Keros Therapeutics, Inc. (KROS) Income Statement

The -99.8% and -100.0% sequential declines in 2026Q1 and 2026Q2 are not evidence of product demand decay in the usual sense; they most plausibly reflect the absence of collaboration or milestone revenue that produced the 2025Q1 spike. An analyst should therefore discount reported growth rates such as the +2,544.1% figure in 2025Q1 and the +35.8% print in 2025Q3, since neither signals an underlying commercial trajectory. Until a durable revenue line emerges, forward revenue modeling remains largely a function of transaction timing rather than execution, which materially raises forecast dispersion.

With COGS never exceeding $403K in any reported quarter, the margin profile is structurally uninformative — a 100% print in 2024Q2 on $37K of revenue is arithmetically trivial, and the -9.8% in 2026Q1 reflects the fact that cost of sales was booked while revenue was near zero. This matters because peer comparisons such as KRYS's 92.6% gross margin or FOLD's 87.3% are meaningful only where revenue is product-driven and recurring; applying that framing to KROS would be misleading. The economically relevant margin benchmark for Keros is instead its operating margin, which has ranged from +72.0% to -1,363.2% depending almost entirely on deal recognition.

The roughly 55% reduction in quarterly R&D from the 2024Q3 peak of $49.2M to 2026Q2's $22.3M appears to reflect study-stage completion or program prioritization rather than a structural change in spending culture, since R&D still represents the overwhelming majority of the cost base at about 72% of total operating expenses in the most recent quarter. SG&A has remained remarkably stable near $10M per quarter across two years, which suggests the administrative platform was sized to support a mature late-stage organization and may not scale down proportionally if programs advance. Investors should monitor whether the lower R&D run rate persists through 2026 or re-accelerates as programs progress, because that swing alone can move quarterly operating income by more than $20M.

Before 2025Q1, Keros was consistently losing $43.1M–$53.0M per quarter with revenue under $3M, and the inflection came entirely from a top-line event rather than cost control or margin expansion — the same quarter actually carried R&D of $48.7M, near its peak. The lasting implication is that the organization's cost structure was built around a pre-commercial or collaboration-dependent phase and has not yet been re-based to a steady-state commercial platform. The subsequent quarters, in which operating losses re-emerged at $25.9M–$39.8M, suggest the 2025Q1 result was an outlier event rather than the start of a new earnings regime, and that the inflection has not compounded.