Executive Summary
Elite Pharmaceuticals reported QQ2 2025 results that demonstrate top-line momentum and a robust product development pipeline, even as the company incurs substantial near-term profitability headwinds linked to upfront investments and non-cash warrant liabilities. Revenue for the quarter reached $18.88 million, up 33% year over year, and gross margin stood at 43.4%. However, net income was negative at $11.04 million and EBITDA was negative at $8.71 million, driven largely by non-operational charges and ramp-up costs surrounding the Elite product line and pipeline investments. Operating income was $3.48 million, reflecting a positive, though modest, operating margin of 18.5%, with year-to-date revenue of $37.70 million (+63% YoY). The company generated positive operating cash flow of $1.46 million in the six months ended September 30, 2024, signaling cash generation from ongoing operations that is expected to support further capacity expansion and pipeline rollouts.
Management reiterated a strategic emphasis on pipeline development as the lifeblood of growth, with several Near-Term ANDAs approaching commercialization (Hydrocodone/APAP, Oxycodone/APAP, Methadone) and a CNS ANDA pending FDA decision expected around November 23. A 35,000 sq ft new building with two packaging lines and significantly enhanced DEA storage capacity is progressing to enable multiple launches over the next 12–24 months. Management projects continued revenue growth and an expanding gross profit runway as volume scales and fixed costs dilute with higher production throughput. While the near-term earnings remain pressured by upfront investments and the noncash warrant liability, the foundation remains for a higher-trajectory earnings profile once new products achieve scale and regulatory milestones are cleared.
Key Performance Indicators
QoQ: -1 892.26% | YoY:-173.90%
QoQ: -1 816.67% | YoY:-170.07%
Key Insights
Revenue: $18.88M, YoY +33.36%, QoQ +0.41%; Gross profit: $8.20M, margin 43.42%, YoY gross profit up 27.15%, QoQ -3.27%; Operating income: $3.48M, margin 18.46%, YoY +80.99%, QoQ -9.81%; EBITDA: -$8.71M, EBITDA margin -46.13%; Net income: -$11.04M, net margin -58.45% (EPS -$0.0103); Cash flow from operations: $1.46M six months ended 9/30/2024; Free cash flow: $1.36M; Cash at end of period: $9.60M; Working capital: $32.4M; Current ratio: 3.52; Quick ratio: 2.42; Debt: $11.40M total; Net debt: $1.8...
Financial Highlights
Revenue: $18.88M, YoY +33.36%, QoQ +0.41%; Gross profit: $8.20M, margin 43.42%, YoY gross profit up 27.15%, QoQ -3.27%; Operating income: $3.48M, margin 18.46%, YoY +80.99%, QoQ -9.81%; EBITDA: -$8.71M, EBITDA margin -46.13%; Net income: -$11.04M, net margin -58.45% (EPS -$0.0103); Cash flow from operations: $1.46M six months ended 9/30/2024; Free cash flow: $1.36M; Cash at end of period: $9.60M; Working capital: $32.4M; Current ratio: 3.52; Quick ratio: 2.42; Debt: $11.40M total; Net debt: $1.84M; Shares: 1.068B weighted average; DSO: 102.22 days; DIO: 119.34 days; CCC: 221.55 days; P/S: 21.95x; P/B: 8.77x; Gross margin 43.4%, Operating margin 18.5%, Pretax margin -50.4%, Net margin -58.5%
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
18.88M |
33.36% |
0.41% |
| Gross Profit |
8.20M |
27.15% |
-3.27% |
| Operating Income |
3.48M |
80.99% |
-9.81% |
| Net Income |
-11.04M |
-173.90% |
-1 892.26% |
| EPS |
-0.01 |
-170.07% |
-1 816.67% |
Key Financial Ratios
operatingProfitMargin
18.5%
operatingCashFlowPerShare
$0
Management Commentary
Key themes from the earnings call: (1) Strategic emphasis on the pipeline as the growth engine and a stated goal of continuing revenue growth with multiple ANDAs nearing commercialization. Nasrat Hakim highlighted upcoming launches including Hydrocodone/APAP, Oxy/APAP, and Methadone, plus CNS ANDA pending FDA decision with a potential launch window around late December/early January. (2) Management outlined a capacity expansion plan via a new 35,000 sq ft facility with two packaging lines (capacity 120 bottles per minute per line) and tripled packaging capacity when the existing line is relocated, underscoring the company’s intent to scale production for future launches. (3) The CFO emphasized that the pipeline is the lifeblood of growth and that gross margins are expected to improve over time as higher volumes offset fixed costs, though near-term margins remain constrained by ramp-up costs and competitive dynamics in generics. (4) Management cautioned that the derivative warrant liability on GAAP is a noncash item that fluctuates with stock price and should not be interpreted as cash burn; however, it does contribute to volatility in reported liabilities. (5) Adderall ER performance remains solid within the DEA quota framework; management asserted that Adderall ER sales have meaningful market share and that they plan to transition Amphetamine ER to a self-branded Elite product after March 31 next year, enhancing long-term pricing and channel control.
pipeline is the lifeblood of generic pharma, and that is so true.
— Carter Ward
We expect to hear from FDA on November 23. If approved, this ANDA becomes our number one priority to launch.
— Nasrat Hakim
Forward Guidance
Management commentary points to a constructive but high-uncertainty path to growth. Near-term catalysts include FDA action on the CNS/DA-Runner ANDA expected by November 23 (with potential launch shortly thereafter), and the planned sequential launches of Hydro/APAP, Oxy/APAP, and Methadone in late 2024 to early 2025, spaced roughly 6–8 weeks apart. The company expects continued revenue growth and a rising gross margin as the new manufacturing footprint comes online and yields higher productivity. Key risks to the outlook include regulatory approvals (FDA/DEA approvals and DMF adequacy), API supply constraints (notably Naltrexone API and particle-size issues noted for Oxy/APAP timing), and intense competition in the U.S. generic market leading to pricing pressure. Long-term guidance remains positive with management targeting multi-year revenue progression, a stronger profit profile as the pipeline scales, and potential M&A opportunities if valuations align with strategic goals. Watchpoints for investors include: (i) FDA approval status for the CNS ANDA and the timing of the CNS launch; (ii) progress of the new facility start-up and its utilization by January; (iii) cadence and market uptake of Hydrocodone/APAP, Oxy/APAP, and Methadone, and (iv) the trajectory of gross margins as volumes scale against fixed cost absorption.