Harrow (HROW): Q1 2026 Earnings Review
Yesterday, HROW reported its Q1 2026 results.
It was a disappointing quarter, and the stock is down over 20%.
Is the thesis broken, or is the market overreacting?
Here’s everything you need to know about the Earnings Report.
Financial Highlights
Revenue of $44.2M vs. $52.5M est. (-8% YoY)
Adj. EBITDA of $(12.7)M vs. $(3.1)M est.
GAAP EPS of $(0.74) vs. $(0.37) est.
Gross Margin of 61% vs. 68% YoY
Cash of $94.6M as of March 31
2026 Guidance:
Q2 revenue of $71-81M (midpoint ~$76M) vs. $76.7M est.
Full-year Revenue of $350-365M (reiterated) vs. $351.3M est.
Full-year Adj. EBITDA of $80-100M (reiterated) vs. $80.5M est.
With Q1 revenue at $44.2M and Q2 guided to $71-81M, the implied H1 midpoint is ~$120M. Last quarter, management explicitly guided H1 revenue to $133-153M.
That’s a ~$23M shortfall at the midpoint.
And yet, full-year guidance was reiterated. That means the H2 ask just got meaningfully larger. Management now expects $230-245M of revenue in the second half to hit the full-year range, compared with the $203-226M implied by the original guidance framework.
That’s a high bar, and it depends on clean execution across every H2 catalyst: BYQLOVI and BYOOVIZ launches, IOPIDINE J-code, IHEEZO pricing improvement, VEVYE ASP recovery, ImprimisRx sequential growth, and the full ramp of the expanded sales forces. Each one of those needs to show up, so the reiterated full-year guide deserves skepticism, especially after the recent disappointments.
The key Q1 context is that the headline revenue number was meaningfully distorted by one discrete issue: an ~$8M gross-to-net reduction on VEVYE tied to the new CVS commercial coverage that launched January 1. Without it, Q1 revenue would have been ~$52M, almost in line with analyst estimates. Management says the issue has since been identified and addressed, and the upcoming quarters are expected to reflect the correction.
IHEEZO revenue was also muted, consistent with what management guided last quarter, as Q4 channel inventory was absorbed.
Neither issue is a mystery or thesis-breaking.
But after management repeatedly said during the Q4 earnings call that this year’s guidance was conservative and that they had learned their lesson when it comes to managing expectations, the miss still feels avoidable. That’s where the frustration is justified.
Last quarter, after Q4 results, I wrote that I believed management had genuinely learned their lesson. Mark Baum had been unusually candid about past guidance failures, and I read it as a real reset.
I was wrong.
Here’s what happened with VEVYE: when the new CVS coverage went live on January 1, management modeled a typical commercial patient mix. What actually happened was a surge of high-deductible patients filling prescriptions through their pharmacy benefit, each requiring co-pay buydowns ~40% higher than any other covered patient group.
Due to the standard industry lag in claims data (January comes in mid-February, February in mid-March, and March in mid-to-late April), they didn’t have the full picture until mid-April. They worked over the weekend, had new business rules to partners by Sunday night, and the issue is considered resolved heading into Q2. Early Q2 demand shows no negative impact from the pricing changes.
Is this explainable? Yes. But it’s still frustrating. Months after pledging to take a more conservative approach, management deployed a model that underestimated one of the most important variables in the business.
I want to be precise about what I’ve concluded: I no longer trust management’s ability to issue reliable financial guidance. There are too many variables they can’t control or predict. For that trust to come back, I’ll need to see a sustained track record of conservative targets that are then met or beaten. Right now, we have the opposite.
What I want to be equally precise about: trusting management to run and grow the business is a different question. This is the same team that grew Harrow from a few million dollars in annual revenue to its current scale. Their guidance failures, which are real and frustrating, haven’t changed the underlying commercial and operational track record that got us here. What they have consistently done is introduce brutal volatility and force shareholders to sit through situations exactly like this one.
I understand the frustration. I share it. But I don’t think anyone should conflate “I’ve lost confidence in their guidance” with “the thesis is broken.”
The real catalysts are still ahead, and my thesis has never depended on 2026’s numbers, let alone the first quarter. Management now needs to prove that the second-half ramp is real.
Let’s assess every part of the business separately.
Segments Review
1. VEVYE
Despite the revenue miss, VEVYE’s underlying demand story is the best it’s ever been.
New prescriptions grew ~25% QoQ.
Total prescriptions grew ~11% QoQ.
The prescriber base expanded ~12% QoQ.
VEVYE exited March at ~14% branded dry eye market share, officially surpassing Xiidra on a monthly total prescription basis for the first time.
All of this was achieved with fewer than 50 sales representatives and without direct-to-consumer advertising.
To put it in context: the entire branded dry eye category declined 18% in Q1, a typically weak period for pharmacy benefit products, and VEVYE was the only meaningful branded product to grow.
Within CVS’ Tier 1 covered accounts specifically, VEVYE prescription volume grew ~170% QoQ.
The financial problem was entirely on the pricing side. Going forward, Andrew Boll confirmed that the net pricing improvement from the new business rules implies roughly a ~30% ASP increase versus Q1 levels. That number was originally raised by an analyst on the call, so I wouldn’t take it literally, but Andrew called it a “reasonable estimate.” Normalizing Q1 for this dynamic, VEVYE was tracking toward ~$28-29M in revenue, which fully supports the full-year $100M target, assuming ASP actually normalizes as expected.
The company has also completed the doubling of the VEVYE sales force to 100 territories, after hiring just over 100 reps in roughly 45 days. Over 2,400 candidates applied for those positions. This inbound talent interest is important, as it tells us something about how the broader pharma community perceives the company’s direction.
Another important point: management also said Harrow is actively bidding on additional VEVYE coverage and expects improved reimbursement over the next 12-18 months. They wouldn’t name the specific payers yet, but additional coverage wins could add another leg to VEVYE’s growth beyond the current CVS-driven inflection.
For VEVYE, the question is no longer whether demand exists. The question is whether Harrow can convert that demand into clean, profitable revenue.
With expanded coverage, a doubled sales force now entering the field, the highest refill persistence in the dry eye category (~9 refills annually for covered patients), potential additional payer wins, and improved net pricing, the setup for the rest of 2026 seems incredibly strong. But ASP really needs to improve for the economics to be as attractive as investors expected.
The CEO noted on the call that he’s already seeing higher daily and weekly new prescription records, with historically slower days now pushing past what used to be the busiest days (“higher highs and higher lows”). It’s still early, since the new reps were hired only in the past few weeks, but the directional trend is encouraging.
2. IHEEZO
Revenue came in at just $1.9M, which looks quite ugly on the surface.
But as I said, this was already expected because channel inventory built during Q4 2025 had to be absorbed before Harrow could recognize meaningful new revenue. Management had guided for this dynamic last quarter, so the weak IHEEZO revenue contribution wasn’t the real issue in Q1.
Q2 revenue is also expected to remain somewhat muted, likely still below prior-year levels, as the company works through the remaining channel inventory and transitions toward the new 5-pack presentation.
But the actual demand picture was completely different.
Unit demand reached 45,509 units in Q1, up 18% YoY, even as the product was losing ASC pass-through status effective April 1. March alone was up 34% YoY, suggesting that underlying adoption continued to build despite the reimbursement headwind.
Retina remains the core driver. ~82% of Q1 unit volume came from retina practices, with the remaining 18% coming from the ASC setting. That mix is important because ASC represented ~30% of 2025 unit volume, so the loss of ASC pass-through is a real headwind. However, growth in retina and early adoption in the in-office channel are beginning to offset that pressure.
The account-level metrics were also strong. A total of 219 accounts ordered IHEEZO during the quarter, including 45 new accounts, meaning new customers represented ~21% of the Q1 customer base. Ordering accounts grew 49% YoY, and the reorder rate held at 85.5%.
That reorder rate is important. With IHEEZO, the question isn’t just whether Harrow can win trial usage. The question is whether the product becomes embedded in procedural workflows. So far, the answer appears to be yes. Once practices adopt IHEEZO, they tend to keep ordering it.
The ASC business is expected to effectively go to zero, and management isn’t pretending otherwise. But the in-office replacement thesis is already being validated. In-office orders began in Q1, some of the new accounts are sizable, and management expects the in-office channel to fully offset the ASC volume loss by year-end. They also mentioned pilot agreements with several large multi-practice eye-care networks and large players in the office-based cataract surgery market, which could contribute more meaningfully in the second half of the year.
The math is still very early relative to the size of the opportunity. Management estimates IHEEZO’s total addressable market at more than 14M annual U.S. procedures, including intravitreal injections, laser procedures, procedural gonioscopy, foreign body removal, corneal procedures, glaucoma implants, punctal occlusion, and other in-office procedures. Current penetration remains below 2%, so the product is still barely scratching the surface.
There are two growth engines here: continued momentum in retina and expansion into the broader in-office procedural market.
Four catalysts will define IHEEZO’s second half.
First, full expansion into the in-office procedural market, which adds more than 2.5M annual procedures to the addressable opportunity beyond retina.
Second, retina-specific clinical data at ASRS in July, followed by QUELL study data in Q4. If that data is favorable, it could give the sales force a much stronger evidence-based message for retina specialists.
Third, the launch of multi-unit packaging, specifically the 5-pack presentation, designed for high-volume retina practices. Management said this should launch in July.
Fourth, an estimated 20-25% improvement in net pricing beginning in H2, which should help convert the strong unit demand into better revenue contribution.
There’s also a strategic synergy angle. IHEEZO sits directly in the same in-office procedural ecosystem as IOPIDINE and BYOOVIZ. IOPIDINE can be sold into the same physician call point for pressure control after laser procedures, while BYOOVIZ gives Harrow a broader retina offering.
For IHEEZO, the key issue isn’t demand. Demand is clearly moving in the right direction. The key issue is timing. Revenue recognition was muted in Q1 and should remain somewhat muted in Q2, but the company expects a more normalized revenue level beginning in Q3 and Q4.
Overall, IHEEZO had a bad reported revenue quarter, but not a bad quarter in terms of demand. The product is still early, underpenetrated, and gaining traction in the channels Harrow needs it to win. The second half is where the real test begins.
3. TRIESENCE
TRIESENCE had an excellent quarter.
No gross-to-net surprise. No channel inventory distortion. No major reimbursement reset. Just steady adoption growth from a product that appears to be gaining real traction in surgical workflows.
Demand reached 10,492 units, up 136% YoY and up 2% QoQ, despite Q1 typically being a weaker quarter for ophthalmic surgery. This was the sixth consecutive quarter of unit demand growth since relaunch, with unit demand up ~250% over that period. March alone set a new monthly high, with demand up 113% YoY.
It’s important to touch on the composition of that growth.
44% of Q1 volume came from ocular surgery, which is the larger long-term opportunity and the segment management expects to drive the majority of new volume going forward. New account growth was also strong, with 709 total accounts ordering TRIESENCE during the quarter, including 195 new accounts. That means new customers represented ~28% of the Q1 customer base.
There are two catalysts worth watching.
First, the label expansion study for cataract surgery and pain is underway. If successful, this could materially broaden the commercial opportunity by making TRIESENCE’s use in cataract surgery more explicit on-label. Management expects the last patient visit by year-end, with top-line data shortly thereafter.
Second, Harrow is developing a next-generation pre-filled syringe format. The company expects a potential H2 2028 / H1 2029 launch, with a filing to the FDA expected within the next 18-20 months. A pre-filled syringe could improve convenience, strengthen the product’s competitive position, and extend the TRIESENCE lifecycle ahead of current Orange Book-listed patents expiring in 2029.
The sales force expansion should also help. Management said TRIESENCE now has a dedicated sales force that recently doubled in size, which should increase reach and pull-through as more surgeons become aware of the product.
All in all, TRIESENCE is clearly gaining traction. No issues here.
4. ImprimisRx / Access+
ImprimisRx / Access+ was one of the weaker parts of the quarter.
Access+ revenue came in at $13.5M, down 33% YoY.
Management attributed the weakness primarily to inventory shortages that accumulated in Q4 2025 and carried into Q1 before being resolved. To be fair, they had already stated last quarter that inventory levels would only return to normal by the end of Q1, but I wasn’t expecting the impact to be this significant. Backorders have now been cleared, inventory across key SKUs has been rebuilt, safety stock is being increased, and the Access+ sales team is being expanded. The company expects sequential growth throughout the rest of 2026.
That explanation is plausible, but it needs to show up in the numbers. If this was truly a supply disruption, revenue should start recovering as product availability normalizes. The upcoming quarters should give us a better read on whether this was temporary.
The big picture is that revenue from ImprimisRx isn’t central to my Harrow thesis. The real upside sits in the branded portfolio: VEVYE, IHEEZO, TRIESENCE, and future pipeline assets. ImprimisRx still has value because it provides a modest but recurring cash-pay revenue and, more importantly, long-standing ophthalmology relationships that strengthen Harrow’s distribution network. But I’m not underwriting Harrow primarily on revenue from the compounding business.
Overall, this segment doesn’t need to be spectacular for the Harrow thesis to work, but it should stabilize and at least stop being a drag.
Pipeline
The pipeline continues to advance, and for investors with a multi-year horizon, this is where a lot of the long-term value could come from.
G-MELT, formerly MELT-300, is one of the biggest pieces. This is Harrow’s ketamine + midazolam sublingual tablet targeting IV- and opioid-free procedural sedation.
All required pharmacokinetic and toxicology studies have been initiated. The non-clinical tox study is in the reporting phase, the first PK study is complete and in CSR drafting, and the renal and hepatic impairment studies are underway, with final reports expected in Q4 2026. A major manufacturing campaign this quarter should help formalize the data package for NDA submission.
By the next quarterly call in August, management expects to provide a more definitive update on the pre-NDA meeting date with the FDA. The current base case is an NDA submission in Q1 2027, although a very late December 2026 filing hasn’t been ruled out. The CEO has described G-MELT as potentially the largest revenue driver in the company’s history. I understand why he frames it that way, given the scale of the cataract surgery market alone, with 5M+ annual U.S. cases, and the broader 100M+ short-duration procedures that could eventually be addressed with an expanded label.
That said, I’m not giving full credit to that opportunity yet. The product is exciting, but I want to see the NDA filed, the FDA path clarified, and the commercial strategy become more concrete before underwriting it too aggressively.
BYOOVIZ, the Lucentis biosimilar developed by Samsung Bioepis, is on track for a July 1 commercial launch, with initial stocking order revenue beginning in Q2.
Harrow’s strategy is to leverage years of trust with retina practices rather than competing only on price. The company also plans to offer extended payment terms to creditworthy accounts, which can be a meaningful lever in the buy-and-bill market. This will be Harrow’s first real step into the anti-VEGF market, broadening the retina platform alongside IHEEZO and TRIESENCE.
IOPIDINE 1% receives its permanent J-code effective July 1, removing the key reimbursement barrier that has historically kept this product underutilized despite strong clinical evidence. The addressable market for on-label laser procedures exceeds 1.5M annual use cases, and the commercial call point overlaps with IHEEZO, meaning Harrow can leverage the existing in-office sales infrastructure. This should be an incremental contributor in H2 and potentially a more meaningful one in 2027.
BYQLOVI, Harrow’s topical steroid, is already in the sampling phase with physicians, with several thousand samples distributed to select customers. However, the actual launch, meaning commercial sales and revenue generation, is now expected in Q3 2026 vs. the prior Q2 expectation. That small delay isn’t ideal, but I don’t view it as dramatic either, especially since sampling has already started and the biosimilars have a much larger TAM.
OPUVIZ, the Eylea biosimilar developed by Samsung Bioepis, remains on track for a 2027 launch following the Samsung Bioepis / Regeneron settlement. This is the larger anti-VEGF opportunity and could extend the same retina strategy Harrow is beginning with BYOOVIZ.
VERKAZIA and NATACYN are being repositioned to unlock new on-label markets. VERKAZIA is the only cyclosporine approved for pediatric patients with vernal keratoconjunctivitis, and management expects to share more detail on that opportunity in the coming weeks. NATACYN is being studied for fungal blepharitis and other sight-threatening fungal infections, with additional updates expected as the ongoing study generates data.
Finally, management also said it’s actively shaping Harrow’s next five-year strategic plan and hopes to complete “some accretive and exciting acquisitions.” I don’t want to overread one sentence, but it stood out to me, especially after the recent $50M debt raise. Harrow didn’t appear to need that capital for near-term liquidity, so it wouldn’t surprise me if part of the reason was to preserve flexibility for M&A. I’m not assuming a deal is imminent, but I do think investors should expect acquisitions to remain part of the story.
Overall, Harrow’s pipeline remains extremely promising and represents a meaningful part of the thesis. Importantly, the near-term catalysts aren’t dependent on binary FDA approvals, which reduces execution risk. If the company executes the 2026-2027 commercial launches while moving G-MELT toward an NDA filing, the next few years’ growth story should be very interesting.
Final Thoughts
Let me address the obvious question: Does this quarter break the thesis?
No. At least I don’t think so. But I understand and respect everyone’s frustration with management.
Unit demand across every core product is at or near all-time highs. The pipeline is advancing. Nothing happened in Q1 that structurally impairs Harrow’s ability to grow or deliver on the upcoming catalysts.
What did happen is that management gave us another painful reminder that their financial modeling can’t be relied upon. I’m not softening that. The pattern is now established well enough that I’m not waiting for another example. When they give guidance, I’ll treat it as a reference point to be stress-tested, not as a credible commitment.
But here’s where I land: this is the same team that built this business from almost nothing. Being consistently poor at guidance didn’t stop the stock from compounding 10x over six years. What it has done, and keeps doing, is create unnecessary volatility, frustrate shareholders who trusted the numbers, and force investors to sit through episodes exactly like this one.
For the expected 2027 growth to materialize, the upcoming product launches need to execute well. We don’t have much data on those yet, and that’s the uncertainty here. But it’s also why Q1 alone is far from enough to say the thesis is broken. The setup remains legitimate, and I think the stock is meaningfully cheap even if management ultimately misses full-year guidance.
To put the current valuation in perspective, analysts expect about $727M in revenue by 2028 (which is lower than what management’s targets imply). Apply a 10% haircut to that, call it $650M, to account for the possibility that management continues to disappoint relative to expectations. Assume 20% EBIT margins, which is well below the 30-40% target management has laid out for the medium term. That gives you ~$130M in EBIT. At today’s market cap, the stock is trading at roughly 8x 2028 EBIT on conservative assumptions.
That’s a very cheap multiple for a specialty pharma company with this growth profile and multiple catalysts that should allow it to continue compounding beyond 2028. You don’t need to believe the bull case. You don’t need to trust management’s guidance. I think the bar is quite low now.
So, what am I doing?
I’m holding my entire position.
I’ll reassess next quarter with fresh data on whether everything is tracking, but I don’t think it would be rational for me to sell at this valuation, especially after what should be the worst quarter of the year for Harrow.
I don’t judge anyone for having a different view. The frustration is entirely valid, and everyone should follow their own conviction. But I personally don’t think anything broke the thesis yet. The direction remains the same. The execution on the commercial and operational side still gives me enough confidence to hold. Management is just pretty terrible at setting expectations, and I won’t give them the benefit of the doubt again.
Best regards,
M. V. Cunha
Disclaimer: As of this writing, M. V. Cunha holds a position in Harrow, Inc. (HROW). This content is for informational purposes only and should not be considered financial, investment, or legal advice. Always conduct your own research before making investment decisions.
At $29 it is a real bargain. I would say: it is a buy.
Let's say: if it recovers fully after Q2 results one could gain +38% in just 3 months.
Very good analysis - thanks!