Biopharmaceutical company Incyte Corporation (NASDAQ: INCY) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 20% year on year to $1.37 billion. Its non-GAAP profit of $2.26 per share was 38% above analysts’ consensus estimates.

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“Our third-quarter results demonstrate strong growth across our product portfolio, with net product revenues increasing 19% year-over-year, which highlights the momentum in our business and effective commercial execution,” said Bill Meury, President & CEO.

Company Overview

Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ: INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Incyte’s sales grew at a solid 14.4% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Incyte’s annualized revenue growth of 15.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Incyte reported robust year-on-year revenue growth of 20%, and its $1.37 billion of revenue topped Wall Street estimates by 8.5%.

Looking ahead, sell-side analysts expect revenue to grow 7.6% over the next 12 months, a deceleration versus the last two years. Still, this projection is above the sector average and suggests the market sees some success for its newer products and services.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Incyte has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average operating margin of 17%.

Looking at the trend in its profitability, Incyte’s operating margin rose by 8.8 percentage points over the last five years, as its sales growth gave it operating leverage. This performance was mostly driven by its recent improvements as the company’s margin has increased by 16.8 percentage points on a two-year basis. These data points are very encouraging and show momentum is on its side.

This quarter, Incyte generated an operating margin profit margin of 32.5%, up 19.6 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Incyte’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

In Q3, Incyte reported adjusted EPS of $2.26, up from $1.07 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Incyte’s full-year EPS of $6.42 to grow 4.3%.

Key Takeaways from Incyte’s Q3 Results

It was good to see Incyte beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock remained flat at $93.15 immediately after reporting.

Sure, Incyte had a solid quarter, but if we look at the bigger picture, is this stock a buy? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.