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Sarepta Therapeutics, Inc. (SRPT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered strong top-line and profitability: Total revenues were $611.1M, GAAP diluted EPS was $1.89, and non-GAAP diluted EPS was $2.02 . Collaboration/other revenue rose to $97.97M, aided by a $63.5M milestone from Roche for ELEVIDYS approval in Japan .
  • Results beat Wall Street consensus: Revenue of $611.1M vs $531.0M estimate (+15%), and Primary EPS of $2.02 vs $0.67 estimate; 18 revenue estimates and 14 EPS estimates backed the consensus. Bolded below where applicable. Values retrieved from S&P Global.*
  • Operational update: FDA recommended resuming ambulatory ELEVIDYS shipments (July 28); infusions have resumed. Label safety process continues (ALI/ALF) and a risk-mitigation approach for non‑ambulatory is under FDA discussion .
  • Strategic actions: Restructuring to reduce annual expenses by ~$400M from 2026 (36% workforce reduction ~500 employees; >$100M savings through 2025 net of $32–$37M severance) and pipeline prioritization toward siRNA programs .
  • No Q2 conference call was held, which places more weight on the detailed release; management highlighted cash balance of $850.3M and was cash-flow positive in the quarter with cash increasing by $202.8M sequentially .

What Went Well and What Went Wrong

What Went Well

  • Strong revenue and profit: Total revenues $611.1M; GAAP operating income $115.6M; GAAP net income $196.9M; non-GAAP net income $215.2M . “The quarter was cash flow positive and total cash… increased by $202.8 million from the previous quarter” .
  • Collaboration milestone and international progress: $63.5M milestone from Roche tied to ELEVIDYS approval in Japan; contract manufacturing and royalty revenues also increased .
  • Ambulatory shipments resumed: “FDA… remove its voluntary pause and resume shipments of ELEVIDYS… ambulatory individuals… infusions are taking place” . CEO: “We are very pleased… we have already resumed deliveries” .

What Went Wrong

  • ELEVIDYS safety/labelling: FDA requested inclusion of a black box warning for acute liver injury/failure; shipments for non-ambulatory paused while enhanced immunosuppression protocol (sirolimus) is under FDA review (proposed ENDEAVOR Cohort 8) .
  • Elevated costs in COGS: Cost of sales rose to $152.6M vs $44.5M YoY driven by inventory dynamics, higher demand, increased supply to Roche, and batch write-offs .
  • Broader restructuring required: 36% workforce reduction (~500 employees); expected one-time severance $32–$37M in Q3 2025; necessary to meet 2027 obligations and sustain profitability .

Financial Results

Revenue, EPS, Operating Income (oldest → newest)

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Total Revenues ($M)$362.9 $658.4 $745.0 $611.1
Net Product Revenue ($M)$360.5 $365.1 $612.0 $513.1
Collaboration & Other ($M)$2.4 $20.3 $133.0 $98.0
GAAP Diluted EPS ($)$0.07 $1.50 $(4.60) $1.89
Non-GAAP Diluted EPS ($)$0.43 $1.90 $(3.42) $2.02
GAAP Operating Income ($M)$(0.7) $161.7 $(300.0) (Arrowhead-driven) $115.6
Non-GAAP Operating Income ($M)$57.9 $221.2 $(250.0) (Arrowhead-driven) $162.8

Versus Wall Street Consensus (S&P Global) – Q2 2025

MetricConsensusActual
Revenue ($M)$531.0*$611.1
Primary EPS ($)$0.67*$2.02
# of Estimates (Revenue / EPS)18 / 14*—
  • Result: Revenue beat by ~15% and EPS beat materially. Values retrieved from S&P Global.*

Segment Breakdown (Net Product Revenue)

SegmentQ1 2025Q2 2025 (Prelim from 8‑K)
ELEVIDYS ($M)$375 $282
PMO exon-skipping ($M)$237 $231
Total ($M)$612 $513

Key KPIs and Cost Structure

MetricQ2 2024Q2 2025
Cost of Sales (ex-amort.) ($M)$44.5 $152.6
R&D Expense GAAP ($M)$179.7 $204.4
R&D Expense Non-GAAP ($M)$153.9 $181.7
SG&A Expense GAAP ($M)$138.8 $137.9
SG&A Expense Non-GAAP ($M)$106.0 $113.4
Cash & Investments ($M)—$850.3 (as of 6/30/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Net Product RevenueFY 2025$2.9B – $3.1B (2/26/25) $2.3B – $2.6B (5/6/25) Lowered
PMO Net Product RevenueFY 2025~1/3 of total (context) ~$900M (maintained) Maintained
Non-GAAP R&D + SG&AFY 2025$1.2B – $1.3B $1.2B – $1.3B; toward low end Maintained (bias lower)
Annual OpEx Run-rate (R&D+SG&A)Starting 2026—$800M – $900M; ~$400M savings New framework
Near-term Cost SavingsThrough 2025—>$100M net of $32–$37M severance New

Earnings Call Themes & Trends

TopicQ4 2024 (2/26)Q1 2025 (5/6)Current Period (Q2 2025)
ELEVIDYS efficacy & durabilityEMBARK 2-year/crossover: statistically significant, muscle MRI minimal progression Reinforced efficacy; trajectory analyses; broad label ASGCT data highlights: NSAA/TTR/10MWR significance; expression in 2-year-olds 93.87% WB (n=6)
Label/safety & FDA interactionsExpanded label in 2024; ongoing commitments Label supplement submitted in April; target completion by 4Q FDA black box warning requested for ALI/ALF; ambulatory shipments resumed; non-ambulatory risk mitigation path under discussion
Commercial cadence & site capacityHockey-stick ramp expected in 2H’24; detailed cadence Cycle times extended; top sites booked; shifting to secondary sites; Q2 softer; guidance lowered Infusions resumed; working labeling and mitigation; no Q2 call
Payer coverageStrong PMO access; rising ELEVIDYS policies to label 100% ELEVIDYS success rate to date; appeals as needed —
siRNA pipeline (FSHD/DM1/SCA2/HD)Arrowhead deal announced; programs defined SAD data planned 2H’25; potential DUX4 knockdown assay Multiple near-term milestones in 2H’25/early 2026
LGMD (SRP-9003/9004/9005)EMERGENE completed enrollment; AA path endorsed; rolling BLA AA path confirmed; rolling review; similar approach across programs BLA submission planned 2H’25

Management Commentary

  • “We are very pleased that… the FDA swiftly recommended that we take the ambulatory patient population off shipment pause… Infusions are taking place for the ambulatory community.” — Doug Ingram, CEO .
  • “Strategic restructuring… reduce operating expenses… approximately $400 million in annual cost reductions… lower… non-GAAP R&D and SG&A to $800–$900M starting in 2026.” .
  • “Preliminary quarterly results [Q2]: total net product revenue of $513 million… ELEVIDYS $282 million… PMOs $231 million.” — Press release (Exhibit 99.1) .
  • “Total revenues were $611.1 million… GAAP and non-GAAP operating profit… cash… increased by $202.8 million from the previous quarter.” .

Q&A Highlights

(From Q1 2025 call; no Q2 call)

  • Cycle time and guidance: Q2 revenue could be ~20% lower than Q1 due to safety-event-related delays; guidance lowered to $2.3–$2.6B; focus shifting to secondary sites with capacity .
  • Label update: April safety label supplement submitted; target completion by 4Q 2025; inclusion of ALF case .
  • Payers: No permanent ELEVIDYS denials to date; PMO success >90%; ELEVIDYS current success rate ~100% .
  • EU studies: Substantial amendment review ~95 days; restart expected end of summer; ex‑EU enrollment continues .
  • Non-ambulatory risk: Enhanced immunosuppression regimen (sirolimus) being proposed (ENDEAVOR Cohort 8) .

Estimates Context

  • Q2 2025 vs S&P Global consensus: Revenue $611.1M vs $531.0M; Primary EPS $2.02 vs $0.67; counts 18 revenue and 14 EPS estimates. Values retrieved from S&P Global.*
  • Implication: Bold beat driven by collaboration milestone (Roche Japan approval) and ongoing ELEVIDYS/PMO sales momentum; non-GAAP profitability supports sustained operating leverage .

Key Takeaways for Investors

  • Bold revenue and EPS beat vs consensus; collaboration milestone was a meaningful tailwind; operating profit and cash-flow positive quarter strengthen liquidity ($850.3M cash/investments) .
  • Ambulatory ELEVIDYS shipments resumed (7/28) — a key near-term commercial catalyst; watch the FDA’s safety labeling outcome and non‑ambulatory mitigation path (Cohort 8) .
  • Cost discipline: Restructuring sets up ~$400M annual savings from 2026 and >$100M through 2025; expect lower non-GAAP R&D+SG&A run-rate over time .
  • Near-term data flow: Multiple siRNA SAD readouts (FSHD, DM1, SCA2) in 2H’25/early 2026; potential DUX4 knockdown assay for FSHD could be a differentiator .
  • LGMD pipeline: SRP‑9003 BLA planned 2H’25; AA pathway endorsed; rolling review accepted — incremental pipeline value beyond Duchenne .
  • Monitor COGS and quality: Elevated cost of sales and batch write-offs highlight manufacturing/quality execution risk amid rising demand and Roche supply .
  • Trading lens: Near-term stock drivers include (1) final Q2 safety labeling outcome, (2) pace of non‑ambulatory resumption, (3) siRNA initial data quality, and (4) confirmation of cost savings cadence; absence of Q2 call focuses attention on next disclosures and events .
Notes:
* Values retrieved from S&P Global.

Citations:

  • Financials and metrics:
  • Q2 operational update and call decision:
  • Restructuring and preliminary segment data:
  • Prior quarter references:
  • Q4 2024 baseline: