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EI

Endo, Inc. (NDOI)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 2024 total revenues (combined predecessor/successor) were $446.6M, down 18% year over year; Adjusted EBITDA was $175.8M and Adjusted Net Income was $104.7M .
  • Endo raised FY2024 guidance: revenue to $1.720–$1.780B (from $1.685–$1.770B) and Adjusted EBITDA to $635–$655M (from $615–$645M), and introduced FY2025 expectations for a return to growth (low-single-digit revenue growth; mid-to-high-single-digit Adjusted EBITDA growth) .
  • Segment mix: Branded grew 6% to $225.1M led by XIAFLEX (+8% to $126.6M); Sterile Injectables (-34% to $90.8M) and Generics (-38% to $110.1M) declined on lapping 2023 items and competitive pressures .
  • CEO transition announced on the print date: Blaise Coleman departing; Scott Hirsch appointed Interim CEO; Board initiating search—an additional near-term stock narrative catalyst alongside the guidance raise .

What Went Well and What Went Wrong

What Went Well

  • Branded strength: XIAFLEX revenues rose 8% YoY to $126.6M, driven by higher net price and demand; XIAFLEX volume rose 8% vs Q1, offsetting declines in SUPPRELIN LA and NASCOBAL .
  • Guidance raised and confidence in 2025 trajectory: “results exceeded internal expectations” and management provided FY2025 growth expectations, signaling normalization post fresh-start accounting .
  • Established Products revenues increased 33% YoY to $62.6M, helped by ~$10M favorable non-recurring non-cash adjustments and recovery from prior supply disruptions .
    • Quote: The company is “executing its strategy of becoming a vibrant growth company” .

What Went Wrong

  • Sterile Injectables down 34% YoY to $90.8M, primarily due to lapping a $33M non-recurring Novavax settlement in Q2 2023 and market competition .
  • Generics down 38% YoY to $110.1M on competitive pressure (varenicline; dexlansoprazole) partly offset by lidocaine patch growth .
  • Operating cash flow for the combined Q2 showed net cash used of ~$698M (vs +$127M in Q2 2023), driven by settlement of certain claims tied to the Plan during the predecessor period .

Financial Results

Core P&L vs Prior Year

MetricQ2 2023Q2 2024 (Combined)
Total Revenues, Net ($USD Millions)$546.9 $446.6
Adjusted EBITDA ($USD Millions)$243.4 $175.8
Adjusted Net Income ($USD Millions)$230.7 $104.7
GAAP Net Income/Loss ($USD Millions)$23.4 $6,378.8 (fresh-start driven)
GAAP Diluted EPS ($USD)$0.10 $(1.95) (successor)
Adjusted Gross Margin % (Non-GAAP)69.1% 67.4% (successor)

Sequential Trend (Prior Quarter vs Current)

MetricQ1 2024 (Predecessor)Q2 2024 (Combined)
Total Revenues, Net ($USD Millions)$419.5 $446.6
Adjusted EBITDA ($USD Millions)$146.3 $175.8
Adjusted Net Income ($USD Millions)$131.4 $104.7
GAAP Diluted EPS ($USD)N/A$(1.95) (successor)

Segment Revenue Breakdown

Segment ($USD Millions)Q2 2023Q2 2024 (Combined)
Branded Pharmaceuticals$212.4 $225.1
Sterile Injectables$137.0 $90.8
Generic Pharmaceuticals$178.6 $110.1
International Pharmaceuticals$18.9 $20.7
Total Revenues, Net$546.9 $446.6

KPIs and Balance Sheet/Liquidity

KPIQ2 2023Q2 2024
XIAFLEX Revenue ($USD Millions)$117.3 $126.6
XIAFLEX Volume vs Q1N/A+8% vs Q1 2024
SUPPRELIN LA Revenue ($USD Millions)$28.2 $20.6
NASCOBAL/Other Specialty Revenue ($USD Millions)$19.8 $15.2
Unrestricted Cash & Equivalents ($USD Millions)N/A~$294 (as of 6/30/24)
Net Cash from Operating Activities ($USD Millions, combined quarter)~$127 provided ~$(698) used

Estimate Comparison (S&P Global)

MetricQ2 2024 ActualQ2 2024 Wall St. Consensus
Revenue ($USD Millions)$446.6 Unavailable – S&P Global mapping for NDOI not available
EPS (GAAP/Adjusted)GAAP diluted $(1.95) (successor) Unavailable – S&P Global mapping for NDOI not available

Note: S&P Global consensus values were unavailable due to missing CIQ mapping for NDOI. Values retrieved from S&P Global were not accessible.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenues, Net ($USD Billions)FY 2024$1.685–$1.770 $1.720–$1.780 Raised
Adjusted EBITDA ($USD Millions)FY 2024$615–$645 $635–$655 Raised
Branded Revenue ($USD Millions)FY 2024$860–$905 $875–$905 Raised (lower bound)
Sterile Injectables Revenue ($USD Millions)FY 2024$370–$390 $370–$390 Maintained
Generic Revenue ($USD Millions)FY 2024$395–$415 $410–$420 Raised
International Revenue ($USD Millions)FY 2024~$60 ~$65 Raised
Adjusted Gross Margin %FY 2024~67% ~67% Maintained
Adjusted Operating Expenses ($USD Millions)FY 2024$585–$605 $595–$615 Raised (narrowed up)
Total Revenues, NetFY 2025N/ALow-single-digit % growth vs FY24 midpoint Initial guide
Adjusted EBITDAFY 2025N/AMid-to-high single-digit % growth vs FY24 midpoint Initial guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2024)Current Period (Q2 2024)Trend
Product performance – XIAFLEXXIAFLEX revenue $113M (+17% YoY), Specialty $148M (+4% YoY) XIAFLEX $126.6M (+8% YoY); volume +8% vs Q1; Branded +6% Positive momentum; pricing and demand drivers sustained
Generics competitionQ1: overall revenue down 19% YoY driven by Generics Generics -38% YoY; pressure in varenicline and dexlansoprazole; lidocaine patch offset Continued headwinds
Sterile InjectablesQ1: segment pressures vs prior -34% YoY; lapping Novavax $33M settlement; competitive landscape YoY decline; normalization expected post-lap
Guidance/OutlookQ1: in-line with expectations FY2024 raised; FY2025 growth introduced Improving
Corporate/LeadershipN/ACEO transition; Interim CEO appointed; search underway Transitional leadership with strategic continuity

Management Commentary

  • “The Company continues executing its strategy of becoming a vibrant growth company. With second-quarter results which exceeded internal expectations, the Company is raising 2024 full-year financial expectations and is also providing 2025 financial expectations, which represent a return to growth.” .
  • “Endo is strategically well-positioned to become a vibrant growth company with a strong balance sheet, a broad, diversified portfolio of on-market medicines, and a pipeline of innovative and differentiated product candidates.” — Paul Herendeen, Chairman .
  • “In the near term, our priority will be continued focus on execution across our branded, sterile injectables and generics portfolios as we position the Company for long-term growth.” — Scott Hirsch, Interim CEO .

Q&A Highlights

  • The full Q2 2024 earnings call transcript is hosted externally; the company provided prepared comments and presentation materials. Key narrative points emphasized pricing-and-demand-driven XIAFLEX growth, competitive pressures in Generics and Sterile Injectables, and the raised FY2024 guide with initial FY2025 growth expectations .
  • Referenced transcript sources: MarketScreener and Seeking Alpha provided the Q2 call transcript links .
  • Conference call logistics (8:00 a.m. ET on Aug 27) and replay availability were provided in the press release .

Estimates Context

  • S&P Global consensus estimates for NDOI were unavailable due to a missing CIQ mapping at the time of analysis; therefore, direct beat/miss vs Wall Street consensus cannot be determined. Values retrieved from S&P Global were not accessible.*
  • Based on reported actuals: Q2 revenue at $446.6M and GAAP diluted EPS (successor) at $(1.95); Adjusted EBITDA at $175.8M and Adjusted Net Income at $104.7M .

Key Takeaways for Investors

  • Branded durability continues to drive the story: XIAFLEX growth (price and demand) supports margin quality amid persistent Generics and Sterile headwinds .
  • FY2024 guidance raise and FY2025 growth outlook reframe the narrative toward stabilization and low-single-digit topline growth with EBITDA leverage potential .
  • Sterile and Generics declines are largely explained by lapping one-time items and competitive intensity; watch for normalization and any product launch timing updates .
  • Cash dynamics were noisy due to restructuring-related settlements; unrestricted cash stood at ~$294M at quarter-end; monitor operating cash flow normalization through 2H .
  • Leadership transition introduces a near-term overhang but could catalyze strategic realignment; interim CEO emphasizes execution across all portfolios .
  • Without SPGI consensus, anchor short-term trading to guidance moves and segment commentary (particularly XIAFLEX trajectory) as the primary catalysts .
  • Medium-term thesis: mix shift toward Branded, operational efficiencies, and selective pipeline execution underpin return-to-growth narrative, contingent on competitive pressures easing and stable pricing .