Why did RVMD's EPS miss forecasts in Q4 2024?

The actual EPS of Revolution Medicines (RVMD) in Q4 2024 was -$1.12, which missed the forecast of -$0.96. This negative surprise can be attributed to several factors: 1. **Increased R&D Expenses**: The company's R&D expenses increased to $188.1 million in Q4 2024, up from $148.5 million in Q4 2023. This significant increase in spending on research and development likely contributed to the lower-than-expected earnings. 2. **G&A Expenses**: Although G&A expenses decreased to $28.2 million in Q4 2024 from $32.2 million in Q4 2023, the reduction may not have been enough to offset the impact of the higher R&D costs. 3. **Net Loss**: Revolution Medicines reported a net loss of $194.6 million for Q4 2024, an increase from the $161.5 million loss in Q4 2023. This substantial net loss indicates that the company is facing significant challenges, which could be a result of operational inefficiencies or strategic investments. In summary, the miss in RVMD's EPS can be attributed to a combination of increased R&D expenses and G&A costs, despite some reduction in the latter, and the resulting net loss. These factors collectively paint a picture of a company that is investing heavily in its pipeline and clinical trials, which can temporarily strain financial performance.