10-Q · May 5, 2026
Alkermes’ Q1 2026 results showed stronger-than-expected revenue of $392.9 million, surpassing estimates by 8.7%. However, the company faced a significant net loss of $66.5 million compared to net income of $22.5 million…
Earnings analysis · 10-Q
ALKS earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Alkermes delivered Q2 revenue of $496.0 million, up 27.0% year over year and 26.2% sequentially, led by the acquired LUMRYZ franchise and continued LYBALVI growth. However, acquisition-related costs, including $31.0…
Read full summary
Alkermes delivered Q2 revenue of $496.0 million, up 27.0% year over year and 26.2% sequentially, led by the acquired LUMRYZ franchise and continued LYBALVI growth. However, acquisition-related costs, including $31.0 million of inventory-step-up amortization and a $26.4 million contingent-consideration revaluation, reduced GAAP diluted EPS to $0.00 from $0.52 a year earlier and drove a negative 3.7% operating margin. The Avadel acquisition also transformed the balance sheet and cash profile, with $1.525 billion of new debt and first-half operating cash outflow of $20.6 million, although management expects $691.6 million of cash and investments to cover requirements for at least 12 months.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.0
What stood out
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Revenue rose 27% year over year
Q2 revenue was $496.0 million, up $105.4 million (27.0%) from $390.6 million a year earlier and up $103.0 million (26.2%) from $393.0 million in Q1 2026. The year-over-year increase was primarily attributed to the addition of LUMRYZ.
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Product portfolio drove sales growth
Net product sales increased $104.4 million year over year to $411.7 million. LUMRYZ contributed $96.6 million following the February 12, 2026 Avadel acquisition, while LYBALVI rose $9.6 million to $93.9 million and VIVITROL increased $2.8 million to $124.5 million.
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Core brands showed volume and pricing support
LYBALVI unit volume increased 18% in Q2, and the company implemented a 6% price increase effective January 1, 2026 for LYBALVI, ARISTADA/ARISTADA INITIO and VIVITROL. ARISTADA/ARISTADA INITIO six-month unit volume increased 7%.
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Profitability improved sequentially
Operating performance improved sequentially: the operating margin was negative 3.7% in Q2, versus negative 12.3% in Q1 2026, while diluted EPS improved to $0.00 from a $0.40 loss.
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Pipeline advanced in hypersomnolence
Alixorexton Phase 3 Brilliance studies in narcolepsy were initiated on April 1, 2026, and LUMRYZ reported positive Phase 3 REVITALYZ topline results in idiopathic hypersomnia on May 12, 2026.
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Management cites at least 12 months of liquidity
Management expects its $691.6 million of cash, cash equivalents and investments at June 30, 2026 to fund anticipated working-capital requirements, debt service and capital expenditures for at least 12 months.
What to watch
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Earnings collapsed despite revenue growth
GAAP profitability deteriorated materially year over year: net income fell to $0.5 million from $87.1 million, diluted EPS fell to $0.00 from $0.52, and operating margin declined 27.5 percentage points to negative 3.7%.
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Acquisition accounting pressured gross margin
Gross margin compressed to 80.2% from 87.3% a year earlier, as cost of goods sold increased $48.6 million to $98.1 million. This included approximately $31.0 million of amortization of the LUMRYZ inventory fair-value step-up.
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Cash conversion turned negative
Operating cash flow was an outflow of $20.6 million for the first six months of 2026, versus $249.0 million of inflow a year earlier. Capital expenditures were $12.2 million, implying calculated six-month free cash flow of negative $32.8 million.
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New leverage adds interest-rate exposure
The company borrowed the full $1.525 billion available under its new term-loan facilities for the Avadel acquisition. At June 30, 2026, a 10% increase in the 3.70% three-month SOFR rate would raise expected interest expense for the July-to-December period by $2.9 million.
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CVR revaluation created a material charge
A $26.4 million contingent-consideration fair-value expense was recognized after positive LUMRYZ Phase 3 results increased the estimated probability of achieving the CVR milestone. The potential aggregate payment is $165.7 million, and management expects the milestone determination by the end of 2027.
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Legacy collaboration revenue declined
Legacy royalty and manufacturing trends were weak: VUMERITY revenue declined $8.8 million to $30.6 million and long-acting INVEGA revenue declined $2.9 million to $27.4 million year over year. VUMERITY manufacturing subcontracting obligations concluded in August 2025.
Management's outlook
The 10-Q does not provide quantitative revenue or EPS guidance; management states that existing cash, cash equivalents and investments are expected to fund anticipated working-capital needs, debt service and capital expenditures for at least the next 12 months.
Earlier filings 4
10-K · February 25, 2026
Alkermes completed the Avadel acquisition (consideration of $21.00 per share plus a CVR up to $1.50) to add LUMRYZ and a narcolepsy commercial organization, while continuing to commercialize ARISTADA, LYBALVI and…
10-Q · July 29, 2025
Alkermes reported Q2 2025 revenue of $390.7M and diluted EPS of $0.52, beating consensus and showing a sharp recovery versus Q1 2025. Gross margin expanded to ~87.3% and operating margin recovered to 23.8% from a weak…
10-Q · July 24, 2024
Alkermes reported Q2 revenue of $399.131M, down sharply from $617.397M in Q2 2023, driven by a $256.055M decline in manufacturing and royalty revenues. Product sales increased to $269.273M (+$37.796M vs prior year),…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.