Pacira Q2 2026 earnings: Revenue rises as adjusted EBITDA declines

Pacira BioSciences (NASDAQ: PCRX) reported Q2 2026 revenue of $192.4 million, up 6% from $181.1 million, while GAAP diluted EPS improved to $0.12 from a loss of $0.11. The quarter combined modest product growth with weaker operating profitability: adjusted EBITDA fell about 10% and non-GAAP net income declined 18% as expenses increased. The July 31 divestiture of iovera° also led Pacira to lower its full-year revenue guidance.

Core financial results

Total operating expenses increased 9% to $188.1 million, outpacing revenue growth and reducing the GAAP operating margin to approximately 2.2% from 4.7%. R&D, SG&A, cost of goods sold and divestiture-related expenses all increased.

GAAP net income nevertheless moved into positive territory because non-operating expenses decreased and the company recorded an income tax benefit. Non-GAAP earnings and adjusted EBITDA provide a less favorable view of the year-over-year operating trend.

Product performance

EXPAREL remained Pacira’s principal revenue source, accounting for approximately 77% of total revenue. Its 4% volume growth was partly offset by vial mix and expanded discount contracting with group purchasing organizations, limiting net sales growth to 3%.

Licensee sales of bupivacaine liposome injectable suspension provided a meaningful portion of the quarter’s incremental revenue, rising by approximately $2.7 million. Royalty revenue also increased to $1.9 million from $0.8 million.

UnitedHealthcare began providing separate reimbursement for EXPAREL in hospital outpatient departments and ambulatory surgery centers. The change covers eligible members across a health plan with approximately 40 million covered lives, although Pacira did not quantify its expected revenue contribution.

The fastest-growing named product was iovera°, but Pacira will no longer recognize its product sales after the divestiture closed on July 31, 2026.

Profitability, liquidity and the balance sheet

GAAP gross margin remained at 77%, but non-GAAP gross margin declined to 78% from 82%. The prior-year non-GAAP calculation excluded a $6.5 million manufacturing-suite decommissioning charge, affecting comparability between the two periods.

R&D expense increased approximately 7% to $30.2 million, while SG&A increased approximately 4% to $91.8 million. Other operating expenses rose to $7.6 million from $0.6 million, including $5.9 million of costs related to the iovera° divestiture.

Pacira ended June with $251.0 million of cash, cash equivalents and available-for-sale investments, compared with approximately $238.4 million at the end of 2025. Inventory declined to $134.6 million from $152.9 million, and long-term debt decreased to $363.1 million from $372.2 million over the same period.

The June balance sheet did not include the $73.6 million of cash received when the iovera° transaction closed after quarter-end.

GAAP profit improved even as underlying earnings declined

Pacira’s movement from a GAAP loss to a profit did not reflect stronger operating income. Operating income fell by approximately half, but net other expense improved to $1.7 million from $10.4 million, and the company recorded a $2.1 million tax benefit instead of a $2.9 million tax expense. The prior-year period included an $11.0 million investment impairment, while Q2 2026 included a $6.4 million release of a deferred-tax valuation allowance.

The decline in non-GAAP net income and adjusted EBITDA therefore better captures the operating pressure during the quarter. Non-GAAP diluted EPS fell by only $0.01 because the diluted share count declined by approximately 18% to 40.3 million from 49.0 million, cushioning the per-share effect of lower adjusted earnings.

2026 guidance

Pacira reduced total revenue guidance by $10 million at both ends following the iovera° divestiture. It also lowered non-GAAP SG&A guidance by the same amount, while maintaining its EXPAREL sales, non-GAAP gross-margin and R&D forecasts.

Total revenue guidance includes iovera° sales only through the July 31 closing date. The unchanged EXPAREL guidance indicates that the revenue revision was tied to the divestiture rather than a change in the company’s outlook for its largest product.

Management perspective

Management said the iovera° sale would allow the product to benefit from Zimmer Biomet’s global commercial reach while sharpening Pacira’s focus on biopharmaceutical innovation. The agreement provides for total consideration of up to $140 million, including an upfront payment of $70 million subject to adjustments and as much as $70 million of revenue-based milestones through December 31, 2031. Pacira received $73.6 million after purchase-price adjustments.

Pacira also advanced PCRX-201, its gene therapy candidate for knee osteoarthritis, to a scalable commercial manufacturing process. Enrollment is underway in Part B of the Phase 2 ASCEND study, while Part A enrollment ended in June and topline results are expected by the end of 2026.

Recent insider transactions

The supplied six-month insider summary reports 566,986 shares purchased across 16 transactions and 45,135 shares sold across six transactions, resulting in 521,851 net shares purchased. These totals include equity awards and derivative activity and therefore should not be interpreted as open-market purchases alone.

The latest reported records include two executive sales, several director equity awards and one derivative exercise. The transactions do not, by themselves, establish insiders’ views of Pacira’s outlook.

Risks investors should watch

• Dependence on EXPAREL: The product generated approximately 77% of quarterly revenue. Volume increased, but vial mix and broader GPO discounts limited sales growth and could continue to affect realized pricing.
• Operating and margin pressure: Expenses grew faster than revenue, operating income declined and non-GAAP gross margin fell year over year. Sustained expense growth could limit earnings conversion even if sales continue to rise.
• Post-divestiture revenue transition: Pacira lowered total revenue guidance after selling iovera°. Future milestone payments are contingent on revenue and, for potential additional compensation, clinical and regulatory outcomes.
• PCRX-201 execution: The pipeline’s progress depends on enrollment, clinical results and continued manufacturing execution. Part A data expected by year-end will be an important development milestone.

Summary

Pacira delivered 6% revenue growth in Q2 2026, supported by gains across its commercial products and licensee sales, but higher expenses reduced operating income, adjusted EBITDA and non-GAAP net income. The iovera° divestiture lowered the reported revenue outlook while reducing projected SG&A spending and adding post-quarter liquidity. Investors’ next operating checkpoints are EXPAREL’s net sales trajectory, margin performance after transaction costs and the expected PCRX-201 data by the end of 2026.