What caused ZLAB's EPS to decline in Q4 2024?

The decline in Zai Lab's (ZLAB) EPS in Q4 2024 can be attributed to several factors: 1. **Increased R&D Expenses**: Despite a 12% year-over-year decrease in R&D expenses, which is a positive aspect, the absolute amount of $234.5 million indicates that the company continues to invest heavily in research and development. This can temporarily strain financial performance as it often leads to increased costs before realizing the benefits of new product developments. 2. **Net Loss Reduction**: Zai Lab reported a 23% year-over-year reduction in net loss, which is a positive indicator. However, the absolute net loss of $257.1 million suggests that the company is still operating at a loss in Q4 2024. A lower net loss can sometimes be offset by lower revenue or increased expenses, affecting EPS. 3. **Revenue Growth**: The company's net product revenue increased by 49% year-over-year to $397.6 million, which is a strong indicator of commercial success. However, the growth in revenue may not fully offset the costs, including those related to R&D and operations, which can impact EPS. In summary, the decline in ZLAB's EPS in Q4 2024 is likely a result of the company's strategic investments in R&D and commercial product revenue growth. While these investments are crucial for long-term growth, they can temporarily strain financial performance and negatively impact short-term EPS.