Pharmaceutical company Amneal Pharmaceuticals (NASDAQ: AMRX) fell short of the market’s revenue expectations in Q2 CY2025 as sales rose 3.2% year on year to $724.5 million. On the other hand, the company’s full-year revenue guidance of $3.05 billion at the midpoint came in 1.1% above analysts’ estimates. Its non-GAAP profit of $0.25 per share was 42.9% above analysts’ consensus estimates.
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Amneal (AMRX) Q2 CY2025 Highlights:
- Revenue: $724.5 million vs analyst estimates of $742.8 million (3.2% year-on-year growth, 2.5% miss)
- Adjusted EPS: $0.25 vs analyst estimates of $0.17 (42.9% beat)
- Adjusted EBITDA: $183.7 million vs analyst estimates of $175 million (25.3% margin, 5% beat)
- The company reconfirmed its revenue guidance for the full year of $3.05 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $0.73 at the midpoint, a 7.4% increase
- EBITDA guidance for the full year is $675 million at the midpoint, in line with analyst expectations
- Operating Margin: 15.4%, up from 13.6% in the same quarter last year
- Free Cash Flow Margin: 8.4%, up from 4.1% in the same quarter last year
- Market Capitalization: $2.49 billion
Company Overview
Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ: AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Amneal’s 10.4% annualized revenue growth over the last five years was decent. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Amneal’s annualized revenue growth of 11.1% over the last two years aligns with its five-year trend, suggesting its demand was stable. 
This quarter, Amneal’s revenue grew by 3.2% year on year to $724.5 million, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 8.9% over the next 12 months, a slight deceleration versus the last two years. Still, this projection is noteworthy and implies the market is forecasting success for its 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.
Amneal was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.2% was weak for a healthcare business.
On the plus side, Amneal’s operating margin rose by 6.6 percentage points over the last five years, as its sales growth gave it operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 4.8 percentage points on a two-year basis.
This quarter, Amneal generated an operating margin profit margin of 15.4%, up 1.8 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Amneal’s remarkable 10.5% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
In Q2, Amneal reported adjusted EPS at $0.25, up from $0.16 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 Amneal’s full-year EPS of $0.74 to shrink by 5.6%.
Key Takeaways from Amneal’s Q2 Results
We were impressed by how significantly Amneal blew past analysts’ EPS expectations this quarter. We were also happy its full-year EPS guidance outperformed Wall Street’s estimates. On the other hand, its revenue missed. Overall, this print had some key positives. The stock remained flat at $8.03 immediately after reporting.
So should you invest in Amneal right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
