Arcutis Biotherapeutics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net product revenue for Q3 2026 was $143.9 million, representing a 45% year-over-year increase and an 11% sequential increase versus Q2 2026.
• Product revenue breakdown for Q3 2026: ZORYVE topical foam 0.3% ($75.1 million), ZORYVE cream 0.3% ($37.8 million), ZORYVE cream 0.15% ($27.3 million), and ZORYVE cream 0.05% ($3.7 million).
• Cost of sales for Q3 2026 was $12.5 million, compared to $8.7 million in Q3 2025, driven by increasing sales volume.
• Research and development (R&D) expenses for Q3 2026 were $22.4 million, up from $19.6 million in Q3 2025, primarily due to ARQ-234 clinical development and medical affairs investment.
• Selling, general, and administrative (SG&A) expenses for Q3 2026 were $99.6 million, compared to $62.4 million in Q3 2025, driven by marketing spend for the "Skin to Believe In" campaign and sales force expansion.
• Net income for Q3 2026 was $8.8 million ($0.07 basic and $0.06 diluted EPS), compared to $7.4 million ($0.06 basic and diluted EPS) in Q3 2025.
• Net cash provided by operating activities for Q3 2026 was $18.9 million.
• Cash, cash equivalents, restricted cash, and marketable securities totaled $259.8 million as of September 30, 2026, compared to $221.3 million as of December 31, 2025.
• Long-term debt, net, was $102.4 million as of September 30, 2026, compared to $107.9 million as of December 31, 2025.

Guidance and Future Outlook:

• Full-year 2026 net product sales guidance was raised to $535 million–$545 million, up from the previous range of $525 million–$540 million.
• The company expects to disclose topline results from the Phase 2 trial of ZORYVE foam 0.3% for vitiligo and a decision on program advancement in Q4 2026.
• Results from Phase 2 proof-of-concept studies for ZORYVE foam 0.3% in hidradenitis suppurativa and a decision on program advancement are expected in Q1 2027.
• The FDA has set a target action date of February 23, 2027, for the supplemental New Drug Application to expand ZORYVE cream 0.05% for infants aged 3 to 24 months.
• Management anticipates potential FDA approval of ZORYVE cream 0.05% for infants as young as 3 months in Q1 2027.

Business Segments and Product Lines:

• ZORYVE is approved in the U.S. and Canada for plaque psoriasis, atopic dermatitis, and seborrheic dermatitis.
• The company initiated a pivotal Phase 3 trial for ZORYVE cream 0.3% for moderate to severe atopic dermatitis in adults and children, distinct from the current 0.15% indication for mild to moderate cases in patients 6 years and older.
• Enrollment continues in the Phase 4 INTEGUMENT-ITCH study evaluating itch improvement with ZORYVE cream 0.15% in adults with atopic dermatitis.
• Enrollment has begun for a Phase 2 trial evaluating ZORYVE foam 0.3% for cutaneous adverse events due to checkpoint inhibitors.
• The company continues enrolling patients in the Phase 1a/1b study of ARQ-234, a CD200 receptor agonist for atopic dermatitis, and has progressed to the multiple ascending dose portion.
• ZORYVE cream 0.15% received the 2026 "Best Prescription Skin Solution" Award from Marie Claire magazine.

Market and Competitive Landscape:

• ZORYVE leads the branded non-steroidal topical segment, driven by efficacy and tolerability across multiple inflammatory skin conditions.
• Revenue growth was driven by increasing unit demand and modest improvements in gross-to-net (GTN) deductions.
• The company launched the "Skin to Believe In" awareness campaign with World Champion gymnast Simone Biles to raise awareness of inflammatory skin diseases and promote steroid-free topical treatment options.

Risks and Challenges:

• Forward-looking statements regarding clinical development, regulatory approval, and commercial success involve substantial risks, including the timing of regulatory filings, success of commercialization efforts, and intellectual property defense.
• Actual results may differ from expectations due to risks inherent in the clinical development process and regulatory approval process.

Management Commentary and Tone:

• Frank Watanabe, President and CEO, stated that the quarter reflects consistent execution of corporate strategy and a strengthened financial position.
• Management expressed excitement regarding the Simone Biles partnership and the potential for continued growth driven by indication expansion trials and the ARQ-234 Phase 1 trial.

Other Key Points:

• Rob Lisicki was appointed Chief Commercial Officer effective November 4, 2026.
• Rob Scott, MD, was appointed to the Board of Directors in October 2026.
• The company obtained one new U.S. patent in Q4 2026 related to topical PDE4 inhibitor foam compositions.
• The company sustained positive operating cash flow for the quarter.