Exelixis 2025 Q1 Earnings Beats Expectations with Net Income Soaring 327.7%

Exelixis (EXEL) reported its fiscal 2025 Q1 earnings on May 13th, 2025. The biotech company exceeded profit expectations, delivering adjusted earnings per share of $0.62, surpassing the projected $0.42 per share by a substantial margin. This marks a 47.62% earnings surprise. Additionally, the company raised its full-year revenue guidance by $100 million, highlighting a strong outlook. Exelixis's performance was bolstered by accelerating growth in Cabometyx demand, with U.S. net product revenues increasing 36% year-over-year. The company's commercial success was complemented by rapid launch plans for Cabometyx following FDA approval for neuroendocrine tumors.

Revenue

Exelixis reported a total revenue of $555.45 million in Q1 2025, marking a 30.6% increase from the previous year. The net product revenues primarily from the cabozantinib franchise reached $513.28 million, reflecting significant demand and strategic pricing initiatives. Collaboration revenues contributed $42.16 million, though slightly lower than the previous year, primarily due to decreased royalty revenues from international sales.

Earnings/Net Income

Exelixis's earnings per share surged by 375.0% to $0.57 in Q1 2025, compared to $0.12 in Q1 2024. This growth reflects a robust financial performance, with net income reaching a record high of $159.62 million, increasing 327.7% from the prior year. The EPS indicates strong profitability and positive market sentiment.

Price Action

The stock price of Exelixis edged down by 0.14% during the latest trading day, but it saw a rise of 0.24% over the past week and climbed 7.23% month-to-date. This suggests a positive investor response despite short-term fluctuations.

Post-Earnings Price Action Review

The backtested strategy of purchasing Exelixis shares when revenues miss expectations and holding them for 30 days has historically yielded a 7.2% gain. Despite the potential for profit, this approach is marked by high volatility, evidenced by a 34.4% drawdown. This indicates that while the strategy may offer significant returns, it carries substantial risk, highlighting the need for cautious consideration. Investors should remember that historical performance may not accurately predict future results, and this strategy might not suit all market conditions. The high volatility underscores the importance of weighing potential gains against possible losses.

CEO Commentary

Michael Morrissey, CEO, emphasized Exelixis's robust Q1 performance and significant progress in the U.S. cabozantinib franchise. He noted a 36% year-over-year revenue growth to $513 million and expressed optimism about CABOMETYX's regulatory approval for neuroendocrine tumors. Morrissey highlighted the company's focus on advancing new molecules, improving cancer care, and exploring zanzalintinib as the next oncology franchise opportunity.

Guidance

Exelixis has raised its fiscal 2025 guidance, increasing net product revenue expectations to between $2.05 billion and $2.15 billion, reflecting a $100 million upward adjustment. Total revenue guidance now ranges from $2.25 billion to $2.35 billion. Morrissey attributes this adjustment to strong performance, particularly in the RCC business, and closely monitors the NET launch trajectory for future adjustments.

Additional News

Exelixis has been active in corporate actions recently, including authorizing an additional $500 million stock repurchase program. This strategic financial move demonstrates the company’s commitment to enhancing shareholder value. Exelixis also announced several fireside chats at investor conferences, facilitating engagement with stakeholders and analysts. Furthermore, the company has reported the initiation of a Phase 1 clinical study evaluating XB628, a first-in-class bispecific antibody in collaboration with Invenra, highlighting its ongoing commitment to expanding its pipeline and exploring innovative cancer treatments.