Heritage Financial (NASDAQ: HFWA) saw its stock price plummet by 5.05% in Thursday's trading session, despite reporting better-than-expected earnings for the second quarter of 2025. The sharp decline appears to be primarily driven by a significant revenue miss that has raised concerns among investors about the company's growth prospects.

The financial services company reported adjusted earnings per share of $0.53, surpassing the analyst consensus estimate of $0.49 by 7.29%. This represents a 17.78% increase from the $0.45 per share reported in the same period last year. However, Heritage's quarterly sales of $56.50 million fell short of expectations, missing the analyst consensus estimate of $63.48 million by a substantial 11%. The revenue figure showed only a marginal 0.25% increase compared to the $56.36 million reported in the same quarter of the previous year.

While Heritage Financial maintained its quarterly dividend at $0.24 per share, payable on August 20 to shareholders of record as of August 6, the market's reaction suggests that investors are more focused on the company's top-line performance. The significant revenue miss, coupled with minimal year-over-year growth, has likely sparked concerns about Heritage's ability to sustain its earnings growth in the face of potential economic headwinds. As a result, despite the earnings beat, the stock experienced a sharp sell-off during the trading session.