • Capital return program provides near-term support: ~$181M negotiated repurchases and up to $194.4M tender at $17.75/share; additional commitment to distribute 25% of net Takeda proceeds received by Dec 31, 2028 .
  • Pipeline catalysts: Takeda advancing elritercept to Phase 3 in first-line MDS; KER-065 targeting Phase 2 start in Q1 2026—two potential stock-moving clinical milestones .
  • Opex tailwinds from elritercept R&D transition to Takeda helped drive R&D down to $19.52M in Q3; watch sustainability as KER-065 advances .
  • Cash runway into H1 2028 post-capital return provides multi-year funding flexibility for KER-065 and corporate objectives .
  • Trading setup: Tender offer price ($17.75/share) may anchor near-term valuation; updates on Takeda Phase 3 initiation and regulatory path for KER-065 represent event-driven opportunities .
  • No non-GAAP metrics were provided; result comparisons are GAAP-based, with licensing effects materially influencing period-over-period deltas .

Notes: All company figures are from Keros press releases and 8-Ks cited above; consensus values are retrieved from S&P Global estimates*.