Halozyme TherapeuticsHALO

Halozyme reported a massive quarter, with earnings per share of $2.28 easily beating the $1.79 analysts expected. Revenue grew 48 percent to $481 million, driven by a 50 percent jump in royalties. The company makes money by licensing its enzyme, which allows medicines that usually require a long IV drip to be given as a quick injection under the skin. Because Halozyme collects a fee on every dose sold by partners like Roche and Johnson & Johnson, these royalties carry almost no extra cost to collect.

Management also raised its profit and revenue targets for the full year. It now expects earnings per share to more than double compared to last year. The company has already signed five new licensing deals this year, beating its own goal of three. This growth in new partnerships is vital because it ensures a steady stream of new royalty checks as these drugs eventually reach the market. The stock rose about 20 percent following the report.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

The company is expected to report about 400 million dollars in revenue and earnings of about 1.79 dollars per share. Halozyme has a strong track record, beating analyst expectations in seven of the last eight quarters.

The most important things to watch are the royalty payments from partners like Roche and Johnson & Johnson. These royalties have almost no cost to collect, so they drive the high profit margins that allow the company to buy back its own shares.

See the full quarter, and how our tracked metrics did

Key highlights

• Royalty revenue accelerating: Royalty revenue grew 50% to $308 million this quarter, and this part of the business now makes up 64% of the company's total sales. This growth was fueled by strong sales of partner drugs like Darzalex SC and Vyvgart Hytrulo, which use the company's technology to turn long intravenous infusions into fast under-the-skin injections.
• New partnerships exceeding goals: The company has already signed 5 new collaboration agreements this year, which is more than the 3 it originally aimed for in all of 2026. These new deals, including the first-ever license for a nucleic acid therapy, create a long-term pipeline of potential milestone payments and future royalties as these drugs move toward the market.
• Aggressive share buybacks: The company spent $333 million to buy back 4.8 million of its own shares during the quarter, which helps increase the value of each remaining share for long-term owners. This was part of a larger plan to buy back at least $400 million in shares during 2026 and up to $1 billion by the end of 2028.
• Operating costs rising: Selling and administrative costs rose to $57 million from $41.6 million a year ago, driven partly by legal fees from patent infringement lawsuits. While these costs increased, the company still maintained a high operating margin of 59.8%, meaning it kept nearly 60 cents of every dollar in revenue as profit after running its business.
• Full year outlook raised: Management raised its 2026 revenue forecast to a range of $1.835 billion to $1.910 billion, which would be growth of 31% to 37% over last year. The company also increased its profit expectations, now forecasting adjusted earnings between $8.65 and $9.00 per share, up from the previous high end of $8.25.

Our take: This was an exceptionally strong quarter that showed the power of the company's licensing model. Royalty revenue growing at 50% is the highlight, as it proves that once partner drugs are approved, the profits flow in with very little extra cost. The aggressive buybacks and raised guidance reinforce a very healthy long-term growth story.