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KRYS, Krystal Biotech

We are commercializing VYJUVEK directly in the United States, major European markets, and Japan.

Item 1 - Business for more information about our commercial product, VYJUVEK , clinical development pipeline and research programs, and the status of our product candidates.

The launch in France is under the post-marketing authorization early reimbursed access Acc s Pr coce program.

Latest annual: FY2025 10-K

KRYS · Krystal Biotech

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$389M

+33.9% YoY

Vital signs · TTM, with 5-yr average

Revenue $417M 5-yr avg $146M

Operating margin 42.8% 5-yr avg −50.7%

ROIC 23% 5-yr avg −9%

Owner-earnings margin 59% 5-yr avg −31%

Free cash flow margin 57% 5-yr avg −36%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Operating margin has run about 23% through the cycle, a solid margin the cost base and competition set as much as the price does. The operating margin has swung widely — from −216% to 41% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. Stock-based pay runs about 17% of sales, a real and recurring claim on owners that the GAAP margin understates. Read this kind of business on the pipeline against the patent cliff, and pricing. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −21%, above 15% in 1 of 5 years). By owner earnings: roughly 41% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2021–2025

realized figures from each filing · older years to the left

2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
						Income statement
$0	$0	$51M	$291M	$389M	$417M	RevenueRevenue
—	—	194%	39%	38%	37%	SG&A / revenueSG&A/rev
—	—	92%	18%	15%	14%	R&D / revenueR&D/rev
($68M)	($145M)	($110M)	$66M	$161M	$179M	Operating incomeOp. inc.
—	—	−216.2%	22.6%	41.5%	42.8%	Operating marginOp. mgn
($70M)	($140M)	$11M	$89M	$205M	$225M	Net incomeNet inc.
—	—	15%	6%	-8%	-9%	Effective tax rateTax rate
						Cash flow & returns
($48M)	($101M)	($89M)	$123M	$201M	$250M	Operating cash flowOp. cash
$3M	$4M	$5M	$6M	$6M	$6M	DepreciationDeprec.
$4M	$2M	($145M)	($21M)	($64M)	($35M)	Working capital & otherWC & other
$68M	$53M	$12M	$4M	$12M	$13M	CapexCapex
—	—	23.3%	1.5%	3.1%	3.1%	Capex / revenueCapex/rev
($51M)	($105M)	($94M)	$119M	$195M	$244M	Owner earningsOwner earn.
—	—	−185.0%	41.0%	50.1%	58.6%	Owner earnings marginOE mgn
($116M)	($154M)	($101M)	$119M	$189M	$237M	Free cash flowFCF
—	—	−198.4%	41.0%	48.5%	56.9%	Free cash flow marginFCF mgn
-21%	-32%	-22%	10%	22%	23%	ROICROIC
-12%	-27%	1%	9%	17%	18%	Return on equityROE
−12%	−27%	1%	9%	17%	18%	Retained to equityRetained/eq
						Balance sheet
$341M	$162M	$358M	$345M	$496M	$510M	Cash & investmentsCash+inv
—	$0	$42M	$105M	$127M	$127M	ReceivablesReceiv.
—	$0	$7M	$27M	$40M	$43M	InventoryInvent.
$8M	$4M	$4M	$5M	$3M	$4M	Accounts payablePayables
—	($4M)	$45M	$126M	$165M	$166M	Operating working capitalOper. WC
$442M	$384M	$588M	$742M	$1.0B	$1.0B	Current assetsCur. assets
$26M	$29M	$33M	$102M	$103M	$108M	Current liabilitiesCur. liab.
17.2×	13.3×	17.8×	7.3×	10.0×	9.5×	Current ratioCurr. ratio
$626M	$558M	$818M	$1.1B	$1.3B	$1.4B	Total assetsAssets
$594M	$522M	$779M	$946M	$1.2B	$1.3B	Shareholders’ equityEquity
—	—	78.8%	16.9%	14.0%	13.1%	Stock comp / revenueSBC/rev
						Per share
22.2M	25.5M	27.8M	29.7M	30.0M	30.5M	Shares out (diluted)Shares
$0.00	$0.00	$1.83	$9.77	$12.99	$13.68	Revenue / shareRev/sh
$-3.13	$-5.49	$0.39	$3.00	$6.84	$7.38	EPS (diluted)EPS
$-2.28	$-4.10	$-3.38	$4.01	$6.52	$8.01	Owner earnings / shareOE/sh
$-5.24	$-6.02	$-3.63	$4.01	$6.31	$7.78	Free cash flow / shareFCF/sh
$3.08	$2.08	$0.43	$0.14	$0.40	$0.42	Cap. spending / shareCapex/sh
$26.74	$20.49	$28.06	$31.82	$40.72	$41.85	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	4-yr	5-yr
Capital spending / share	−40.0%/yr	−40.0%/yr (4-yr)
Book value / share	+11.1%/yr	+11.1%/yr (4-yr)

The record, charted

FY2021–2025

Each measure over its full record; the current point and the worst year marked.

Share count

30Mpeak FY2025

ROIC

22%low FY2022

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$195Mowner earningsvs.$205Mnet incomelow FY2022

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $195M of owner earnings, the operating cash left after the $6M it takes just to hold its position. It put $6M more into growth; free cash flow, after that spending, was $189M.

Reported net income$205M

Owner earnings$195M · 50% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$205M	$89M	$11M	($140M)	($70M)
Depreciation & amortizationnon-cash charge added back	+$6M	+$6M	+$5M	+$4M	+$3M
Stock-based compensationreal costnon-cash, but a real cost	+$55M	+$49M	+$40M	+$33M	+$15M
Working capital & othertiming of cash in and out, other non-cash items	−$64M	−$21M	−$145M	+$2M	+$4M
Cash from operations	$201M	$123M	($89M)	($101M)	($48M)
Maintenance capital expenditurethe spending needed just to hold position and volume	−$6M	−$4M	−$5M	−$4M	−$3M
Owner earnings	$195M	$119M	($94M)	($105M)	($51M)
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$6M	—	−$7M	−$49M	−$66M
Free cash flow	$189M	$119M	($101M)	($154M)	($116M)
Owner-earnings marginowner earnings ÷ revenue	50%	41%	-185%	—	—

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $6M, roughly its depreciation, the rate its assets wear out). The other $6M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $55M), owner earnings is nearer $141M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

No meaningful interest burden

Little or no interest expense reported

What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
How heavy is the debt, net of cash? +$492M

Net cash

Cash $496M − debt $4M

What this means
Cash and short-term investments exceed every dollar of debt by $492M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital -21%

Below average through the cycle

5-yr median, range -32%–22%; 22% latest = NOPAT $161M ÷ invested capital $728M

Industry peers: median -40%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 5 years (it ran 22% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 41%

High through the cycle

3-yr median margin, range -185%–50%; latest $195M = operating cash $201M − maintenance capex $6M

Industry peers: median -92%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 50% of revenue this year, a 41% median across 3 years. Treating stock comp as the real expense it is (less $55M of SBC) leaves $141M.
Are earnings backed by cash? 0.98×

Mostly cash-backed

Cash from ops $201M ÷ net income $205M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? —

Not enough data

What this means
The filing data didn't include the inputs for this check.
Investing or harvesting? 2.09×

Expanding

Capex $12M ÷ depreciation $6M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $389M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 9.95×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $4M vs $922M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (5-yr record) · 2 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $3.45/share (latest year $6.95), the averaged base the calculator's gate runs on, and book value is $41.37/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2021–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 3 of 5

What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
Operating margin 23% (median, 3 yrs)

In the filing’s words The margin widened even though the filing names price competition — the gain came from volume or cost, not pricing power. Read where.

What this means
Over the 3 years on record the operating margin has run around 23% — too short a record to call a through-cycle trend, but that is the level the business earns at.
Worst year 2023 · −216.2% op. margin

What this means
Operations went underwater in 2023, understand why before trusting the good years.
Share count +7.8%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing Named as a competitive risk

Its FY2025 10-K names artificial intelligence as a competitive threat.

“Our failure to use AI technologies in a way that maintains trust, quality and control in our business activities and to capitalize on opportunities presented by AI may place us at a competitive disadvantage.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$1.0B

Cash & short-term investments$510M
Receivables$127M
Inventory$43M
Other current assets$340M

Current liabilities$108M

Accounts payable$4M
Other current liabilities$104M

Current ratio9.46×all current assets ÷ what's due · Graham looked for 2×

Quick ratio9.06×stricter: inventory excluded

Cash ratio4.73×strictest: cash alone against what's due

Working capital$912Mthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago+31.9%the freshest read on whether the business is still growing

Current ratio, recent quarters9.5× → 9.5×

Deeper floors

Tangible book value$1.3Bequity stripped of goodwill & intangibles

Net current asset value$900MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$13M$9M of it operating leases

From the company's latest filing.

How the cash was used, 2021–2025

Over the record, the business generated $87M of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$149M · 172%

Source of funding−$62M
Reinvestment and shareholder returns ran $62M beyond the operating cash the business generated, so the gap was financed off the balance sheet.
Net change in share count37.4%
The diluted count rose from 22M to 31M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Return on what it retained164%
Of the earnings it kept rather than paid out ($95M over the span), annual owner earnings (first three years vs last three) grew $157M, so each retained $1 added about 1.64 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Krishnan	$7.4M	$6.8M	($51M)
2022	Mr. Krishnan	$3.3M	$4.3M	($105M)
2023	Mr. Krishnan	$6.2M	$11.7M	($94M)
2024	Mr. Krishnan	$15.6M	$19.8M	$119M
2025	Mr. Krishnan	$10.4M	$22.8M	$195M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership13.1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$55M
The slice of the business handed to employees in shares this year, 14% of revenue, equal to 34% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Stock compensation as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Biotechnology

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
ADMAADMA Biologics Inc	$510M	-13%	-106.6%	-39%	-158%
TARSTarsus Pharmaceuticals Inc.	$451M	—	-65.9%	-41%	-46%
IMCRImmunocore Holdings plc	$400M	99%	-23.9%	—	-3%
KRYSKrystal Biotech	$389M	—	22.6%	-21%	41%
TWSTTwist Bioscience Corporation	$377M	38%	-115.4%	-51%	-92%
ADPTAdaptive Biotechnologies Corporation	$277M	68%	-108.0%	-32%	-97%
VCELVericel Corporation	$276M	67%	-4.7%	-4%	10%
IOVAIovance Biotherapeutics Inc.	$264M	34%	-240.9%	-65%	-222%
Group median	—	—	-86.3%	-39%	-69%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Krystal Biotech has delivered.

Today’s price $

Base Normalize · through-cycle ($69M) Net of stock comp (−$55M) Steady-state · maintenance capex ($245M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · since FY2024+59%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $237M on 29M shares outstanding, per the 10-Q cover, as of 2026-04-29; net cash $505M. The if-converted diluted count is 31M, 3% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($13M) runs well above depreciation ($6M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $245M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh KRYS against another business →

Cite: Owner Scorecard, "Krystal Biotech (KRYS), the owner's record," https://ownerscorecard.com/c/KRYS, data as of 2026-07-09.

Manual order: ← KRUS its page in the Manual KSS →

Industry order: ← IPSC the Biotechnology chapter KYMR →