Halozyme Q2 2026 results: Royalty revenue rises 50% as guidance increases

Halozyme Therapeutics (NASDAQ: HALO) reported Q2 2026 revenue of $481.0 million, up 48% year over year, while GAAP diluted EPS rose to $1.90 from $1.33. For the quarter ended June 30, royalty revenue increased 50% to $307.7 million and adjusted EBITDA climbed 46% to $328.8 million, prompting the company to raise all four full-year guidance ranges.

Core performance data

Growth was led by royalties from partner products and higher product sales. Operating income and net income also increased, although both grew more slowly than revenue as product costs, acquisition-related expenses and litigation-related professional fees rose.

Adjusted EBITDA and non-GAAP EPS exclude specified items including intangible-asset amortization, share-based compensation and intellectual-property litigation costs.

Revenue streams and partner activity

Royalty revenue represented about 64% of quarterly revenue. Its 50% increase was primarily attributed to continued adoption of ENHANZE partner products launched since 2020, particularly argenx’s VYVGART Hytrulo and Janssen’s DARZALEX SC across global markets, together with contributions from other recent launches.

Net product sales rose about 59% to $129.6 million from $81.5 million. Revenue under collaborative agreements increased about 13% to $43.7 million from $38.6 million, producing growth across all three reported revenue categories.

Halozyme signed five ENHANZE and Hypercon collaboration agreements through July 2026, exceeding its full-year goal of three. The partners included Vertex, Oruka, GSK, Incyte and an undisclosed company. The agreements also expanded the technologies into areas including nucleic-acid therapeutics and a potential antibody-drug conjugate application, although future milestone and royalty contributions depend on partner development and commercialization.

Profitability, cash and the balance sheet

Operating margin declined by about 2.4 percentage points even as operating income increased. Cost of sales rose to $79.2 million from $46.4 million, primarily because of increased bulk rHuPH20 sales. Intangible-asset amortization increased to $29.5 million following the November 2025 acquisition of Elektrofi.

R&D expense rose to $27.7 million from $17.5 million, mainly due to the Elektrofi and Surf Bio acquisitions. SG&A increased to $57.0 million from $41.6 million because of higher consulting and professional-service fees, patent-litigation costs, acquisition expenses and compensation. Halozyme excluded $6.9 million of intellectual-property litigation costs from adjusted EBITDA, compared with $2.6 million a year earlier.

Cash, cash equivalents, restricted cash and marketable securities totaled $231.9 million at June 30, up from $145.4 million at the end of 2025. The company attributed the increase primarily to cash generated from operations, although it did not disclose quarterly operating cash flow in the release. Inventory fell to $137.1 million from $176.5 million over the same period.

During the quarter, Halozyme repurchased 4.8 million shares for $332.8 million. Its new authorization allows up to $1.0 billion of repurchases through December 31, 2028, with at least $400 million expected in 2026. Total current and long-term debt was approximately $2.15 billion at quarter-end, including $209.0 million classified as current.

2026 guidance

Halozyme raised both ends of every full-year guidance range previously issued on May 11. The higher outlook reflects expected royalty growth and increased API product sales, while adjusted EBITDA and EPS guidance already include approximately $60 million of new Hypercon and Surf Bio investment.

The new ranges imply year-over-year growth of 31%-37% for total revenue, 41%-43% for royalty revenue, 86%-95% for adjusted EBITDA and 108%-117% for non-GAAP diluted EPS. EPS guidance does not incorporate potential future share repurchases.

Recent insider transactions

The supplied six-month insider summary reports 457,445 shares acquired across 22 transactions and 242,959 shares sold across 11 transactions, resulting in net reported purchases of 214,486 shares. The latest valid individual records were largely sales and derivative-security exercises; these transactions do not by themselves establish insiders’ views of the company’s outlook.

A June 12 entry for officer Mark Howard Snyder was omitted because the supplied data did not identify a transaction action or amount.

Risks investors should monitor

• Dependence on partner-product royalties: Quarterly royalty growth was driven predominantly by VYVGART Hytrulo and DARZALEX SC. Changes in partner sales uptake would directly affect Halozyme’s largest revenue stream.
• Investment and acquisition-related costs: Elektrofi and Surf Bio increased amortization and R&D expenses, while the 2026 outlook includes about $60 million of additional Hypercon and Surf Bio investment. These costs could continue to limit operating leverage.
• Patent-litigation expense: Intellectual-property litigation costs rose to $6.9 million and contributed to higher SG&A, even though they were excluded from adjusted results.
• Capital allocation and leverage: Halozyme executed $332.8 million of repurchases during the quarter and plans further buybacks while carrying approximately $2.15 billion of debt. The balance among repurchases, investment and debt obligations remains an important cash-flow consideration.
• Execution of new collaborations: Upfront payments, milestones and royalties from newly signed agreements depend on partners advancing programs through clinical development, regulatory review and commercialization.

Summary

Halozyme’s Q2 2026 growth was centered on expanding royalty revenue from established partner products, supplemented by higher product sales and new technology collaborations. Profit increased substantially, but operating margin narrowed as product costs, acquired-business expenses and litigation fees rose. The raised 2026 guidance points to continued confidence in royalty and API sales growth, while future margin development, partner execution, investment spending and capital allocation are the main areas to monitor.