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Tarsus Pharmaceuticals, Inc. (TARS)·Q2 2025 Earnings Summary

Executive Summary

  • Record net product sales of $102.66M (+152% YoY) and ~91,000 bottles dispensed; revenue beat consensus by ~7% while EPS missed as SG&A stepped up to support DTC . Revenue: $102.66M vs consensus $95.81M*; EPS: $(0.48) vs consensus $(0.38)* .
  • Gross-to-net held ~45% with CFO guiding improvement to ~43–45% in Q3 and “low 40s” by year-end; gross margin ~93% .
  • Q3 guidance: bottles dispensed 95,000–100,000; SG&A relatively consistent with Q2; DTC annual spend raised to $70–80M (from prior $60–70M) to accelerate awareness and prescriptions .
  • Management tone confident: “strongest quarter to date… established XDEMVY as the standard of care” and peak potential “greater than initially expected,” supported by DTC traction and >20,000 ECP prescribers .

What Went Well and What Went Wrong

What Went Well

  • Commercial execution: “over $100 million in net sales” and XDEMVY “standard of care for Demodex blepharitis” with >90% coverage across payers .
  • DTC campaign delivering early momentum: unaided awareness “more than tripled” and website engagement up ~400% since start of 2025; >20,000 ECPs now prescribing .
  • Margin durability and operational cadence: gross margin ~93%; distributor inventory ~2.5 weeks, steady Q/Q .

What Went Wrong

  • EPS loss widened vs consensus due to higher SG&A (DTC, market access, sales force): $(0.48) actual vs $(0.38) consensus*; SG&A $103.0M (+75% YoY) .
  • Continued operating losses as scale builds: EBIT margin still negative, improving sequentially but at -21.6% in Q2 2025* .
  • Retreatment rates not yet at steady state; management continues to target ~20% annualized long-term but current retreatment tracking ~mid to low double-digit and building over time (qualitative call signals) .

Financial Results

Quarterly P&L and Margins

MetricQ4 2024Q1 2025Q2 2025
Net Product Sales ($USD Millions)$66.408 $78.335 $102.660
Net Loss per Share (EPS, $USD)$(0.60) $(0.64) $(0.48)
EBIT Margin %-36.8%*-33.5%*-21.6%*

Values marked with * retrieved from S&P Global.

Q2 2025 Actual vs Prior Year and Consensus

MetricQ2 2024Q2 2025 ActualQ2 2025 Consensus*
Net Product Sales ($USD Millions)$40.813 $102.660 $95.814 [GetEstimates]*
EPS ($USD)$(0.88) $(0.48) $(0.377) [GetEstimates]*

Values marked with * retrieved from S&P Global.

  • YoY revenue growth: +152% (company-disclosed) .
  • QoQ revenue growth: +31% vs Q1 2025 ($78.335M) .

KPIs

KPIQ4 2024Q1 2025Q2 2025
Bottles Dispensed to Patients (#)~58,500 ~72,000 ~91,000
Gross-to-Net Discount (%)~45% ~47% ~45%
Covered Lives (% across commercial/Medicare/Medicaid)>90% >90% >90%
ECP Prescribers (#)>15,000 n/a>20,000

Segment Breakdown

  • Not applicable; revenue is primarily XDEMVY (lotilaner ophthalmic solution) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Bottles Dispensed (#)Q3 2025n/a95,000–100,000New quantitative range
Gross-to-Net Discount (%)Q3 2025n/a~43%–45%New quantitative range
Gross-to-Net Discount (%)FY 2025 Exit“Low 40s” by YE 2025 “Low 40s” by YE 2025Maintained
SG&A ($)Q3 2025n/a“Relatively consistent with Q2”New qualitative guide
DTC Annual Spend ($)FY 2025$60–70M $70–80MRaised to accelerate demand
Distributor InventoryQ3 2025n/a~2.5 weeksMaintained steady levels
TP-04 Phase 2 Cost ($)2H 2025–2026$7–10M (split) $7–10M (split)Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
DTC campaign impactLaunched in Q4; early positive indicators, expanded to network TV in Jan 2025 Avg weekly website visits +140% vs Dec 2024; building methodically Unaided awareness >3x; website engagement ~+400%; driving prescriptions Accelerating
Prescriber adoption/depth>15,000 target ECPs; moving from monthly to weekly/daily +110% growth in ECPs writing >1 Rx/week vs Q3 2024 >20,000 ECPs prescribing; weekly prescriber base expanding Broadening and deepening
Gross-to-net and marginsGTN ~45% FY/Q4; margin ~93% GTN guided 46–49% in Q1; exit “low 40s” GTN ~45% in Q2; guide ~43–45% in Q3; gross margin ~93% Improving towards low-40s steady-state
RetreatmentsEarly days; mid-single digit; long-term target ~20% (based on recurrence data) Early cohort dynamics; tracking building over time Longitudinal data trending “just over 10%” and rising; still NRx-led Gradually improving
Pipeline (TP-04 – ocular rosacea)Clear FDA path; Phase 2 planned 2H 2025 On track 2H 2025; expected $7–10M split 2025/26 Phase 2 initiation in H2 2025 reiterated On schedule
Global expansionEU PF formulation targeted 2027; Japan engagement planned 2025 Japan prevalence study and regulatory meetings planned H2 2025 Japan meetings on track H2 2025; EU PF approval expected 2027 Steady progress

Management Commentary

  • CEO: “We… delivered our strongest quarter to date with over $100 million in net sales and established XDEMVY as the standard of care for Demodex blepharitis… we remain confident in our ability to drive sustained growth” .
  • CFO: “Gross-to-net… ~45%… gross margins were flat at 93%. For the third quarter… gross-to-net… ~43% to 45%… bottles dispensed… 95,000 to 100,000” .
  • CCO: “Unaided awareness… more than tripled… interactions on our XDEMVY.com website are up nearly 400%… now have over 20,000 ECPs prescribing XDEMVY” .

Q&A Highlights

  • DTC durability and ROI: Expect continuation through year-end and into next year, with potential to pulse seasonally; annual DTC spend raised to $70–80M to sustain momentum .
  • Gross-to-net trajectory: Model “low 40s” steady-state, with Q3 guide ~43–45%; improvement driven by deductible seasonality abating and co-pay dynamics .
  • Prescriber base and mix: Incremental prescribers across both optometry (~60%) and ophthalmology (~40%); deeper weekly prescribing within core audience .
  • Retreatments: Longitudinal retreatment “just over 10%” and trending up; long-term target ~20% annualized based on Saturn-1 recurrence data; still predominantly NRx-led .
  • Seasonality: Q3 lighter seasonally but guided stronger than prior expectations due to DTC and sales force initiatives; no “hockey stick” into Q4 .

Estimates Context

  • Q2 2025 comparison to Wall Street consensus (S&P Global):
    • Revenue: Actual $102.66M vs consensus $95.81M → beat (~$6.85M, ~7%) [GetEstimates]*.
    • EPS: Actual $(0.48) vs consensus $(0.38) → miss (more negative by ~$0.10) [GetEstimates]*.
  • Forward consensus snapshot:
    • Q3 2025 revenue estimate $115.22M; EPS estimate $(0.34) (company subsequently reported actuals in Q3 above estimates) [GetEstimates]*.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Topline momentum intact: XDEMVY revenue inflected to $102.66M; DTC and prescriber depth are driving demand; sequential growth +31% despite SG&A scaling .
  • Quality of revenue improving: CFO guides gross-to-net towards low 40s by YE; gross margin ~93% underscoring attractive unit economics .
  • Near-term setup: Q3 bottles 95–100k and GTN 43–45% should sustain revenue growth into seasonally lighter quarter; watch weekly prescriber penetration .
  • Expense cadence: SG&A remains elevated near-term as DTC scales; DTC budget raised to $70–80M to capture TAM; monitor operating leverage as GTN improves .
  • Pipeline optionality: TP-04 (ocular rosacea) Phase 2 initiation in H2 2025 adds medium-term catalysts; Japan/EU paths provide international upside .
  • Estimate revisions: Expect upward revenue revisions given beat and stronger Q3 qualitative guide; EPS may remain pressured near-term on DTC and SG&A [GetEstimates]*.
  • Trading implications: Positive revenue beat plus improving GTN/margin trajectory are supportive; EPS miss largely investment-driven. Near-term catalysts include monthly script trends from DTC and Q3 bottle guidance delivery .

Values marked with * retrieved from S&P Global.