0001193125-26-206534
SEC filingRevenue grew 28.2% year-over-year to $392.9 million, driven by higher product sales, though operating and net losses widened significantly due to acquisition-related expenses and inventory step-up amortization recognized as inventory sold.
Total revenue for Q1 FY2026 was $392.9 million, an increase of 28.2% compared to $306.5 million in Q1 FY2025. This growth was primarily attributable to higher product sales, net, partially offset by a decrease in manufacturing and royalty revenue. The increase in product sales reflects the integration of LUMRYZ following the Avadel Acquisition, though specific contribution amounts are not quantified in the authoritative financial packet.
Gross profit totaled $331.3 million, up 28.8% year-over-year, with gross margin holding steady at 84.3%. This margin reflects the recognition of inventory step-up amortization in cost of goods manufactured and sold as the underlying inventory is sold — a non-recurring accounting impact tied to the Avadel Acquisition that affects timing but not ultimate profitability.
Net income was -$66.5 million, compared to $22.5 million in Q1 FY2025, and diluted EPS was -$0.40 versus $0.13. The decline reflects the operating loss and associated non-cash impacts from acquisition accounting, including amortization of intangible assets and inventory step-up.
Net cash used in operating activities was $165.7 million, reversing the $98.8 million provided in Q1 FY2025. Capital expenditures decreased to $4.1 million from $10.1 million, yielding free cash flow of -$169.8 million. These results reflect the combined effect of the net loss, non-cash adjustments, and working capital dynamics arising from acquisition integration.