Rafael Holdings 2025 Q3 Earnings Net Loss Narrows 93.5% Year-Over-Year

Rafael Holdings (RFL) reported its fiscal 2025 Q3 earnings on June 11th, 2025. The company announced it significantly narrowed its net loss to $-4.05 million for the quarter, an improvement of 93.5% from the previous year's $-62.29 million. Results surpassed expectations due to strategic changes post-merger. Despite reporting a net loss, the company's financial position was strengthened by a $25 million rights offering. Guidance remains optimistic with potential revenue growth anticipated from ongoing clinical developments.

Revenue

Rafael Holdings' total revenue rose by 7.7% to $362,000 in Q3 2025, compared to $336,000 in Q3 2024. The revenue increase is attributed to several segments: Infusion Technology contributed $42,000, Third-Party Rentals generated $49,000, Related Party Rentals added $28,000, and product revenue reached $243,000, culminating in the reported total revenue.

Earnings/Net Income

Rafael Holdings narrowed its loss to $0.19 per share in Q3 2025 from a loss of $1.36 per share in Q3 2024, marking an 86.0% improvement. The company's net loss reduction is a positive indicator of operational efficiency and strategic alignment, reflecting a significant improvement in earnings per share.

Price Action

Post-Earnings Price Action Review

The strategy of purchasing Rafael Holdings (RFL) shares following a quarter-over-quarter revenue increase on the financial report release date and holding for 30 days yielded a 21.94% return. However, this performance lagged behind the benchmark, which achieved a 58.09% return, resulting in an excess return of -36.15%. The strategy's compound annual growth rate (CAGR) stood at 6.89%, with a maximum drawdown of -54.08%, indicating considerable risk despite moderate returns. This highlights the challenges faced in outperforming market benchmarks even in the context of positive revenue growth. Investors should be aware of the inherent risks and carefully consider their strategies when engaging with Rafael Holdings' stock.

CEO Commentary

“We are pleased to have completed our merger with Cyclo Therapeutics and look forward to reporting the topline data from the 48-week interim analysis of the pivotal Phase 3 TransportNPC™ study evaluating Trappsol® Cyclo™ for the treatment of Niemann-Pick Disease Type C1 anticipated later this month,” said Howard Jonas, Chief Executive Officer, Executive Chairman and Chairman of the Board of Rafael Holdings. Mr. Jonas emphasized the strengthened financial position following a $25 million rights offering, which will aid in advancing treatment options for patients with this rare genetic disease. The decrease in net loss year-over-year reflects improved operational efficiency and strategic alignment post-merger.

Guidance

Rafael Holdings anticipates continued advancements in its clinical pipeline with a focus on Trappsol® Cyclo™ as data from the Phase 3 study is expected imminently. The company reported cash and cash equivalents of $37.9 million as of April 30, 2025, bolstered by the recent rights offering. While the company experienced a net loss of $4.8 million for Q3 2025, the leadership remains optimistic about future revenue growth potential through ongoing research and development efforts, particularly in addressing rare diseases.

Additional News

Rafael Holdings has actively engaged in mergers and acquisitions, completing its merger with Cyclo Therapeutics, which is set to enhance its clinical pipeline. Additionally, the company successfully closed a $25 million rights offering, significantly bolstering its financial position to fund upcoming clinical trials and regulatory approvals. The offering led to increased shareholding by CEO Howard Jonas, who reinforced his commitment by purchasing unsubscribed shares, highlighting his confidence in the company's future prospects. These strategic moves underscore Rafael Holdings' commitment to advancing its clinical objectives and securing a stronger foothold in the biotechnology sector.