Adverum Biotechnologies, Inc. :ADVM-US: Earnings Analysis: Q2, 2016 By the Numbers : August 15, 2016

Adverum Biotechnologies, Inc. reports financial results for the quarter ended June 30, 2016.

We analyze the earnings along side the following peers of Adverum Biotechnologies, Inc. – Acceleron Pharma Inc and Ardelyx, Inc. (XLRN-US and ARDX-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 0.31 million, Net Earnings of USD -61.66 million.
  • Year-on-year change in operating cash flow of 11.09% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings declined although operating margins improved from -4,867.98% to -3,968.08%.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2015-06-30 2015-09-30 2015-12-31 2016-03-31 2016-06-30
Relevant Numbers (Quarterly)
Revenues (mil) 0.2 0.95 0.96 0.27 0.31
Revenue Growth (%YOY) 50.37 367.16 372.91 30.54 51.23
Earnings (mil) -9.77 -14.08 -14.09 -15.39 -61.66
Earnings Growth (%YOY) -91.72 -70.59 -35.64 -61.87 -531.37
Net Margin (%) -4810.84 -1477.86 -1468.13 -5808.3 -20084.69
EPS -0.38 -0.55 -0.55 -0.57 -1.76
Return on Equity (%) -14.2 -21.14 -21.9 -24.92 -100.83
Return on Assets (%) -13.55 -20.21 -20.95 -23.81 -95.36

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Market Share Versus Profits

Revenues History
Earnings History

ADVM-US‘s change in revenue this period compared to the same period last year of 51.23% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that ADVM-US is holding onto its market share. Also, for comparison purposes, revenues changed by 15.85% and earnings by -300.60% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Cash Versus Earnings – Sustainable Performance?

ADVM-US‘s change in operating cash flow of 11.09% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Margins

Despite an overall improvement in operating (EBIT) margins, the company’s earnings fell. EBIT margins went from -4,867.98% to -3,968.08%. The decline in earnings appears to be largely because of one-time items. Pretax margins declined from -4,810.84% to -20,091.21%.

EBIT Margin Versus PreTax Margin
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Adverum Biotechnologies, Inc.

Company Profile

Adverum Biotechnologies, Inc. is a clinical-stage biotechnology company that develops and discovers novel gene therapies to treat patients with sight-threatening ophthalmic diseases. The company was founded by Mark S. Blumenkranz, Thomas W. Chalberg, Jr. and Steven Daniel Schwartz on July 17, 2006 and is headquartered in Menlo Park, CA.

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