Arcutis Biotherapeutics (ARQT -8.07%), a dermatology-focused pharmaceutical company, reported earnings results on August 6, 2025. Highlights included strong revenue growth and improved earnings, significantly outperforming Wall Street expectations, with GAAP revenue of $81.5 million and GAAP EPS of $0.13, both exceeding analyst estimates. Revenue (GAAP) climbed to $81.5 million, topping analyst forecasts of $73.69 million (GAAP). The company also posted a narrower net loss per share of $(0.13) (GAAP), which came in ahead of estimates by $0.28 (GAAP). This result marks a notable improvement compared to the $(0.42) loss per share (GAAP) in Q2 2024. The quarter demonstrated solid execution in product launches and market expansion, notably for its leading ZORYVE dermatology portfolio.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.13) | $(0.15) | $(0.42) | N/A |
| Revenue (GAAP) | $81.5 million | $73.69 million | $30.9 million | 164.0% |
| Gross Margin | 90.8% | 88.7 % | 2.1 pp | |
| R&D Expense | $19.5 million | $19.3 million | 1.0% | |
| SG&A Expense | $69.2 million | $58.2 million | N/A |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Strategic Focus
Arcutis Biotherapeutics is a biopharmaceutical firm dedicated to creating and commercializing treatments for chronic skin conditions. Its primary product family, ZORYVE, features a range of topical therapies: creams and foam based on the phosphodiesterase-4 (PDE4) inhibitor roflumilast. ZORYVE is approved for multiple indications, including plaque psoriasis, atopic dermatitis, and seborrheic dermatitis. The franchise targets both adult and pediatric markets.
The company’s recent focus has been on expanding the ZORYVE portfolio’s reach, developing new product formulations, and winning regulatory approval for use across more patient groups. Success depends on strong execution in new product launches, strategic partnerships (such as its co-promotion efforts with Kowa in primary care and pediatrics), and a robust pipeline to fuel future growth. Differentiation in a crowded dermatology market remains critical, with ZORYVE positioned as a non-steroidal alternative that aligns with evolving prescribing guidelines.
Quarterly Performance: Key Milestones and Financial Trends
This momentum reflected sustained demand for ZORYVE products and the addition of new approvals. Prescription milestones were notable: the cumulative total surpassed 1 million prescriptions dispensed, indicating strong clinician trust across four approved ZORYVE indications.
The product lineup saw robust uptake. ZORYVE cream 0.3%, intended for plaque psoriasis, contributed $27.7 million, while ZORYVE cream 0.15% for atopic dermatitis added $14.6 million in GAAP product revenue. The newly launched ZORYVE foam 0.3% (scalp and body psoriasis, seborrheic dermatitis) contributed $39.2 million in GAAP product revenue. Quarter-over-quarter, total product revenue increased by 28% (GAAP), driven by expanding insurance reimbursement (now near 80% of prescriptions as of Q1 2025) and broader clinical adoption. The company attributes this to favorable gross-to-net rates, high insurance coverage, and growing recognition in clinical guidelines, such as recent recommendations from the American Academy of Dermatology.
Selling, general, and administrative expenses (GAAP) rose 18.9% year-over-year compared to Q2 2024, mainly due to increased commercialization costs and hiring linked to launches and new indications. Despite this, net loss (GAAP) narrowed sharply to $15.9 million, with loss per share improving to $(0.13) (GAAP) and reflecting leverage from expanding product sales.
The period also brought significant regulatory and pipeline news. ZORYVE foam 0.3% secured FDA approval for scalp and body psoriasis in May 2025, with launch in June, extending the reach of the franchise. The company now awaits a decision in October 2025 for low-concentration ZORYVE cream (0.05%) in children aged 2-5 for atopic dermatitis. Development of ARQ-234, a biologic treatment for atopic dermatitis, moved forward as the investigational new drug application was submitted in July. Meanwhile, the ARQ-255 program for alopecia areata was halted after failing to meet advancement criteria in Phase 1b.
On the intellectual property front, three new patents covering topical roflumilast were granted, strengthening the company’s protection for its lead asset. Market recognition also increased as ZORYVE products became the first prescription therapies to receive the Seal of Recognition from the National Psoriasis Foundation.
Pipelines, Partnerships, and Future Drivers
Leadership continues to pursue broader approvals to reach new patient populations, notably with ZORYVE cream in children as young as two years old, pending regulatory review. The foam formulation’s approval for scalp and body psoriasis expands its clinical utility, addressing areas with high unmet need. Notable efforts are also being placed in clinical trials for ZORYVE in pediatric settings, with a Phase 2 trial initiated for infants as young as three months.
Externally, strategic partnerships remain central to Arcutis’s growth plan. The co-promotion agreement with Kowa Pharmaceuticals supports efforts to grow ZORYVE use in primary care and pediatrics—settings where non-steroidal products have had minimal historical promotion. Global partnerships, like those with Sato in Japan and Huadong in China, extend the ZORYVE franchise internationally, though these contributed minimally in this period. Insurance access continues to climb, with expanded Medicaid coverage and an estimated 80% of all ZORYVE prescriptions now reimbursed as of Q1 2025.
Management acknowledged risk factors including continued losses, a concentrated product portfolio after the discontinuation of ARQ-255, and the nascent state of primary care and pediatric penetration. Financial discipline is a focus: operating cash flow turned marginally positive at $0.3 million. The company ended the period with $191.1 million in cash, cash equivalents, restricted cash, and marketable securities, and long-term debt at $107.05 million, supporting ongoing investments in R&D and commercialization.
There was no dividend declared or adjusted during the quarter. ARQT does not currently pay a dividend. No material one-time events, other than a $10 million milestone payment to AstraZeneca for cumulative ZORYVE sales, affected core operating results.
Looking Ahead: Guidance and Priorities
Confirmed pipeline catalysts include the late-2025 FDA approval decision (PDUFA action date of October 13, 2025) for ZORYVE cream 0.05% in children ages 2 to 5 years old and advancement of ARQ-234 into human trials. SG&A expense levels are expected to stabilize through 2026, with management maintaining confidence in achieving cash breakeven in 2026 as product sales grow and expenses stabilize. No explicit revenue or EPS forecasts were provided for upcoming quarters.
Investors and observers should watch for uptake trends in newly launched products and indications, progress toward pediatric approvals, and the effectiveness of partnerships in expanding into primary care and pediatric practices. Execution in less familiar market channels—beyond dermatology specialists—represents the next test as ZORYVE’s position as a non-steroidal option continues to solidify. Monitoring cash use, operating leverage, and advancements in the pipeline is also critical as the company balances growth with the ongoing challenge of reaching sustainable profitability.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
