Title

Earning Preview: Galapagos NV this quarter’s revenue is expected to decrease by 13.46%, and institutional views are bearish

Abstract

Galapagos NV is scheduled to release quarterly results on February 23, 2026 before-market; investors will parse revenue mix, margin trajectory, and the earnings inflection implied by forecasts against recent volatility in collaboration-driven proceeds and expense resets.

Market Forecast

Current-quarter forecasts indicate Galapagos NV revenue of $59.98 million, representing a 13.46% year-over-year decline, with adjusted EPS of -$0.25 improving by 27.54% year-over-year and EBIT of $26.94 million rising by 163.25% year-over-year. Forecasts do not provide a gross profit margin or net profit margin, so commentary focuses on revenue, EPS, and EBIT; consensus points to an earnings quality pivot supported by lower losses and a swing in operating profit despite softer top line. The main business remains collaboration-driven revenue with a supplemental supply stream; last quarter’s mix was led by Collaboration at $121.78 million and Supply at $18.49 million, with outlook hinging on the timing of milestones and delivery schedules. The most promising segment near term is Collaboration at $121.78 million last quarter, where upcoming milestones and contract-driven recognition will be decisive for quarterly momentum; segment-level year-over-year data was not disclosed.

Last Quarter Review

In the previous quarter, Galapagos NV reported revenue of $71.16 million (up 18.90% year-over-year), a gross profit margin of -19.07%, GAAP net profit attributable to the parent of -$202.00 million, a net profit margin of -284.02%, and adjusted EPS of -$3.07 (down 298.70% year-over-year). Quarter-on-quarter, net profit deteriorated sharply with a -91.13% sequential change, underscoring the sensitivity of earnings to milestone timing and expense patterns. By business line, Collaboration contributed $121.78 million and Supply $18.49 million in the reported period, while total revenue grew 18.90% year-over-year, highlighting the disproportionate role of collaboration proceeds in the revenue mix.

Current Quarter Outlook

Main business: Collaboration revenue and milestone recognition

Collaboration proceeds are the core of Galapagos NV’s revenue mix, and they are inherently episodic because they depend on the achievement and recognition of partner milestones, as well as on contract amortization schedules. The model for the current quarter implies $59.98 million in revenue, down 13.46% year-over-year, which suggests lower milestone intensity versus the year-ago period or a lighter recognition calendar for upfront consideration amortization. Given that adjusted EPS is forecast to improve to -$0.25 (a 27.54% year-over-year improvement) and EBIT to rise to $26.94 million (up 163.25%), management appears to be pairing lower top-line expectations with tighter expense control or richer margin mix on recognized collaboration items. Investors should be prepared for quarter-to-quarter variability tied to milestone timing, which can overshadow underlying operating progress; better-than-expected milestone receipts would provide upside to revenue, while slippage of partner timelines would skew the outcome below the $59.98 million baseline.

Most promising business: Supply revenue as a stabilizer

Although smaller than collaboration, Supply revenue at $18.49 million last quarter has the potential to act as a stabilizer in reported results because it is more closely tied to delivery schedules and less to binary milestone events. In the current quarter, improved EBIT guidance alongside a softer revenue outlook implies a leaning on more predictable, lower-volatility streams to support margin optics. The contribution from Supply can also help smooth gross margin swing factors tied to collaboration accounting, even though the last quarter’s gross margin was negative at -19.07% due to the cost structure and recognition mix. If supply deliveries track plan and cost absorption improves, this line can support operating leverage despite lower collaboration receipts, contributing to the sharp improvement implied in EBIT.

Key stock-price drivers this quarter

The path of collaboration milestones and their accounting recognition is the single most important driver of the stock into this print: the $59.98 million top-line forecast assumes lighter milestone content, and any deviation—positive or negative—will have an outsized impact on revenue and perceived momentum. Profitability optics are also in focus: the forecast swing to $26.94 million in EBIT and narrowed losses at the EPS line will concentrate attention on operating cost discipline, including ongoing expense resets following program changes; any commentary on structural opex reductions and sustainability of these gains is likely to drive post-earnings sentiment. Strategic portfolio updates matter as well: recent commentary around discontinuation of cell and gene therapy efforts indicates a reshaping of R&D priorities toward pathways with clearer return profiles; investors will look for evidence that these changes translate into lower cash burn and steadier earnings quality, which could mitigate the negative effect of a 13.46% year-over-year revenue decline.

Margins and expense trajectory

The last quarter’s gross margin of -19.07% and net margin of -284.02% reflected revenue mix and the weight of fixed and semi-fixed costs, highlighting how collaboration accounting can skew reported profitability. The guidance-implied improvement in adjusted EPS and the sizable increase in EBIT suggest that operating costs may be trending lower, that mix is more favorable, or that non-cash effects are easing—important signals that the underlying earnings base is normalizing. Investors will parse whether these gains are sustainable into subsequent quarters or if they are one-offs tied to accounting and event timing; clarity on cost baselines and forward operating leverage will be crucial for valuation.

Cash discipline and earnings quality

Quarterly volatility in collaboration revenue can obscure the trajectory of cash burn and core earnings quality. The forecast improvement in EPS and EBIT, despite softer revenue, implies that Galapagos NV may be executing on cost control and prioritizing programs with nearer-term economic impact. Commentary on working capital, milestone cash versus non-cash revenue recognition, and the cadence of partner payments will be pivotal in assessing whether the forecasted earnings inflection translates into stronger cash metrics, which would strengthen the case for rerating even if top-line growth decelerates year-over-year.

Comparative context inside the company’s results

The previous quarter’s net profit decline of 91.13% quarter-on-quarter and a negative gross margin set a low comparison base for profitability optics. The current model, however, embeds a sharp EBIT uplift and an EPS improvement, implying material changes in either cost allocation, mix, or both. This sets expectations for a “quality-over-quantity” print, where investors are likely to accept lower revenue if evidence shows that margins and expense discipline are genuinely improving and if management provides conviction that collaboration milestones are deferred rather than lost.

Analyst Opinions

Sentiment skew is negative over the last six months, with bearish views representing 100% of the sampled opinions and no discernible bullish calls. Bank of America Securities reiterated a Sell rating with a $28.00 price target, signaling caution on near-term revenue contraction and uncertainty around the timing and magnitude of collaboration milestones. Morgan Stanley also maintained a Sell rating with a $22.00 price target, reflecting concerns around earnings volatility and the path to sustainable profitability after recent program changes. The common thread across these views is a focus on the interplay between declining year-over-year revenue expectations and improved profit optics. Analysts appear to be discounting the improvement in EPS and EBIT until there is clearer evidence that margin gains are durable and not merely a function of lower, episodic expense or accounting-driven swings. They also flag the reliance on collaboration revenue—valuable but variable—as a headwind for forecasting confidence in the near term; any slippage in partner timelines could reintroduce volatility similar to the last quarter’s wide swings in net profit and negative margin prints. Against this backdrop, the implied setup for February 23, 2026 is that narrative and guidance will matter as much as reported figures. If Galapagos NV demonstrates that cost discipline is structural and articulates a credible cadence for collaboration receipts that can offset a 13.46% year-over-year revenue decline, the Street may begin to reassess the durability of the EBIT improvement. Conversely, if management signals lighter milestone flow beyond this quarter or a reacceleration in opex, investors are likely to side with the prevailing bearish stance and emphasize the risks associated with negative gross margins and episodic revenue recognition. In essence, while the quantitative guideposts point to an earnings quality inflection, the qualitative reassurances around cash economics and milestone visibility will likely determine whether the stock can overcome entrenched skepticism.