Executive Summary

Q3 2025 delivered a significant EPS beat versus consensus, driven primarily by $19.8M in gains on acquisitions (HilleVax and Turnstone), with diluted EPS of $0.70 versus Wall Street consensus of -$0.04*; revenue of $9.35M was below the $11.47M* consensus .
Total income and revenues rose 30% year over year to $9.35M, while cash receipts from royalties/commercial payments were $14.3M, reflecting solid partner execution (VABYSMO, OJEMDA) .
Management emphasized “innovative ways to increase optionality” and a near‑term path to self‑sustainability from royalties; cash and cash equivalents were $130.6M including $85.4M restricted cash to fund deals (Mural) and lease obligations (HilleVax) .
Key upcoming catalysts include Rezolute’s December 2025 Phase 3 sunRIZE topline data (cHI) and Gossamer’s PROSERA Phase 3 readout expected in February 2026, which could shape future royalty trajectories .

What Went Well and What Went Wrong

What Went Well

Gains on acquisitions ($17.9M HilleVax; $1.8M Turnstone) propelled net income to $14.1M, enabling a major EPS beat; CFO highlighted $43.9M YTD cash from partners and growing royalties .
“Growing royalty receipts reflect solid commercial execution on the part of our partners,” CEO Owen Hughes noted, pointing to near‑term clinical readouts that could “meaningfully shape our business trajectory” .
Cash receipts from royalties/commercial payments were $14.3M in Q3, helping fund ongoing business development while limiting dilution; restricted cash was earmarked for Mural closing and HilleVax lease obligations .

What Went Wrong

Revenue missed consensus ($9.35M vs $11.47M*), likely reflecting timing/mix of revenue recognition across purchased receivables and contract revenue versus cash receipts .
Operating income was negative ($-1.33M), driven by higher G&A ($9.7M) from deal‑related costs and intangible amortization; despite YoY improvement from Q3 2024, core operating profitability was pressured .
No formal financial guidance was provided, which may limit near‑term visibility; investors must monitor partner milestones and regulatory timelines for revenue trajectory .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025	Consensus Q3 2025
Total income & revenues ($USD Millions)	$7.20	$15.91	$13.13	$9.35	$11.47*
Diluted EPS ($)	$(1.59)	$0.06	$0.44	$0.70	$(0.04)*
Income (Loss) from operations ($USD Millions)	$(15.64)	$5.93	$4.60	$(1.33)	N/A
Operating margin (%)	(224.0%)	37.3%	35.1%	(14.2%)	N/A

Notes: Operating margin calculated as Income from operations ÷ Total income & revenues using cited values.
Values with asterisks (*) are retrieved from S&P Global.

Revenue composition detail (Q3 2025):

Revenue Component ($USD Millions)	Q3 2025
Income from purchased receivables (EIR)	$6.96
Income from purchased receivables (cost recovery)	$1.86
Revenue from contracts with customers	$0.23
Revenue recognized under units-of-revenue method	$0.31

KPIs and balance sheet:

KPI	Q1 2025	Q2 2025	Q3 2025
Cash receipts (royalties + milestones) ($USD Millions)	$18.0	$11.7	$14.3
Dividends paid on perpetual preferred ($USD Millions)	$1.4	$1.4	$1.4
Cash & cash equivalents ($USD Millions)	$90.27	$75.06	$45.19
Restricted cash – short‑term ($USD Millions)	$1.41	$0.08	$45.29
Restricted cash – long‑term ($USD Millions)	$3.35	$3.35	$40.08
Gains on acquisitions ($USD Millions)	$—	$—	$19.80
Interest expense ($USD Millions)	$3.47	$3.24	$3.30
Common share repurchases (shares; $USD Millions)	25,828; $0.5	81,682; $1.8	~108,510 YTD; $2.4 YTD

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Financial guidance (Revenue/EPS/OpEx)	FY/Q4 2025	N/A	No formal guidance provided	Maintained N/A

Earnings Call Themes & Trends

No earnings call transcript was found for Q3 2025; themes tracked via press releases.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Royalty cash receipts trajectory	H1 cash receipts $29.6M; Q2 $11.7M; accelerating royalty base (VABYSMO/OJEMDA)	Q3 royalties/commercial receipts $14.3M; YTD $43.9M	Improving royalty run-rate
Business development/M&A	Announced acquisitions: Turnstone, HilleVax, LAVA; structured Xeno/ESSA; sold Kinnate assets	Closed Turnstone & HilleVax; announced LAVA & Mural; acted as structuring agent for Xeno/ESSA	Continued portfolio building
Regulatory/milestones	Day One/Ipsen tovorafenib EMA MAA accepted; Zevra arimoclomol MAA; Takeda mezagitamab Phase 3 started; Rezolute BTD, enrollment	Rezolute alignment with FDA, Zevra MAA submitted, Gossamer Phase 3 timelines reaffirmed	Multiple late-stage catalysts
Operating expenses	Q1 R&D $1.3M; G&A $8.1M; Q2 G&A $7.8M; amortization began	Q3 R&D $0.069M; G&A $9.7M; amortization $0.88M	G&A elevated on deal costs
Capital allocation	Share repurchases: Q1 $0.5M; Q2 $1.8M	YTD buybacks $2.4M; preferred dividends $4.1M YTD	Ongoing returns amid BD

Management Commentary

CEO Owen Hughes: “We continue to execute on innovative ways to increase optionality within our portfolio while maintaining a healthy cash balance and limiting dilution to our shareholders… we look forward to several clinical readouts… that, if positive, can meaningfully shape our business trajectory.”
CFO Tom Burns: “In the first nine months of 2025, we have received $43.9 million in cash from partners… In the third quarter, we received $14.3 million… XOMA Royalty has the potential to become a self-sustaining entity from royalties alone over the near term.”

Q&A Highlights

No Q3 2025 earnings call transcript found; no Q&A highlights available [Search result: none].

Estimates Context

Revenue: Actual $9.35M vs consensus $11.47M* → miss; EPS: Actual $0.70 vs consensus $(0.04)* → significant beat. Mix of other income (notably $19.8M gains on acquisitions) and lower operating income drove divergence between revenue miss and EPS beat .
Four estimates underpinned both EPS and revenue consensus for Q3 2025*; given XOMA’s revenue recognition across purchased receivables and contract revenue, models may need adjustment for acquisition gains and timing of partner milestones .

Values with asterisks (*) are retrieved from S&P Global.

Key Takeaways for Investors

EPS materially beat due to $19.8M acquisition gains; watch for sustainability of EPS absent one‑time items in future quarters .
Royalty cash receipts are rising (Q3 $14.3M; YTD $43.9M), supporting management’s path toward self‑sustainability from royalties .
Revenue missed consensus, underscoring the importance of understanding XOMA’s revenue recognition versus cash receipts and non‑operating drivers of profitability .
Near‑term catalysts: Rezolute sunRIZE (Dec 2025) and Gossamer PROSERA (Feb 2026) could influence future royalty streams and valuation .
Balance sheet flexibility: $130.6M cash and equivalents including $85.4M restricted cash earmarked for Mural closing/HilleVax lease, supports ongoing BD without heavy dilution .
Expense vigilance: G&A elevated on deal activity; core operating profitability was negative in Q3; monitor deal pipeline integration and amortization impacts .
Portfolio optionality expands: Completed HilleVax/Turnstone, announced LAVA/Mural acquisitions; continued structuring capabilities (Xeno/ESSA) broaden exposure to partnered assets .

XOMA Royalty Corp (XOMA)·Q3 2025 Earnings Summary