Earnings Call Transcript - ADMA Q4 2025

Operator, Operator

Good afternoon, and welcome to the ADMA Biologics, Inc. Full Year 2025 Financial Results and Business Update Conference Call on Wednesday, 02/25/2026. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at the company's request and will be available on the company's website approximately two hours following the end of the call. At this time, I would like to introduce the company. Please go ahead. Welcome, everyone, and thank you for joining us this afternoon to discuss ADMA Biologics, Inc.'s financial results for the fourth quarter and full year 2025 and recent corporate updates. I'm joined today by Adam Grossman, our President and Chief Executive Officer, Brad Tade, our retiring Chief Financial Officer and Treasurer, and Terry Kohler, our incoming Chief Financial Officer and Treasurer. During today's call, Adam will provide some introductory comments and provide an update on corporate progress. Brad will then provide an overview of the company's fourth quarter and full year 2025 financial results, and Terry will make some introductory comments. Finally, Adam will then provide some brief summary remarks before opening up the call for questions. Earlier today, we issued a press release detailing the full year 2025 financial results and summarized certain achievements and recent corporate updates. The release is available on our website at www.admabiologics.com. Before we begin our formal comments, I'll remind you that we will be making forward-looking assertions during today's call that represent the company's intentions, expectations, or beliefs concerning future events and constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to factors, risks, and uncertainties, such as those detailed in today's press release announcing this call and our filings with the SEC, which may cause actual results to differ materially from the results expressed or implied by such statements. In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update any such statements except as required by the federal securities laws. We refer you to the disclosure notice section in our earnings release we issued today and the Risk Factors section in our Annual Report on Form 10-K for the year ended 12/31/2025 for a discussion of important factors that could cause actual results to differ materially from these forward-looking statements. Please note that the discussion on today's call includes certain non-GAAP financial measures including adjusted EBITDA and adjusted net income. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric is available in our earnings release. And with that, I would now like to turn the call over to Adam Grossman. Adam, go ahead.

Adam Grossman, President and Chief Executive Officer (CEO)

Thank you. Good afternoon, everyone. ADMA Biologics, Inc. delivered a strong finish to 2025 reflecting disciplined execution across our commercial, manufacturing, and financial platforms. For the full year, total revenue was $510,000,000, representing 20% year-over-year growth. Adjusted EBITDA was $231,000,000, increasing 40% year-over-year, and adjusted net income was $161,000,000, increasing 35% year-over-year. These results underscore the durability of our growth engine and the expanding operating leverage within our fully integrated U.S.-based business model. Importantly, 2025 was a defining year for ADMA Biologics, Inc. We expanded margins, improved our balance sheet, and executed several strategic initiatives that enhance the long-term durability and earnings power of our company. As we enter the next phase of growth, ASCENIV continues to drive our growth. For full year 2025, ASCENIV achieved $363,000,000 in net revenue, representing 51% year-over-year growth. Our differentiated patent-protected specialty immune globulin exited the year at record utilization levels, driven by high demand and strong prescriber adoption. With ASCENIV still forecasted to be early in its penetration curve within its total addressable market, driven by broad payer access and increasing confidence in long-term supply continuity, ASCENIV is well positioned for sustained utilization growth throughout 2026 and beyond. Before turning to additional operating highlights, I want to briefly address working capital. We expect accounts receivable and days sales outstanding to improve over the course of 2026, trending toward and potentially improving beyond industry benchmarks over time. The recent increase in working capital primarily reflects the growth in ASCENIV and the acceleration in revenue growth we are guiding to. As we continue to make meaningful inroads into ASCENIV's still significantly underpenetrated addressable market, as demand builds, and our McKesson distribution agreement ramps up, alongside further anticipated diversification of our distribution network, we expect improving working capital efficiency and cash conversion throughout 2026. We are also seeing continued validation of ASCENIV's differentiation in real-world settings. Independent data sets generated during 2025 reinforce ASCENIV's unique biologic profile. A peer-reviewed study by Tan et al., presented at the ACAAI 2025 conference and published in the Journal of Clinical Immunology, demonstrated statistically significant reduction in infections and hospitalizations among patients who failed prior IVIG therapy and transitioned to ASCENIV. Seventy-one percent of these patients showed clinical improvement. These outcomes, along with additional publications expected throughout 2026, should further enhance physician confidence, support constructive payer engagement, expand medical education, and drive sustained utilization growth. From a manufacturing and supply perspective, 2025 marked a major inflection point as yield-enhanced production transitioned into routine commercial practice, with continued FDA lot releases. This makes 2026 the first full year of yield-enhanced output, a structural improvement to our business model, supporting meaningful gross margin growth and increasing earnings power. In parallel, we strategically repositioned our plasma collection network to improve capital efficiency while securing our long-term high-titer plasma supply. In December, we entered into an agreement to monetize three plasma centers while retaining ownership of seven centers, and concurrently executed a long-term supply agreement that continues to diversify our high-titer plasma sourcing base with the purchaser of ADMA Biologics, Inc.'s three centers. In total, the company now has access to over 280 plasma collection centers, and we have improved supply visibility through the late 2030s and beyond. This transaction remains on track to close this quarter. I want to thank the entire ADMA Biologics, Inc. team for their exceptional execution and commitment throughout 2025. Their discipline and dedication continue to drive our performance and position us for sustained success. Before I turn the call over to Brad, I also want to share an important leadership update. After a successful tenure and meaningful contributions to ADMA Biologics, Inc.'s growth and financial transformation, including the successful onboarding of KPMG as the company's independent auditor, Brad has informed the company of his intention to retire as Chief Financial Officer and Treasurer. We are grateful for Brad's contributions and partnership, and we are pleased that he will remain with ADMA Biologics, Inc. in a consulting capacity through a structured transition period to ensure continuity of operations, which will extend through July. Today, we are excited to announce the appointment of our incoming Chief Financial Officer and Treasurer, Terry Kohler. He brings extensive public company experience, deep expertise in working capital optimization and cash conversion, and a proven track record of disciplined capital allocation and financial execution. This leadership transition further solidifies our ability to scale efficiently, enhance financial flexibility, and maximize long-term stockholder value creation. Importantly, there have been no changes to our previously issued financial statements, no changes to our internal control conclusions, and our forward-looking guidance remains strong. Our financial foundation remains robust, and our priorities are clear: drive commercial execution, invest in our capital-efficient pipeline, and maintain balance sheet discipline. With that, I'll now turn the call over to Brad to review our fourth quarter and full year financial results in greater detail.

Brad Tade, Chief Financial Officer and Treasurer (Retiring)

Thank you, Adam. Our full year 2025 financial results demonstrate ADMA Biologics, Inc.'s consistent execution, expanding profitability, and earnings power. Total revenue for the year was $510,200,000, representing 20% year-over-year growth. Gross margin expanded to 57.4%, compared to 51.5% in 2024, driven primarily by ASCENIV's growing mix contribution and the successful transition of yield-enhanced production into routine commercial execution. Adjusted net income totaled $160,800,000, representing 35% growth, and adjusted EBITDA reached $231,000,000, increasing 40% year-over-year. These results reflect continued operating leverage, cost management, and the structural margin improvements anticipated by yield enhancement and embedded in our vertically integrated model. Fourth quarter 2025 total revenue was $139,200,000, reflecting 18% year-over-year growth. Importantly, we exited 2025 with corporate gross margins of 63.8%, representing approximately 10% year-over-year improvement. Fourth quarter 2025 adjusted EBITDA grew by 52% to $73,600,000, and adjusted net income for the year grew by 57% to $52,600,000. ASCENIV's continued growth through broader market dynamics is a testament to the product's differentiation and relative insulation from standard IVIG market contours. ADMA ended 2025 with $88,000,000 in cash, largely excluding proceeds from the previously announced plasma center divestiture, which remains on track to close in 2026. We maintain a healthy balance sheet and expect improved cash generation in 2026, driven by higher margins, improving working capital dynamics, and disciplined capital allocation. Turning to our outlook, our 2026 and 2027 financial guidance forecasts continued ASCENIV strength, favorable product mix shift, full-year yield-enhanced production efficiencies, and sustained operating leverage. For 2026, total revenue is expected to exceed $635,000,000, adjusted net income is expected to exceed $255,000,000, and adjusted EBITDA is expected to exceed $360,000,000. For 2027, total revenue is expected to exceed $775,000,000, adjusted net income is expected to exceed $315,000,000, and adjusted EBITDA is expected to exceed $455,000,000. For 2029, total revenue is expected to exceed $1,100,000,000, and adjusted EBITDA is expected to exceed $700,000,000. These targets are driven by continued ASCENIV penetration into its addressable patient market, full realization of yield-enhancement efficiencies, continued mix improvement, and disciplined operational execution. Importantly, these projections exclude potential contributions from SG001 and future capacity expansion, which represent meaningful potential long-term upside. We believe ADMA Biologics, Inc. is entering 2026 from a position of strength, with strong demand in a growing U.S. IG market, higher margins, increasing cash generation, and a structurally improved earnings profile. As I've shared with our Board and leadership team, it has been a privilege to serve as ADMA Biologics, Inc.'s Chief Financial Officer and Treasurer during a period of meaningful growth and financial transformation. With record ASCENIV utilization, yield-enhanced production now fully integrated into our commercial operations, and improving long-term plasma supply visibility, I believe ADMA Biologics, Inc. is exceptionally well positioned for sustained revenue growth, continued margin growth, and increasing cash generation in the years ahead. I am proud of what the team has accomplished, and I'm exceedingly confident in the company's outlook. With that, prior to turning the call back to Adam, I'd like to introduce Terry to say a few words. Terry?

Terry Kohler, Incoming Chief Financial Officer and Treasurer

Thanks, Brad. I'm excited to join ADMA Biologics, Inc.'s management team at a time of significant momentum and forward-looking opportunities. The company has built a differentiated platform with high demand, increasing margins, and a clear path to increasing cash generation. My focus will be on supporting disciplined execution, strengthening working capital performance and cash conversion, and enhancing financial strategy as we scale. I look forward to partnering with Adam, Caitlin, our Chief Operating Officer, and the entire ADMA Biologics, Inc. team to continue to drive growth, profitability, and long-term shareholder value.

Brad Tade, Chief Financial Officer and Treasurer (Retiring)

Thanks, Terry. Adam, I'll pass it back to you.

Adam Grossman, President and Chief Executive Officer (CEO)

Thank you, Brad and Terry. Stepping back, ADMA Biologics, Inc. is entering 2026 with strong momentum and increasing financial strength. We are scaling a differentiated growth platform with the highest margins in the plasma-derived therapeutics complex. The company is committed to improving its capital efficiency while forging ahead with our focus on generating increasing cash flow, which we believe will unlock meaningful stockholder value. ASCENIV remains the core of our growth strategy. In 2026, we expect continued demand and market penetration, expanding prescriber adoption, durable and now expanded payer access, and growing market confidence in our IG supply continuity. With ASCENIV still forecasted to be early in its penetration curve, we believe the runway for sustained utilization and growth remains significant. Yield-enhanced production is now fully integrated into commercial operations, making 2026 our first full year of structurally higher-margin IG output. Combined with continued mix shift towards ASCENIV, we are well positioned for outside gross margin growth, increasing operating leverage, and continued earnings power. The strategic repositioning of our plasma collection network enhances capital efficiency and secures diversified long-term supply visibility through the late 2030s. These actions are expected to generate accretive cost savings beginning in 2026 and further improve the durability of our platform. Beyond our commercial business, our lead pipeline asset, SG001, represents meaningful long-term optionality. We anticipate submitting a pre-IND package in 2026, potentially enabling direct progression into a cost-efficient registrational trial. We continue to view SG001 as a potential $300,000,000 to $500,000,000 peak annual revenue opportunity. In closing, ADMA Biologics, Inc. has never been better positioned. We are forecasting substantial revenue growth, continued margin growth, and increasing cash generation, driven by disciplined execution across the organization. Thank you for your time today. We appreciate your continued interest and support. And with that, operator, let's open up the call for questions.

Operator, Operator

Thank you. Today's question-and-answer session will be conducted electronically. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. We'll pause just a moment to assemble the roster. Our first question comes from the line of Kristen Kluska from Cantor Fitzgerald.

Rick Miller, Analyst (Cantor Fitzgerald)

Hi. This is Rick Miller on for Kristen. Thanks for taking our questions. Now that we can clearly see the proportion of sales that ASCENIV accounts for, is there any updated color you can give us on how you're expecting ASCENIV to fit into the product mix as it relates to the revenue guidance that you've lined out going forward?

Adam Grossman, President and Chief Executive Officer (CEO)

Yes. I was trying to figure out what the first question was going to be, Rick, and it was certainly one of the top ones. We're very proud of the year-over-year growth of 51%, $363,000,000. This is our first time breaking out product-level revenue. We have been very bullish on ASCENIV's opportunity for some time and have been talking about mix shift. I believe the ratio is about a roughly 70/30 split between ASCENIV and BIVIGAM in 2025. We believe that split is going to continue to shift toward ASCENIV. We have given guidance around revenue, EBITDA, and net income for next year. We think those metrics are going to grow. In the fourth quarter, we were at 63.8% gross margins, and we expect that to continue to grow quarter-over-quarter and for the full year as well. The 57.02% gross margin that we achieved for the year is something we're proud of. The ASCENIV mix is going to continue to shift. As we have said, we are buying more high-titer plasma and making more product. We continue to forecast that working capital will be flat to improve throughout calendar year 2026. So we expect margins to improve, we expect ASCENIV to continue to progress with strong utilization and demand, and we are very proud of the results.

Brad Tade, Chief Financial Officer and Treasurer (Retiring)

And, Rick, just to expand on the gross margin piece that Adam just hit on. In 2025, Q4 included yield-enhanced product being sold. So exiting Q4 2025 with a 63.8% gross margin and looking into 2026, we feel strongly about our margin profile. We are going to continue to see the mix shift from BIVIGAM to ASCENIV, and we are going to have a full year of yield-enhanced product being sold for both BIVIGAM and ASCENIV. Again, we are feeling pretty confident about our gross margin profile.

Rick Miller, Analyst (Cantor Fitzgerald)

Okay. And maybe then to kind of follow up on something you brought up there. Heading into this year, you indicated you'd look to expand your third-party supply contracts to get more RSV plasma. Is there any update on these efforts? Could you give us any color on finding additional supply on that front?

Adam Grossman, President and Chief Executive Officer (CEO)

With respect to the third-party supply agreements, they are continuing to perform in good standing. We are collecting more plasma each and every month. Testing is ongoing and routine in connection with the plasma center divestiture that we announced at the J.P. Morgan conference in January. We also signed an additional third-party supply agreement with the acquirer of those three centers. That operator is an independent collector of plasma. They are not connected to any fractionation capacity. They sell plasma to third parties, and we are very pleased to be partnering with them. They have a robust network. What we said is it adds about 30 centers today, and they have plans to grow and expand their network. They have given us projections to about 50 additional centers. All in all, we are collecting high-titer plasma from more than about 280 centers. That is what we have put in print, and it is going really well. We are very pleased and proud of our partnership with Grifols; they are a great partner. Kedrion is also a great partner, working very well. And to the ADMA Biologics, Inc. team here, we test a lot of samples. We test an enormous amount of samples when you really look at it. As we have said, less than 10% of the donor population has the antibody profile that we are looking for. It is a labor of love, and we are collecting more raw material, and we are going to make more product.

Brad Tade, Chief Financial Officer and Treasurer (Retiring)

Rick, I would just add that just like the team has operationalized yield-enhanced manufacturing into normal course of business and normal course of manufacturing, I would say the same is true with RSV collections. The third-party agreements have exceeded our expectations, and I think it is fair to say that we have normalized the collection of RSV plasma into normal course of operations.

Rick Miller, Analyst (Cantor Fitzgerald)

Great. Okay. I'll jump back in the queue. Thank you, guys.

Operator, Operator

One moment for our next question. Our next question comes from the line of Anthony Petrone from Mizuho Americas.

Anthony Petrone, Analyst (Mizuho Americas)

Thanks, and congrats on the strong end to the year here. Great working with you, Brad, and welcome, Terry. Maybe, Adam, just on ASCENIV: clearly there was an outbreak in April, at least by our math, and we will scrub it a bit with these new disclosures. But when you think about the strategy here, you've shared there are really about 900 target immunology sites that you are going after. There's still more penetration to achieve. On the offensive strategy, how many more new centers do you think you can add in 2026, and by what level do you think the prescriber base specifically can increase this year?

Adam Grossman, President and Chief Executive Officer (CEO)

Thank you so much, Anthony. We are very proud of the results, as you know. We actively call on about 300 immunologists. A large majority of that number have prescribed ASCENIV to at least one or more patients. We feel very good about our ability to continue to grow both from a reach perspective—getting more prescribers writing their first script—and from depth within existing institutions, where we are seeing prescribing increase rapidly. With commercial payer access opening up in certain territories, we are very proud of the work that our team has done. We think that will open up more lives for us to treat. We have also mentioned the recent distribution agreement, which expands and diversifies our distribution network to McKesson and a number of institutions that buy strictly through McKesson. There is a large number of users of immune globulin in the PI space and related immune deficient populations that buy exclusively through McKesson and related entities. We are very pleased to be in a position where we have a robust supply of raw material, which gives us visibility into forward-looking throughput at our plant and into distribution. We are excited about the opportunity to expand to additional institutions that we have not yet tapped. With the guidance we have given—$510 million for calendar year 2025 achieved and guidance to $635 million for next year—we believe substantially all that growth is going to come from utilization, from new institutions gaining experience, new prescribers, and from deeper use within existing institutions. The drug continues to work well. The data we are seeing from investigator-initiated studies and publications is encouraging, and we are very pleased with how the company performed. We are really excited about 2026. A lot of this feels like we announced it already. We are very excited about the future. I would say we have really unlocked the value creation driver, which is yield enhancement. With the third-party plasma supply, you are going to continue to see quarter-over-quarter growth.

Anthony Petrone, Analyst (Mizuho Americas)

Very helpful. And a quick follow-up on receivables: when does McKesson show up in receivables, and if you can define what a normalized level looks like once we get there, that would be helpful. Thanks again. Congrats.

Adam Grossman, President and Chief Executive Officer (CEO)

Thanks, Anthony. Maybe I'll start on when we are going to see McKesson. We are actively working. We have the agreement set up. We are working with their partners and the customers they serve. I think we'll start to see it in the first half of the year, but I really think you will see it materialize more meaningfully in the back part of the year. My team has been working closely because there are a number of steps to get access with many of these customers. We've been working closely with McKesson and the constituents that procure through them regarding formulary approvals, P&T committee approvals at certain buying groups and infusion consortia. We are making substantial progress. I am optimistic that we will see this with McKesson and that we will also see rightsizing of inventory and accounts receivable normalize toward the middle to back part of the year. That is what we have been messaging. When I look at the numbers and, for the first time, examine the 10-K with product-level revenue broken out, seeing 51% year-over-year growth makes me understand more about what our distribution partners and specialty pharmacies have been experiencing. ASCENIV is an extremely important product in the lives of these patients. It has a higher cost per infusion than standard IG. As we have said, ASCENIV sells for about five and a half to six times other standard IG products. I think our customers hear us when we say to prepare for this level of demand, and they have adjusted. With that substantial growth, the working capital requirements on our distributors and some of our end-user customers have been robust. Give us some time to work through this. It is going to normalize this year. We are very excited about the new relationship with McKesson and all the opportunities that brings. We will keep growing and focus on reducing AR over time. Thanks, Anthony.

Operator, Operator

Thank you. Ladies and gentlemen, this will conclude our question-and-answer portion of the call. I'd like to turn it back over to Adam Grossman now for additional closing remarks.

Adam Grossman, President and Chief Executive Officer (CEO)

Thank you very much. With that, I'd like to thank everyone for dialing in to today's call. Again, donate plasma helps save lives, and we appreciate all the support from the investor community and the team at ADMA Biologics, Inc. Have a great evening.

Operator, Operator

Ladies and gentlemen, this does conclude the conference call for today. We appreciate your participation, and you may now disconnect.