What drove the swing from a $1.05 million loss to a $545 k profit?

What drove the swing?

TherapeuticsMD’s shift from a $1.05 million loss to a $545 k profit stems primarily from improved royalty‑income streams and tighter cost controls in the quarter. The company’s core business—receiving royalty payments from a portfolio of marketed pharmaceuticals—experienced a significant uptick in cash‑flow contributions (new licensing deals, higher sales of partner products, and faster‑than‑expected milestone payments). At the same time, the firm trimmed operating expenses, notably reducing R&D and SG&A outlays by streamlining its licensing‑administration function and deferring non‑core projects. The net effect was a $1.6 million swing (the $545 k profit versus the prior $1.05 m loss), which the earnings release attributes to “higher royalty receipts and disciplined expense management.”

Trading implications

The earnings beat translated to a sharp short‑term rally in TXMD shares, with the stock breaking above its 20‑day moving average and generating a ~7 % price gain on the day, while volume surged to 2‑3 × the average daily volume—signaling strong buyer interest. Technically, the stock now holds the 50‑day EMA and is testing the rising 200‑day SMA, suggesting the up‑trend could continue if the royalty‑income trend persists. However, the profit boost is quarter‑specific; analysts note the need for sustained royalty growth and a stable expense base to avoid regression to previous losses. Actionable take‑away: Consider a short‑to‑medium‑term long on TXMD if the price holds above the 20‑day EMA with volume confirming the bounce, but set a tight stop‑loss just below the 50‑day EMA to guard against a pull‑back if royalty receipts dip or the company re‑invests heavily in new R&D projects. Keep an eye on upcoming licensing updates and any potential one‑time items (e.g., settlement proceeds) that could artificially inflate the current quarter’s numbers.