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XOMAO, XOMA Royalty Corporation

We do this by providing capital in exchange for the economic rights to future milestone and royalty payments associated with clinical candidates and approved products.

In return the drug developer or marketer receives non-dilutive, non-recourse funding.

We have a sizable portfolio of economic rights to future potential milestone and royalty payments associated with over 120 commercial products and pre-commercial therapeutic candidates.

Latest annual: FY2025 10-K

XOMAO · XOMA Royalty Corporation

The business

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

Revenue · FY2025

$10M

+55.6% YoY · −18% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $19M 5-yr avg $12M

Operating margin 26.6% 5-yr avg −488.4%

ROIC 5% 5-yr avg −14%

Owner-earnings margin 36% 5-yr avg −524%

Free cash flow margin 36% 5-yr avg −524%

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 reached 110% at its best but run negative through the cycle (median −333%) — so the question is which reading is truer: whether the median was pulled below zero by one-off charges, by the cycle, or by spending it is still growing into, and whether it settles back at a profit. Stock-based pay runs about 77% 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 −16%, above 15% in 2 of 7 years). Owner earnings, the cash-based check, have been thin too. 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, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$6M	$52M	$5M	$17M	$28M	$37M	$4M	$3M	$7M	$10M	$19M	RevenueRevenue
329%	46%	366%	122%	60%	56%	559%	966%	518%	349%	213%	SG&A / revenueSG&A/rev
795%	15%	33%	7%	1%	0%	4%	5%	43%	17%	3%	R&D / revenueR&D/rev
($62M)	$17M	($17M)	($4M)	$12M	$18M	($17M)	($42M)	($40M)	$11M	$5M	Operating incomeOp. inc.
n/m	32.5%	−332.6%	−22.5%	44.4%	48.0%	−419.6%	n/m	−601.1%	110.0%	26.6%	Operating marginOp. mgn
($54M)	$15M	($13M)	($2M)	$13M	$16M	($17M)	($41M)	($14M)	$32M	$34M	Net incomeNet inc.
—	10%	—	—	—	1%	—	—	—	0%	0%	Effective tax rateTax rate
											Cash flow & returns
($34M)	$3M	($13M)	($285K)	$10M	$23M	($13M)	($18M)	($14M)	$3M	$7M	Operating cash flowOp. cash
$800K	$300K	$30K	$25K	$22K	—	—	—	—	—	$9K	DepreciationDeprec.
$11M	($20M)	($3M)	($3M)	($7M)	$685K	$617K	$14M	($10M)	($38M)	($37M)	Working capital & otherWC & other
$59K	$8K	$6K	—	$9K	—	$15M	$17K	$20K	—	$20K	CapexCapex
1.1%	0.0%	0.1%	—	0.0%	—	367.4%	0.6%	0.3%	—	0.1%	Capex / revenueCapex/rev
($34M)	$3M	($13M)	—	$10M	—	($28M)	($18M)	($14M)	—	$7M	Owner earningsOwner earn.
−606.5%	5.1%	−249.6%	—	36.1%	—	−677.7%	−685.8%	−207.0%	—	36.3%	Owner earnings marginOE mgn
($34M)	$3M	($13M)	—	$10M	—	($28M)	($18M)	($14M)	—	$7M	Free cash flowFCF
−606.5%	5.1%	−249.6%	—	36.1%	—	−677.7%	−685.8%	−207.0%	—	36.3%	Free cash flow marginFCF mgn
—	—	—	—	—	$3M	$5M	$5M	$5M	$5M	$6M	Dividends paidDiv. paid
—	—	—	-16%	59%	36%	-21%	-56%	-40%	10%	5%	ROICROIC
—	252%	-71%	-5%	15%	11%	-14%	-46%	-22%	38%	36%	Return on equityROE
—	—	—	—	—	9%	−18%	−52%	−31%	31%	30%	Retained to equityRetained/eq
											Balance sheet
$26M	$43M	$46M	$57M	$86M	$93M	$58M	$153M	$102M	$83M	$86M	Cash & investmentsCash+inv
$474K	$397K	$1M	$3M	—	—	$0	—	—	—	$0	ReceivablesReceiv.
$6M	$2M	$1M	$614K	$456K	$1M	$524K	$653K	$1M	$2M	$4M	Accounts payablePayables
($5M)	($1M)	$224K	$2M	—	—	($524K)	—	—	—	($4M)	Operating working capitalOper. WC
$27M	$44M	$48M	$60M	$88M	$97M	$61M	$169M	$126M	$117M	$119M	Current assetsCur. assets
$33M	$7M	$6M	$9M	$12M	$13M	$7M	$19M	$24M	$35M	$33M	Current liabilitiesCur. liab.
0.8×	6.0×	8.4×	6.8×	7.2×	7.5×	9.0×	8.7×	5.2×	3.4×	3.6×	Current ratioCurr. ratio
$29M	$45M	$64M	$96M	$125M	$167M	$140M	$234M	$221M	$273M	$272M	Total assetsAssets
$43M	$15M	$22M	$32M	$21M	—	$0	$124M	$118M	$109M	$103M	Total debtDebt
$17M	($29M)	($23M)	($24M)	($66M)	—	($58M)	($29M)	$17M	$26M	$17M	Net debt / (cash)Net debt
($47M)	$6M	$19M	$44M	$86M	$142M	$124M	$89M	$62M	$84M	$93M	Shareholders’ equityEquity
137.4%	13.9%	77.0%	28.6%	14.2%	17.0%	86.9%	343.4%	155.1%	89.6%	51.3%	Stock comp / revenueSBC/rev
											Per share
6.0M	8.0M	8.4M	8.8M	11.5M	12.2M	11.4M	11.5M	11.7M	18.0M	17.4M	Shares out (diluted)Shares
$0.92	$6.57	$0.61	$1.97	$2.43	$3.00	$0.36	$0.23	$0.57	$0.58	$1.07	Revenue / shareRev/sh
$-8.89	$1.83	$-1.59	$-0.23	$1.16	$1.30	$-1.50	$-3.56	$-1.18	$1.76	$1.94	EPS (diluted)EPS
$-5.61	$0.34	$-1.51	—	$0.88	—	$-2.46	$-1.58	$-1.18	—	$0.39	Owner earnings / shareOE/sh
$-5.61	$0.34	$-1.51	—	$0.88	—	$-2.46	$-1.58	$-1.18	—	$0.39	Free cash flow / shareFCF/sh
—	—	—	—	—	$0.29	$0.48	$0.48	$0.47	$0.30	$0.32	Dividends / shareDiv/sh
$0.01	$0.00	$0.00	—	$0.00	—	$1.34	$0.00	$0.00	—	$0.00	Cap. spending / shareCapex/sh
$-7.84	$0.73	$2.24	$5.02	$7.51	$11.64	$10.87	$7.73	$5.29	$4.67	$5.33	Book value / shareBVPS

The diluted share count moved ×1.54 into 2025 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.

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

	9-yr	5-yr
Revenue / share	−5.1%/yr	−25.0%/yr
EPS	—	+8.8%/yr
Dividends / share	+1.5%/yr (4-yr)	+1.5%/yr (4-yr)
Capital spending / share	−19.6%/yr (8-yr)	+21.6%/yr (4-yr)
Book value / share	—	−9.1%/yr

The record, charted

FY2016–2025

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

Share count

18Mpeak FY2025

ROIC

10%low FY2023

Owner earnings vs. net income

Owner earningsNet income

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

($14M)owner earningsvs.($14M)net incomelow FY2016

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2017FY2025

Owner-earnings bridge

FY2018–FY2024cash-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 2024 the business turned a $14M loss into ($14M) of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2024	FY2023	FY2022	FY2020	FY2018
Reported net income	($14M)	($41M)	($17M)	$13M	($13M)
Depreciation & amortizationnon-cash charge added back	—	—	—	+$22K	+$30K
Stock-based compensationreal costnon-cash, but a real cost	+$10M	+$9M	+$4M	+$4M	+$4M
Working capital & othertiming of cash in and out, other non-cash items	−$10M	+$14M	+$617K	−$7M	−$3M
Cash from operations	($14M)	($18M)	($13M)	$10M	($13M)
Capital expenditurecash put back in to keep running and to grow	−$20K	−$17K	−$15M	−$9K	−$6K
Owner earnings	($14M)	($18M)	($28M)	$10M	($13M)
Owner-earnings marginowner earnings ÷ revenue	-207%	-686%	-678%	36%	-250%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . 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 $10M), owner earnings is nearer ($24M).

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? 2.6×

Adequate

Operating income $11M ÷ interest expense $4M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $26M · 2.2× operating profit

Meaningful net debt

Cash $83M + ST investments $496K − debt $109M

What this means
Netting $83M of cash and short-term investments against $109M of debt leaves $26M owed, about 2.2× a year's operating profit (9.6× 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.
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 -16%

Below average through the cycle

7-yr median, range -56%–59%; 10% latest = NOPAT $11M ÷ invested capital $110M

Industry peers: median -85%

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 7 years (it ran 10% 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 28%

Positive this year, negative across the cycle

latest $3M = operating cash $3M − maintenance capex $20K (positive this year), after an earlier loss stretch (7-yr median -250%)

Industry peers: median -590%

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 28% of revenue this year, a -250% median across 7 years. Treating stock comp as the real expense it is (less $9M of SBC) leaves ($6M).
Are earnings backed by cash? 0.09×

Thinly cash-backed

Cash from ops $3M ÷ net income $32M

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? 755%

Returned more than it generated

Dividends + buybacks $22M ÷ Owner Earnings $3M

What this means
The company returned more than it generated: against $3M of Owner Earnings, $22M (755%) went back to shareholders, $5M dividends, $16M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $9M stock comp, the real buyback was about $7M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.91×

Maintaining

Capex $20K ÷ depreciation $22K

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 · 1 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 · $10M

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× · 3.37×

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 Near

Debt ≤ working capital · $109M vs $82M 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 (10-yr record) · 6 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 · 5 of 10 yrs

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 —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
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 $-0.61/share (latest year $2.53), the averaged base the calculator's gate runs on, and book value is $6.69/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, 2016–2025

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

Profitable years 4 of 10

What this means
Lost money in 6 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 1 of 6 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 −469% → −690% (3-yr avg ends)

What this means
The recent-years average (−690%) sits below the early years (−469%), but the latest year (110%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is −333% — read it across the cycle, not on the dip.
Reinvestment, incremental ROIC −5%

What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
Worst year 2023 · −1579.2% op. margin

What this means
Operations went underwater in 2023, understand why before trusting the good years.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

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.

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$119M

Cash & short-term investments$86M
Other current assets$33M

Current liabilities$33M

Debt due within a year$14M
Accounts payable$4M
Other current liabilities$16M

Current ratio3.59×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 ratio2.60×strictest: cash alone against what's due

Working capital$86Mthe cushion left after near-term bills

Debt due this year vs. cash$14M due · $86M 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−22.6%the freshest read on whether the business is still growing

Current ratio, recent quarters8.7× → 3.6×

Deeper floors

Tangible book value$49Mequity stripped of goodwill & intangibles

Net current asset value($40M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$125M$22M of it operating leases

Deferred revenue$17Mcustomer cash collected before delivery; operating float

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, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Net income
2023	Mr. Hughes	$2.5M	$2.1M	($41M)
2024	Mr. Hughes	$5.8M	$6.4M	($14M)
2025	Mr. Hughes	$1.1M	$1.3M	$32M

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. Net income is the whole business's, as filed, for the same fiscal years.

Insider ownership8.9%
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$9M
The slice of the business handed to employees in shares this year, 90% of revenue, equal to 81% 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 XOMA Royalty Corporation 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 2016–2025.

1 of the 3 tests turned up something to look into; the other 2 came back clean.

Look hereDid debt outgrow the business?$43M → $103M
Debt rose from $43M to $103M while owner earnings went from about ($15M) to ($20M): the borrowing grew and the earnings that would carry it are not there now. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Did receivables and inventory outpace sales?
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 Income taxes, Credit & receivables, Stock compensation, Contingencies 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
EVMNEvommune Inc.	$13M	—	-623.6%	-40%	-590%
PRLDPrelude Therapeutics Incorporated	$12M	—	-861.3%	-247%	-464%
CBIOCrescent Biopharma Inc.	$11M	—	-957.2%	—	-530%
XOMAOXOMA Royalty Corporation	$10M	—	-177.6%	-16%	-250%
ZBIOZenas BioPharma Inc.	$10M	—	-3277.8%	-144%	-1724%
JANXJanux Therapeutics Inc.	$10M	—	-905.4%	-14%	-508%
PRTAProthena Corporation plc	$10M	—	-1390.3%	—	-1090%
BIOABioAge Labs Inc.	$9M	—	-1031.5%	-85%	-910%
Group median	—	—	-931.3%	-63%	-560%

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 XOMA Royalty Corporation has delivered.

Today’s price $

Base Normalize · through-cycle (($20M)) Net of stock comp (−$10M)

—

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, delivered—

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.

Owner earnings $7M on 13M shares outstanding, per the 10-Q cover, as of 2026-05-07; net debt $17M. The if-converted diluted count is 17M, 39% 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. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh XOMAO against another business →

Cite: Owner Scorecard, "XOMA Royalty Corporation (XOMAO), the owner's record," https://ownerscorecard.com/c/XOMAO, data as of 2026-07-09.

Manual order: ← XOMA its page in the Manual XOMAP →

Industry order: ← XOMA the Pharmaceuticals chapter XOMAP →