Helen Torley, Halozyme's President and Chief Executive Officer, who will provide an update on our business, David Ramsay, our Interim Chief Financial Officer, will review our financial results as well as our outlook. Certain non-GAAP or adjusted financial measures are reconciled with the comparable GAAP financial measures in our earnings press release and slide presentation. The continued strong performance of our currently approved products gives us strong conviction in the 2026-2028 financial guidance. We have clear priorities for capital allocation, reinvesting at compelling returns to create new value and returning value to our shareholders.
The key drivers of revenue in the 2026 to 2028 timeframe are our first 10 ENHANZE launch products, which includes DARZALEX subcutaneous, VYVGART Hytrulo, and PHESGO. Total revenue for the quarter increased 42% year-over-year to $377 million, reflecting the strength of our commercial royalty portfolio. This revenue growth translated into adjusted EBITDA of $230 million and non-GAAP earnings per share of $1.60, representing a greater than 40% increase year-over-year. Based on these results, I am pleased to reaffirm our full year 2026 financial guidance and the 2026 to 2028 financial guidance.
For 2026, we continue to project ENHANZE royalties to exceed $1 billion for the first time, representing 30%-35% growth over 2025. During the 2026 to 2028 timeframe, we project our adjusted EBITDA margin will be greater than 65%, growing to approximately 70%. As you know, our business converts revenue to free cash flow very efficiently, which provides us with the capital to deliver durable, long-term value for our shareholders. During 2026 to 2028, we plan to deploy our capital predominantly in four key areas.
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue | FY2026 | $1.71B-$1.81B (22%-30% YoY growth) (Reiterated) |
| Royalty revenue | FY2026 | $1.13B-$1.17B (30%-35% YoY growth) (Reiterated) |
| Adjusted EBITDA | FY2026 | $1.125B-$1.205B (includes ~$60M Hypercon/SurfBio investment) (Reiterated) |
| Non-GAAP diluted EPS | FY2026 | $7.75-$8.25 (excludes any future share repurchase impact) (Reiterated) |
| ENHANZE royalties | FY2026 | Exceed $1 billion for the first time, 30%-35% growth over 2025 (Reaffirmed) |
| Adjusted EBITDA margin | 2026-2028 | Greater than 65%, growing to approximately 70% (Reaffirmed) |
| Net leverage | End of 2026 | Approximately 1.2x (Projected reduction) |
| Share buyback yield | Multi-year | Approximately 3% annual share buyback yield (New target) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | +42% to $376.7M (from $264.9M) | Broad-based strength across the business including strong royalty growth and higher product sales to partners. |
| Royalty revenue | +43% to $240.7M (from $168.2M) | Continued commercial success of DARZALEX SC, VYVGART Hytrulo, and Phesgo, plus the continued ramp of recently launched OCREVUS, Opdivo, TECENTRIQ, and RYBREVANT. |
| Adjusted EBITDA | +42% to $229.5M (from $162M) | Driven by continued strong royalty growth while still investing in Hypercon and SurfBio. |
| Non-GAAP diluted EPS | Up to $1.60 (from $1.11) | Strong royalty revenue growth and operating leverage of the high-margin royalty model. |
| R&D expenses | Up to $25.6M (from $14.8M) | Integration of the Hypercon and SurfBio acquisitions. |
| SG&A expenses | Up to $57.9M (from $42.4M) | Higher operating costs in the quarter versus the prior year period. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| ENHANZE royalty backlog and durability | — | Only ~25% of projected royalties from the 10 approved products realized by end-2025, with ~66% still to come between 2026 and 2032 and 9% beyond. | Rising |
| Hypercon as the next ENHANZE-like platform | — | Five agreements covering up to 17 targets; first two phase I starts now in 1H2027, launches in 2030-2031, targeting ~$1 billion royalties by mid-2030s. | Rising |
| New collaboration and licensing deal momentum | — | Three new CLAs signed in 2026 meeting the full-year goal, with line of sight to additional agreements this year. | Rising |
| Capital allocation and shareholder returns | — | New $1 billion buyback authorization, at least $400M repurchases in 2026, deleveraging by retiring 2027 and 2028 notes at maturity. | Rising |
| 2029-plus revenue drivers | — | Four drivers: 10 current products, up to 13 new ENHANZE launches, two Hypercon launches, and additional targets under signed and new agreements. | Rising |
| Antibody drug conjugate expansion | — | First ENHANZE ADC collaboration signed with GSK; engaged with several pharma/biotech companies on a product-by-product basis, with nucleic acid discussions also in parallel. | Rising |