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Tarsus Pharmaceuticals, Inc. (TARS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered strong growth and beats: revenue $118.7M (+147% Y/Y; +15.6% Q/Q) and EPS $(0.30), both ahead of S&P Global consensus ($115.2M revenue, $(0.34) EPS)* .
  • Commercial KPIs inflected: ~103k bottles dispensed (+13% Q/Q), weekly prescribers +20% and multi-times-per-week prescribers +30%; gross-to-net (GTN) 44.7% remained stable as Medicare mix grew .
  • Management introduced revenue guidance: Q4 net sales $140–$145M and FY25 $440–$445M; Q4 GTN 43–45%, inventory steady at ~2.5 weeks; DTC spend to the top end of $70–$80M .
  • Catalyst: positive DTC ROI, deepening prescriber engagement, and the introduction of revenue guidance support the “Blockbuster Plus” narrative and could drive estimate and sentiment revisions .

What Went Well and What Went Wrong

What Went Well

  • Revenue and EPS beats with durable demand: $118.7M net sales vs ~$115.2M consensus*; EPS $(0.30) vs $(0.34)*; bottles dispensed >103k with strong coverage (>90% lives) and stable GTN of 44.7% .
  • Prescriber depth accelerating; DTC ROI positive and building: weekly prescribers +20%, multi-times-per-week +30%; website traffic +90% Q/Q and unaided awareness +42% Q/Q; quote: “XDEMVY is one of the biggest eye care breakthroughs in the past two decades.” – CCO Aziz Mottiwala .
  • Clear near-term growth runway with Q4 guidance and pipeline progress: Q4 net sales $140–$145M; TP‑04 Phase 2 to initiate December 2025 with topline in 2026; EU preservative‑free filing in 2026, potential approval 2027 .

What Went Wrong

  • High OpEx persists: Q3 SG&A $108.6M (vs $57.9M Y/Y) and R&D $16.3M; management expects Q4 OpEx higher due to volume‑linked costs and stepped-up DTC .
  • GTN pressure from Medicare dynamics: GTN 44.7% included a ~0.7% headwind from the Medicare Manufacturer Discount Program and more patients in catastrophic coverage; this mix likely continues through year-end .
  • Still loss-making despite scale: net loss $(12.6)M (vs $(23.4)M Y/Y), reflecting investment intensity (commercial, DTC) even as gross margins exceed 90% .

Financial Results

Historical performance (chronological columns)

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)$48.1 $102.7 $118.7
Cost of Sales ($M)$3.2 $6.2 $8.3
Gross Margin (%)93.3% (calc. from rev & CoS) 93.9% (calc.) 93.0% (calc.)
R&D ($M)$12.1 $15.6 $16.3
SG&A ($M)$57.9 $103.0 $108.6
Net Loss ($M)$(23.4) $(20.3) $(12.6)
Diluted EPS ($)$(0.61) $(0.48) $(0.30)
Bottles Dispensed (000s)41.4 91.0 103.0
Gross-to-Net Discount (%)n/a~45.0 44.7

Notes: Gross Margin calculated using reported revenue and cost of sales (citations in the same cells). Q2 GTN per company disclosure was “~45%” .

Q3 2025 actuals vs S&P Global consensus

MetricActualConsensusSurprise
Revenue ($M)$118.7 $115.2*+$3.5M (beat)*
EPS ($)$(0.30) $(0.34)*+$0.04 (beat)*
# of Estimates—6 (rev), 6 (EPS)*—

*Values retrieved from S&P Global.

Additional KPIs and balance sheet

  • Distributor inventory steady at ~2.5 weeks; revenue recognized on shipments to distributors (107k bottles shipped vs 103k dispensed) .
  • Coverage breadth: >90% of commercial, Medicare, Medicaid lives covered .
  • Cash, cash equivalents and marketable securities: $401.8M as of 9/30/25 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
XDEMVY Net Product SalesQ4 2025n/a$140–$145M Introduced
Revenue (Company total)FY 2025n/a$440–$445M Introduced
Gross-to-Net DiscountQ4 2025n/a (Q2 disclosed ~45%) 43–45% Set range; broadly consistent
Distributor InventoryQ4 2025~2.5 weeks (Q3) ~2.5 weeks Maintained
DTC SpendFY 2025$70–$80M range (implied) Top end of $70–$80M Raised to high end
DTC SpendFY 2026n/aSimilar to 2025 New framework
TP‑04 (Ocular Rosacea)StartH2 2025 December 2025; topline 2026 Timing specified
EU PF Submission/ApprovalEUSubmission 2026; Approval 2027 Submission 2026; Approval 2027 Maintained
Japan Regulatory Path—Meetings in H2 2025 Ongoing regulator discussions On track

Earnings Call Themes & Trends

TopicQ1 2025 (Prev-2)Q2 2025 (Prev-1)Q3 2025 (Current)Trend
DTC/Marketing ROI140% ↑ in weekly web visits vs Dec’24; ramp planned DTC drove Rx growth; ~400% web ↑; unaided awareness >3x Positive ROI; +90% web visits Q/Q; +42% unaided awareness Q/Q Strengthening
Prescriber Depth>1 Rx/week prescribers +~110% vs Q3’24 >20k ECPs prescribing; +30% since start of 2025 Weekly prescribers +20%; multi‑times/week +30% Deepening
Product Traction$78.3M, 72k bottles $102.7M, 91k bottles $118.7M, 103k bottles Sequential growth
GTN/Payer MixGTN ~47% ~45% 44.7%; +0.7% MDP headwind; ↑Medicare catastrophic mix Stable to slightly improving GTN; Medicare mix rising
Regulatory/GlobalJapan meetings, EU PF approval 2027 On track; EU 2027 EU submission 2026; approval 2027; Japan ongoing On track
R&D ExecutionTP‑04 Phase 2 H2’25; TP‑05 2026 Same TP‑04 Dec’25 start; topline 2026; TP‑05 Phase 2B 2026; exploring partnerships Timelines clarified
Macro/Seasonality——Outperformed typical softer Q3 seasonality in eye care Outperformance sustained

Management Commentary

  • “XDEMVY is now one of the best-selling prescription eye drops… We delivered more than 103,000 bottles… and recognized approximately $119 million in net revenue.” – CEO Bobak Azamian .
  • “The number of weekly writers has increased by approximately 20%, and the number… prescribing more than once a week has increased by approximately 30%.” – CCO Aziz Mottiwala .
  • “Our gross to net discount was 44.7%… driven by [MDP] adding ~0.7%… and an increase in Medicare patients entering the catastrophic category of coverage.” – CFO Jeff Farrow .
  • “For the fourth quarter, we expect XDEMVY net product sales to be $140–$145 million… representing annual revenue of $440–$445 million.” – CFO Jeff Farrow .

Q&A Highlights

  • Prescribing breadth/depth: MGD data broadening use cases across dry eye, cataract, contact lens patients; weekly prescribers +20% and multi-times/week +30% as practice patterns evolve .
  • Retreatment dynamics: >10% weekly scripts are refills; mid-teens in earliest cohorts; expectation to stabilize ~20% annually; physician protocols and streamlined pharmacy process support retention .
  • DTC ROI and spend: ROI positive and scaling week-to-week; 2026 DTC spend expected similar to 2025; potential to optimize cadence longer-term .
  • 2026 OpEx framing: SG&A broadly in line with 2025; incremental variability tied to volume; TP‑04 spend $7–$10M across 2025–2026; TP‑05 Phase 2B under evaluation for additional spend .
  • Channel mix/coverage: ~65% volume from optometry; balanced with ophthalmology; both segments growing with favorable practice dynamics .

Estimates Context

  • Q3 2025 beats: revenue $118.7M vs $115.2M consensus (+$3.5M beat); EPS $(0.30) vs $(0.34) consensus (+$0.04 beat) .
  • Coverage: 6 estimates for revenue and EPS; target price consensus $84.38 (8 estimates)*. Company’s introduction of Q4 revenue guidance ($140–$145M) and FY25 ($440–$445M) provides explicit anchors for models and may prompt updates to Q4 revenue and FY DTC expense trajectory .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Commercial momentum remains robust with consistent sequential growth in bottles and revenue, supported by positive DTC ROI and deeper prescriber engagement; GTN stable despite Medicare mix headwinds .
  • Q3 revenue/EPS beats and the introduction of Q4 and FY25 revenue guidance bolster credibility of the “Blockbuster Plus” trajectory .
  • High SG&A (DTC and variable patient programs) continues to weigh on profitability near-term; management signaled higher Q4 OpEx and similar SG&A in 2026, tempering near-term margin expansion .
  • Retreatment behavior building toward ~20% annualized over time is a structural tailwind to sustainable growth .
  • Pipeline milestones (TP‑04 Phase 2 start in Dec’25; topline 2026) and international expansion (EU PF filing 2026; potential approval 2027; Japan path ongoing) add medium-term catalysts .
  • Risk watch: Medicare dynamics (MDP and catastrophic mix) on GTN; execution risk on DTC ROI durability and OpEx discipline; and timelines for TP‑04/TP‑05 development .

Appendix: Sources

  • Q3 2025 8‑K/Press Release: financials, KPIs, and balance sheet .
  • Q3 2025 Earnings Call Transcript: commercial drivers, GTN commentary, guidance, and Q&A .
  • Other Q3 2025 press releases (timing/participation) -.
  • Prior quarters (for comparisons): Q2 2025 8‑K -; Q1 2025 8‑K -.