AstraZeneca (AZN) Q2 2024 earnings summary

Executive summary

• Total revenue grew 18% at CER in H1 2024, reaching $25,617m, with Q2 revenue at $12,938m, driven by strong demand across therapy areas and geographies.

• Core operating profit rose to $8,411m, up 7% CER; core EPS increased 5% to $4.03, with growth below revenue due to prior year one-time gains.

• Upgraded FY 2024 guidance: total revenue and core EPS now expected to increase by mid-teens percentage at CER, up from previous low double-digit to low teens.

• Double-digit growth achieved in the US, Europe, China (15%), and emerging markets (ex-China 29%); oncology, biopharma, and rare disease all delivered double-digit growth.

• Pipeline momentum continued with multiple positive phase III readouts and new approvals, including Imfinzi, Tagrisso, Enhertu, and breakthrough designations for Tezspire and eneboparatide.

Financial highlights

• Product sales and alliance revenue grew strongly; alliance revenue up 50% in H1, mainly from increased HER2 sales.

• Core product sales gross margin was 82.4% in H1 2024, expected to decline slightly in H2 due to seasonal impacts and product mix.

• SG&A and R&D costs both increased 15% in H1; R&D expense for the full year expected at the upper end of low 20s% range.

• Net cash inflow from operations grew 15% to $5,571m in H1 2024; net debt increased by $3,814m to $26,324m, mainly due to acquisitions and dividend payments.

• Tangible CapEx rose, with major investments in new manufacturing facilities in Ireland, China, Maryland, and a planned $1.5bn ADC site in Singapore.

Outlook and guidance

• Upgraded 2024 guidance: total revenue and core EPS to increase by mid-teens % at CER; no increase in collaboration revenue assumed.

• FX expected to have a low single-digit adverse impact on revenue and mid-single-digit on core EPS if current rates persist.

• Core tax rate expected between 18-22%.

• Strategic ambition to reach $80 billion in revenue by 2030 and mid-30s% core operating margin by 2026 remains on track.