ARDELYX, INC.ARDX
ARDELYX, INC. Segments Disclosure
SEGMENT REPORTING
We operate in a single reportable segment with a mission to develop and commercialize innovative medicines that meet significant unmet medical needs. A centralized research and development organization, supply chain organization and commercial organization are all responsible for the development, manufacturing, supply and sale of our products. Our business is also supported by centralized corporate functions. We currently operate primarily in the U.S. and earn revenues from sales of IBSRELA and XPHOZAH, both branded products derived from tenapanor, a molecule developed from our unique and innovative platform. In addition to commercializing IBSRELA and XPHOZAH, we are also developing a next-generation NHE3 inhibitor that we believe can have application across multiple therapeutic areas. Collaboration and licensing agreements with external partners are utilized for development and commercialization activities outside the U.S. Currently, we maintain such agreements for certain indications of tenapanor in Japan (Kyowa Kirin), China (Fosun Pharma) and Canada (Knight), as discussed further in Note 7. Collaboration and Licensing Agreements. We recognize other revenues in the form of licensing revenue, product supply revenue or non-cash royalty revenue related to the sale of future royalties under such agreements. Royalties and commercialization milestones earned under the Kyowa Kirin Agreement are subject to a separate agreement where such revenue payments are sold to HCR, as discussed further in Note 8. Deferred Royalty Obligation Related to the Sale of Future Royalties.
Our Chief Executive Officer (CEO) is our Chief Operating Decision Maker (CODM), responsible for allocating resources and assessing the Company’s performance using aggregated financial information. Utilizing aggregated financial information enables the CODM to determine the most appropriate resource allocation across the commercial organization, research and development projects or other initiatives consistent with our long-term corporate wide strategic goals. The CODM primarily uses aggregated net loss as reported on the statements of operations and comprehensive loss to measure segment loss, supplemented by certain additional significant expense details reflected in the table below.
Detailed information regarding our single operating segment’s significant revenues, expenses and operating loss is as follows:
| Year Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
Revenues | |||||||||||||||||
| Product sales, net | $ | 377,808 | $ | 319,196 | $ | 82,526 | |||||||||||
Other revenues(1) | 29,512 | 14,419 | 41,930 | ||||||||||||||
| Total revenues | 407,320 | 333,615 | 124,456 | ||||||||||||||
| Less | |||||||||||||||||
Cost of product sales(2) | 11,185 | 6,851 | 2,323 | ||||||||||||||
Other cost of revenue(3) | 28,352 | 43,705 | 15,472 | ||||||||||||||
Research and development(4) | 58,429 | 39,480 | 29,231 | ||||||||||||||
Selling(4) | 226,925 | 162,957 | 80,028 | ||||||||||||||
General and administrative(4) | 58,662 | 52,916 | 34,020 | ||||||||||||||
| Stock-based compensation | 48,962 | 37,381 | 13,530 | ||||||||||||||
Other segment expenses(5) | 15,782 | 18,275 | 13,128 | ||||||||||||||
| Total costs and operating expenses | 448,297 | 361,565 | 187,732 | ||||||||||||||
| Consolidated loss from operations | (40,977) | (27,950) | (63,276) | ||||||||||||||
Other reconciliation items(6) | (20,622) | (11,186) | (2,791) | ||||||||||||||
| Consolidated net loss | $ | (61,599) | $ | (39,136) | $ | (66,067) | |||||||||||
(1)Other revenues includes revenues from our collaboration partnerships, including licensing revenue, product supply revenue and non-cash royalty revenue related to the sale of future royalties.
(2)Cost of product sales includes the cost of commercial goods sold to our Customers, such as the cost of materials, third-party contract manufacturing, third-party packaging services, freight, labor costs for personnel involved in the manufacturing process and indirect overhead costs.
(3)Other cost of revenue includes the cost of materials sold to our collaboration partners under product supply agreements, certain costs related to capacity expansion at current and future CMOs and payments due to AstraZeneca. As of the end of the 2025 second quarter, the maximum $75.0 million royalty obligation under the AstraZeneca Termination Agreement had been fully recognized.
(4)Research and development, selling and general administrative expenses herein do not include certain allocated items, such as stock-based compensation expenses.
(5)Other segment expenses primarily consists of allocated facilities, information technology, and employee costs of approximately $14.8 million, $16.9 million and $12.3 million in 2025, 2024 and 2023, respectively.
(6)Other reconciliation items includes interest expense, non-cash interest expense related to the sale of future royalties, provision for income taxes and other income, net.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.