ANI PHARMACEUTICALS INCANIP
ANI PHARMACEUTICALS INC Revenue Disclosure
REVENUE RECOGNITION AND RELATED ALLOWANCES
Revenue Recognition
Revenues are primarily derived from sales of generic, rare disease, and brands portfolio pharmaceutical products, royalties, and other pharmaceutical services. Revenue is recognized when obligations under the terms of contracts with customers are satisfied, which generally occurs when control of the products is transferred to the customer. Variable consideration is estimated after the consideration of applicable information that is reasonably available. The Company generally does not have incremental costs to obtain contracts that would otherwise not have been incurred. The Company does not adjust revenue for the promised amount of consideration for the effects of a significant financing component because its customers generally pay within 100 days.
All revenue recognized in the accompanying consolidated statements of operations is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue:
| Years Ended December 31, | ||||||||||||||||||||
| Products and Services (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Rare Disease and Brands | ||||||||||||||||||||
| Cortrophin Gel | $ | 347,778 | $ | 198,085 | $ | 112,117 | ||||||||||||||
| ILUVIEN and YUTIQ | 74,868 | 31,514 | — | |||||||||||||||||
| Rare Disease total net revenues | $ | 422,646 | $ | 229,599 | $ | 112,117 | ||||||||||||||
| Brands | 61,308 | 64,743 | 85,384 | |||||||||||||||||
| Rare Disease and Brands total net revenues | $ | 483,954 | $ | 294,342 | $ | 197,501 | ||||||||||||||
| Generics and Other | ||||||||||||||||||||
| Generic pharmaceutical products | $ | 384,110 | $ | 301,004 | $ | 269,449 | ||||||||||||||
| Royalties and other pharmaceutical services | 15,302 | 19,030 | 19,866 | |||||||||||||||||
| Generics and Other total net revenues | $ | 399,412 | $ | 320,034 | $ | 289,315 | ||||||||||||||
| Total net revenue | $ | 883,366 | $ | 614,376 | $ | 486,816 | ||||||||||||||
| Years Ended December 31, | ||||||||||||||||||||
| Timing of Revenue Recognition (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Performance obligations transferred at a point in time | $ | 883,366 | $ | 614,376 | $ | 486,441 | ||||||||||||||
| Performance obligations transferred over time | — | — | 375 | |||||||||||||||||
| Total | $ | 883,366 | $ | 614,376 | $ | 486,816 | ||||||||||||||
In the years ended December 31, 2025 or 2024, the Company did not incur, and therefore did not defer, any material incremental costs to obtain or fulfill contracts. As of December 31, 2025, there were no contract assets recorded which were related to revenue recognized based on percentage of completion but not yet billed.
The Company recognized a decrease of $2.1 million of net revenue from performance obligations satisfied in prior periods during the year ended December 31, 2025, consisting primarily of revised estimates for variable consideration, including chargebacks, rebates, returns, and other allowances, related to prior period sales.
As of December 31, 2025, the aggregate amount of the transaction price allocated to the remaining performance obligations for all open contract manufacturing customer contracts was $2.4 million, which consists of firm orders for contract manufactured products. ANI will recognize revenue for these performance obligations as they are satisfied, which is anticipated within six months.
Variable Consideration
Sales of pharmaceutical products are subject to variable consideration due to chargebacks, government rebates, returns, administrative and other rebates, and cash discounts. Estimates for these elements of variable consideration require significant judgment.
Chargebacks
Chargebacks, primarily from wholesalers, result from arrangements with indirect customers establishing prices for products which the indirect customer purchases through a wholesaler. Alternatively, the Company may pre-authorize wholesalers to offer specified contract pricing to other indirect customers. Under either arrangement, the Company provides a chargeback credit to the wholesaler for any difference between the contracted price with the indirect customer and the wholesaler’s invoice price, typically Wholesale Acquisition Cost (“WAC”).
Prior period chargebacks claimed by wholesalers are analyzed to determine the actual average selling price (“ASP”) for each product. This calculation is performed by product by wholesaler. ASPs can be affected by several factors such as:
•A change in customer mix,
•A change in negotiated terms with customers,
•A change in the volume of off-contract purchases, and
•Changes in WAC.
As necessary, ASPs are adjusted based on anticipated changes in the factors above.
The difference between ASP and WAC is recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets, at the time revenue is recognized from the product sale. The Company continually monitors chargeback activity and adjusts ASPs when the Company believes that actual selling prices will differ from current ASPs.
Government Rebates
Government rebates reserve consists of estimated payments due to governmental agencies for utilization of the Company's products by beneficiaries under such governmental programs. The two largest government programs are Medicaid and Medicare.
The Company participates in the Medicaid Drug Rebate Program and pays rebates to the states related on Medicaid beneficiary utilization of the Company's products. Medicaid rebates are billed within 60-90 days of the end of the quarter in which the product was dispensed to a Medicaid beneficiary. Medicaid rebate amounts per product unit are established by law, based on the Average Manufacturer Price (“AMP”), which is reported on a monthly and quarterly basis, and, in the case of branded products, best price, which is reported on a quarterly basis.
Medicaid reserves are based on expected utilization from state Medicaid programs. Estimates for expected claims are driven by patient usage, sales mix, calculated AMP or best price, as well as inventory in the distribution channel that will be subject to a Medicaid rebate. As a result of the delay between selling the products, dispensing the products and rebate billing, the Medicaid rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related invoice has not been received, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicaid beneficiaries.
Many of the Company's products are also covered under Medicare. Through 2024, the Company participated in the Coverage Gap Discount Program (“CGDP”), under which it provided discounts on covered Part D drugs approved under NDAs that were dispensed to Medicare Part D beneficiaries in the coverage gap phase of the benefit. Beginning in 2025, the Company participates in the Medicare Part D Manufacturer Discount Program (“MDP”), which replaces the CGDP under the Inflation Reduction Act of 2022. Under the MDP, the Company is required to provide discounts on covered Part D drugs approved under NDAs or BLAs that are dispensed to Medicare Part D beneficiaries during the initial coverage and catastrophic phases of the benefit. This requirement applies to all covered Part D drugs approved under NDAs or BLAs, including products marketed as authorized generics.
Estimates for these discounts are based on historical experience with Medicare Part D utilization and discount invoicing patterns for applicable products. Medicare Part D discounts are billed quarterly for drugs dispensed to Medicare Part D in the prior quarter, which is typically 120 days after the product is shipped. As a result of the delay between selling the products, dispensing the products and discount invoicing, Medicare Part D discount reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicare Part D beneficiaries.
To evaluate the adequacy of government rebate and discount reserves, the Company reviews these reserves on a quarterly basis against actual claims and invoicing data to ensure the liability is reasonably stated. The Company continually monitors the government rebate and discount reserve and adjusts estimates when it expects that actual obligations may differ from established accruals. Accruals for government rebates and discounts are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to accrued government rebates in the consolidated balance sheets
Returns
A returns policy is in place that allows customers to return product within a specified period prior to and subsequent to the expiration date. Generally, product may be returned for a period beginning six months prior to its expiration date to up to one year after its expiration date. Product returns are settled through the issuance of a credit to the customer. The estimate for returns is based upon historical experience with actual returns. While such experience has allowed for reasonable estimation in the past, history may not always be an accurate indicator of future returns. The Company continually monitors estimates for returns and make adjustments when it is expected that actual product returns may differ from the established accruals. Accruals for returns are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to the return goods reserve in the consolidated balance sheets. Generally, the Company does not accept product returns in international markets, however, there is a limited history of returns in such areas.
Administrative Fees and Other Rebates
Administrative fees or rebates are offered to wholesalers, group purchasing organizations, and indirect customers. Fees and rebates are accrued, by product by wholesaler, at the time of sale based on contracted rates and ASPs.
To evaluate the adequacy of the administrative fee accruals, on-hand inventory counts are obtained from the wholesalers. The Company continually monitors administrative fee activity and adjust accruals when it is expected that actual administrative fees may differ from the accruals. Accruals for administrative fees and other rebates are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable or accrued expenses in the consolidated balance sheets.
Prompt Payment Discounts
Sales discounts may be granted to customers for prompt payment. The reserve for prompt payment discounts is based on invoices outstanding. Based on past experience, it is assumed that all available discounts will be taken. Accruals for prompt payment discounts are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets.
The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the years ended December 31, 2025, 2024, and 2023:
| Accruals for Chargebacks, Returns, and Other Allowances | |||||||||||||||||||||||||||||
| (in thousands) | Chargebacks | Government Rebates | Returns | Administrative Fees and Other Rebates | Prompt Payment Discounts | ||||||||||||||||||||||||
| Balance at December 31, 2023 (1) | $ | 84,208 | $ | 12,168 | $ | 29,678 | $ | 11,412 | $ | 4,865 | |||||||||||||||||||
| Accruals/Adjustments | 576,461 | 32,008 | 38,587 | 65,661 | 25,760 | ||||||||||||||||||||||||
| Credits Taken Against Reserve | (555,039) | (25,462) | (28,991) | (57,485) | (24,367) | ||||||||||||||||||||||||
| Balance at December 31, 2024 (1) | $ | 105,630 | $ | 18,714 | $ | 39,274 | $ | 19,588 | $ | 6,258 | |||||||||||||||||||
| Accruals/Adjustments | 677,311 | 78,276 | 37,333 | 86,620 | 35,993 | ||||||||||||||||||||||||
| Credits Taken Against Reserve | (639,489) | (53,836) | (27,103) | (77,295) | (33,618) | ||||||||||||||||||||||||
| Balance at December 31, 2025 (1) | $ | 143,452 | $ | 43,154 | $ | 49,504 | $ | 28,913 | $ | 8,633 | |||||||||||||||||||
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(1)Chargebacks are included as an offset to accounts receivable, net of chargebacks and other allowances in the consolidated balance sheets. Administrative Fees and Other Rebates and Prompt Payment Discounts are included as a reduction to accounts receivable, net of chargebacks and other allowances or accrued expenses and other in the consolidated balance sheets. Returns are included in returned goods reserve in the consolidated balance sheets. Government Rebates are included in accrued government rebates in the consolidated balance sheets.
Credit Concentration
ANI’s customers are primarily national wholesalers, specialty pharmacies, retail pharmacy chains, other U.S. and international distributors, group purchasing organizations, and hospitals and healthcare providers.
During the year ended December 31, 2025, there were three customers that accounted for 10% or more of net revenues, made up of wholesale distributors. As of December 31, 2025, accounts receivable from these customers totaled 64% of accounts receivable, net. During the years ended December 31, 2024, and 2023, there were four customers that accounted for 10% or more of net revenues.
The four customers represent the total percentage of net revenues as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Customer 1 | 17 | % | 25 | % | 31 | % | |||||||||||
| Customer 2 | 9 | % | 11 | % | 13 | % | |||||||||||
| Customer 3 | 14 | % | 12 | % | 13 | % | |||||||||||
| Customer 4 | 22 | % | 16 | % | 12 | % | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.