Harrow 2025 Q3 Earnings Record $1.02M Net Income After 124.2% Turnaround

Harrow Inc. (HROW) reported Q3 2025 results that exceeded profitability expectations but fell short of revenue estimates. The company returned to profitability with a net income of $1.02 million, a 124.2% improvement from a $4.22 million loss in 2024 Q3. While revenue grew 45.9% year-over-year to $71.50 million, it missed the $73.69 million consensus. Harrow updated its full-year revenue guidance to $270–$280 million, reflecting a more conservative outlook amid near-term challenges.

Revenue

Harrow’s total revenue surged 45.9% to $71.50 million in Q3 2025, driven by robust performance in its core product sales. Product sales, net, accounted for $71.50 million, forming the vast majority of revenue, while other revenue streams contributed $141,000. This growth underscores the company’s focus on its branded ophthalmic therapies, particularly VEVYE and IHEEZO, which delivered 22% and 20% sequential revenue increases, respectively.

Earnings/Net Income

The company achieved a remarkable turnaround, reporting a net income of $1.02 million in Q3 2025, reversing a $4.22 million net loss in the prior-year period. Earnings per share (EPS) improved to $0.03 from a loss of $0.12, marking a 125% positive swing. This profitability milestone reflects operational efficiency and strong demand for key products, positioning Harrow for sustained growth.

Post-Earnings Price Action Review

Following the earnings release, Harrow’s stock experienced mixed reactions. Shares surged 13.94% on the latest trading day, 9.71% for the week, and 3.36% month-to-date, reflecting investor optimism about the company’s strategic initiatives. However, revenue falling short of expectations led to a post-announcement sell-off, with shares tumbling 14% in after-hours trading. The market’s response highlights confidence in Harrow’s long-term growth potential but underscores near-term execution risks.

CEO Commentary

CEO Mark Baum highlighted Q3’s strong performance, driven by 22% quarter-over-quarter growth in VEVYE and 20% in IHEEZO. He emphasized new formulary agreements with national payers, including the largest U.S. PBM, set to enhance pricing stability starting January 2026. Strategic priorities include scaling commercial infrastructure for upcoming product launches and expanding the “Harrow Access for All” program. TRIESENCE, which underperformed in Q3, is expected to regain traction in 2026 with new leadership and retina market expansion.

Guidance

Harrow updated its 2025 full-year revenue guidance to $270–$280 million, reflecting sequential Q4 growth and near-term challenges like ImprimisRx inventory shortages. VEVYE is projected to deliver $100 million in 2025 revenue, with further growth in 2026 as coverage expands. The company anticipates a seasonal Q1 2026 revenue decline but remains confident in achieving record 2026 results. Adjusted EBITDA for Q3 was $22.7 million, with operating leverage expected to persist as commercial investments drive revenue.

Additional News

Harrow’s strategic initiatives include the acquisition of Melt Pharmaceuticals, a clinical-stage company developing non-opioid sedation therapies, and the launch of Harrow Access for All (HAFA) to improve patient access. However, challenges persist, including an ongoing dispute with the California Board of Pharmacy over ImprimisRx’s license renewal and a $4–$6 million revenue hit from October inventory shortages. The company also withdrew from prescription data reporting services to prioritize accuracy and competitive advantage.

Financial Health and Market Position

Harrow operates in the ophthalmic pharmaceuticals niche, with a market capitalization of $1.26 billion. Its 45.4% revenue growth in Q3 2025 reflects strong market penetration, though a net margin of -4.49% and high debt-to-equity ratio (4.66) highlight financial risks. Analysts remain cautiously optimistic, with a “buy” recommendation and a 12-month price target of $64.40, indicating confidence in its growth trajectory despite near-term headwinds.

Risk and Valuation

The company’s high P/S ratio (5.43) and P/B ratio (25.29) suggest elevated valuations, supported by a robust gross margin of 74.56%. However, liquidity constraints (current ratio of 0.62) and regulatory challenges, such as the ImprimusRx license dispute, pose risks. Institutional ownership of 57.4% underscores institutional confidence, while technical indicators like the RSI (32.04) suggest the stock is nearing oversold territory.

Outlook

Harrow’s pipeline includes four new product launches over the next two years, including biosimilars and Samsung collaborations, which are expected to drive long-term growth. With VEVYE and IHEEZO on track for record 2025 results and expanded payer coverage, the company is positioned to capitalize on its market leadership in ophthalmic disease management.