Harrow Swings to Profit in Q3 on Strong Sales Growth

Ticker: HROW · Form: 10-Q · Filed: Nov 10, 2025 · CIK: 1360214

Harrow, INC. 10-Q Filing Summary
FieldDetail
CompanyHarrow, INC. (HROW)
Form Type10-Q
Filed DateNov 10, 2025
Risk Levelmedium
Pages15
Reading Time18 min
Key Dollar Amounts$0.001
Sentimentmixed

Sentiment: mixed

Topics: Ophthalmic Solutions, Pharmaceuticals, Q3 Earnings, Debt Refinancing, Revenue Growth, Net Income, Liquidity

Related Tickers: HROW

TL;DR

**HROW is back in the black for Q3, but watch that debt refinancing loss – it's a mixed bag but trending up.**

AI Summary

HARROW, INC. reported a significant increase in product sales, reaching $71,497,000 for the three months ended September 30, 2025, up from $49,019,000 in the prior year, a 45.8% increase. For the nine months, product sales grew to $182,899,000 from $132,398,000, a 38.1% increase. The company achieved a net income of $1,020,000 for the three months ended September 30, 2025, a substantial improvement from a net loss of $4,220,000 in the same period of 2024. However, for the nine months, HARROW still reported a net loss of $11,765,000, though this was an improvement from the $24,258,000 net loss in the prior year. Operating income for the three months surged to $14,747,000 from $1,321,000, and for the nine months, it turned positive at $14,924,000 from a loss of $4,077,000. A key financial event was the extinguishment of debt, resulting in a $7,750,000 loss, and the issuance of new 2030 Notes totaling $242,874,000, replacing previous debt instruments like the Oaktree Loan and 2026/2027 Notes. Cash and cash equivalents increased to $74,290,000 as of September 30, 2025, from $47,247,000 at December 31, 2024, driven by $35,453,000 in net cash provided by operating activities for the nine months.

Why It Matters

HARROW's return to profitability in Q3 2025, with a net income of $1,020,000, signals a potential turnaround for investors, especially given the significant year-over-year revenue growth of 45.8% in product sales. The strategic refinancing of debt, replacing the Oaktree Loan and 2026/2027 Notes with new 2030 Notes, could improve the company's long-term financial stability and reduce interest rate risk, impacting future earnings. For employees, this improved financial health could mean greater job security and potential for growth. In a competitive ophthalmic market, HARROW's ability to increase product sales and improve operational efficiency suggests it is gaining market share and effectively managing its product portfolio, which could attract new customers and strengthen its position against rivals.

Risk Assessment

Risk Level: medium — While HARROW, INC. reported a net income for the quarter, the company still has an accumulated deficit of $163,150,000 as of September 30, 2025, and incurred a $7,750,000 loss on extinguishment of debt during the nine months. The significant increase in notes payable to $242,874,000 from $219,539,000 at December 31, 2024, indicates a reliance on debt financing, which could pose future interest rate or repayment risks.

Analyst Insight

Investors should closely monitor HARROW's ability to sustain its Q3 profitability and reduce its accumulated deficit in subsequent quarters. The successful debt refinancing with the 2030 Notes should be evaluated for its long-term impact on interest expenses and cash flow. Consider this a 'wait and see' situation, looking for consistent positive net income and further debt reduction before making a significant investment.

Financial Highlights

revenue
$71,497,000
total Debt
$242,874,000
net Income
$1,020,000
eps
$0.03
cash Position
$74,290,000
revenue Growth
+45.8%

Revenue Breakdown

SegmentRevenueGrowth
Product Sales, Net$71,497,000+45.8%

Key Numbers

Key Players & Entities

FAQ

What were HARROW, INC.'s product sales for the three months ended September 30, 2025?

HARROW, INC.'s product sales, net, for the three months ended September 30, 2025, were $71,497,000, a significant increase from $49,019,000 in the same period of 2024.

Did HARROW, INC. achieve a net profit or loss in Q3 2025?

HARROW, INC. reported a net income of $1,020,000 for the three months ended September 30, 2025, a positive shift from a net loss of $4,220,000 in Q3 2024.

How did HARROW, INC.'s operating income change year-over-year for Q3 2025?

HARROW, INC.'s income from operations for the three months ended September 30, 2025, dramatically increased to $14,747,000, compared to $1,321,000 in the same period of 2024.

What was the impact of debt extinguishment on HARROW, INC.'s financials?

HARROW, INC. recognized a loss on extinguishment of debt of $7,750,000 for the nine months ended September 30, 2025, as part of its debt refinancing activities.

What is HARROW, INC.'s current cash and cash equivalents position?

As of September 30, 2025, HARROW, INC. had cash and cash equivalents totaling $74,290,000, an increase from $47,247,000 at December 31, 2024.

How many shares of common stock did HARROW, INC. have outstanding as of November 10, 2025?

As of November 10, 2025, there were 37,037,453 shares of HARROW, INC.'s common stock outstanding.

What are the primary risks HARROW, INC. faces according to the filing?

HARROW, INC. is subject to regulatory standards, approvals, guidelines, and inspections, which could materially impact its ability to make, dispense, and sell certain products, affecting its financial condition and operations.

How has HARROW, INC.'s net cash from operating activities changed?

For the nine months ended September 30, 2025, HARROW, INC. generated $35,453,000 in net cash from operating activities, a significant improvement from using $4,423,000 in the same period of 2024.

What was HARROW, INC.'s accumulated deficit as of September 30, 2025?

As of September 30, 2025, HARROW, INC.'s accumulated deficit was $163,150,000, an increase from $151,385,000 at December 31, 2024, despite the quarterly profit.

What is HARROW, INC.'s business focus?

HARROW, INC. is a leading provider of ophthalmic disease management solutions in North America, offering products for conditions affecting the front and back of the eye, including dry eye disease, macular degeneration, cataracts, and glaucoma.

Risk Factors

Industry Context

Harrow, Inc. operates within the healthcare industry, likely focusing on specialized medical products or services. This sector is characterized by significant R&D investment, stringent regulatory oversight (e.g., FDA), and evolving reimbursement landscapes. Competition can be intense, with established players and emerging innovators vying for market share.

Regulatory Implications

The company faces potential risks from changes in healthcare regulations, such as shifts in Medicare/Medicaid reimbursement policies or new FDA approval requirements for its products. Compliance with these regulations is critical and requires ongoing investment and attention.

What Investors Should Do

  1. Monitor the sustainability of Q3 revenue growth: Assess whether the 45.8% increase is a trend or a one-off event by examining future quarterly reports.
  2. Analyze the impact of debt refinancing: Understand the long-term implications of the new 2030 Notes on interest expenses and financial flexibility.
  3. Evaluate the path to sustained profitability: While Q3 showed net income, the year-to-date net loss persists. Investors should watch for continued operational improvements driving bottom-line profitability.
  4. Assess cash flow generation: The strong positive operating cash flow is a good sign, but its consistency and ability to fund growth and debt obligations should be monitored.

Key Dates

Glossary

Extinguishment of Debt
The act of paying off debt, which can involve replacing old debt with new debt, often resulting in a loss or gain recognized on the income statement. (A $7,750,000 loss was recognized due to this activity, impacting the company's net income.)
Notes Payable
A formal written promise to pay a specific amount of money at a future date, typically with interest. (The company has $242,874,000 in Notes Payable as of September 30, 2025, reflecting new debt issuance.)
Operating Income
A measure of profit after deducting operating expenses from revenue, excluding interest and taxes. (Surged to $14,747,000 in Q3 2025 from $1,321,000 in Q3 2024, indicating improved core business performance.)
Net Cash Provided by Operating Activities
The net amount of cash generated from a company's normal business operations over a period. (Reported as $35,453,000 for the nine months ended September 30, 2025, a significant positive shift.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Harrow, Inc. has demonstrated significant top-line growth, with product sales increasing by 45.8% in Q3 and 38.1% year-to-date. The company has also achieved a notable turnaround in quarterly profitability, moving from a net loss to a net income in Q3 2025. While the year-to-date net loss has narrowed, it remains a concern. Operating income has seen a dramatic improvement, turning positive year-to-date. A key change is the significant debt refinancing, which introduced new long-term debt and incurred a one-time loss, impacting the overall net loss.

Filing Stats: 4,417 words · 18 min read · ~15 pages · Grade level 18 · Accepted 2025-11-10 17:16:28

Key Financial Figures

Filing Documents

Financial Statements (unaudited)

Financial Statements (unaudited) 3 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 31 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 39 Item 4.

Controls and Procedures

Controls and Procedures 39 Part II OTHER INFORMATION 40 Item 1.

Legal Proceedings

Legal Proceedings 40 Item 1A.

Risk Factors

Risk Factors 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44 Item 3. Defaults Upon Senior Securities 44 Item 4. Mine Safety Disclosures 44 Item 5. Other Information 44 Item 6. Exhibits 45

Signatures

Signatures 46 2 PART I FINANCIAL INFORMATION Item 1. Financial Statements HARROW, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 74,290,000 $ 47,247,000 Accounts receivable, net 77,600,000 116,373,000 Inventories 12,834,000 10,702,000 Prepaid expenses and other current assets 12,880,000 15,329,000 Total current assets 177,604,000 189,651,000 Property, plant and equipment, net 3,380,000 3,734,000 Capitalized software costs, net 1,330,000 1,751,000 Operating lease right-of-use assets, net 7,971,000 8,554,000 Intangible assets, net 172,457,000 184,949,000 Goodwill 332,000 332,000 TOTAL ASSETS $ 363,074,000 $ 388,971,000 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 20,162,000 $ 41,406,000 Accrued rebates and copay assistance 34,516,000 39,900,000 Accrued payroll and related liabilities 9,518,000 9,496,000 Deferred revenue and customer deposits 345,000 44,000 Current portion of operating lease obligations 859,000 497,000 Total current liabilities 65,400,000 91,343,000 Operating lease obligations, net of current portion 8,139,000 8,792,000 Notes payable, net of unamortized debt discount 242,874,000 219,539,000 TOTAL LIABILITIES 316,413,000 319,674,000 Commitments and contingencies - STOCKHOLDERS' EQUITY Common stock, $ 0.001 par value, 50,000,000 shares authorized, 37,034,582 and 35,622,214 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 37,000 35,000 Additional paid-in capital 210,129,000 221,002,000 Accumulated deficit ( 163,150,000 ) ( 151,385,000 ) TOTAL HARROW, INC. STOCKHOLDERS' EQUITY 47,016,000 69,652,000 Noncontrolling interests ( 355,000 ) ( 355,000 ) TOTAL STOCKHOLDERS' EQUITY 46,661,000 69,297,000 TOTAL LIABILITIES AND STOCKHOLDERS' EQUIT

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