Arcus Biosciences, Inc. (RCUS)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered a headline beat on both revenue and EPS driven by a $143M cumulative catch-up related to pausing etrumadenant development and Gilead’s license return; revenue was $160.0M vs S&P Global consensus $32.9M*, and EPS was $0.00 vs -$1.17* consensus, a material positive surprise .
• FY25 GAAP revenue guidance was raised from $75–$90M (May) to $225–$235M (Aug), explicitly including the catch-up revenue; R&D is expected to remain elevated through Q3 on CMC spend before declining from Q4 2025 .
• Pipeline execution advanced: PEAK-1 (Phase 3, casdatifan + cabozantinib, post-IO ccRCC) and AstraZeneca’s eVOLVE-RCC02 (casdatifan + volrustomig, 1L) initiated; ASCO ARC-20 combo data showed 46% confirmed ORR with good tolerability, de-risking Phase 3 .
• Liquidity remains a key support: $927M in cash/marketable securities at 6/30, plus an additional $50M term-loan draw in June; management reiterates runway through initial pivotal readouts for domvanalimab, quemliclustat, and casdatifan (incl. PEAK-1) .

What Went Well and What Went Wrong

• What Went Well

  • Material top- and bottom-line beats vs. consensus on a one-time catch-up: $160.0M revenue and EPS ~$0.00 vs $32.9M and -$1.17* expected; beat driven by $143M cumulative revenue catch-up on etrumadenant program change and Gilead license return .
  • Pipeline momentum: Initiated PEAK-1 (post-IO Phase 3) and AstraZeneca’s eVOLVE-RCC02 (1L Phase 1b/3); ASCO ARC-20 combo cohort delivered 46% confirmed ORR with favorable safety, supporting best-in-class potential for casdatifan .
  • Balance sheet strength preserved: $927M cash/marketable securities at quarter-end; reiterated funding through initial pivotal readouts (incl. PEAK-1) .
  • Quote: “We… believe [casdatifan] demonstrate[s] the potential… to be the best-in-class HIF-2a inhibitor for clear cell RCC… we are well equipped to fund casdatifan through data for PEAK-1” – CEO Terry Rosen .

• What Went Wrong

  • Underlying opex intensity: R&D rose to $139M (vs. $115M YoY; $122M QoQ), driven by elevated CMC and Phase 2 casdatifan activities; CMC costs to remain elevated through Q3 .
  • Quality of beat: The revenue/EPS outperformance was primarily non-recurring (accounting catch-up), limiting visibility into sustainable revenue cadence absent new milestones/options .
  • Program reprioritization: Etrumadenant was deprioritized (no Phase 3); Gilead returned its license—strategically refocusing but also removing a near-term registrational path for that asset .

Financial Results

Results vs prior year and prior quarter

Results vs S&P Global consensus (Q2 2025)

• Values marked with * retrieved from S&P Global.

Segment-like revenue detail (Q2)

KPIs and operating metrics

Why results moved:

• Revenue uplift was driven by a $143M cumulative catch-up tied to program changes (etrumadenant pause and Gilead license return), materially elevating Q2 revenue/EPS above historical run-rate .
• R&D grew on CMC and Phase 2 casdatifan activity; management expects CMC-driven elevation through Q3, then lower R&D from Q4 as domvanalimab Phase 3 costs abate .

Guidance Changes

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript was available in the repository; we reference the Q2 press release and slide deck for current-period themes.

Management Commentary

• “We have now presented data from over 125 patients treated with casdatifan monotherapy or casdatifan plus cabozantinib… [supporting] best-in-class HIF-2a inhibitor… We are forging ahead… and… well equipped to fund casdatifan through data for PEAK-1” – Terry Rosen, CEO .
• On ARC-20 combo data: “Nearly half of patients had a confirmed response… well tolerated… [supporting] initiation of PEAK-1… designed to change the standard of care” – Terry Rosen; ASCO presentation details included .

Q&A Highlights

• No Q2 2025 earnings call transcript was available in the document set; slides and the press release provided qualitative color on strategy, milestones, and spending trajectory -.

Estimates Context

• Q2 2025 vs S&P Global consensus: Revenue $160.0M vs $32.9M* and EPS $0.00 vs -$1.17*, driven by a $143M cumulative catch-up related to etrumadenant/Gilead license return; we expect models to adjust FY25 revenue higher but normalize outer-year run-rates absent recurring catch-ups .
• Prior quarters for context: Q1 2025 missed revenue ($28M vs $38.6M*); Q4 2024 modest revenue miss ($26M vs $28.6M*) but EPS beat (-$1.03 vs -$1.20*) as opex timing and non-operating items varied .
• Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• The quarter’s outsized beat is primarily accounting-driven (one-time catch-up), not a structural shift in commercial revenue; expect normalization in subsequent quarters absent new milestones/options .
• Execution and differentiation for casdatifan are central to the thesis; the 46% ORR combo signal and Phase 3 initiations (PEAK-1, eVOLVE-RCC02) increase probability of success and potential best-in-class positioning vs HIF-2a competition .
• Near-term catalysts: ESMO 2025 OS presentation for domvanalimab + zimberelimab + chemo in gastric; additional ARC-20 monotherapy data in fall 2025; further casdatifan combo updates in 2026 -.
• Spending trajectory should improve in 4Q as CMC peaks in Q3; watch for R&D inflection and collaboration reimbursements as late-stage domvanalimab costs taper .
• Strong cash position ($927M) and added $50M term-loan draw extend runway through initial pivotal readouts; financing overhang limited near term, reducing dilution risk into readouts .
• Trading implications: Positive on headline beat and pipeline momentum; risk lies in non-recurring revenue quality and execution risk into registrational timelines; focus on readout cadence (ESMO, PEAK-1 enrollment, STAR-221 2026) for re-rating catalysts -.

Footnote: Values marked with * are retrieved from S&P Global.