Share count
564Mpeak FY2023
← All companies ← RPM Manual RR → ← ROIV Pharmaceuticals RYTM →
RPRX, Royalty Pharma PLC
Pharmaceuticals consumer brand
Royalty market, collaborating with innovators from academic institutions, research hospitals and not-for-profits through small and mid-cap biotechnology companies to leading global pharmaceutical companies.
Royalty receipts include variable payments based on sales of products, net of contractual payments to the legacy non-controlling interests, that are attributed to us ("Royalty Receipts").
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$2.4B
+5.1% YoY · 2% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $2.4B 5-yr avg $2.3B
Revenue $631M +11.0% vs yr-ago qtr
Operating margin 89.3% yr-ago 94.0%
Net income $468M yr-ago $434M
Net margin 74.3% yr-ago 76.5%
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 63% through the cycle, a wide margin for the work it does — whether that reflects a durable edge or one that can fade is what the record weighs. The operating margin has swung widely — from 14% to 145% over the years — so the through-cycle figure carries more than any single year, and the worst year more than the best. 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 sat near the cost of capital (median 10%). 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, 2018–2025
realized figures from each filing · older years to the left| 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||
| $1.8B | $1.8B | $2.1B | $2.3B | $2.2B | $2.4B | $2.3B | $2.4B | $2.4B | RevenueRevenue |
| 3% | 6% | 9% | 8% | 10% | 11% | 10% | 24% | 25% | SG&A / revenueSG&A/rev |
| 22% | 5% | 1% | 9% | 8% | 2% | 0% | 19% | 18% | R&D / revenueR&D/rev |
| $1.4B | $2.6B | $1.6B | $1.4B | $307M | $1.5B | $1.3B | $1.6B | $1.6B | Operating incomeOp. inc. |
| 76.0% | 144.6% | 75.2% | 62.5% | 13.7% | 63.4% | 57.1% | 65.6% | 65.1% | Operating marginOp. mgn |
| $1.4B | $2.3B | $975M | $620M | $43M | $1.1B | $859M | $771M | $826M | Net incomeNet inc. |
| 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||
| $1.6B | $1.7B | $2.0B | $2.0B | $2.1B | $3.0B | $2.8B | $2.5B | $2.6B | Operating cash flowOp. cash |
| — | — | — | — | — | $0 | $0 | $4M | $5M | DepreciationDeprec. |
| $241M | ($681M) | $1.1B | $1.4B | $2.1B | $1.9B | $1.9B | $1.4B | $1.4B | Working capital & otherWC & other |
| — | — | — | — | — | $0 | $0 | $74M | $74M | AcquisitionsAcquis. |
| $0 | $4M | $0 | $0 | $0 | $305M | $230M | $1.2B | — | BuybacksBuybacks |
| — | 22% | 11% | — | — | 9% | 8% | — | — | ROICROIC |
| 30% | 38% | 10% | 6% | 0% | 11% | 8% | 8% | 8% | Return on equityROE |
| 30% | 38% | 10% | 6% | 0% | 11% | 8% | 8% | 8% | Retained to equityRetained/eq |
| Balance sheet | |||||||||
| $1.9B | $246M | $1.0B | $1.5B | $1.7B | $477M | $929M | $619M | $586M | Cash & investmentsCash+inv |
| — | $11M | $11M | $6M | $8M | $15M | $13M | $19M | $25M | Accounts payablePayables |
| — | $832M | $2.7B | $2.9B | $2.6B | $1.3B | $1.8B | $1.5B | $1.4B | Current assetsCur. assets |
| — | $333M | $308M | $171M | $1.2B | $161M | $1.3B | $636M | $536M | Current liabilitiesCur. liab. |
| — | 2.5× | 8.8× | 16.8× | 2.2× | 7.9× | 1.4× | 2.4× | 2.7× | Current ratioCurr. ratio |
| — | — | — | — | — | — | $0 | $925M | $925M | GoodwillGoodwill |
| — | $12.4B | $16.0B | $17.5B | $16.8B | $16.4B | $18.2B | $19.6B | $19.8B | Total assetsAssets |
| — | $6.2B | $5.8B | $7.1B | $7.1B | $6.1B | $7.6B | $9.0B | $9.0B | Total debtDebt |
| — | $6.0B | $4.8B | $5.6B | $5.4B | $5.7B | $6.7B | $8.3B | $8.4B | Net debt / (cash)Net debt |
| 4.9× | 9.8× | 10.2× | 8.6× | 1.6× | 8.0× | 5.7× | 5.1× | 4.7× | Interest coverageInt. cov. |
| $4.6B | $6.1B | $9.9B | $10.2B | $9.5B | $10.1B | $10.3B | $9.7B | $9.9B | Shareholders’ equityEquity |
| 0.0% | 0.0% | 0.3% | 0.1% | 0.1% | 0.1% | 0.1% | 12.2% | 16.9% | Stock comp / revenueSBC/rev |
| Per share | |||||||||
| — | — | 375M | 415M | 438M | 603M | 594M | 564M | 557M | Shares out (diluted)Shares |
| — | — | $5.65 | $5.52 | $5.11 | $3.91 | $3.81 | $4.21 | $4.38 | Revenue / shareRev/sh |
| — | — | $2.60 | $1.49 | $0.10 | $1.88 | $1.45 | $1.37 | $1.48 | EPS (diluted)EPS |
| — | — | $26.36 | $24.71 | $21.75 | $16.73 | $17.41 | $17.21 | $17.85 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 7-yr | 5-yr | |
|---|---|---|
| Revenue / share | −5.7%/yr (5-yr) | −5.7%/yr |
| EPS | −12.1%/yr (5-yr) | −12.1%/yr |
| Book value / share | −8.2%/yr (5-yr) | −8.2%/yr |
The record, charted
FY2018–2025Each measure over its full record; the current point and the worst year marked.
ROIC
8%low FY2024
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
FY2018FY2025
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 10-K · source on SEC EDGAR →
Will it survive?
- ComfortableOperating income $1.6B ÷ interest expense $308M
What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- How heavy is the debt, net of cash? $8.3B · 5.3× operating profitHeavy net debtCash $619M − debt $9.0B
What this means
Netting $619M of cash and short-term investments against $9.0B of debt leaves $8.3B owed, about 5.3× a year's operating profit (5.7× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Solid through the cycle4-yr median, range 8%–22%; the latest year is left out — large non-operating charges put its operating line well above pretax profitIndustry peers: median -7%
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 4 years, 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.
- Not enough dataIndustry peers: median 1%
What this means
The filing data didn't include the inputs for this check.
- Cash-backedCash from ops $2.5B ÷ net income $771M
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?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? —Not enough data
What this means
The filing data didn't include the inputs for this check.
Graham’s defensive tests · 3 of 6 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 PassRevenue ≥ $2B · $2.4B
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 PassCurrent ratio ≥ 2× · 2.40×
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 MissDebt ≤ working capital · $9.0B vs $892M 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 PassA profit every year (8-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted 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.
- Earnings growth MissEarnings +33% over the record · −41%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- 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 $2.11/share (latest year $1.77), the averaged base the calculator's gate runs on, and book value is $22.24/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, 2018–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 8 of 8
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 1 of 7 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 99% → 62% (3-yr avg ends)
In the filing’s words The filing claims pricing power in its strongest form — price raised, volume held — yet the margin here has not widened to match. The claim leads the record; weigh them together.
What this means
Through the cycle the operating margin slipped — about 99% early to 62% lately, median 63% — competition or costs are biting in.
- Reinvestment, incremental ROIC returns capital
What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Worst year 2022 · 13.7% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count +6.0%/yr
What this means
The share count is rising, dilution works against you on a per-share basis.
Does AI threaten the moat?
Low contestabilityThe 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.
“If these information technology systems suffer severe damage or disruption and the issues are not resolved in a timely manner, our business, financial condition or operations could be adversely affected. 39 In addition, the use of artificial intelligence-based software (including machine learning) is increasingly being…”
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, 2026Can 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$1.4B
- Cash & short-term investments$586M
- Other current assets$839M
Current liabilities$536M
- Debt due within a year$380M
- Accounts payable$25M
- Other current liabilities$130M
Current ratio2.66×all current assets ÷ what's due · Graham looked for 2×
Quick ratio—inventory untagged this quarter, so withheld rather than shown equal to the current ratio
Cash ratio1.09×strictest: cash alone against what's due
Working capital$890Mthe cushion left after near-term bills
Debt due this year vs. cash$380M due · $586M cash
covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet
Revenue, latest quarter vs. a year ago+11.0%the freshest read on whether the business is still growing
Current ratio, recent quarters9.4× → 2.7×
Deeper floors
Tangible book value$9.0Bequity stripped of goodwill & intangibles
Net current asset value($8.5B)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$9.0Bno operating-lease liability tagged this quarter, so debt alone
From the company's latest filing.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid.
- Insider ownership1.4%
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$290M
The slice of the business handed to employees in shares this year, 12% of revenue, equal to 19% 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.
Inverting the record
Invert: instead of why Royalty Pharma PLC is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2018–2025.
1 of the 3 tests turned up something to look into; the other 2 came back clean.
- Look hereIs it less profitable than it was?62.0% vs 98.6%
The operating margin averaged 98.6% early in the record and 62.0% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
And these came back clean
- Did reported profit become cash?
- Are "one-time" charges a yearly habit?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
What an owner would ask, FY2025
read the 10-K →- Which reported numbers are a judgment call?Management names Credit & receivables 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, Pharmaceuticals
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 |
|---|---|---|---|---|---|
| ALNYAlnylam | $3.7B | 86% | -126.0% | -83% | -107% |
| BMRNBioMarin | $3.2B | 78% | -1.7% | -1% | 1% |
| UTHRUnited Therapeutics | $3.2B | 92% | 47.5% | 20% | 39% |
| AMRXAmneal Pharmaceuticals Inc. | $3.0B | 37% | 7.9% | 3% | 9% |
| RPRXRoyalty Pharma PLC | $2.4B | — | 64.5% | 10% | — |
| SRPTSarepta | $1.9B | — | -93.0% | -25% | -63% |
| PTCTPTC Therapeutics Inc. | $1.7B | 97% | -55.4% | -45% | -28% |
| ALKSAlkermes | $1.5B | 84% | -4.8% | -7% | 3% |
| Group median | — | — | -3.3% | -4% | — |
The price
What a price has to assume.
What the price implies
reverse-DCFRoyalty Pharma PLC is profitable, but its owner-earnings base could not be formed from this filing’s tagged data (operating cash flow or capital spending is missing), so the owner-earnings reverse-DCF has no base to grow. We read the price from both ends instead: type a price to see the profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
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The assumptions
Revenue, delivered2%/yr’20→’25
Enter a price to run it.
Owner earnings it must reach—
Margin the price demands—
Owner-earnings margin today—
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.
Cite: Owner Scorecard, "Royalty Pharma PLC (RPRX), the owner's record," https://ownerscorecard.com/c/RPRX, data as of 2026-07-09.
Manual order: ← RPM its page in the Manual RR →
Industry order: ← ROIV the Pharmaceuticals chapter RYTM →