Key Points

• Clinical progress accelerated as Phase 3 SELVA enrollment outpaced targets and pipeline expansion plans were outlined for later in 2025.

• Cash balance stood at $70.4 million as of June 30, 2025, funding operations into the second half of 2027, while operating expenses rose sharply compared to the same period in 2024.

• These 10 stocks could mint the next wave of millionaires ›

Palvella Therapeutics (NASDAQ:PVLA), a late-stage biopharmaceutical company focused on rare genetic skin diseases, released second-quarter 2025 earnings results on August 14, 2025. No revenue was recorded (GAAP), consistent with its pre-commercial status, and operating expenses increased sharply compared to the prior year. The quarter marked significant clinical progress, with faster-than-anticipated enrollment in key trials and steps taken to expand the QTORIN™ platform. Overall, the period demonstrated measurable momentum in development but highlighted ongoing cash requirements and execution risks typical of early-stage biotechs.

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview and Recent Focus

Palvella Therapeutics is dedicated to developing therapies for serious, rare genetic skin diseases where existing treatment options are limited or non-existent. Its lead drug candidate is QTORIN™ rapamycin, an investigational treatment formulated using a unique gel to deliver medications to deep layers of the skin.

The company’s recent focus has been on scaling its clinical program for QTORIN™ rapamycin, with late-stage trials in microcystic lymphatic malformations (LMs) and ongoing studies in cutaneous venous malformations (VMs). Key success factors include successful completion of Phase 3 and Phase 2 trials, protecting intellectual property for their platform, and preparing for potential future commercialization by strengthening its management team and building a commercial infrastructure ahead of product approvals.

Quarter in Detail: Key Developments and Metrics

The company completed enrollment for the SELVA Phase 3 trial in microcystic LMs, exceeding the target by enrolling 51 subjects—over 25% more than the originally planned 40. This sets up the company for top-line results in the first quarter of 2026. The study received an Orphan Products Grant from the U.S. Food and Drug Administration (FDA), potentially supporting funding up to $2.6 million. In parallel, the TOIVA Phase 2 study for cutaneous VMs continues to enroll, with about 15 targeted participants and initial results expected in the last quarter of 2025. Both conditions currently lack FDA-approved therapies, pointing to a significant unmet medical need.

Research and development expenses (GAAP) increased to $5.1 million, up from $1.4 million for the same period in 2024. The growth came primarily from ramped up spending on the Phase 3 SELVA and Phase 2 TOIVA clinical trials, both launched in late 2024. General and administrative expenses also rose, reaching $4.1 million (GAAP), reflecting expanding company operations, headcount additions, and incremental public company costs.

During the quarter, Palvella took concrete steps to expand its development pipeline. It expects to announce a third clinical development indication for QTORIN™ rapamycin and to bring forward a second candidate from the QTORIN™ platform before the end of 2025. The platform itself is designed to accommodate a broad range of drugs for delivery into deep skin layers, potentially enabling future treatments for a wider array of rare genetic skin diseases. Two new U.S. patents were also issued, extending QTORIN™ rapamycin intellectual property into at least 2038.

On the commercialization front, the company appointed Ashley Kline as Chief Commercial Officer. Kline brings previous launch experience, including with Oxervate®, a topical eye therapy for neurotrophic keratitis. The period also saw Palvella added to the Russell 3000® and Russell 2000® indexes, improving its visibility among institutional investors.

Looking Ahead: Guidance, Risks, and What to Watch

Management reiterated that the company’s cash and cash equivalents, which stood at $70.4 million (GAAP) as of June 30, 2025, are expected to fund operating activities into the second half of 2027. No formal financial guidance or projections were provided for future revenues or profits. The next key milestones will be the Phase 2 TOIVA results in late 2025 and Phase 3 SELVA results in early 2026, as well as announcements related to expanding the QTORIN™ platform and pipeline.

Investors and observers should continue to monitor Palvella's progress on its clinical and regulatory milestones, the pace of cash deployment as operating expenses rise, and updates on intellectual property or competitive positioning in rare skin disease treatments. As is typical for companies at this stage, future success relies on positive clinical trial outcomes and subsequent regulatory approvals, as the company has yet to generate product revenue.

PVLA does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Ibotta(NYSE:IBTA) reported second quarter 2025 earnings on August 13, 2025, with revenue of $86 million, a 2% year-over-year decline, and adjusted EBITDA of $17.9 million. Management cited a 48% shortfall at the midpoint of prior guidance and issued third quarter guidance below expectations due to ongoing business model transformation. This summary highlights key executional setbacks, transformation progress, and evolving client engagement, with a focus on long-term investor implications. (Note: All quarters refer to fiscal periods ending June 30, 2025, unless otherwise specified.)

Transformation drives Ibotta revenue volatility

Revenue for the quarter fell below the prior guidance range, and management now forecasts a 17% year-over-year revenue decline at the midpoint for the third quarter. The primary driver was the failure to reactivate two initial pilot partners for the new Cost Per Incremental Dollar (CPID) performance marketing model, with neither expected to participate in the upcoming quarter. Additionally, a reorganization of the enterprise sales team created further near-term disruption, impacting continuity across top accounts.

"We reported revenue (GAAP) below the guidance range we provided on our first quarter earnings call, while adjusted EBITDA was in the lower half of the range. We are also guiding to third quarter results that are significantly below our prior expectations. These disappointing results can be explained by short-term headwinds, but I think it's important to first pan back and provide context on the broader transformation we are undertaking."
-- Bryan Leach, CEO

This combination of a significant revenue miss and weak forward guidance amplifies transition risk, increasing earnings volatility for shareholders and extending the timeline for sustainable growth reacceleration.

CPID validation boosts Ibotta credibility

Ibotta recently secured third-party validation for its CPID digital promotions model, with campaign results exceeding the company’s own conservative internal metrics. Despite positive feedback from consumer packaged goods (CPG) clients, management noted that pilot-to-scale rollouts remain unpredictable, with a typical adoption cycle of 9-12 months at major clients based on recent experience.

"I'm happy to report that recently we've received third-party validation from a leading media measurement company. Their study shows that our campaign results are better than the data we reported using our own more conservative methodology. Based on these initial results, we are in active dialogue with our client about resuming and expanding their programming on the Ibotta performance network."
-- Bryan Leach, CEO

While third-party measured sales lift increases Ibotta’s credibility among advertisers, slow enterprise adoption and lengthy client decision cycles limit the near-term financial impact of this innovation and hinder reliable forecasting.

Ibotta publisher channel offsets DTC weakness

The publisher channel, led by Walmart and DoorDash, drove 17% year-over-year growth in third-party publisher redemption revenue to $48.6 million, even as direct-to-consumer (DTC) redemption revenue declined 24% year over year. Enhanced collaboration with Walmart included digital manufacturer offer integration at self-checkout, phone-number identification, and expanded in-store and online promotions, signaling growing publisher-side momentum.

"We've picked up steam and gained momentum in terms of the tightness of our collaboration and these efforts they're making to increase awareness and decrease friction in terms of using the programs that feature our digital manufacturer offers. With Walmart, for example, we've been collaborating ever more closely across the board, ranging from how they communicate with their customers at every touchpoint, you know, digitally and in the store. Beyond just search results. You'll now see that there are certain display ads that have a reference to a relevant digital manufacturer offer that wasn't true before. They're badging other forms of digital media with something that indicates that a digital manufacturer offer."
-- Bryan Leach, CEO

Expanding integration with leading retailers enhances Ibotta’s network effects and shopper reach, potentially offsetting DTC channel headwinds and creating a foundation for long-term scale advantage.

Looking Ahead

Management provided third quarter revenue guidance of $79 million to $84 million (midpoint: $81.5 million), representing a 17% year-over-year decline, and adjusted EBITDA guidance of $9.5 million to $13.5 million (midpoint margin: 14%), implying a sequential margin decrease. No specific timeline or quantified targets were given for CPID adoption, scaled client rollouts, or overall revenue reacceleration. Management expects near-term operating expenses to rise due to sales investments and lower full-year performance, with de minimis cash taxes anticipated for the remainder of the year.

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Key Points

• GAAP EPS loss of $0.41 in Q2 2025 beat analyst expectations for a larger loss of $0.48 per share.

• R&D expenses (GAAP) rose 19% to $23.4 million in Q2 2025 compared to Q2 2024, primarily due to higher consulting, personnel, and clinical costs related to BLA and confirmatory study activities.

• Cash and securities at the end of Q2 2025 totaled $138.5 million, with pro forma cash of $203.6 million following a mid-July capital raise.

• These 10 stocks could mint the next wave of millionaires ›

Larimar Therapeutics (NASDAQ:LRMR), a clinical-stage biotechnology firm focused on treatments for rare diseases such as Friedreich’s ataxia, reported its second quarter results on August 14, 2025. The key news was a net loss per share (GAAP) of $0.41 in Q2 2025, which was smaller than the expected $0.48 loss forecast by analysts. While the company reported no revenue, expenses grew due to accelerated clinical trial activities for its lead drug candidate. Management affirmed that all critical clinical and regulatory milestones remain on schedule, with a backlog of cash reserves bolstered by a recent public offering. Overall, it was a quarter marked by steady progress in drug development and strategic capital deployment.

Source: Analyst estimates for the quarter provided by FactSet.

What Larimar Therapeutics Does and Where It’s Focused

Larimar Therapeutics develops treatments for serious rare diseases, with its primary drug candidate being nomlabofusp for Friedreich’s ataxia. This is a genetic disorder that causes nervous system damage and movement problems. Nomlabofusp is designed to increase frataxin (FXN) protein levels in cells—a key deficiency in people with the disease. The drug uses the company's Cell Penetrating Peptide (CPP) platform to deliver treatment inside patient cells, which is uncommon among existing therapies.

Recently, the company's focus has been on completing key clinical studies and preparing for a global Phase 3 trial for nomlabofusp. It is also scaling its research and development spend to not only advance clinical programs but to carry out the work required for a planned biologics license application (BLA) submission. Success for the company depends on delivering positive clinical trial results, achieving regulatory approvals, and managing cash efficiently as it remains a clinical-stage company with no current product revenue.

Quarter in Review: Clinical Activity and Financial Highlights

During the quarter, the company took significant steps forward in clinical research. Enrollment has expanded for nomlabofusp studies, now including children as young as two years old. In May, it began transitioning to a freeze-dried (lyophilized) formulation, which is the commercial-ready version. Importantly, the company expects to present initial data from a higher-dose open label study and an adolescent pharmacokinetic study in September 2025, marking two meaningful milestones for the program.

Research and development expenses increased 19% to $23.4 million in Q2 2025, compared to $19.7 million in Q2 2024. This increase was driven by higher spending on consulting, increased personnel costs, and greater activity related to upcoming confirmatory studies needed for the BLA submission. General and administrative costs (GAAP) decreased about 10% to $4.4 million in Q2 2025, compared to $4.9 million in Q2 2024, aided by lower noncash stock compensation and professional services fees.

Larimar received written guidance from the U.S. Food and Drug Administration (FDA) during the period. The FDA is open to considering skin frataxin protein concentrations as a surrogate marker for expedited approval, with final acceptability to be determined upon review of future data. The regulator also specified the required safety database, including the number of participants and exposure to the 50 mg dose. This regulatory detail provides clarity as the company prepares to file for accelerated approval in the second quarter of 2026. Additionally, the company published two new scientific papers in July 2025 supporting its approach; these publications play an important role in building regulatory and scientific consensus.

Capital resources remain a key part of the company’s strategy. Cash, cash equivalents, and marketable securities totaled $138.5 million as of June 30, 2025. Following its July 2025 public offering, pro forma cash, cash equivalents, and marketable securities stood at $203.6 million as of June 30, 2025, which the company states is sufficient to fund operations into the fourth quarter of 2026, based on pro forma cash, cash equivalents, and marketable securities as of June 30, 2025. There is no revenue, so all operational costs are covered by current reserves and periodic capital raises. The firm’s balance sheet reflects no long-term debt.

What to Watch Heading Into 2026

Looking forward, management affirmed that it remains on track to file its BLA with the FDA in the second quarter of 2026. It maintained expectations that planned studies and milestones, including the first readout from the higher-dose nomlabofusp open label study in September 2025, will occur as scheduled. Specific financial guidance on either full-year spending or earnings was not provided. The company did, however, reiterate its projected cash runway into late 2026, citing the extra funds from its July capital raise as a source of operational flexibility.

Investors and stakeholders will be watching for updates as the company moves into the critical Phase 3 clinical phase and pushes forward with regulatory engagement. Key areas to monitor include the timing of patient recruitment for the Phase 3 trial, results from both the open label and adolescent studies, and clarity on any additional requirements from regulatory authorities. As a clinical-stage biotech, the company continues to report no revenue and increased spending in Q2 2025, so successful progress in clinical and regulatory roadmaps remains central to future updates and funding needs.

LRMR does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• GAAP revenue for Q2 2025 exceeded estimates at $0.719 million

• GAAP net loss nearly halved year over year, declining from $57.3 million to $27.7 million, but GAAP EPS of ($0.14) missed the ($0.12) consensus estimate.

• supporting operations through the second half of 2027

• These 10 stocks could mint the next wave of millionaires ›

Atai Life Sciences (NASDAQ:ATAI), a biotechnology company developing novel treatments for mental health conditions, reported its results for the second quarter of fiscal 2025 on August 14, 2025. The most notable news from this release was that GAAP revenue reached $0.72 million, beating expectations, and Cash, cash equivalents, and short-term securities totaled $95.9 million as of quarter end. However, the company posted a net loss, with GAAP EPS of ($0.14), short of the ($0.12) loss analysts predicted. Overall, the period showed notable progress in clinical trials, continued operating losses, and a strengthened balance sheet.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Key Success Factors

Atai Life Sciences is focused on developing new drug treatments for mental health disorders that do not respond well to existing therapies. Its lead programs target conditions like treatment-resistant depression (TRD), social anxiety disorder (SAD), and cognitive impairment linked to schizophrenia. These disorders represent large unmet medical needs, as many patients find current therapies ineffective. The company aims to address this gap with a pipeline of both psychedelic and non-psychedelic compounds.

It seeks to reduce risk by keeping a diversified pipeline. In recent quarters, Atai has placed particular emphasis on advancing lasting solutions for TRD and SAD. Essential factors for its progress include successful clinical trial outcomes, intellectual property protection for its drug candidates, and building strong partnerships or acquisitions--such as with Beckley Psytech. Maintaining a strong cash position is also critical to fund ongoing research and development.

Quarter Highlights: Clinical Progress, Expenses, and Capital

The period saw Atai report GAAP revenue ahead of expectations, at $0.719 million but remains low, as the company is not yet commercial-stage. Research and development (R&D) expenses (GAAP) fell to $11.1 million, down nearly 12% from the year-before period, primarily due to decreases in personnel-related expenses and consulting services, partially offset by higher contract research organization costs associated with clinical programs. However, spending on contract research for clinical programs did rise.

In contrast, general and administrative (G&A) expenses were $14.9 million, compared to $13.4 million in the same prior-year period. This increase was mainly due to legal and professional fees related to the planned combination with Beckley Psytech and the company’s move of its corporate domicile to the U.S. during the quarter. Total operating expenses (GAAP) remained flat compared to Q2 2024, as savings in one area balanced out growth in another.

Net loss (GAAP) improved markedly, shrinking from $(57.3) million in Q2 2024 to $(27.7) million. However, GAAP EPS of ($0.14) was still slightly below analyst expectations. These losses reflect Atai’s position as a clinical-stage biotech, where ongoing spending supports drug development prior to any commercial product launches.

On the pipeline side, the company’s lead program is BPL-003, an intranasal psychedelic treatment (mebufotenin) for TRD, being advanced with Beckley Psytech. Recent clinical data showed positive primary and secondary study endpoints, with a single dose producing rapid and durable effects for up to eight weeks in the core phase of the Phase 2b clinical trial, and a strong safety profile. These results support moving BPL-003 to a Phase 3 trial, pending regulatory discussions. However, the VLS-01 program (an oral DMT film for TRD) experienced trial delays.

Atai also recorded ongoing progress for EMP-01, an oral R-MDMA formulation targeting SAD, with Phase 2 data expected in early 2026. Earlier-stage research includes 5-HT2A receptor agonists, which are non-hallucinogenic drug candidates under investigation for depression. The program for inidascamine (focused on cognitive impairment associated with schizophrenia, or CIAS) did not meet its main clinical endpoint, which led to resources being shifted away from this effort.

A major corporate development was the strategic combination planned with Beckley Psytech, which, if completed, will add advanced-stage assets and strengthen Atai’s position in its field. The company also fully repaid its outstanding loan with Hercules on May 2, 2025, saving approximately $2.1 million in future interest. Management noted that its cash, cash equivalents, short-term securities, public equity holdings, and digital assets are now expected to fund operations for the combined company into the second half of 2027, especially after recent capital raises that brought in nearly $140 million this year. This improved liquidity increases flexibility, with cash, cash equivalents, and short-term securities totaling $95.9 million as of June 30, 2025.

Looking Ahead: Outlook and Trends

Looking ahead, management projects that current and committed financial resources—including cash, cash equivalents, short-term securities, public equity holdings, and digital assets—will be sufficient to fund operations into the second half of 2027. There was no explicit forward-looking revenue or profit guidance provided for the next quarter or for fiscal 2025.

Investors will be watching for progress on the BPL-003 program, including new data from clinical studies in the coming quarters, as well as developments in the Beckley Psytech merger. Other key areas to monitor include how the company continues to manage its balance sheet as it moves toward possible commercialization. ATAI does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Image source: Getty Images

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Key Points

• Shares of the package delivery giant have slipped about 30% on the year.

• Q2 revenue and net income slid, and tariffs appear to be taking a toll.

• With a P/E of 13 and a 7.5% yield, UPS is a value play for long-term investors.

• 10 stocks we like better than United Parcel Service ›

United Parcel Service (NYSE: UPS) is back in the bargain bit. As of this writing, shares of the package shipping company trade under $90, a level they haven't seen since before the COVID-fueled e-commerce surge that made it a household essential. Back then, it was a lifeline for locked-down lifestyles. But now? It's a delivery company that's trying to find its next growth lane.

And yet UPS's fundamentals aren't exactly broken. In fact, the company is growing more efficient. Plus, let's be real: With a dividend yield hovering around 7.5%, even the most cautious investor has to ask if this a rare value play or a trap wrapped in brown paper?

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Let's take a closer look and see if UPS is a buy right now.

A business in limbo

Let's start with the rough part: the second quarter. It wasn't a disaster, but it wasn't the kind that gets investors fired up either. Revenue slipped for the fourth time in five quarters, landing at $21.2 billion, down nearly 3% from last year. Profits fell faster than sales, with earnings per share coming in light and net income sliding almost 9%.

Volume trends told about the same story. The repeal of the de minimis exemption -- which once let low-value imports from China pass through without duties -- has hurt the China-to-U.S. express lanes, one of UPS's highest-margin routes. Those shipments are down about 35% year over year, which not only hurts sales but can also leave expensive aircraft with underutilized space.

Zooming out a bit, it's clear that the competitive landscape isn't helping either. Both Amazon and Walmart are eating market share with in-house delivery networks. Regional couriers are also becoming both faster and cheaper. The total addressable market is growing -- parcel volumes reached about $24 billion in 2024, an increase of 4% -- but UPS's slice is shrinking.

These aren't numbers any UPS investors wants to hear. And yet they don't tell the full story.

Image source: Getty Images.

UPS's business is getting leaner

Here's the thing: UPS knows it needs to change. And it's already making cuts to strengthen its balance sheet. The company has already announced plans to eliminate 20,000 jobs, close 73 facilities, and refocus on higher-margin segments of its business per its "Efficiency Reimagined" plan. Earlier this year, the company made the crucial decision to pull back from Amazon, a high-volume client but with thin margins on per-package deliveries.

True, high tariffs are likely going to test whatever margin gains UPS can eke out. But the company is shifting gears. Its China-to-rest-of-world shipments, for example, climbed more than 22.4% last quarter, while India-to-Europe nearly doubled. It's not a full offset (and management isn't pretending that is it). But its a strategic pivot that helps profit move in the right direction when a core lane goes cold.

Healthcare logistics is another bright spot. It's the kind of business that doesn't rise and fall with holiday shopping or the latest import policy. Demand for shipping pharmaceuticals, vaccines, and other medical products is steady, often super urgent, and almost always high margin. The company's $1.6 billion agreement to acquire Andlauer Healthcare Group earlier this year is a clear signal that UPS sees this lane as a potential growth engine.

Patience required (dividends included)

UPS isn't likely going to stage a dramatic rebound anytime soon. Tariff headwinds mixed with low consumer confidence and a lack of guidance is a recipe for caution, and investors shouldn't overlook those problems because their eyes are fixed on that juicy dividend.

At the same time, UPS looks severely undervalued. It currently trades at roughly 13 times trailing earnings, which is below its historical average. That pricing bakes in a lot of near-term uncertainty as well as leaves room for upside if margins stabilize. For long-term investors, buying a global logistics leader at this kind of multiple, with this kind of yield, is the sort of math that can work out over a patient horizon.

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Steven Porrello has positions in Amazon and United Parcel Service. The Motley Fool has positions in and recommends Amazon, United Parcel Service, and Walmart. The Motley Fool has a disclosure policy.

Hyperfine reported second quarter 2025 results on Aug. 13, highlighting $2.7 million in revenue for the first half of the year, a 26% sequential increase, and the sale of eight systems in the second quarter. Hyperfine(NASDAQ:HYPR) achieved an 800 basis point sequential gross margin expansion to 49.3% and reduced cash burn by 19% quarter over quarter, excluding financing. The company reached key milestones, including FDA clearance and the first commercial sales of its next-generation portable MR subsystem and Optive AI software, while reiterating full-year revenue growth guidance of 10% to 20% over 2024 and projecting accelerated sales in the second half of the year. These updates demonstrate accelerated adoption, expanded product capabilities, and improving financial efficiency, providing several strategic insights for long-term investors.

FDA clearances accelerate Hyperfine’s next-gen pipeline

Hyperfine received two major FDA clearances in May, executing ahead of its plan to introduce one new product every half year. Within ten weeks of clearance, the company sold its first two next-generation systems, expanded manufacturing, and began building inventory to meet commercial demand. The next-generation subsystem, powered by Optive AI software, demonstrated transformative image quality and was launched in both hospital and office settings.

"First, we received FDA clearance for two major new technologies. We have discussed our plan to bring one new product to market every half year, and with these two clearances in May, we are executing well ahead of schedule. Second, we completed our office pilot program. In the U.S., we now have launched our new next-generation subsystem powered by Optive AI software with transformative image quality and additional user and patient-friendly features. Optive AI software was also cleared as a standalone software and we have now begun rolling it out to our installed base of systems, bringing significantly improved image quality to our users. Our AI technology is among the leading AI-enabled health products cleared by the FDA. The market response to the next generation and the Optive AI software has been immensely positive thus far."
-- Maria Sainz, President and Chief Executive Officer

The rapid regulatory progress and swift commercialization underscore Hyperfine’s execution capabilities and first-mover advantage in portable AI-powered MR imaging, expanding its addressable market and strengthening its competitive position in a $6 billion imaging segment.

Margin and cash efficiency improve as Hyperfine scales

Gross margin increased 800 basis points quarter over quarter to 49.3%, driven by a higher average selling price from the next-generation subsystem, increased sales volumes, and prior MSRP increases. Net cash burn, excluding financing, declined 19% sequentially to $8.1 million, while research and development and SG&A expenses also decreased, reflecting benefits from organizational restructuring and a shift toward commercial scaling.

"Gross profit for 2025 was $1.3 million, and gross margin for 2025 was 49.3%, representing an 800 basis point increase sequentially driven by the increased number of units sold and increase in average selling price. We continue to drive healthy margins for our stage, and we believe we are well-positioned for meaningful margin expansion at scale. R&D expenses for 2025 were $4.5 million, a sequential quarterly decrease from $5 million in Q1 2025. We are realizing the benefits of the reorganization completed in the first quarter, as we transition to a commercial growth stage organization. Sales, general, and administrative expenses for 2025 were $6.4 million, a sequential quarterly decrease from $6.7 million in Q1 2025. Net loss for 2025 was $9.2 million, equating to a net loss of $0.12 per share as compared to a net loss of $9.4 million or a net loss of $0.12 per share the prior sequential quarter. Our net cash burn, including financing in 2025, was $7.7 million. As of June 30, 2025, we have $25.4 million in cash and cash equivalents on our balance sheet. For 2025, our net cash burn excluding financing was $8.1 million, down 19% sequentially from the prior quarter."
-- Brett Hale, Chief Administrative Officer and CFO

Management’s ability to expand margins and reduce operating expenses during product launches and channel expansion enhances sustainability, supporting a cash runway into 2026 and margin upside as volumes scale.

Strong demand and diversified pipeline drive revenue acceleration

Guidance indicates that the sequential revenue increase from the second to the third quarter is expected to be at least 50% higher than the increase from the first to the second quarter, supported by multiple launches across hospitals, office settings, and expanded international channels. The MSRP of the next-generation hardware is $550,000, representing a 15% premium over prior systems, and funnel management is now stratified by geography and channel.

"So we posted about $560,000 increase in Q1 to Q2, and we would see it being at least 50% higher going into Q3 versus from Q2 to Q3. Maria Sainz: And then maybe I can comment off sort of our confidence. I think as we think about the inflection point that we have crossed, we really now have different layers that are all incremental revenue contributors. So the U.S. hospital business with the new technology is going to accelerate. You add to that moving from pilot phase to full launch phase in the office business in the U.S., that is another layer. The third layer is the continued expansion into international markets. We did message that we still expect India approval by the end of the year. And all of that is now fueled by what is really a remarkably improved product, whether we're talking about the first generation of the product, the latest software, which is Optive AI, or the brand new system that also has Optive AI. That is getting market traction, which market activation which really we were confident we were going to see, but sort of ten weeks into it, we are seeing."
-- Maria Sainz, President and Chief Executive Officer

The combination of higher average selling prices, a diversified channel strategy, and rapid go-to-market execution positions Hyperfine for a step-change in quarterly sales velocity in the third and fourth quarters, establishing multiple engines for long-term growth and reducing revenue concentration risk.

Looking Ahead

For the full year, management guided to 10% to 20% revenue growth over 2024 on a GAAP basis, with gross margin expected between 47% and 50%, and total annual cash burn anticipated at $27 million to $29 million (a 27% year-over-year decrease at the midpoint). The third quarter sequential revenue increase is expected to be at least 50% higher than the $560,000 improvement from the first to the second quarter. Key strategic milestones include European and Indian regulatory approvals by the end of 2025, commercial availability of next-generation hardware internationally in 2026, and publication of major office study results in early 2026.

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Key Points

• GAAP EPS loss of $0.468 in Q2 2025 matched estimates and

• No revenue was reported, a decrease compared to the second quarter of 2024, a decrease from $1.143 million in GAAP collaboration revenue in the prior-year period and in line with expectations.

• Research and development expenses declined 14.4% compared to the prior-year period, and cash runway extends into the fourth quarter of 2026.

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Werewolf Therapeutics (NASDAQ:HOWL), an early-stage biotechnology company dedicated to innovative cancer immunotherapies, reported its second quarter 2025 results on August 14, 2025. The main story this period: it continues to invest heavily in research while awaiting critical clinical milestones, with GAAP EPS loss was $0.40 and no revenue, mirroring consensus forecasts. While commercial activity was muted, Research and development and general and administrative expenses declined compared to the same period in 2024, along with setting the tone for the remainder of fiscal 2025. Net loss (GAAP) was $18.0 million, compared to $17.2 million for the same period in 2024. The quarter showed stable execution, but all eyes are on late 2025 clinical and regulatory events.

Source: Analyst estimates for the quarter provided by FactSet.

About Werewolf Therapeutics and Its Focus

Werewolf Therapeutics is a biopharmaceutical company specializing in cancer immunotherapy. It is focused on creating conditionally activated biology, using a proprietary PREDATOR platform to craft treatments that target tumors while sparing healthy tissue. The company is primarily engaged in the development of next-generation cytokine therapies and T-cell engaging drugs designed for improved safety and effectiveness.

The business remains in its clinical development stage, meaning it does not yet market approved drugs or generate commercial revenue. Success depends on clinical trial results, regulatory interactions, careful management of research and administrative spending, and the ability to secure strategic partnerships during this long research period. It is currently pushing two lead assets—WTX-124 and WTX-330—forward in clinical trials, while newer molecules such as WTX-1011 provide future growth opportunities.

Quarter in Review: Pipeline Progress, Spending, and Operations

The most visible development was the continued clinical advancement of WTX-124 and WTX-330. WTX-124 is an IL-2 INDUKINE molecule—this means it is a modified cytokine drug designed to enhance immune system attack specifically within the tumor microenvironment, tested in several types of solid tumors. Settling on a recommended 18 mg intravenous dose every two weeks, it remains on track for a critical interim clinical data release in the fourth quarter of 2025. This update will focus on key clinical endpoints like patient tolerability, response rates, and how long responses last, particularly in melanoma and kidney cancer patients. Werewolf plans regulatory discussions with the United States Food and Drug Administration (FDA) later in 2025 for potential registration studies, a pivotal step toward eventual commercialization.

WTX-330, an IL-12 INDUKINE molecule also engineered for targeted immune stimulation, is enrolling in an early-stage (Phase 1b/2) trial. Management expects to set the dosing strategy by the end of 2025. No new clinical data from these programs were released this quarter, and financial plans for moving either drug into later-phase trials remain dependent on the strength of forthcoming results and regulatory feedback.

New platform innovation was reported in preclinical programs, especially WTX-1011. This product is an anti-STEAP1 T-cell engager for prostate cancer, aiming to drive immune system T cells directly against tumor cells using the company’s INDUCER technology. Data showed WTX-1011 achieves low systemic activity, potentially reducing side effects—less than 0.7% of active agent is detectable in circulation—and limits unwanted immune signaling outside tumors. The next pipeline milestone is expected in the second half of the year, with the nomination of an additional INDUCER candidate.

From a financial view, Research and development spending dropped 14.4% to $13.1 million (GAAP) compared to the same period in 2024. General and administrative costs fell modestly as well. The company ended the quarter with a $77.6 million cash position, down from $92.0 million as of March 31, 2025, while stating this cash should last into the fourth quarter of 2026. Werewolf reported no new partnership or collaboration revenue, and the prior-year period's $1.1 million in collaboration revenue was not repeated. The strategic focus now includes seeking additional partners, especially for early-stage pipeline assets that are available for out-licensing.

Looking Ahead: Financial Guidance and Investor Focus Points

Management reiterated that cash and cash equivalents as of June 30, 2025, should finance the business through the fourth quarter of 2026, assuming spending rates remain steady and no unexpected major costs arise. No specific forecasts for revenue, product approvals, or profitability were provided, which is typical at this research phase. Investors should watch for the critical interim results from WTX-124 in late 2025 and the planned FDA meetings as major upcoming events.

HOWL does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Accuray reported fourth-quarter fiscal 2025 results on August 13, 2025, with $128 million in revenue (down 5% year-over-year), service revenue of $56.9 million (up 4% year-over-year), and adjusted EBITDA of $9.4 million. Management completed a comprehensive debt refinancing in June, highlighted solid order momentum (book-to-bill 1.2), and issued guidance of $471 million to $485 million in revenue for fiscal year 2026 (ending June 30, 2026) and $31 million to $35 million in adjusted EBITDA for fiscal year 2026. The call focused on margin drivers, global supply chain shocks, and strategic product expansion in growth markets.

Debt refinancing boosts Accuray's flexibility

During the quarter, Accuray(NASDAQ:ARAY) exchanged approximately $82 million of 3.75% convertible notes due in 2026 for about 8.9 million shares and $68.6 million in cash, and entered a $190 million credit agreement with TCW, including a $150 million five-year term loan, $20 million delayed draw term loan, and $20 million revolver. This refinancing ended the company’s relationship with Silicon Valley Bank and resulted in a liquidity position of $62 million at quarter end.

"This refinancing extends our debt maturity by five years and adds meaningful liquidity to support high-return initiatives. Importantly, it consolidates our capital structure under a single counterparty, allowing us to focus on execution with greater clarity and confidence. We view this transaction as a critical milestone that enhances our ability to invest in innovation, drive margin improvement, and deliver long-term value to our shareholders."
-- Ali Pervaiz, Chief Financial Officer

The new capital structure eliminates near-term refinancing risk and provides the flexibility to invest in growth, research and development, and process efficiency over the next several years.

International growth drives Accuray's revenue mix

International markets accounted for 80% of total revenue for fiscal year 2025 (ending June 30, 2025), with product revenue up 20% year-over-year in China and more than 200% in the rest of Asia Pacific, even as EIMEA (Europe, India, Middle East, Africa) saw a 32% year-over-year decline and Japan revenue fell 19%. The Americas delivered 24% year-over-year revenue growth in the fourth quarter, while Asia Pacific grew 22% in the same period, despite tariffs and geopolitical unrest causing a 14% decline in China and a 34% contraction in EIMEA for the quarter.

"Growth in the emerging markets where we have introduced new products like the Helix and TomoC in China are seeing strong demand. These are among the highest growth markets in the world, which we are actively targeting and are an integral part of our growth plan in the next few years."
-- Suzanne Winter, President & Chief Executive Officer

Momentum in emerging and Asia Pacific markets positions the company for continued topline growth, while diversification reduces dependence on volatile developed market replacement cycles.

Service margin expansion signals operational leverage

Service gross margins improved by nine points, driven by lower parts consumption and successful price initiatives, alongside a service revenue increase of 4% year-over-year to $56.9 million. The installed base outside the U.S. grew, and service contract capture rates post-warranty improved across nearly all geographies for fiscal year 2025, with contract revenue now comprising 90% of total service revenue.

"I was encouraged to see service margins up nicely both year over year and sequentially. This will be a continued area of focus for us in the future, and we believe that we have laid out the foundation, including strategic pricing, development of high-value support and education offerings, and finally, driving efficiencies in our cost to service."
-- Suzanne Winter, President & Chief Executive Officer

Growth in the service business enhances earnings resilience, creates recurring revenue streams, and offers a pathway to sustainable margin expansion as the global installed base rises.

Looking Ahead

Management guided revenue to $471 million to $485 million for fiscal year 2026 (ending June 30, 2026) and adjusted EBITDA to $31 million to $35 million for fiscal year 2026, with 45% of revenue and 30% of EBITDA expected in the first half of the year. Back-end loaded contributions are expected from a growing installed base and new launches (Helix, TomoSeq, adaptive radiotherapy). Guidance assumes progress on foreign trade zone establishment and continued tariff mitigation, but acknowledges persistent macro and geopolitical risks.

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Key Points

• GAAP net loss per share was $0.41, outperforming the estimated $0.44 loss.

• Cash and investments totaled $77.3 million as of Q2 2025, with the company expecting this to fund operations into the second quarter of 2026.

• GAAP research and development expenses dropped 12.5% compared to the prior year period, as the business narrowed focus to its oral SMARCA2 degrader program.

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Prelude Therapeutics (NASDAQ:PRLD), a clinical-stage precision oncology company concentrating on novel cancer therapies, released its second quarter 2025 earnings on August 14, 2025. The headline news was a GAAP net loss per share of $0.41. The company reported no revenue, in line with expectations. The quarter highlighted a large drop in operating expenses and a narrowed development focus, with management emphasizing a tighter cash runway and resource discipline as it advances its clinical pipeline. The period was characterized by a modestly improved loss, careful cost management, and a shrinking cash balance—supporting operations into the next year but underlining ongoing financial risk.

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview and Strategic Focus

Pursuing new approaches in cancer drug development, Prelude Therapeutics is focused on discovering and developing new targeted therapies known as small molecule inhibitors and targeted protein degraders. These treatments are designed to address hard-to-treat cancers by targeting specific genetic drivers of disease. Most of its work takes place at the early and mid-clinical trial stage, meaning products are still years from reaching the market if successful.

The company's most important success factors are rapid advancement of its pipeline—mainly the oral SMARCA2 degrader program—developing more selective next-generation cancer drugs, and managing its cash reserves until new funding or partnerships are secured. Over the past year, the company concentrated its resources on fewer programs, trimmed operating costs, and prioritized drug candidates with the strongest clinical promise and commercial potential.

Quarter in Review: Progress, Costs, and Focus

During Q2 2025, Prelude Therapeutics significantly reduced its GAAP research and development costs from $29.5 million in the prior year quarter to $25.8 million, a decrease of 12.6%. General and administrative expenses also fell 16.9% to $6.4 million compared to the prior year period, driven by lower stock-based compensation. These changes led to a narrowing of the company's GAAP net loss to $31.2 million—down from $34.7 million in Q2 2024.

The decision to pause further development of its intravenous SMARCA2 degrader, PRT3789, was the main strategic shift in the period. Management chose instead to focus resources on its oral SMARCA2 degrader, PRT7732. In clinical-stage biotech, oral delivery is typically more patient-friendly and attractive for future commercialization. The company is now enrolling a seventh dose cohort of PRT7732, with first-in-human safety and activity data expected by the end of 2025.

Beyond SMARCA2, the company advanced preclinical programs including its KAT6A protein degrader and antibody-drug conjugate (ADC) efforts. KAT6A is a novel, orally available targeted protein degrader, with planned submission to begin human trials (an IND, or Investigational New Drug filing) in the first half of 2026. ADCs are a class of cancer drugs that link a cancer-targeting antibody to a toxin. Prelude is developing mCALR-targeted precision ADCs for myeloproliferative neoplasms, which are disorders involving abnormal marrow cell growth.

Other milestones included continued collaboration with AbCellera Biologics (a company specializing in antibody discovery), but no new partnership deals or sources of non-dilutive funding were announced. Management stated it expects existing cash, cash equivalents, and marketable securities to be sufficient to fund operations into the second quarter of 2026. The shrinking cash balance, down 44.7% as of June 30, 2025, compared to June 30, 2024, underscores the need for future funding or partnerships.

Looking Ahead: Capital, Milestones, and Risks

Management did not provide specific financial guidance for the coming quarter or fiscal year. Instead, it reiterated that its current cash resources will last into the second quarter of 2026, giving the company roughly twelve months of operating runway. The key upcoming events for investors to watch are the first clinical data readouts from the ongoing PRT7732 trial later in 2025 and the planned IND filing for KAT6A, which, if successful, would advance the company's pipeline into a new area. Other possible milestones could come from new research partnerships or advancements in the ADC or mCALR preclinical programs.

There is no immediate path to product revenue given the stage of programs, and no dividend is paid. The company's continued funding and eventual success depend on clinical trial results and potential partnering agreements. PRLD does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Net loss per share (GAAP) was $(0.40) in Q2 2025, missing analyst estimates by $(0.11).

• Research and development expenses (GAAP) fell 41.3% in Q2 2025.

• Leap Therapeutics initiated a strategic alternatives process and reduced its workforce by 75% during Q2 2025.

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Leap Therapeutics (NASDAQ:LPTX), a clinical-stage biotechnology company focused on cancer therapies, released its second quarter 2025 results on August 14, 2025. The company reported a net loss of $(0.40) per share (GAAP), coming in wider than analyst estimates of $(0.29) per share. The main news was the initiation of a strategic alternatives process and a significant reduction in workforce. Research and development expenses (GAAP) fell substantially compared to Q2 2024, but the company missed GAAP earnings expectations despite these cost-cutting efforts. Overall, the quarter highlighted progress in clinical trials but underscored ongoing financial and operational challenges.

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview and Key Success Factors

Leap Therapeutics is a biotech company developing novel monoclonal antibodies for cancer treatment. Its leading pipeline asset is sirexatamab (DKN-01), a drug targeting DKK1, which is involved in cancer growth and immune system evasion. The company also has FL-501, an antibody targeting GDF-15, in earlier-stage development.

In recent years, Leap’s main focus has been advancing sirexatamab in clinical trials for colorectal cancer. The company’s success depends on positive clinical outcomes from these trials, strong protection of its intellectual property, and the ability to forge effective partnerships. Regulatory designations, like the U.S. Food and Drug Administration’s Fast Track status for sirexatamab, help speed up the review process and can accelerate time to market.

Second Quarter Highlights and Developments

The quarter was marked by several significant events. Leap Therapeutics reported updated clinical data from the Phase 2 DeFianCe study of sirexatamab combined with bevacizumab (a cancer therapy) and chemotherapy in colorectal cancer patients. The data showed a statistically meaningful improvement in overall response rate and progression-free survival for patients with high levels of DKK1, those who had not received prior anti-VEGF (anti-blood vessel growth) therapy, and those with liver metastasis, based on updated analysis as of May 22, 2025.

Despite the positive clinical signals, Leap’s losses came in higher than expected. It reported a net loss of $(16.6) million (GAAP), compared to $(20.4) million (GAAP) in Q2 2024. Operating expenses fell sharply, with research and development spending down $7.4 million and general and administrative expenses declining $1.6 million. The company initiated a major restructuring, reducing its workforce by about 75%. During the second quarter of 2025, the company incurred $4.5 million in restructuring charges associated with its workforce reduction; however, most of these costs will be recognized in the third and fourth quarters of 2025.

The company did not generate any revenue during the quarter, in line with its status as a pre-commercial biotech. Cash burn was pronounced, with $14.5 million used in operating activities and cash at quarter end dropping to $18.1 million from $78.5 million a year earlier. Shareholders’ equity (GAAP) declined significantly as well, showing the effect of ongoing operating losses and reduced headcount.

The pipeline beyond sirexatamab saw only minor updates. FL-501, Leap’s anti-GDF-15 monoclonal antibody targeting cancer cachexia (muscle wasting), demonstrated positive results in preclinical models, including extended half-life and restoration of body composition in animal studies. However, the emphasis remains on finding a path for sirexatamab, either through partnerships, a sale, or additional external support.

Company Strategy and Financial Status

Leap Therapeutics kicked off a formal process to explore “strategic alternatives” for the company, including options like asset sales, partnerships, or even an acquisition. It hired the investment banking firm Raymond James & Associates to advise on this process. This signals an urgent need to secure new capital or a partner, reflecting the shrinking cash reserves and high ongoing research costs. The operational downsizing, including the major staff cut, aims to stretch existing resources as the company evaluates its options.

No significant updates were provided regarding new licensing agreements or changes to intellectual property protections this quarter. Existing agreements remain important, including a licensing agreement with Eli Lilly for technology and rights related to sirexatamab.

Outlook and What to Watch

Management did not offer new forward financial or operational guidance for the next quarters or the full year. The company stated that further updates about its strategic review and next steps would be provided in the coming weeks, but provided no outlook for key financial measures or timelines.

LPTX does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Non-GAAP diluted EPS of $1.30 in Q2 2025 exceeded the analyst estimate of $0.61, and Non-GAAP diluted EPS increased 136.4% year-over-year in Q2 2025.

• The gross margin (GAAP) expanded to 47.4% in Q2 2025, up 10.1 percentage points from a year ago, driving strong profit growth.

• Full-year guidance was raised across revenue, EPS, and margin, following $12.9 million in federal purchase orders from the USDA Forest Service after the quarter ended.

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Bk Technologies (NYSEMKT:BKTI), a public safety radio and communications equipment provider, released its second quarter fiscal 2025 results on August 14, 2025. The company posted a major earnings beat, driven by widening gross margins (GAAP, 47.4% in Q2 2025, up from 37.3% in Q2 2024) and strong order momentum, particularly from U.S. federal agencies. GAAP revenue in Q2 2025 was $21.2 million, ahead of the $19.7 million GAAP consensus, and non-GAAP diluted earnings per share reached $1.30, compared to the $0.61 estimate. Gross margin (GAAP) jumped to 47.4%, up substantially from a year earlier, while GAAP operating income nearly doubled. These results prompted upward revisions to full-year revenue, gross margin, and EPS guidance, reinforcing confidence in the company’s outlook. Overall, the quarter demonstrated strong operational performance, robust contract wins, and the benefits of product mix improvements—although top-line growth remained moderate and government exposure remains high.

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview and Focus Areas

Bk Technologies is a U.S.-based provider of Land Mobile Radio (LMR) communications equipment, with a core focus on supplying reliable, durable radios to government agencies, public safety organizations, and first responders. Its main product lines include P25-compliant portable and mobile radios, which enable direct and interoperable voice communication in mission-critical settings such as firefighting, law enforcement, and military applications.

The company’s recent strategic priorities include ramping up its higher-margin BKR product family—particularly the BKR 9000 multiband portable radio—and investing in new product development for future releases such as the BKR 9500 vehicle radio. Expansion into software solutions, including Software-as-a-Service (SaaS) offerings that facilitate communication interoperability (like the BK ONE platform), is also underway. Success for the company hinges on competitive pricing, the quality of ruggedized hardware, strong government contract relationships, and supply chain management.

Quarter Highlights: Financial, Product, and Operational Developments

In Q2 2025, BK Technologies outperformed analyst expectations on key financial metrics, reporting non-GAAP EPS of $1.30 and GAAP revenue of $21.2 million. Its revenue figure was driven by a continued shift towards higher-value, higher-margin products, most notably the BKR 9000 multiband radio. Gross margin (GAAP) improved by more than 10 percentage points from the prior year, illustrating the effects of favorable product mix and ongoing cost efficiencies gained through outsourced manufacturing arrangements (mainly with EastWest Manufacturing). Operating income nearly doubled year-over-year on a GAAP basis.

Financial data points to a robust bottom line: non-GAAP adjusted EBITDA rose 76% in Q2 2025 compared to Q2 2024. Non-GAAP adjusted diluted EPS increased 136.4% in Q2 2025 compared to Q2 2024. Working capital and cash reserves also improved, with $11.9 million in cash and equivalents at the end of Q2 2025, up from $7.1 million as of December 31, 2024. despite inventory levels remaining steady near $17 million at both June 30, 2025, and December 31, 2024.

From a sales perspective, the federal government remained a significant driver. The period was marked by a $12.9 million order from the USDA Forest Service, announced after Q2 2025, one of several government and public safety wins. The timing of these orders was affected by legislative processes in Washington, specifically delayed federal budget approvals, which pushed some contract flow from the first into the second and third quarters. The seasonality of government spending, especially around wildfire season and federal fiscal year-end, continues to define order timing and revenue recognition for the business.

On the product front, the BKR 9000 multiband portable radio’s share of sales is rising, driving both margin and revenue per unit higher. The company also secured purchase orders during the quarter for RelayONE, a rapid-deployment, portable repeater kit designed to improve field interoperability among different communication devices. RelayONE is part of the broader BK ONE product ecosystem, which seeks to address interoperability challenges across public safety agencies—a key need as communications technologies evolve. While SaaS and software-driven solutions are a growing focus, their revenue contribution remains limited for now. The core growth is still in hardware sales.

Supply Chain, Risks, and Expense Management

The company’s transition to a hybrid manufacturing model continues to support efficiency and profit margin. Most radios are now produced in the United States, Mexico, and Vietnam; exposure to Chinese manufacturing has been purposefully minimized to mitigate tariff risks. Tariffs on Vietnamese-produced goods rose to 10% in Q2 2025, and management flagged the potential for higher tariffs if trade deals with Mexico or Vietnam do not progress. Less than 5% of product revenue comes from China, and efforts are underway to reduce this further by shifting production to Taiwan, albeit at somewhat higher costs but with more predictable policy risks.

SG&A spending totaled $6.0 million in Q2 2025. The increase relative to last year is tied to investments in expanding sales and marketing, as well as in engineering new hardware and software products. Operating leverage was evident, as the growth in expenses lagged profit improvement. One-time items (such as severance) seen in prior-year quarters were not material this period, providing a cleaner comparison of underlying cost trends.

The heavy reliance on government contracts remains a defining characteristic of the business. Sales to U.S. federal agencies regularly account for a large portion of total revenue, with seasonality and shifting public procurement budgets creating both opportunity and “lumpiness” in quarterly figures. The large USDA Forest Service order following the period close signals continued strength, but the risk of future swings—especially in the event of federal spending changes—remains present.

Other key risk areas flagged by management include potential for margin compression if product mix shifts away from higher-margin radios, unpredictability in recurring SaaS revenue growth, and broader macroeconomic or policy-driven disruptions to the supply chain. The company’s regulatory environment, particularly compliance with the Project 25 (P25) digital radio standard and Federal Communications Commission (FCC) rules, also remains central to its ongoing eligibility for government contracts and agency relationships.

Look Ahead: Guidance and What to Watch

Bk Technologies raised its outlook for the full fiscal 2025 year. Management now expects full-year 2025 revenue growth in the “high single digits,” with gross margin projected above 47%. The full-year 2025 GAAP diluted EPS target was raised to $3.15 from $2.40, while non-GAAP adjusted EPS guidance increased to $3.80 from $2.80 for FY2025. These upgrades reflect not only the strong run-rate exiting the quarter but also increased confidence based on recent contract wins and a healthy backlog of orders.

Investors should watch for sustained gross margin above 47% for full-year 2025. Key risks are tied to the timing of federal contracts, potential changes to tariff regimes, and supply chain cost stability. Management’s outlook suggests optimism for continued growth, although exposure to possible external disruptions—such as new tariffs or major shifts in procurement—remains a factor.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• GAAP revenue reached $1.72 billion in Q4 FY2025, surpassing estimates for non-GAAP EPS and GAAP revenue and Revenue reached $1.72 billion, surpassing estimates and marking 8% year-over-year growth (GAAP).

• Coach achieved a 14% sales increase (GAAP), offsetting declines at Kate Spade and Stuart Weitzman.

• The quarterly dividend was raised 14% to $0.40 per share, payable September 22, 2025, with annual non-GAAP guidance reflecting new tariff headwinds.

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Tapestry (NYSE:TPR), the parent company behind luxury brands such as Coach, Kate Spade, and Stuart Weitzman, reported fourth-quarter results on August 14, 2025, covering the period. The company delivered GAAP revenue of $1.72 billion, exceeding the consensus GAAP estimate of $1.68 billion, and posted non-GAAP earnings per share of $1.04, beating the $1.02 non-GAAP forecast. The quarter's results were marked by continued strength at Coach and gross margin expansion, though accompanied by an impairment charge related to Kate Spade (GAAP) and the divestment of Stuart Weitzman. Overall, the results outperformed expectations, with non-GAAP EPS and GAAP revenue both exceeding analyst estimates, reflecting momentum in the core Coach brand, ongoing customer acquisition, and tactical execution across channels, while also highlighting brand and portfolio challenges for the business going forward.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.

Business Overview and Key Focus Areas

Tapestry is a luxury fashion holding company with a portfolio that includes the Coach (handbags, accessories, and footwear), Kate Spade (handbags, accessories, and lifestyle products), and until recently, Stuart Weitzman (footwear) brands. Each label operates independently but benefits from shared sourcing, supply chain, and data analytics platforms. Coach is the clear growth driver, accounting for most of the company’s sales.

Over recent periods, Tapestry has focused on four pillars: effective brand portfolio management, executing a seamless omni-channel (integrated physical and online retail) strategy, targeted geographic expansion, and product innovation. These efforts aim to reinforce each brand’s market position, grow the customer base—with special emphasis on Millennials and Gen Z customers—and increase profitability by advancing gross margins and operational discipline. Success depends on continued strength at Coach, progress on turning around Kate Spade, and disciplined capital allocation, particularly now that Stuart Weitzman has been divested from the brand mix.

Quarter Highlights: Brand, Channel, and Financial Developments

The quarter was defined by impressive growth at Coach, supported by strong performance in handbags (a core category) and a mid-teens percentage increase in average unit retail (AUR—average sale price per unit sold). Coach operating income (GAAP) was $447.7 million, while Gross profit (GAAP) jumped to $1.32 billion. Product innovation, particularly in handbags and footwear, along with premium pricing, sustained the brand's momentum. Coach’s ongoing focus on acquiring new, younger consumers maintained long-term customer retention and brand desirability.

Kate Spade, in contrast, continued to face headwinds. Net sales (GAAP) slid 13% to $252.6 million year over year, and the segment posted a substantial operating loss driven by an $855 million impairment charge (GAAP). This charge reflected lower-than-expected future cash flows, compounded by anticipated effects from rising tariffs and cost inflation, as disclosed in Tapestry's GAAP results. These results, paired with flat-to-declining volume at Stuart Weitzman (which was sold in early August 2025), increased Tapestry’s reliance on Coach for growth.

Direct-to-consumer sales—via both digital platforms and physical stores—rose 6% compared to last year. Digital revenue was a particular standout, increasing by a mid-teens percentage, while brick-and-mortar operations grew in the low-single digits. This digital focus allowed Tapestry to acquire about 1.5 million new North American customers, around 60 % of whom were Gen Z or Millennials. Globally, new customer additions topped 6.8 million, a core growth lever for the company’s major labels.

Regionally, revenue expanded in North America (up 8%), Europe (up 10%), and Asia-Pacific (up 6%; with Greater China up 18%) on a constant currency basis. Growth in Europe was particularly notable, with revenue increasing 35% year-over-year in Q3 FY2025, while sustained gains in Greater China showed resilience despite industry pressures affecting U.S.-based brands. The gains offset softer trends in Japan, where revenues dipped relative to last year. Management credited a mix of successful product introductions and brand storytelling for securing customer engagement across all key markets. There were no material anti-U.S. sentiment or geopolitical impacts called out by management in the period.

Financial Metrics, Capital Allocation, and Segment Results

Profitability improved, driven by gross margin expansion and steady operating discipline. Gross margin (GAAP) rose to 76.3%, a 1.4 percentage-point increase compared to the prior year, even as currency shifts created a slight headwind. Non-GAAP operating income was $289 million, with the operating margin (non-GAAP) improved to 16.8%. Growing gross margin reflects operational improvements and discipline in inventory and pricing, especially at Coach. However, selling, general, and administrative (SG&A) expenses grew as a share of revenue on a non-GAAP basis, in part due to higher brand marketing investments. Marketing now approaches 10% of sales, up from pre-pandemic levels of about 3–4%.

Free cash flow, adjusted for one-time items (non-GAAP), climbed to $424 million, a jump of 25.5% versus last year. At quarter's end, Tapestry reported $1.12 billion in cash and manageable net debt of $1.27 billion, supported by a leverage ratio of 1.4 times. The company returned $2.3 billion to shareholders—including a $2 billion accelerated share repurchase program and $300 million in dividends. The quarterly dividend was increased 14% to $0.40 per share, effective Q1 FY2026, raising the annual payout rate to $1.60 per share for FY2026. Tapestry expects to buy back $800 million in common stock under its existing share repurchase authorization.

Looking Ahead: Guidance and Areas to Watch

Management provided non-GAAP outlook guidance for FY2026, forecasting revenue approaching $7.2 billion—a low single-digit increase, with mid-single-digit pro-forma growth excluding Stuart Weitzman. Earnings per share (non-GAAP) for FY2026 are expected to reach $5.30 to $5.45, a 4–7% rise, though this projection includes a negative impact of more than $0.60 per share from new and expanded tariffs on imported goods. Operating margin is expected to climb in FY2026 (non-GAAP), but a tariff headwind of 230 basis points, or about $160 million, will nearly offset underlying gains. Adjusted free cash flow (non-GAAP) was $1.35 billion.

Investors should monitor three main trends: turnaround progress at Kate Spade, but increases reliance on Coach and the success of planned recovery efforts at Kate Spade. Management signaled its view that customer acquisition—especially of younger demographics—remains a critical lever for growth, while discipline in marketing investment and tactical use of data and supply chain flexibility will be important as Tapestry navigates a more volatile trade and policy environment.

The quarterly dividend was raised 14% to $0.40 per share for Q1 FY2026.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Still riding the momentum of its successful moon mission earlier this year, Firefly Aerospace is one of the most successful IPO stocks of 2025.

• Its valuation is undoubtedly high, but investors should focus more on evaluating the quality of the business as well as the long-term opportunity of its market.

• 10 stocks we like better than Firefly Aerospace ›

On Aug. 6, Firefly Aerospace (NASDAQ: FLY) had its initial public offering (IPO) at $45 per share. As of this writing, Firefly stock is already over $50 per share, as investors are eager to get their hands on shares of the first fully successful private company to land on the moon.

At its current share price, Firefly Aerospace is valued at roughly $7.4 billion. This puts the space stock into the top 10 most valuable IPO stocks of 2025. But is it already overvalued here at the start? The answer may not be as cut-and-dried as investors hope.

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Image source: Getty Images.

How does Firefly make money?

It's usually a bad idea to start by thinking about a stock's valuation. A better idea would be to size up a business's quality and future opportunity. Low-quality companies with bleak outlooks likely won't be good investments, regardless of valuation.

For its part, Firefly generates revenue from launching rockets for its customers, and it also generates revenue from moon landings. According to the company, its addressable market for launching rockets could hit $32 billion in 2035, and its addressable market for moon landings could hit $9 billion in 2030. This gives investors a ballpark idea of how much spending it hopes to capture in the coming years.

As of the end of the first quarter of 2025, Firefly had trailing-12-month revenue of $108 million. And it had a backlog of $1.1 billion, which was up 100% from the first quarter of 2024. So, it clearly has room to grow from here.

Firefly's Q1 revenue of $56 million was up a staggering 572% year over year. But keep in mind that the company landed on the moon during the quarter. That doesn't happen often, but there's a big payday when it does.

Is Firefly stock overvalued?

Without a doubt, Firefly stock looks overvalued for a variety of reasons.

First, consider Firefly's lumpy revenue growth. It only grew by 10% in 2024 compared to 572% growth in Q1, making it hard to approximate a true growth rate. Moreover, Firefly stock has a sky-high price-to-sales (P/S) ratio of more than 70. Compare that to fellow space stock Rocket Lab, which trades at a P/S ratio of 48, which is still quite pricey as well, but far cheaper.

Firefly stock has surged because of a dynamic that many recent IPO stocks have. The company has nearly 147 million outstanding shares, but it only offered about 19 million. This means that there's a relatively small supply of shares available for trading, but there is high investor demand for space stocks. The imbalance naturally pushes valuations higher.

Firefly stock is expensive, but it's still worth considering for its future business opportunities.

Could Firefly stock be a good investment anyway?

Privately held SpaceX became one of the most valuable companies in the world by pioneering reusable rockets, which helped lower costs. Firefly is developing its own reusable rocket in partnership with Northrop Grumman. As one of the largest defense contractors in the world, this is a good partner, likely ensuring that the project will cross the finish line.

Right now, Firefly operates at a gross loss. Therefore, anything the company can do to lower costs could make a material difference to business results.

Another reason to have optimism with Firefly is that its top customers include the U.S. Space Force, Lockheed Martin, and NASA. These are demanding customers, to be sure. But they're also deep-pocketed if Firefly can reliably deliver on its promises.

With a company such as Firefly Aerospace -- relatively unproven and with a still small revenue base -- its valuation won't derail the investment thesis. To the contrary, it will be the company's execution.

To be clear, Firefly Aerospace has had launch failures in its history. The company's massive backlog is encouraging. But that's not money in the bank -- there are termination rights. Ongoing failures could cause customers to cancel contracts.

If Firefly Aerospace can consistently launch without failure and drive down costs, then it will likely win more business in this growing space. This would dramatically change the financial profile of the business. Valuing the stock today is almost impossible for this reason.

That said, I will throw out one cautionary thought in closing: The space industry is slow-moving even though the headlines are exciting. For example, NASA recently announced plans to put a nuclear reactor on the moon, accelerating plans for a permanent base. But even with the accelerated timeline, the agency is targeting a 2030 launch.

This example highlights that even if things are going well, Firefly Aerospace could need to endure losses for some time yet because it simply takes time to develop plans for outer space. For this reason, I'll patiently wait on the sidelines for the foreseeable future with this one.

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.

Key Points

• GAAP revenue reached $313.9 million, exceeding expectations in Q2 2025, up 1.5% year over year.

• Adjusted EBITDA dropped approximately 7.6% year-over-year to $54.6 million as margins compressed.

• NV5 merger completed post-quarter, setting up a larger, more leveraged company.

• These 10 stocks could mint the next wave of millionaires ›

Acuren (NYSE:TIC), a leading provider of testing, inspection, certification, and asset integrity services, released its second quarter 2025 results on August 14, 2025. The company reported GAAP revenue above analyst expectations and continued to grow its business with existing customers. However, profitability fell compared to the prior year as Adjusted EBITDA margin declined to 17.4% from 19.1%, with margins coming under pressure due to higher costs. The period also marks a transition, as the major acquisition of NV5, closed after quarter-end, will reshape the company’s size and future direction. Management did not provide updated guidance as it prepares for the post-merger phase, leaving assessments of the quarter mixed: revenue is growing year-over-year, but investors await clarity on improved profitability and integration progress.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Key Success Factors

Acuren specializes in asset integrity management, providing crucial services like nondestructive testing (NDT), inspections, and engineering solutions to help customers maintain equipment and infrastructure. Its work spans industries such as energy, utilities, infrastructure, and government, focusing on helping clients keep assets safe and compliant throughout their operational life.

The company’s growth is driven by several secular trends. Aging infrastructure creates a steady need for inspection and maintenance, while tighter regulations require frequent compliance checks. Acuren leans into digital transformation, deploying proprietary software and analytics for inspection data, and integrating newer methods like drone-enabled geospatial analytics. The competitive landscape rewards companies that meet evolving customer needs with better technology and broader service offerings. Key to success are a strong presence in recurring, compliance-driven revenue streams and expertise in technology-enhanced asset protection.

Quarter Highlights: Revenue, Margins, Transformational M&A

The company reported GAAP revenue of $313.9 million, exceeding analyst estimates by $5.5 million (GAAP) and up 1.5% year-over-year. Organic revenue, which excludes effects from acquisitions and currency changes, rose 2.0%. Management credited the gains to “strong callout work”, which refers to on-demand, project-based services, and deeper relationships with existing customers. These trends align with the broader industry needs for regular asset inspections as infrastructure ages and regulations tighten.

Adjusted EBITDA, which is earnings before interest, taxes, depreciation, amortization, and certain non-cash charges, dropped to $54.6 million from $59.1 million. The company’s Adjusted EBITDA margin—the share of revenue converted to Adjusted EBITDA—fell to 17.4%. Management highlighted increased expenses tied to being a public company and higher costs related to transforming the business for future growth. Net loss (GAAP) narrowed sharply to $0.2 million, from a loss of $5.5 million in the comparable period, mainly reflecting the absence of costs that hit last year, including share compensation for legacy shareholders and lower interest expenses. However, business transformation costs still weighed on the bottom line.

The biggest structural event was the merger with NV5, which closed after the quarter ended on August 4, 2025. This $1.7 billion acquisition created a $2 billion TICC and engineering services company on a pro forma basis, as disclosed following the completion of the NV5 merger and broadens its services, especially by adding geospatial and engineering capabilities. The deal brought a sizable increase in the company’s debt load—term loan debt rose to $1.6 billion post-merger (as of August 2025), while total shares outstanding jumped to 200.6 million as of August 12, 2025, from 121.5 million. Management sees the merger as unlocking opportunities for cross-selling and cost savings.

Cash and liquidity were reasonable at quarter end, with $130.1 million on hand and $75 million available via undrawn borrowing, all before the NV5 debt was added. Free cash flow and debt management will become more important metrics for investors as the combined company moves forward. The mix of recurring compliance revenue and digital, tech-enabled service offerings should provide a stable foundation, but margin trends and execution of the merger are now the main areas to watch.

The ongoing volume in callout work and compliance-focused services demonstrates continued demand in a heavily regulated environment.

Outlook and What’s Ahead

Management did not provide financial guidance for the third quarter or for fiscal 2025. It stated that a comprehensive outlook, including anticipated revenue and adjusted EBITDA ranges, will be provided with its next earnings report in November 2025. This measured approach reflects the company’s focus on completing the NV5 integration and preparing updated forecasts based on the combined entity.

Without guidance, investors will closely track progress on integrating NV5, the impact on earnings and cash flows, and any signs of reversing margin compression. The absence of explicit outlook means near-term uncertainty will persist until management sets new targets and provides post-merger updates.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• GAAP revenue grew 47% year-over-year in Q2 2025, driven by expanding adoption of Gimoti.

• GAAP earnings per share were a net loss of $0.62 in Q2 2025, reflecting rising operating costs.

• Management reaffirmed its net product sales guidance of approximately $16 million for FY2025, a 60% gain over 2024 levels.

• These 10 stocks could mint the next wave of millionaires ›

Evoke Pharma (NASDAQ:EVOK), a specialty pharmaceutical company focused on treatments for gastrointestinal diseases, released its second quarter results on August 14, 2025. The most notable news from the earnings release was Net product sales increased 47% year-over-year to $3.8 million in Q2 2025, marking continued commercial momentum for its Gimoti nasal spray for diabetic gastroparesis. Net loss per share was $0.62 in Q2 2025. While GAAP revenue was $3.8 million, exceeding expectations by $0.004 million. Confidence in demand persisted as management affirmed its full-year net product sales outlook of approximately $16 million. Overall, the quarter showed solid sales growth but flagged persistent cost and profitability challenges as the company continues its push for broader adoption of its only commercial product.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Understanding Evoke Pharma’s Business and Focus

Evoke Pharma is a U.S.-based pharmaceutical company specializing in treatments for gastrointestinal (GI) disorders. Its core focus is Gimoti, a nasal spray designed for adult patients with diabetic gastroparesis, a chronic disorder that impairs stomach emptying.

The company’s primary business is built around two drivers: achieving widespread adoption of Gimoti among prescribers and patients, and maintaining a partnership with Eversana, a commercialization partner providing sales and marketing infrastructure. Evoke emphasizes the uniqueness of Gimoti’s nasal delivery, which offers an alternative to oral medications for patients suffering from severe symptoms such as nausea or vomiting. The company’s critical success hinges on doctor adoption, repeat prescriptions (refill rate), market access, and successful navigation of reimbursement and regulatory environments.

Quarter Highlights: Sales Growth and Strategic Update

During the quarter, Evoke grew GAAP revenue 47% year-over-year in Q2 2025. The company attributed this expansion to increasing adoption of Gimoti by U.S. gastroenterology clinics and a steady refill rate of about 70%. The number of new prescribers rose 20% year-over-year in Q2 2025 compared to Q2 2024.

The company highlighted strong performance in several key commercial metrics. Net product sales growth in Q2 2025 was driven by greater physician adoption, improved pharmacy fill rates, and sustained therapy adherence, as evidenced by high prescription refill rates. These operating milestones were reinforced by recent presentations at conferences such as Digestive Disease Week 2025, where Evoke reported favorable real-world safety data for Gimoti, particularly in relation to the risk of tardive dyskinesia—a serious movement disorder associated with other formulations of metoclopramide.

This was primarily due to increased profit-sharing with Eversana, which is directly tied to net product sales, as well as higher professional fees. The structure of Evoke’s partnership means that as Gimoti sales rise, SG&A costs also grow, as evidenced by SG&A expenses increasing from approximately $3.7 million in Q2 2024 to $5.1 million in Q2 2025, impacting the company’s near-term earnings profile.

Total operating expenses in the second quarter of 2025 were approximately $5.3 million, compared to $3.8 million in the same period of 2024. This dynamic contributed to a wider net loss for the period compared to a year ago. The company ended Q2 2025 with $12.06 million in cash and cash equivalents. Evoke stated that cash and near-term sales should support operations into the third quarter of 2026, based on its internal projections. Evoke stated that cash and near-term sales should support operations into the third quarter of 2026, based on its internal projections as of Q2 2025.

About Gimoti and Recent Developments

Gimoti is a nasal spray medication used to treat diabetic gastroparesis, a condition causing significant stomach discomfort and delayed gastric emptying in adults with diabetes. Unlike standard oral tablets, Gimoti’s nasal delivery bypasses the stomach, making it suitable for patients with symptoms like chronic nausea and vomiting.

Gimoti is positioned as a non-oral treatment option for patients with diabetic gastroparesis who may have unpredictable absorption or difficulty swallowing because of symptoms such as nausea or vomiting. Refill rates remained steady at approximately 70% in Q2 2025. The company also reported real-world outcomes in Q2 2025 highlighting Gimoti’s safety, including data on the incidence of tardive dyskinesia with continuous versus intermittent metoclopramide use.

Financial Outlook and Key Watchpoints

Management reiterated its 2025 net product sales forecast of approximately $16 million for Gimoti, representing a 60% projected increase in net product sales over 2024. This FY2025 outlook is anchored by recent trends in prescription growth, consistently strong refill rates, and expanding pharmacy access. Evoke also noted that its cash position and anticipated cash flows from sales are expected to fund operations into the third quarter of 2026.

For investors, the key areas to watch are the trajectory of Gimoti adoption among prescribers, trends in refill rates, the evolution of operating expense levels, and developments in reimbursement or competitive pressures. There were no changes to dividend policy—EVOK does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• Revenue (GAAP) rose sharply to $2.7 million for Q2 2025, driven primarily by a one-time recognition of deferred revenue from a terminated legacy agreement.

• Net loss (GAAP) narrowed dramatically year over year, mainly due to the absence of a large prior-year acquisition charge and lower research expenses.

• Cash and equivalents (GAAP) totaled $13.1 million as of Q2 2025.

• These 10 stocks could mint the next wave of millionaires ›

Traws Pharma (NASDAQ:TRAW), a clinical-stage biopharmaceutical company focused on antivirals for COVID-19 and influenza, released its second quarter results on August 14, 2025. The most notable news was a sudden jump in reported revenue, up to $2.7 million (GAAP) from $0.06 million (GAAP) in Q2 2024, solely due to the one-time recognition of deferred revenue after a licensing agreement for an oncology program was terminated. This did not reflect underlying commercial progress in the company's core antiviral pipeline. Net loss (GAAP) narrowed sharply to $0.9 million from $123.1 million in Q2 2024, with the prior-year figure inflated by a large acquisition-related charge. There are no analyst estimates available for meaningful comparison. Overall, the quarter spotlighted pipeline activity and ongoing financial constraints, with operational funding needs becoming more pressing.

About Traws Pharma and Current Focus

Traws Pharma develops experimental drugs aimed at preventing and treating respiratory viral infections, especially COVID-19 and influenza. Its business centers on moving two core antiviral candidates through clinical trials, as well as seeking partnerships for its legacy oncology drug programs.

The company's main priorities right now are preparing ratutrelvir (a COVID-19 antiviral tablet) and tivoxavir marboxil (an influenza and bird flu antiviral tablet) for Phase 2 studies and potential government stockpiling. Key success factors include achieving positive clinical trial results, navigating regulatory approval requirements, and demonstrating an ability to address drug-resistant virus strains—an area of unmet medical need.

Quarterly Highlights and Developments

The substantial increase in reported revenue (GAAP) to $2.7 million was not tied to progress in Traws's core antiviral business. The $2.7 million GAAP revenue resulted from the recognition of deferred revenue following the end of a licensing deal involving an older oncology program, not from product sales or clinical milestones. The company still has no recurring revenue from its main pipeline projects.

Net loss (GAAP) improved sharply, landing at $0.9 million, compared to a GAAP net loss of $123.1 million in Q2 2024. The 2024 figure included a significant one-time charge tied to the acquisition of in-process research and development. Excluding this charge, expense savings came from lower research spending on discontinued oncology work and reduced personnel costs, even as spending on current virology programs increased slightly.

Research and development spending (GAAP) dropped to $2.3 million, down from $4.0 million in Q2 2024, primarily due to decreased expenses related to the oncology program and personnel, partially offset by increased spending on virology programs.

General and administrative spending also declined to $1.7 million (GAAP), reflecting decreases in stock compensation and other personnel-related costs, partly offset by higher fees from professional services.

Cash (GAAP) fell to $13.1 million, a decline of about $8 million since the start of the year. With combined research and administrative expenses averaging around $4 million per quarter (GAAP), this funding level suggests a short financial runway. Leadership transitions also took place, with new interim Chief Executive and Chief Financial Officers stepping in during the quarter. The company continued discussions with regulatory agencies and progressed on clinical submissions, but it did not announce any new commercial partnerships or active government contracts this period.

In terms of pipeline progress, Traws submitted ratutrelvir—a COVID-19 antiviral tablet positioned as a potential alternative to existing therapies like PAXLOVID (a COVID-19 drug by Pfizer)—for Phase 2 clinical trial review.

The Phase 2 trial will compare ratutrelvir to PAXLOVID in newly diagnosed COVID-19 patients and will also include a single-arm study in PAXLOVID-ineligible patients. Management expects data before the end of 2025.

Preclinical and early trial results showed encouraging tolerability and sustained drug exposure in the bloodstream, supporting further development.

Tivoxavir marboxil, designed for influenza and bird flu, did not advance into new clinical studies. Management shifted strategy to focus on "stockpiling readiness," targeting government demand for pandemic response rather than short-term patient trials, as described in recent disclosures. This decision followed feedback from U.S. regulators that human clinical results are needed before full approval for bird flu; so, clinical trial timelines are now closely tied to the level of active outbreaks. Preclinical studies, including animal models, demonstrated high levels of viral suppression and favorable safety data, but regulatory approval remains some way off.

For its legacy oncology products, such as rigosertib (used in rare skin cancer), Traws reported newly published data indicating potential benefit in a small patient group. No new investment or clinical advances were reported for other cancer drugs. The company stated it is seeking industry partners to help move these assets forward, a task that remains incomplete.

Looking Ahead

Management highlighted the anticipated start of Phase 2 studies for ratutrelvir, with clinical results expected by year-end 2025. The outlook for tivoxavir marboxil depends on the emergence of new bird flu cases or increased government interest in antiviral stockpiling. No clear guidance was given for future quarterly or full-year financial performance.

Cash, cash equivalents, and short-term investments (GAAP) declined to $13.1 million.

As clinical programs advance, the need for external capital—through partnership deals or further stock offerings—remains substantial. The company's future performance will depend on achieving trial milestones, gaining regulatory support, and securing additional funding.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Key Points

• The stock has crashed 47.6% year to date despite maintaining its position as America's largest health insurer.

• Trading at just 11.5 times 2027 projected earnings, the stock’s current valuation implies permanent damage that seems overdone.

• A 3.38% dividend yield pays investors to wait while medical costs normalize and margins recover.

• 10 stocks we like better than UnitedHealth Group ›

The market has abandoned UnitedHealth Group (NYSE: UNH), and that's exactly why I'm buying it. While investors flee the stock over rising medical costs and regulatory headlines, they're missing a crucial fact -- this is still the most dominant health insurer in America trading at recession-level valuations. At 11.5 times projected 2027 earnings, the pessimism looks overdone.

The collapse has been breathtaking. Down 47.6% year to date as of this writing (Aug. 13, 2025) in a market hitting record highs, UnitedHealth faces real challenges: medical costs rising faster than premiums, a potential $1.6 billion settlement over billing practices, and regulatory scrutiny of its Optum unit. These aren't minor headwinds.

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But excessive pessimism creates opportunity, especially when it involves a company processing $1.7 trillion in medical payments annually with no real competitor matching its scale.

The math behind the contrarian play

Trading in the low $270s, UnitedHealth has fallen more than 57% from its 52-week high of $630.73. At about 11.5 times projected 2027 earnings, the stock is priced as if its profitability will remain permanently impaired. While some large-cap peers such as Elevance Health and Cigna currently trade at lower forward multiples, UnitedHealth's scale, vertical integration, and cash generation give it advantages those competitors cannot match.

Wall Street analysts still project earnings per share reaching $40 by the decade's end. That assumes high single-digit annual growth, hardly aggressive for a company that has compounded earnings at 13% annually over the past decade. Apply even a below-market multiple of 16 times to that $40 earnings figure, and you get a $640 stock price. That's roughly 135% upside from current levels.

Meanwhile, the healthcare giant pays an $8.84 annual dividend, yielding about 3.38%. UnitedHealth has raised its dividend for 15 consecutive years, including a 5.2% increase last quarter. You're collecting a sizable yield backed by roughly $30 billion in annual operating cash flow, giving you steady income while you wait for the recovery.

Why the tide will turn for this top healthcare insurer

The recent spike in medical costs is being driven by higher utilization, particularly in Medicare Advantage, and management expects the elevated trend to extend into 2026. While this creates short-term margin pressure, UnitedHealth has begun adjusting premiums for 2026 contracts to reflect the higher cost base.

With about 50 million members across commercial, Medicare, and Medicaid plans, the company has the negotiating leverage to implement rate increases more effectively than smaller competitors. Leadership has signaled a return to earnings growth in 2026 as these pricing adjustments take hold.

The potential $1.6 billion settlement over billing practices, although painful, would resolve a significant legal uncertainty. Once that is behind the company, investor focus can shift back to fundamentals, including Optum's roughly $260 billion in annual revenue. Optum Rx continues to grow at a double-digit rate, while Optum Health works to stabilize performance after a recent decline.

The asymmetric opportunity

Buying UnitedHealth today requires patience for the narrative to shift. The stock could trade lower if medical costs surprise negatively or new regulatory challenges emerge. This isn't a risk-free bet on a quick bounce.

But at this valuation, the market has already priced in an extremely negative scenario. In a market where Nvidia trades at over 50 times earnings, and unprofitable software companies command billion-dollar valuations, finding a profitable industry leader at 11 times earnings is increasingly rare.

UnitedHealth's problems are real but temporary. Its competitive advantages -- scale, data, and vertical integration -- are permanent. That disconnect, plus a rich dividend, is why I'm buying while others are selling.

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George Budwell has positions in Nvidia and UnitedHealth Group. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

Key Points

• Berkshire Hathaway has achieved stellar returns under Buffett's leadership and has $340 billion in cash.

• American Express has a strong brand and affluent customer base, giving it resilience across economic cycles.

• Ally Financial relies on cyclical automotive lending, and that makes it vulnerable to economic downturns.

• 10 stocks we like better than Berkshire Hathaway ›

For decades, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) has captured the attention of investors with its long track record of stellar returns. Since taking over as CEO in 1965, Buffett has consistently delivered an incredible annualized return of 20%. Just imagine, a $100 investment back then would have blossomed into over $5 million today.

Buffett's keen eye for high-quality companies with competitive moats has made him a beacon of inspiration for investors everywhere. While his successful track record speaks volumes, it's important to remember that not every investment hits the mark. With that in mind, here are two Buffett stocks that I would scoop up right now, along with one that I'd steer clear of right now.

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Buy Berkshire Hathaway

The first stock I'd buy is Buffett's own Berkshire Hathaway. Investing in Berkshire provides investors with diversification, disciplined capital management, and stellar long-term returns. At its core, Berkshire is a conglomerate of high-quality businesses, including wholly owned subsidiaries like Geico, BNSF Railway, and Berkshire Hathaway Energy, as well as a massive equity portfolio featuring blue chip names like Apple, Coca-Cola, and Visa.

What has set Berkshire apart is its capital management and patience across economic cycles. Buffett and his right-hand man, the late Charlie Munger, achieved a stellar track record of investing in high-quality companies going back 60 years. The company has done so by avoiding fads and investing in durable businesses with strong moats and steady cash flows.

Earlier this year, Warren Buffett announced he was passing the reins of CEO on to Greg Abel. Meanwhile, investing lieutenants Todd Combs and Ted Weschler will help direct Berkshire's massive investment portfolio.

The company is in a good spot in terms of capital. Its huge cash pile stands at nearly $340 billion, providing it with dry powder for opportunistic purchases during market dislocations. For long-term investors, Berkshire Hathaway is a well-run conglomerate with a ton of cash on hand, leaving it well positioned even in a post-Buffett era.

Buy American Express

The second Buffett stock to buy is American Express (NYSE: AXP). American Express boasts a strong brand, customer loyalty, and strong credit metrics, making it a solid blue chip stock for long-term investors.

The company operates a closed-loop payments network, unlike Visa or Mastercard which only handle transactions. As a result, American Express captures fees from transactions on its network along with interest-earning loans on those credit card balances. Visa and Mastercard earn swipe fees, but credit card loans are held by banking partners that reap the benefits of interest payments.

While this gives American Express interest income, which can help boost earnings, especially when interest rates rise as they did a few years ago, it also opens the company up to credit risk. If its credit card borrowers fail to repay their balances, it could impact its credit quality and ultimately its earnings.

This is where American Express' strength becomes evident. The company reduces its credit risk by focusing on a high-spending, high-credit customer base that can be more resilient in economic downturns. As a result, American Express tends to have stellar credit metrics compared to its peers. On top of that, it benefits from growth in travel, luxury spending, and business expenditures as its affluent consumer base helps drive above-average transaction volumes and fee income.

For long-term investors seeking quality, resilience, and consistent shareholder returns, American Express is a compelling stock for your diversified portfolio.

Avoid Ally Financial

One Warren Buffett stock I wouldn't buy is Ally Financial (NYSE: ALLY). There is nothing wrong with the company per se, and it could do well if we get interest rate cuts from the Federal Reserve in the coming years. However, the company has some limitations that could hurt its long-term growth prospects.

First, it operates in a highly cyclical business, with over three-quarters of Ally's revenue coming from automotive lending. This reliance on auto lending makes it sensitive to economic downturns.

During recessions or credit contractions, demand could wane and delinquencies and charge-offs could spike, causing a hit to its profits. This is precisely what happened in recent years, when Ally's revenue and income dropped off amid the rising interest rate environment of 2022 to 2023.

Additionally, Ally competes in crowded markets, such as automotive lending, digital banking, and investing. It faces competition from banks, like JPMorgan Chase, Bank of America, and Capital One Financial, along with fintech companies like SoFi. It also faces competition in automotive lending from PNC Financial and Upstart, which is gaining a foothold in the space.

Ally could do well in the near term, especially if credit conditions normalize and the Federal Reserve cuts its benchmark interest rate. While the stock is reasonably priced on a forward basis, I don't see a strong, robust business model with a strong moat, which is why I would avoid this Buffett stock today.

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Ally is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Courtney Carlsen has positions in American Express, Apple, Berkshire Hathaway, JPMorgan Chase, and SoFi Technologies. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, JPMorgan Chase, Mastercard, Upstart, and Visa. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy.

Key Points

• Revenues from product sales grew 16% year-over-year in Q2 2025, modestly exceeding analyst expectations on a GAAP basis.

• GAAP earnings per share missed estimates in Q2 2025 due to a sharp increase in research and development spending.

• These 10 stocks could mint the next wave of millionaires ›

Protalix BioTherapeutics (NYSEMKT:PLX), a biopharmaceutical company specializing in plant cell-based protein production, announced its second quarter results on August 14, 2025. Revenues from product sales grew 16% to $15.4 million compared to Q2 2024. GAAP revenue of $15.6 million was slightly ahead of the $15.53 million analyst estimate. Despite this top-line beat, the company reported GAAP earnings per share (EPS) of $0.00, missing analyst expectations of $0.04 GAAP EPS. The result was influenced by a significant increase in research and development costs as the company prepared for a key clinical trial. Overall, the quarter showed strong commercial traction for Elfabrio®, gains in gross profit, and a return to quarterly profitability (GAAP).

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview and Strategic Focus

Protalix BioTherapeutics develops and markets enzyme replacement therapies using its proprietary ProCellEx technology, a plant cell-based system for manufacturing complex proteins. This technology supports its two commercial enzyme replacement therapy (ERT) products: Elfabrio, for Fabry disease, and Elelyso, for Gaucher disease. Both address rare genetic disorders by replacing missing enzymes in patients. The company is also advancing new drug candidates, with its most developed pipeline asset being PRX-115 for uncontrolled gout.

The ProCellEx platform remains at the heart of Protalix's competitiveness. It allows for scalable, flexible protein manufacturing and offers potential safety and cost benefits over traditional approaches. The company's recent business efforts have centered on scaling Elfabrio sales globally through its partnership with Chiesi and progressing clinical trials for new indications. Key success factors include successful commercialization of current therapies, advancing the pipeline, managing costs, and maintaining productive strategic partnerships.

Quarter in Review: Product Sales, Pipeline Progress, and Financial Shifts

Sales momentum remained strong, led by a substantial increase in Elfabrio enzyme therapy shipments. Sales to Chiesi, the global commercialization partner for Elfabrio, grew by $8.0 million versus Q2 2024, highlighting robust early demand and successful commercial execution. Management called this out as a highlight, stating sales performance was “beyond our expectations.” Shipments to Fiocruz (Brazil) fell by $4.7 million, and Sales to Pfizer dropped by $1.2 million. Despite these declines, overall goods revenue from commercial products increased 16% year over year, underscoring the growing importance of Elfabrio to the business.

This improvement was supported by higher product revenue and a sharp 38% drop in cost of goods sold, driven by reduced sales to lower-margin legacy markets (Pfizer and Fiocruz). Operating income (GAAP) swung to $1.2 million from a prior-year operating loss

The company's research and development spending jumped to $6.0 million, Research and development spending increased by 100% to $6.0 million for the three months ended June 30, 2025, compared to $3.0 million in the prior-year period. This was primarily due to preparations for a phase II clinical trial of PRX-115, a biologic drug candidate targeting uncontrolled gout. This molecule aims to address a form of gout that does not respond to typical therapies, potentially opening up a valuable new indication. The investment in pipeline advancement contributed to the quarter’s earnings miss, but reflects the company’s strategy of expanding its therapeutic reach over time. Notably, selling, general, and administrative expenses declined 26% to $2.6 million, showing restraint on non-R&D costs.

During the period, Protalix continued to benefit from its strategic collaboration with Chiesi. The company expects milestone payments from this agreement to be a key driver of future revenue, with remaining regulatory milestone payments described as "milestone by milestone" and potentially up to $75 million, depending on achievement of specific regulatory events, with up to $500 million possible over time tied to commercial and regulatory goals, as referenced in management commentary regarding the aggregate potential milestone payments. However, management stated that ongoing license and research revenue outside of these milestones will remain minimal. On the regulatory front, the company noted the ongoing review at the European Medicines Agency for a proposed change to the Elfabrio dosing schedule, with the submission accepted for review in December 2024. The European Medicines Agency is reviewing the proposed change to the Elfabrio dosing schedule. There was also a key management announcement: Gilad Mamlok will succeed Eyal Rubin as Chief Financial Officer, with a transition planned to help ensure continuity.

Product Portfolio and Key Assets

Elfabrio is an enzyme replacement therapy designed for the treatment of Fabry disease, a rare inherited disorder. Commercial launch momentum for this therapy is driving current revenue growth, especially through global sales booked by Chiesi. Elelyso, another enzyme replacement therapy, targets Gaucher disease, but sales from this program declined.

On the research side, PRX-115 is a biologic candidate expected to enter a phase II trial for uncontrolled gout in the second half of 2025, with first patient dosing planned for the fourth quarter. Development of other early-stage candidates, such as PRX-119 for diseases linked to neutrophil extracellular traps, continued but did not materially affect financials. Protalix’s core technology platform, ProCellEx, underpins both the current commercialized products and pipeline molecules by supporting plant-based production of recombinant proteins. This platform is a strategic differentiator in biologics manufacturing by offering flexible and potentially safer processes than mammalian cell systems.

Looking Ahead: Management Outlook and Key Watch Areas

Management did not provide explicit forward guidance for future revenue or earnings. Instead, it reiterated confidence in Elfabrio’s long-term sales outlook and noted that fluctuations in revenue may continue as inventory orders normalize following product launch. The company expects research and development expenses to remain elevated as it advances its pipeline programs, particularly with the initiation of the PRX-115 phase II clinical trial.

For future quarters, critical watch points include progress on the Elfabrio European label application, evolving sales patterns for both commercial products, and execution through the CFO transition. Investors should also note that potential milestone-related revenues may cause variability in reported results depending on product and regulatory achievements.

PLX does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,069%* — a market-crushing outperformance compared to 184% for the S&P 500.

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*Stock Advisor returns as of August 13, 2025

JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.