Krystal Biotech, Inc. (KRYS) Earnings & Analysis

Latest quarter

Krystal Biotech reported Q2 FY2026 revenue of $119.2 million, above the consensus of $119.1 million. Adjusted earnings per share were $1.79, above the consensus of $1.70.

Revenue rose 24.1% from $96.0 million a year earlier. Krystal sells VYJUVEK, a genetic medicine for wounds in people with dystrophic epidermolysis bullosa, and the product generated $27.6 million outside the U.S. during the quarter, including from launches in Europe and Japan. Krystal said German pricing accruals reduced sequential net European revenue despite growth in related vial sales.

The company reported diluted earnings per share of $1.79, up from $1.29 a year earlier. Gross margin rose to 94.6% from 92.5%, while operating margin increased to 49.0% from 41.0%. Free cash flow was $71.2 million, compared with $50.8 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Krish Krishnan said Krystal was working to broaden international access to VYJUVEK while pursuing pricing and reimbursement discussions in Germany, France, Italy, Spain and the U.K. Asked about demand, Europe general manager Laurent Goux said “over 180 patients have been treated in Western Europe and Japan so far.” Goux said estimating the European patient count precisely was becoming more difficult as Krystal expanded into more centers and countries.

CFO Kathryn Romano said a full quarter of German pricing accruals contributed to lower sequential net European revenue despite growth in related vial sales. Krishnan said Krystal expected German pricing negotiations to conclude in Q3 and hoped to return to an actual net revenue number there by Q4, assuming a successful agreement. Goux said France’s early-access pathway currently concentrates administration in hospitals because of its GMO classification requirements, while Japan’s prescription-renewal requirements can burden patients during the first year of launch.

Asked about U.S. demand, commercial head Christine Wilson said Krystal had surpassed its initial penetration target of 60% of the diagnosed patient population and continued to find patients in community settings. Krishnan said the company was reaching “somewhere between 35 and 50 reimbursement approvals” almost every quarter.

On development spending, Krishnan said commercial performance allowed Krystal to invest in global expansion and its pipeline. He said the company had two registrational studies underway, in neurotrophic keratitis and ocular lesions in patients with dystrophic epidermolysis bullosa. Krishnan said repeat-dose studies in cystic fibrosis and Hailey-Hailey disease could advance to registrational development in 2027, assuming supportive data. Research and development president Suma Krishnan said patients had started dosing in the Hailey-Hailey study and that Krystal expected to start a registrational trial early the following year.

Guidance

On the Q2 call, CFO Kathryn Romano said Krystal continued to expect $175 million to $195 million in non-GAAP research and development and selling, general and administrative expenses for full-year 2026.