ARDELYX, INC.ARDX
ARDELYX, INC. Revenue Disclosure
REVENUE
Disaggregation of total revenues by nature is as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Product sales, net | $ | 377,808 | $ | 319,196 | $ | 82,526 | |||||||||||
| Product supply revenue | 15,879 | 11,649 | 6,121 | ||||||||||||||
| Licensing revenue | 5,088 | 78 | 35,809 | ||||||||||||||
| Non-cash royalty revenue related to the sale of future royalties | 8,545 | 2,692 | — | ||||||||||||||
| Total revenues | $ | 407,320 | $ | 333,615 | $ | 124,456 | |||||||||||
Product Sales, Net
Products are primarily sold to wholesalers, GPOs and specialty pharmacies, and to a lesser extent, directly to retailers, hospitals, clinics and government agencies. Customer orders are generally fulfilled within a few days from receipt. Contractual performance obligations are fulfilled once our Customers receive the product and obtain legal title, at which point, they are able to direct the use of and obtain substantially all of the remaining benefits of the product.
Total product sales, net was as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Product sales, net | |||||||||||||||||
| IBSRELA | $ | 274,207 | $ | 158,286 | $ | 80,062 | |||||||||||
| XPHOZAH | 103,601 | 160,910 | 2,464 | ||||||||||||||
| Total product sales, net | $ | 377,808 | $ | 319,196 | $ | 82,526 | |||||||||||
Product sales, net as a percentage of total revenues | 92.8 | % | 95.7 | % | 66.3 | % | |||||||||||
GTN Adjustments
We recognize revenue from product sales at the net sales price which includes estimates of variable consideration related to the following GTN adjustments:
•Discounts and chargebacks: We offer prompt pay discounts to our Customers for payment within a specified period, generally approximating two percent of the invoiced sales price. Our payment terms are generally 30 to 60 days. Chargebacks represent the estimated liability to wholesalers resulting from the difference between the wholesale acquisition cost and the lower program price offered to qualified government healthcare providers.
•Rebates, wholesaler and GPO fees: We are subject to discount obligations under governmental programs, such as Medicare and Medicaid. For the Medicaid program, we estimate the portion of sales attributed to Medicaid patients as rebates to be paid to the respective state. For the Medicare Part D program, beginning in 2025, we estimate the percentage of products sold to patients in the initial coverage and catastrophic coverage phases and adjust the transaction price for such discount at the time of sale. Prior to 2025, we paid a 70% discount to CMS when the Medicare Part D beneficiaries were in the coverage gap. Wholesaler and GPO fees are based on contracts and therefore require less estimation.
•Copay assistance and returns: We estimate the expected cost under the copay assistance program for qualified commercially-insured patients based on the terms of the program and redemption information provided by third-party claims processing organizations. We estimate products’ returns based on products’ actual returns history and other factors, including levels of our inventory in the distribution channel, estimated shelf life and historical sales returns of similar products.
Discounts, chargebacks, returns and wholesaler and GPO fees are reflected as reductions to receivables and are typically settled within contractual terms through credits to our Customers. All other GTN adjustments are reflected as a liability and settled through cash payments to our Customers or governmental payor programs, typically over various time periods that may span for multiple quarters.
The activities and ending reserve balances for each significant category of GTN adjustments on product sales, net, which constitute variable consideration, were as follows:
| (in thousands) | Discounts and Chargebacks | Rebates, Wholesaler and GPO Fees | Copay Assistance and Returns | Total | |||||||||||||||||||
| Balance as of December 31, 2023 | $ | 478 | $ | 4,234 | $ | 3,916 | $ | 8,628 | |||||||||||||||
| Provisions | 15,099 | 65,833 | 28,925 | 109,857 | |||||||||||||||||||
| Credits/payments | (13,934) | (55,592) | (21,671) | (91,197) | |||||||||||||||||||
| Balance as of December 31, 2024 | 1,643 | 14,475 | 11,170 | 27,288 | |||||||||||||||||||
Provisions(1) | 23,356 | 108,547 | 31,667 | 163,570 | |||||||||||||||||||
| Credits/payments | (23,306) | (88,566) | (33,563) | (145,435) | |||||||||||||||||||
| Balance as of December 31, 2025 | $ | 1,693 | $ | 34,456 | $ | 9,274 | $ | 45,423 | |||||||||||||||
(1)Provisions included approximately $4.4 million of net favorable adjustment resulting from changes in prior periods’ estimates.
Geographic Information and Concentrations
Revenues are attributed to geographical areas based on the location at which we earned revenue for product sales of IBSRELA and XPHOZAH or the domicile of our collaboration partners. A summary of our revenues by geographic area is as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
United States(1) | $ | 377,808 | $ | 319,196 | $ | 83,276 | |||||||||||
| International | |||||||||||||||||
Asia Pacific(2) | 29,170 | 14,341 | 41,121 | ||||||||||||||
North America(3) | 342 | 78 | 59 | ||||||||||||||
| Total revenues | $ | 407,320 | $ | 333,615 | $ | 124,456 | |||||||||||
(1)Revenues from the United States were comprised of amounts earned from sales of IBSRELA and XPHOZAH.
(2)Revenues from Asia Pacific were comprised of amounts earned in accordance with the Kyowa Kirin Agreement and the Fosun Agreement.
(3)Revenues from North America were comprised of amounts earned from Canada in accordance with the Knight Agreement.
Gross product sales from Customers and revenues from collaboration partners, each accounting for more than 10% of total revenues, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Customers(1) | |||||||||||||||||
| BioRidge Pharma, LLC | 65.9 | % | 75.4 | % | 24.0 | % | |||||||||||
| Cardinal Health | 21.4 | % | 14.5 | % | 19.8 | % | |||||||||||
| McKesson Corporation | 17.9 | % | 14.1 | % | 15.7 | % | |||||||||||
Cencora (formerly AmerisourceBergen Drug Corporation) | 17.3 | % | 16.4 | % | 19.1 | % | |||||||||||
Collaboration partners | |||||||||||||||||
| Kyowa Kirin | 5.9 | % | 4.3 | % | 29.0 | % | |||||||||||
(1)The total of the above percentages exceeds 100% as the numerators used in the calculations represent gross product sales for each Customer, as opposed to product sales, net as presented on our statements of operations and comprehensive loss.
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.