Biopharma company Jazz Pharmaceuticals (NASDAQ: JAZZ) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 2.1% year on year to $1.05 billion. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $4.23 billion at the midpoint. Its non-GAAP loss of $8.25 per share was 32.1% below analysts’ consensus estimates.

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"It has been a privilege to lead Jazz over my 22-year tenure. I am proud of what we have achieved on behalf of patients and confident that our new President and CEO, Renee Gala, will build on Jazz's momentum and serve as a catalyst in driving long-term growth," said Bruce Cozadd, chairman and chief executive officer, Jazz Pharmaceuticals.

Company Overview

Originally founded in 2003 and now headquartered in Ireland following a 2012 tax inversion merger, Jazz Pharmaceuticals (NASDAQGS:JAZZ) develops and markets medicines for sleep disorders, epilepsy, and cancer, with a focus on treatments for patients with limited therapeutic options.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Jazz Pharmaceuticals grew its sales at a solid 13% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers.

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. Jazz Pharmaceuticals’s recent performance shows its demand has slowed as its annualized revenue growth of 4.2% over the last two years was below its five-year trend.

This quarter, Jazz Pharmaceuticals grew its revenue by 2.1% year on year, and its $1.05 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 7.5% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and indicates its newer products and services will catalyze better top-line performance.

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Operating Margin

Jazz Pharmaceuticals was profitable over the last five years but held back by its large cost base. Its average operating margin of 5.7% was weak for a healthcare business.

Looking at the trend in its profitability, Jazz Pharmaceuticals’s operating margin decreased by 24.7 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 8.3 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.

In Q2, Jazz Pharmaceuticals generated an operating margin profit margin of negative 65.6%, down 85.1 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

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.

Sadly for Jazz Pharmaceuticals, its EPS declined by 12.1% annually over the last five years while its revenue grew by 13%. This tells us the company became less profitable on a per-share basis as it expanded.

We can take a deeper look into Jazz Pharmaceuticals’s earnings to better understand the drivers of its performance. As we mentioned earlier, Jazz Pharmaceuticals’s operating margin declined by 24.7 percentage points over the last five years. Its share count also grew by 9.5%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q2, Jazz Pharmaceuticals reported adjusted EPS at negative $8.25, down from $5.30 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Jazz Pharmaceuticals’s full-year EPS of $6.64 to grow 189%.

Key Takeaways from Jazz Pharmaceuticals’s Q2 Results

We were impressed by how Pharmaceuticals's full-year EPS guidance, but it lowered its revenue outlook and its EBITDA forecast missed. Its EPS also fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 6.2% to $106 immediately following the results.

Jazz Pharmaceuticals underperformed this quarter, but does that create an opportunity to invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.