JAZZ Q2 Earnings Miss, Sales Beat, Stock Jumps on Raised '26 View

Total revenues rose 16% year over year to $1.21 billion, which beat the Zacks Consensus Estimate of $1.11 billion. This uptick was driven by the better-than-expected sales performance of its oncology and neuroscience products.

Shares of Jazz rose in after-hours trading yesterday. The gain was attributed to the stronger-than-expected revenues and raised 2026 sales outlook that outweighed the earnings miss.

Year to date, the stock has gained 48% compared with the industry’s 2% growth.

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JAZZ's Product Sales Fuel Revenue Growth

Net product sales totaled $1.16 billion, up 17% year over year. The reported figure beat both the Zacks Consensus Estimate of $1.08 billion and our model estimate of $1.05 billion.

High-sodium oxybate authorized generic (AG) royalty revenues fell 22% year over year to $42 million. Other royalty and contract revenues increased 67% to $10 million, though they remained a relatively small contributor to total revenues.

Jazz's Sleep Franchise Sustains Momentum

Net product sales for the combined oxybate business, comprising Xyrem and Xywav, rose 11% to nearly $502 million. This figure beat both the Zacks Consensus Estimate of about $455 million and our model estimate of $441 million.

Xywav sales increased 13% year over year to $471 million, supported by continued demand in narcolepsy and idiopathic hypersomnia (IH).

Jazz added approximately 525 net Xywav patients during the second quarter, marking its highest quarterly increase in a year. The company exited June with around 17,125 active patients, including 11,275 narcolepsy patients and 5,850 IH patients.

Management said the uptake of competing high-sodium generics remained limited, supporting its expectation for double-digit Xywav growth in 2026.

Xyrem sales continued their downward trajectory, declining 14% year over year to $30.5 million due to patients switching to Xywav and generic erosion.

JAZZ's Epilepsy Business Benefits From Demand

Epidiolex/Epidyolex sales increased 16% year over year to $292 million. Management attributed the performance primarily to strong underlying demand across pediatric and adult treatment settings.

Alongside the earnings release, Jazz announced that it had submitted a regulatory filing to the FDA for a capsule formulation of Epidiolex. This version is intended to broaden utilization within the currently approved indications, particularly among adolescent and adult patients for whom the liquid formulation may be less convenient.

The company is also expanding the Epidiolex clinical program through studies in developmental and epileptic encephalopathies, juvenile myoclonic epilepsy and adult Lennox-Gastaut syndrome.

Jazz's Oncology Portfolio Records Broad Growth

Oncology sales increased 32% year over year to $362 million.

Zepzelca revenues surged 42% to nearly $106 million, driven by adoption in first-line maintenance treatment for extensive-stage small-cell lung cancer (SCLC). This figure beat the Zacks Consensus Estimate of more than $93 million and our model estimate of $81 million.

During the conference call, Jazz announced plans to submit a labeling supplement to remove Zepzelca’s second-line metastatic SCLC indication. The proposed removal will not affect its first-line maintenance indication.

Rylaze/Enrylaze posted sales of $99.5 million, down 1% year over year.

Modeyso generated $48 million in sales compared with $41 million in the previous quarter. More than 600 patients had received the brain tumor treatment through the end of the second quarter since its launch last year.

Vyxeos sales declined 30% to more than $31 million, while Defitelio revenues rose 29% to $62 million.

Ziihera contributed $15.4 million in the reported quarter versus $13.3 million in the previous quarter. Jazz is preparing for a potential launch in first-line HER2-positive gastroesophageal adenocarcinoma (GEA) following the drug's Aug. 25 regulatory action date.

JAZZ's Higher Expenses Weigh on Earnings

Adjusted gross margin contracted 60 basis points year over year to 92.1%. The decline reflected higher sales of Modeyso and Zepzelca, which carry third-party royalty obligations.

Adjusted selling, general and administrative expenses rose 11% to more than $343 million, reflecting higher marketing investments and compensation-related expenses.

Adjusted research and development costs also increased 11% to about $185 million, primarily due to higher clinical study expenses related to Ziihera.

The quarter included $77 million in acquired IPR&D expenses related to agreements with AbCellera Biologics ABCL and Werewolf Therapeutics HOWL.

Jazz Raises Its 2026 Revenue Guidance

Jazz raised its 2026 revenue guidance to $4.60-$4.75 billion from $4.25-$4.50 billion. The revision reflects stronger Xywav performance and expected double-digit growth from the epilepsy and oncology franchises.

The company now expects rare sleep revenues of $2.03-$2.13 billion.

Adjusted SG&A expense guidance was increased to $1.33-$1.37 billion from $1.26-$1.32 billion, while adjusted R&D expense guidance was maintained at $725-$775 million.

The adjusted effective tax rate is expected to remain between 11.5% and 13.5%.

JAZZ’s Zacks Rank

Jazz currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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