Specialty pharmaceutical company ANI Pharmaceuticals (NASDAQ: ANIP) announced better-than-expected revenue in Q2 CY2025, with sales up 53.1% year on year to $211.4 million. The company’s full-year revenue guidance of $830.5 million at the midpoint came in 4.9% above analysts’ estimates. Its non-GAAP profit of $1.80 per share was 26.8% above analysts’ consensus estimates.

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“We had another record-setting quarter for our Company, with all-time highs in net revenue, adjusted EBITDA, and adjusted EPS, reflecting very strong momentum across our business units,” said Nikhil Lalwani, President and CEO of ANI.

Company Overview

With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ: ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.

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, ANI Pharmaceuticals’s 30.5% annualized revenue growth over the last five years was incredible. Its growth beat 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. ANI Pharmaceuticals’s annualized revenue growth of 36.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, ANI Pharmaceuticals reported magnificent year-on-year revenue growth of 53.1%, and its $211.4 million of revenue beat Wall Street’s estimates by 10.4%.

Looking ahead, sell-side analysts expect revenue to grow 9.5% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is admirable and indicates the market sees success for its products and services.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

ANI Pharmaceuticals was roughly breakeven when averaging the last five years of quarterly operating profits, lousy for a healthcare business.

On the plus side, ANI Pharmaceuticals’s operating margin rose by 6.4 percentage points over the last five years, as its sales growth gave it operating leverage. Zooming into its more recent performance, however, we can see the company’s margin has decreased by 2.7 percentage points on a two-year basis. If ANI Pharmaceuticals wants to pass our bar, it must prove it can expand its profitability consistently.

This quarter, ANI Pharmaceuticals generated an operating margin profit margin of 6.6%, up 2.8 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.

ANI Pharmaceuticals’s EPS grew at a remarkable 9.9% compounded annual growth rate over the last five years. Despite its operating margin improvement during that time, this performance was lower than its 30.5% annualized revenue growth, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

We can take a deeper look into ANI Pharmaceuticals’s earnings quality to better understand the drivers of its performance. A five-year view shows ANI Pharmaceuticals has diluted its shareholders, growing its share count by 69.7%. This dilution overshadowed its increased operating efficiency and has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, ANI Pharmaceuticals reported adjusted EPS at $1.80, up from $1.02 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 ANI Pharmaceuticals’s full-year EPS of $6.47 to stay about the same.

Key Takeaways from ANI Pharmaceuticals’s Q2 Results

We were impressed by how significantly ANI Pharmaceuticals blew past 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 good print with some key areas of upside. The stock traded up 7.4% to $74 immediately following the results.

Sure, ANI Pharmaceuticals had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.