• Q4 Revenue: $66.8 million, an 84% increase year-over-year and a 36% sequential increase.
• Q4 Net Income: Approximately $6.8 million.
• Q4 Adjusted EBITDA: Approximately $22.5 million.
• Full Year 2024 Revenue: $199.6 million, a 53% increase from the previous year.
• Full Year 2024 Adjusted EBITDA: $40.3 million, a 43% increase.
• Q4 Gross Margin: 84%.
• Full Year 2024 Gross Margin: 80%.
• IHEEZO Revenue: $23 million in Q4, representing 34% of total revenues.
• IHEEZO Unit Volume Growth: 43% increase in Q4 compared to the previous quarter.
• VEVYE Prescription Growth: 44% increase in Q4 over the prior quarter.

• Warning! GuruFocus has detected 6 Warning Signs with HROW.

Release Date: March 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Harrow Inc (NASDAQ:HROW) reported a record financial performance for 2024, with a 53% increase in full-year revenues to $199.6 million.
• The company achieved a remarkable 84% increase in fourth-quarter revenue compared to the same period in 2023.
• Adjusted EBITDA increased by 43% to $40.3 million for the full year 2024.
• The company's core gross margins improved significantly, reaching 84% for Q4 and 80% for the full year.
• Harrow Inc (NASDAQ:HROW) launched the VEVYE Access for All program, which aims to improve patient access and affordability, potentially boosting prescription volumes and revenue growth.

Negative Points

• The company experienced a delay in filing its Form 10-K due to a merger with a new auditing firm.
• There may be quarter-to-quarter volatility in unit demand for IHEEZO, despite its strong performance.
• Harrow Inc (NASDAQ:HROW) anticipates starting to pay taxes in 2025, which could impact cash flow.
• The company extended payment terms for distributors, impacting cash flow in Q4.
• Harrow Inc (NASDAQ:HROW) plans to stop reporting prescription data to IQVIA, which may reduce the accuracy and actionability of data for stockholders.

Q & A Highlights

Q: Can you explain the significant improvement in VEVYE's gross-to-net revenue and the drivers behind it? A: Mark Baum, CEO, explained that VEVYE's revenue more than tripled, with a considerable improvement in ASP due to changes in business rules and fewer copay buy downs. The demand for VEVYE increased significantly, and the new VEVYE Access for All program is expected to further boost growth.

Q: What impact do you expect the VEVYE Access for All program to have on market access and prescription volumes? A: Mark Baum, CEO, stated that the program opens access to all patients, regardless of insurance status, and aims to reduce costs for patients. It is expected to expand the prescription market and increase Harrow's market share in the US dry eye prescription market.

Q: What should we expect for SG&A growth and cash flow conversion in 2025? A: Andrew Boll, CFO, indicated that SG&A growth should be modeled based on the second half of 2024, with a focus on operating leverage. The company expects most of the EBITDA to convert to cash flow, with some impact from taxes.

Q: Can you provide insights into the extended payment terms with distributors and its impact on accounts receivable? A: Andrew Boll, CFO, explained that the extended terms are tied to buy and bill products like TRIESENCE and IHEEZO, allowing end users to complete their revenue cycle before payment. This approach became more pronounced with the introduction of TRIESENCE.

Q: What are the strategic plans for the next generation of TRIESENCE, and how will it impact the market? A: Mark Baum, CEO, mentioned that while specifics can't be disclosed due to competitive reasons, the next generation TRIESENCE is being developed based on market research and customer needs. It is expected to provide a competitive advantage and contribute to long-term sales growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.