Earnings call transcript: PulteGroup Q4 2024 earnings beat expectations

PulteGroup Inc. (NYSE:PHM) reported a robust performance for the fourth quarter of 2024, with earnings per share (EPS) of 4.43, significantly surpassing the forecasted 3.27. This earnings beat was accompanied by actual revenue of 4.92 billion dollars, exceeding the anticipated 4.65 billion dollars. The company’s strong performance is reflected in its impressive financial health metrics, with InvestingPro data showing a return on equity of 27% and return on invested capital of 22%. Despite these positive results, the stock experienced a 1.46% decline in the premarket session, reflecting broader market concerns.

Key Takeaways

• PulteGroup’s EPS outperformed expectations by 35.5%.
• Revenue exceeded forecasts, reaching 4.92 billion dollars.
• Stock price decreased by 1.46% in premarket trading.
• Broader market trends may be influencing investor sentiment.
• The company anticipates continued revenue growth in 2025.

Company Performance

PulteGroup demonstrated strong financial performance in Q4 2024, continuing its trend of surpassing market expectations. The company’s ability to deliver higher-than-expected earnings and revenue highlights its operational efficiency and market positioning. According to InvestingPro analysis, PHM is currently trading at an attractive P/E ratio of 7.11x and appears undervalued based on Fair Value calculations. The stock’s decline suggests external factors may be affecting investor confidence, though the company maintains a "GREAT" overall financial health score of 3.28 out of 5.

Financial Highlights

• Revenue: 4.92 billion dollars, exceeding the forecast by 270 million dollars.
• Earnings per share: 4.43, surpassing expectations by 1.16.
• Pre-market stock price change: 0.7% increase post-earnings announcement.

Earnings vs. Forecast

PulteGroup’s actual EPS of 4.43 significantly exceeded the forecast of 3.27, marking a 35.5% positive surprise. This performance is notable compared to previous quarters, where the company has consistently met or slightly exceeded expectations.

Market Reaction

Despite the positive earnings report, PulteGroup’s stock price fell by 1.46% in premarket trading, closing at 102.83. This movement contrasts with the earnings beat, suggesting that broader market dynamics or sector-specific challenges may be impacting investor sentiment.

Outlook & Guidance

Looking ahead, PulteGroup anticipates continued revenue growth in 2025. The company’s strategic initiatives and market positioning are expected to support this positive trajectory. InvestingPro subscribers have access to detailed analysis from 8 analysts covering PHM, along with comprehensive fair value models and 15+ exclusive ProTips about the company’s financial strength and market position. The guidance for upcoming quarters remains optimistic, with projected EPS and revenue increases, supported by the company’s strong current ratio of 7.78x and moderate debt levels.

Executive Commentary

"We continue to be active in seeking late-stage or commercial-stage assets," stated Pascal Veisman, highlighting the company’s focus on strategic growth opportunities. Jose Luis Moreno noted, "2024 has been a year of solid growth, strategic progress, and continued commitment to innovation," reflecting the company’s successful execution of its business strategy.

Risks and Challenges

• Potential macroeconomic pressures affecting the housing market could impact future performance.
• Market volatility may influence investor sentiment and stock price stability.
• Supply chain disruptions could pose challenges to operational efficiency.

Q&A

During the earnings call, analysts inquired about the company’s strategic initiatives and market expansion plans. The management emphasized ongoing business development efforts and the exploration of licensing opportunities in new markets, particularly in Europe and Asia.

Full transcript - Pulte Group (PHM) Q4 2024:

Charlie, Call Coordinator: Good afternoon, and welcome to the PharmaMall Full Year Results twenty twenty four Conference Call. My name is Charlie, and I’ll be coordinating the call today. If you’d like to ask a question at the end of the presentation, you can do so by pressing star followed by one on your telephone keypad. I should now hand over to our host, Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations to begin. Jose, please go ahead.

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: Thank you, Charlie, and good morning to everyone. Thank you for joining today’s pharma earnings conference call for the financial results for the year 2024. On the call with me today are Maria Lucia Efrantia, Chief Financial Officer of PharmaMaa Luis Murra, Managing Director of PharmaMaa and Pascal Veisman, Senior Vice President of Strategic Development. Following our prepared remarks today, we’ll open the line for questions. And I would like to remind you that today’s conference call might include forward looking statements regarding future events or the future financial and operating performance of the company.

Such forward looking statements are only predictions based on current expectations, and actual results may vary from those projected. We disclaim any obligation to update any information provided herein, and we refer you to our Safe Harbor statement on our corporate presentation, which is available on our website together with the press release, the report of the results we released this morning and the presentation we are seeing in this call. Well, we are delighted to share with you what has been a year of solid growth, strategic progress and continued commitment to innovation. Firstly, we are pleased to report that Pharma marked close 24% with a double digit revenue growth, primarily driven by Seflka, along with growth from Yandelli’s total revenues, which are included milestones. I’d like to highlight the strong performance of Fotelka sales in The U.

S, which significantly contributed to 18% growth in our total royalty revenues in 2024. Our financial success is reflected in our robust bottom line, achieving an EBITDA of $13,000,000 and a net profit charge of $26,000,000 in $2,024,000,000 dollars as Maria Lisa will explain in a minute. This underscores our strong operating performance and ongoing investment in R and D, which is of course a cornerstone of our long term growth strategy. Our financial position remains robust with net cash over EUR 100,000,000, reinforcing our financial stability and providing a strong foundation for future growth. Lastly, I want to emphasize recent significant developments like the highly encouraging results from the Phase III EINFORCE trial.

And based on those of these positive results, we plan to submit a marketing authorization application to the EMA, as Luis will elaborate on later. Our partner, Jazz, has indicated that they will file in The U. S. Also in the first half of twenty twenty five. And now I will turn the floor to Maria Luisa, who will provide more detail into our financial results.

Maria Luisa?

Maria Lucia Efrantia, Chief Financial Officer, PharmaMar: Thank you, Jose Luisa. Good morning and thank you all for joining us in the PharmaMath twenty twenty four full year results call. 2024 has been a very positive year, not only from a financial point of view, but I will focus on this part. We have seen an increase in our total revenues with good performance in each of the lines. On the recurring revenue side, sales of the active ingredient to our partners, leading indicator of future sales in partners’ territories, almost offset the decline in sales of Giondelis in its second full year of coexistence with generics.

Seppeltka continued to be available under the Access Compassionnel program in France and had a good year of commercial sales in Switzerland where sales amounted to EUR 6,400,000.0. Royalties from Sibstelka sales royalties from Sibstelka sales in United States increased by 15%. Royalties including those from Yundelis increased 18% over the previous year. Nonrecurring revenues also increased by 38% due to milestones received from Janssen for Yandelli and a milestone received from Lueye Pharma for the conditional approval of Tebcelka in China. Looking at revenues by product, Sefzelka accounts for approximately 70% of total income in both years.

And in 2024, revenues from Sefzelka amounted to million and Yandere’s to EUR 54,500,000.0. R and D expenses have increased by 4% year on year to EUR 103,500,000.0, sorry, mainly in oncology due to the development of our pipeline, which Chuytsemora will now explain. The rest of expenses has remained fairly stable with the exception of general expenses, which include the costs of the new oligonucleotide production facility complete this year. All this leads to an EBITDA of EUR 13,000,000 compared to EUR 2,100,000.0 last year. Net profit reached EUR 26,200,000.0, EUR 1 point 1 million in 2023, driving by both positive financial results and positive tax gains.

The later mainly as a result of the monetization of tax deductions for R and D investments. Financial results are the result of good market conditions, particularly in the first half of the year and of dollar deposits, which were mark to market at the end of the year with positive results. I would like to end my presentation by referring to the net cash position of EUR 109,000,000, which is the sum of cash and cash equivalents plus current and non current financial assets amounting to EUR 157,000,000 minus total financial debt of EUR 47,800,000.0. I would like also to mention that the cash flow generated from operations of EUR 6,000,000 versus EUR 13,500,000.0 of tax used in operations in 2023. Finally, a brief reference to SV activities during the year.

I mentioned that the annual sustainability report was produced in accordance with CSRD standards. The board has been very active in this area approving policies on human rights and biodiversity as well as a sustainability action plan setting out the group strategy for 2024 to 2026. This year also saw the complexion of the net zero carbon emission plan and an analysis of climate change, risk and opportunities. To conclude, I would say that we expect revenues to grow in 2025. Also, the major inflection point should be in 2026.

On the cost on the expenses and cost side, we expect most of them to remain stable. And now I pass to Luis Mora.

Luis Mora, Managing Director, PharmaMar: Hello, good morning. Thank you, Maria Luisa. Twenty twenty four has been a great year for Farmer Mar. Apart from the good financial results that Mayolis has just been shown, important milestones have been achieved in the different compounds that make up our pipeline. As you can see, we have currently six compounds in our pipeline, three already approved in different indications and another three compounds in clinical development, all of which come from our technology platform.

The DIALIS, the first compound approved in 02/2007 and which in 2022 in Europe become a generic, continues to be a cash generator exceeding in revenue for those obtained in 2023, especially in territories outside Europe. And today, it is still considered a standard of treatment in second line of soft tissue sarcoma. Uploading approval for multiple myeloma in Australia, we hope that during this year 2025, the revaluation in Europe will take place. After we won the lawsuit that we filed against European Commission before the Luxembourg Court for the negative opinion obtained in 2018, and that is the court revoking 2018 decision considering that there have been a conflict of interest. Regarding the compassionate use for small cell lung cancer, the value of this compassionate use by beyond the revenues, the increase in awareness of the product across Europe is demonstrated is highly concentrated in France, Austria, Portugal and Greece, where more than 1,200 patients have been treated in nearly two thirty different hospitals in 2024, growing by more than 15% compared to 2023.

Our launch at Telkent in Switzerland is also being a factor, reaching a market share of thirty percent in second line extensive disease treatment in 2024. In October, we announced the positive data from Phase III of Tepsilka plus atezolizumab in first line maintenance small cell lung cancer. The data were statistical significant in the two prebudian points, PFS and overall survival and clinically relevant. This will lead the presentation of the registration dossier in Europe by PharmaMar and The USA by our partner, Jasper Masoptical in the first half of this year. We believe strongly believe that the data from this trial will change the treatment pattern in this label.

And we expect it this data will be present this year in the major medical meetings and to publish in medical journal. Thus, lorbenectin, we expect it to increase our current income several times over. Muscle lung cancer in first life maintenance means being able to access our European market of approximately sixty five thousand patients, of which seventy percent have extensive disease and of this ninety percent have access to the first line of treatment. It means being able to treat about thirty percent more patients than in second line. With Inactivin for the small cell lung cancer, extensive disease in second line of treatment is based in the LAGOON trial, which we announced at the end of the treatment in December 2024.

It is a three hour trial, the CelcA monotherapy, CelcA combining with irinotecan on the control arm, topotecan or irinotecan. This trial is positive and clinically relevant, may also offer second line patients in Europe and other therapeutic alternatives and has two possibility factors, either monotherapy or combination with Idinotecan. The first indication is Reimerosalcoma in first line combined with toxadulisine. Approximately, four thousand five hundred patients are diagnosed in Europe each year and about two thousand five hundred patients in The USA. The Phase twothree clinical trial is recruiting better than expected and we hope to finish the enrollment in the first quarter next year.

Then we will have three registrational dossier, one in 2026, first line, small cell lung cancer MINDRA study in 2027, in second line in the small cell lung cancer and in 2028 in first line Leukemia sarcoma. Regarding market access, we are already working to accelerate the entry of the product into the different European market as much as possible. We have an excellent sales network in Europe, which we will gradually and appropriate reinforce of the price and reimbursement are obtained in the different European countries. In the rest of the world, the SELCA is already approved in 17 countries for the small cell and cancer second line business. It is marketed through our partners and the new registration of those shares will also be presented through 2025 and 2026.

There are also the main territory left to license Eclta in Japan. We are in conversation with different companies and we hope to give new flows in 2025. As I said before, we have the other three compounds in clinical development. Equivectin is currently in Phase II in different tumor types and the first indication we are going to focus is in a small cell membrane high grade prostate cancer. In this semester, we plan a meeting with the FDA to agree on the development in this indication.

In addition, it is in development in combination with immunotherapy and we are seeing tumor responses. PM54, potentially the second generation of lorbenactidine with a very good safety profile, we have already seen partial responses, longer stabilization and different tumor types in the Phase I. And we are already planning the Phase II trial, single agent and new Phase I combination. Lastly, PM534, a new tubulin inhibitor, unit in this class, we have not observed neurotoxicity and it is already producing very interesting activity signals in solid tumor. The plan with these three compounds is that in 2028, ’20 ’20 ’9, they will be in different phases three.

And now I pass the word to Jose Luis Moreno.

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: Thank you, Luis. And with this, we conclude our prepared remarks today and we open the line for questions. Charlie?

Charlie, Call Coordinator: Thank you. Thank you. Of course. If you’d like to ask a question via the telephone lines, you can do so

Luis Mora, Managing Director, PharmaMar: by pressing star followed by one on your telephone keypad.

Charlie, Call Coordinator: If you choose to withdraw your question, please press star followed by 2. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question comes from Ami Sadia of Needham. Ami, your line

Luis Mora, Managing Director, PharmaMar: is open. Please go ahead.

Poona, Analyst (representing Ami Sadia), Needham: Hi. This is Poona on for Ami. Thank you for taking our question. I just wanted to know how do we approach in business development in 2025? Is there not any activity that we can see over there?

And my second question is, could

Pascal Veisman, Senior Vice President of Strategic Development, PharmaMar: you hear me

Maria Lucia Efrantia, Chief Financial Officer, PharmaMar: over here?

Pascal Veisman, Senior Vice President of Strategic Development, PharmaMar: We can barely hear you. Could you speak a little louder, please, or closer to the microphone?

Poona, Analyst (representing Ami Sadia), Needham: Can you hear me better now?

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: Much better, I thought.

Poona, Analyst (representing Ami Sadia), Needham: Oh, sorry.

Charlie, Call Coordinator: Yes, much better.

Poona, Analyst (representing Ami Sadia), Needham: Hi, this is Poona on for Ami and thank you for taking our question. Just two questions on my end. How are you approaching business development in 2025? Is there any activity that we can see there? And second question, could you provide us an overview of the study assessing Zepsilkow with Doctor.

Roberson for LMS, the design of the Phase IIb3 trial and timeline? And what gives you confidence regarding the study? Thank you.

Pascal Veisman, Senior Vice President of Strategic Development, PharmaMar: Well, I’ll take the first one and Luis will take the second. On the business development front, we continue to be active in seeking late stage or commercial stage assets, primarily for Europe. The process is arduous and continues. Prices continue to be elevated and we continue to be disciplined. We’re not going to give any guidance on timelines that we don’t control, however, so we can just say that once we’ve got the ink dry on a piece of paper, we’ll make it publicly known shortly thereafter.

And I think the second question was regarding the trial design of the sarcoma trial, is that right with Doctor. Rubinstein?

Maria Lucia Efrantia, Chief Financial Officer, PharmaMar: Yes.

Luis Mora, Managing Director, PharmaMar: Thank you, Ami. The trial design is that two parts, the Phase II and Phase III. The three arms trial in the first part, the one arm is lorbenectin plus low dose doxorubicin, the second arm, lorbenectin plus high dose doxolubicin and the control arm is full dose doxolubicin. The idea is when we achieve this number of events, the IDMC pick the winner of the two lubinectin arms or with high dose or low dose of doxolubicin in order to continue the enrollment to finalize the Phase III. We don’t stop the trial in this period of time to select the winner that the transition, the Phase II to Phase III is automatic, okay?

The enrollment was fantastic, much better than expected. We are open about 100 hospitals, centers in USA, mainly USA and Europe. And we expected to finalize the enrollment in the first quarter of next year. The primary endpoint is PFS, but is powered for overall survival. Then we expected the readout data in the first half of twenty twenty seven.

Poona, Analyst (representing Ami Sadia), Needham: Got it.

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: Thank you

Poona, Analyst (representing Ami Sadia), Needham: so much. Thank

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: you, Ami. We have some more written questions, Luis, so we can address them. I had

Luis Mora, Managing Director, PharmaMar: a few questions

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: about the license of a little bit negative in Japan. I know you’ve mentioned that, but if you could remind about what you just said about the license in Japan.

Luis Mora, Managing Director, PharmaMar: Yes, absolutely. We are happy with the contract with several companies. We are in a tougher conversation with different companies, and we are expected to finalize this negotiation in 2025, okay? We obviously, we can disclose the company. We can’t say exactly why and when we achieved this agreement.

But what is interesting is several companies have huge interest in this drug for Japan.

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: Okay. We have two more questions before we take another question. We’ll just go over the phone. This again is another reminder. I know you’ve mentioned it, but if you could remind what’s the estimated debt for approval of lorbenecedibine in first line in Europe.

Luis Mora, Managing Director, PharmaMar: Well, we announced we will submit the dossier in the first half. The timing for the EMA depends if it’s considered an accelerated review or not. This is in the EMA half. Then you can take from the submission for BPD, you can consider between seven, eight months to twelve.

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: Until that. This is

Luis Mora, Managing Director, PharmaMar: normal official times in the EMI if it’s considered an accelerated review

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: or not. And the final one that we received in Britain, They ask about when we can see the first revenues from sales from China.

Luis Mora, Managing Director, PharmaMar: From China, well, our partner, Wuya Pharma, announced the drug was approved in 2024 in the last quarter in December. After this approval in China, they needed to perform several activities before launch, but we expect it to launch in the first half this year.

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: Thank you. And Charlie, I believe there’s another question on the phone.

Charlie, Call Coordinator: Yes, that’s correct. Our next question comes from Sameer Devani of Rx Securities. Sameer, your line is open. Please go ahead.

Sameer Devani, Analyst, Rx Securities: Hi, guys. Thanks for taking my questions and congrats on the results. I think I’ve got three, a couple on the numbers and maybe just one on the pipeline. I guess on the numbers, you just mentioned about China and Louis. And I just wanted to confirm that that revenue all from Louis in the 2024 numbers was the approval milestone.

Is that correct?

Maria Lucia Efrantia, Chief Financial Officer, PharmaMar: Yes. That’s correct. That’s correct.

Sameer Devani, Analyst, Rx Securities: Okay. That’s fine. And then there was no mention in the press release about a dividend?

Maria Lucia Efrantia, Chief Financial Officer, PharmaMar: No. We haven’t mentioned because the board hasn’t decided yet about dividends for this year.

Sameer Devani, Analyst, Rx Securities: Okay. And then the final question is just on ecubectodine. There’s obviously a Basket trial ongoing. Can you just remind us of the size of that study, the different tumor types you’re looking at and when we can expect to see the data? Thanks.

Luis Mora, Managing Director, PharmaMar: Yes. The Basket trial is ongoing. In the Basket trial, I think five, six different tumor types. One of them is the neilendocrine tumors. And I’ve said before, now we will plan to meet with FDA this semester in order to agree that the development plan in this indication.

But the basket trial is not to stop it. Then it still continues the enrollment. Then we expected to finalize enrollment across this year because several tumor types. Then from we finalize enrollment, follow-up the patients probably next year, we kind of have some data.

Sameer Devani, Analyst, Rx Securities: Okay. I’m sorry, just one follow-up. Just on the lorbenectadyen sNDA in The U. S, is it fair to assume that you’re going to get priority review based on the data?

Pascal Veisman, Senior Vice President of Strategic Development, PharmaMar: That’s going to be FDA’s decision when they get it. And so out of our hands, we’ve not been privy to the conversations at this point nor will we. So we hope JAS is very successful with that, but can’t help you from here. Sorry.

Luis Mora, Managing Director, PharmaMar: Okay. Thanks, Pascal.

Charlie, Call Coordinator: Thank you. We have no further questions registered on today’s call. So I’ll hand back over to the management team for any further or final closing remarks.

Jose Luis Moreno, Vice President, Head of Capital Markets and Investor Relations, PharmaMar: Thank you. Thank you, Charlie, for your help today. In summary, our 24 results, I have to say that they reflect a robust growth with increasing revenues from HEBSELCA and significant advances in our clinical development. And additionally, we have an exciting and relevant news flow ahead and that we can expect in the following months. So with this, we conclude our call today and we’d like to thank you all for joining and thank And have a nice weekend.

Thank you very much.

Charlie, Call Coordinator: Ladies and gentlemen, this concludes today’s call. Thank you for joining.

Sameer Devani, Analyst, Rx Securities: You may now disconnect your lines.

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