Pharmaceutical company Collegium Pharmaceutical (NASDAQ: COLL) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 12.9% year on year to $205.4 million. The company’s full-year revenue guidance of $815 million at the midpoint came in 1% above analysts’ estimates. Its non-GAAP profit of $2.04 per share was 4.7% below analysts’ consensus estimates.

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“In 2025, we delivered on our strategic priorities by driving significant growth for Jornay PM, maximizing the durability of our pain portfolio, and strategically deploying capital,” said Vikram Karnani, President and Chief Executive Officer.

Company Overview

Pioneering abuse-deterrent technology in a field plagued by addiction concerns, Collegium Pharmaceutical (NASDAQ: COLL) develops and markets specialty medications for treating moderate to severe pain, including abuse-deterrent opioid formulations.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Collegium Pharmaceutical’s sales grew at an impressive 20.3% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Collegium Pharmaceutical’s annualized revenue growth of 17.4% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Collegium Pharmaceutical’s year-on-year revenue growth was 12.9%, and its $205.4 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 2.8% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and implies its products and services will see some demand headwinds.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

Collegium Pharmaceutical has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average operating margin of 20.9%.

Looking at the trend in its profitability, Collegium Pharmaceutical’s operating margin rose by 16.6 percentage points over the last five years, as its sales growth gave it immense operating leverage. Zooming into its more recent performance, however, we can see the company’s margin has decreased by 6.4 percentage points on a two-year basis. If Collegium Pharmaceutical wants to pass our bar, it must prove it can expand its profitability consistently.

This quarter, Collegium Pharmaceutical generated an operating margin profit margin of 29.6%, up 8.6 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Collegium Pharmaceutical’s EPS grew at a spectacular 14.5% compounded annual growth rate over the last five years. Despite its operating margin improvement during that time, this performance was lower than its 20.3% annualized revenue growth, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

Diving into the nuances of Collegium Pharmaceutical’s earnings can give us a better understanding of its performance. A five-year view shows Collegium Pharmaceutical has diluted its shareholders, growing its share count by 13.2%. This dilution overshadowed its increased operational efficiency and has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, Collegium Pharmaceutical reported adjusted EPS of $2.04, up from $1.77 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Collegium Pharmaceutical’s full-year EPS of $7.46 to stay about the same.

Key Takeaways from Collegium Pharmaceutical’s Q4 Results

It was good to see Collegium Pharmaceutical provide full-year revenue guidance that slightly beat analysts’ expectations. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. On the other hand, its EPS missed and its revenue was in line with Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 3% to $44.37 immediately after reporting.

Is Collegium Pharmaceutical an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).