Revenue grew 16.5% year-over-year to $674.1M in 2026Q2, but gross margin dipped to 60.2% from near-100% levels, and net income fell 42.9% year-over-year to $17.9M, reflecting significant non-operating losses.
Royalty Pharma plc (RPRX) annual income statement — 9-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Sales/Revenue | 2.54B | 2.38B | 2.26B | 2.35B | 2.24B | 2.29B | 2.12B | 1.81B | 1.79B | 1.6B |
| Revenue Growth % | 10.01% | 5.06% | -3.86% | 5.24% | -2.28% | 7.87% | 16.98% | 1.08% | 12.33% | - |
| Cost of Goods Sold | 269.39M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| COGS % of Revenue | - | - | - | - | - | - | - | - | - | - |
| Gross Profit | 2.27B | 2.38B | 2.26B | 2.35B | 2.24B | 2.29B | 2.12B | 1.81B | 1.79B | 1.6B |
| Gross Margin % | 89.38% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| Gross Profit Growth % | - | 5.06% | -3.86% | 5.24% | -2.28% | 7.87% | 16.98% | 1.08% | 12.33% | - |
| Operating Expenses | 685.47M | 818.67M | 971.13M | 862.4M | 1.93B | 858.75M | 526.95M | -808.92M | 430.45M | 658.24M |
| OpEx % of Revenue | - | 34.42% | 42.9% | 36.63% | 86.27% | 37.51% | 24.83% | -44.59% | 23.98% | 41.19% |
| Selling, General & Admin | 603.89M | 573.48M | 236.67M | 249.75M | 227.3M | 182.83M | 181.72M | 103.44M | 61.91M | 106.44M |
| SG&A % of Revenue | - | 24.11% | 10.46% | 10.61% | 10.16% | 7.99% | 8.56% | 5.7% | 3.45% | 6.66% |
| Research & Development | 239.35M | 452M | 2M | 52M | 177.11M | 200.08M | 26.29M | 83.04M | 392.61M | 117.87M |
| R&D % of Revenue | - | 19.01% | 0.09% | 2.21% | 7.92% | 8.74% | 1.24% | 4.58% | 21.87% | 7.38% |
| Other Operating Expenses | 2M | -206.81M | 732.46M | 560.66M | 1.53B | 475.84M | 318.95M | -995.4M | -24.07M | 433.93M |
| Operating Income | 1.58B | 1.56B | 1.29B | 1.49B | 307.06M | 1.43B | 1.6B | 2.62B | 1.36B | 939.69M |
| Operating Margin % | 62.34% | 65.58% | 57.1% | 63.37% | 13.73% | 62.49% | 75.17% | 144.59% | 76.02% | 58.81% |
| Operating Income Growth % | - | 20.66% | -13.38% | 385.94% | -78.54% | -10.32% | -39.18% | 92.25% | 45.2% | - |
| EBITDA | 1.63B | 1.56B | 1.56B | 1.89B | 312.74M | 1.45B | 1.62B | 2.65B | 1.4B | 972.96M |
| EBITDA Margin % | 64.15% | 65.74% | 68.76% | 80.15% | 13.98% | 63.5% | 76.26% | 145.91% | 77.87% | 60.89% |
| EBITDA Growth % | -15.75% | 0.45% | -17.54% | 503.47% | -78.49% | -10.18% | -38.86% | 89.39% | 43.66% | - |
| D&A (Non-Cash Add-back) | 3.64M | 3.85M | 0 | 0 | 5.67M | 23M | 23.06M | 23.92M | 33.27M | 33.27M |
| EBIT | 1.71B | 1.63B | 1.56B | 1.89B | 418.02M | 1.41B | 1.86B | 2.73B | 1.8B | 1.59B |
| Net Interest Income | -335.74M | -274.07M | -178.17M | -114.9M | -109.63M | -112.61M | -128.68M | -246.24M | -255.51M | -240.58M |
| Interest Income | 25.33M | 33.59M | 47.34M | 72.29M | 78.33M | 53.53M | 28.38M | 22.33M | 24.44M | 6.76M |
| Interest Expense | 361.07M | 307.66M | 225.51M | 187.19M | 187.96M | 166.14M | 157.06M | 268.57M | 279.96M | 247.34M |
| Other Income/Expense | -231.27M | -235.33M | 38.37M | 207.94M | -77M | -189.51M | 106.56M | -161.76M | 153.41M | 403.49M |
| Pretax Income | 1.35B | 1.32B | 1.33B | 1.7B | 230.06M | 1.24B | 1.7B | 2.46B | 1.52B | 1.34B |
| Pretax Margin % | 53.23% | 55.68% | 58.79% | 72.2% | 10.28% | 54.21% | 80.19% | 135.67% | 84.57% | 84.06% |
| Income Tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Effective Tax Rate % | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| Net Income | 815.3M | 770.95M | 858.98M | 1.13B | 42.83M | 619.73M | 975.04M | 2.35B | 1.38B | 1.21B |
| Net Margin % | 32.15% | 32.42% | 37.95% | 48.2% | 1.91% | 27.07% | 45.94% | 129.45% | 76.76% | 75.72% |
| Net Income Growth % | -20.13% | -10.25% | -24.31% | 2549.5% | -93.09% | -36.44% | -58.48% | 70.46% | 13.86% | - |
| Net Income (Continuing) | 1.35B | 1.32B | 1.33B | 1.7B | 230.06M | 1.24B | 1.7B | 2.46B | 1.52B | 1.34B |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 91.28M | 3.24B | 3.4B | 3.56B | 3.9B | 4.47B | 5.08B | 35.88M | 63.87M | 0 |
| EPS (Diluted) | 1.46 | 1.80 | 1.91 | 2.53 | 0.10 | 1.49 | 1.28 | 6.63 | 3.89 | 3.42 |
| EPS Growth % | -19.44% | -5.76% | -24.51% | 2430% | -93.29% | 16.41% | -80.69% | 70.44% | 13.74% | - |
| EPS (Basic) | - | 2.33 | 1.92 | 3.41 | 0.10 | 1.49 | 1.28 | 6.63 | 3.89 | 3.42 |
| Diluted Shares Outstanding | 556.9M | 559.61M | 594M | 602.9M | 564.93M | 414.8M | 388.13M | 354.18M | 354.18M | 354.18M |
| Basic Shares Outstanding | 445.06M | 431.89M | 445.99M | 447.6M | 437.96M | 414.79M | 388.13M | 354.18M | 354.18M | 354.18M |
| Dividend Payout Ratio | - | 49.06% | 43.83% | 31.58% | 778.21% | 46.02% | 40.8% | 31.48% | 59.11% | 60.76% |
Quick answers to the most common questions about buying RPRX stock.
For fiscal year 2025, Royalty Pharma plc (RPRX) reported total revenue of $2.38B. This represents a 48.8% increase compared to $1.60B in 2017.
Royalty Pharma plc (RPRX) is profitable, generating $770.9M in net income for the fiscal year ending 2025 with a net profit margin of 32.4%.
Royalty Pharma plc (RPRX) reported an operating income of $1.56B, resulting in an operating profit margin of 65.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Royalty Pharma plc (RPRX) generated $2.38B in gross profit for the year, representing a gross profit margin of 100.0%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Revenue concentration and volatility
Metrics are mathematically derived from official filings.
Revenue Growth Shows Resilience
Royalty Pharma's revenue grew 16.5% year-over-year in 2026Q2, reaching $674.1M, according to the latest quarterly report, though growth has been uneven across quarters, with 2024Q1 showing a 17% decline.
The 16.5% growth in 2026Q2 is the strongest in the observed period, but it follows a deceleration in 2025Q1 when growth was flat. This suggests that revenue growth is not linear, possibly due to the timing of royalty milestones or new acquisitions. Investors should monitor whether this acceleration is sustainable or a one-off event.
Gross Margin Near Pristine Levels
Gross margin has been consistently at or near 100% for most quarters, with 2026Q2 dipping to 60.2% due to a $268.2M COGS line, as per the income statement, which is atypical for a royalty company.
The 2026Q2 gross margin drop is a significant anomaly, as COGS was essentially zero in prior quarters. This may indicate a one-time cost or a change in revenue mix. If this persists, it could pressure the company's high-margin business model, which is a key investment thesis.
Operating Leverage Highly Variable
Operating margin swung from 130.2% in 2024Q3 to -13.0% in 2024Q1, and more recently from 100.3% in 2026Q1 to 19.7% in 2026Q2, based on reported figures, indicating significant volatility in operating leverage.
The extreme swings in operating margin are driven by fluctuations in R&D and SG&A expenses, which appear to be lumpy. For instance, R&D spiked to $300.5M in 2025Q2, likely due to a milestone payment. This suggests that operating income is not scaling predictably with revenue, and investors should expect continued volatility.
Earnings Quality Clouded by Non-Operating Items
Net income in 2026Q2 was only $17.9M despite $133.0M operating income, implying significant non-operating losses, as per the income statement, and EPS fell 42.9% year-over-year.
The gap between operating income and net income suggests large interest expenses or investment losses, which are not detailed in the provided data. This reduces the quality of reported earnings, as the core business is profitable but bottom-line results are heavily impacted by non-operating factors. Investors should scrutinize the components of net income.
Expense Volatility Masks Cost Discipline
SG&A expenses have ranged from $54.7M to $179.8M over the past ten quarters, with R&D spiking to $300.5M in 2025Q2, according to the income statement, suggesting a lack of consistent cost control.
The variability in SG&A and R&D is unusual for a royalty company, which typically has minimal R&D. The $300.5M R&D charge in 2025Q2 may be a one-time acquisition-related cost, but the overall pattern suggests that expenses are not tightly managed. This could indicate that the company is investing in growth opportunities, but it also introduces unpredictability.
2024Q1 Marks a Turning Point
In 2024Q1, Royalty Pharma reported a negative operating margin of -13.0% and near-zero net income, as per the income statement, but subsequently rebounded to record margins in 2024Q3, signaling a volatile inflection.
The 2024Q1 quarter appears to be a trough, possibly due to a one-time charge or revenue shortfall. The subsequent recovery to 130.2% operating margin in 2024Q3 suggests that the company's core royalty model is intact, but the volatility raises questions about the stability of its earnings stream. This inflection highlights the importance of understanding the drivers behind quarterly fluctuations.
What Could Invalidate the Base Case
The 2026Q2 gross margin collapse to 60.2% and the persistent gap between operating and net income, as reported in the income statement, could signal structural issues that undermine the royalty model's profitability.
Short-sellers might argue that the 2026Q2 COGS of $268.2M is not a one-off but the beginning of a new cost structure, especially if it relates to revenue-sharing obligations. Additionally, the consistent non-operating losses, which reduced net income to just $17.9M in 2026Q2, suggest that the company's financing costs or investment losses are eroding shareholder value. If these trends persist, the high-margin, high-ROIC narrative could be challenged, and the stock could re-rate lower.