# ADMA BIOLOGICS, INC. (ADMA) — Financial Analysis

**Exchange:** Nasdaq  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-06-03  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/ADMA/thesis · /stocks/ADMA/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: ADMA
step: 04
title: Financial Quality & Adversarial Sweep
created: 2026-06-03
---

### Step 04 — Financial Quality & Adversarial Sweep: ADMA Biologics, Inc.

#### Key Findings

**NET NEGATIVE — material red flags require investigation.** The Adversarial Sweep surfaces the Culper Research short report as the dominant concern. The DSO expansion from ~43 days (FY2024) to ~113 days (FY2025) is real, large, and unexplained by management to the market's satisfaction. Multiple securities fraud investigation law firms launched probes [S7]. Q1 2026's $114.5M revenue (vs. $142.7M expected) and guidance cut provided partial validation of the concern [S4]. The financial quality assessment must treat FY2025 revenue as potentially overstated pending investigation, and the analytical base case should use FY2024 as the more reliable baseline.

Setting aside the controversy, underlying financial quality is strong: GAAP-to-cash conversion, low D&A (asset-light fractionation through Q4 2025 CapEx), minimal goodwill, and no evidence of aggressive non-cash accounting [S1][S6].

#### Implications for Thesis and Valuation

- The FY2025 reported $510M revenue should be treated as a high-confidence floor for the bull case and a questioned number in the bear case (channel stuffing would mean some FY2025 revenue was "borrowed" from FY2026).
- The Q1 2026 AR collection progress ($158M → $136M, a $22M reduction) is a positive data point — distributors are paying down their balances, which is inconsistent with permanent channel stuffing but consistent with a Q4 2025 end-of-year push followed by normal collection.
- If the channel stuffing allegation is false, the stock trades at ~11x trailing P/E on $146.9M net income — a compelling valuation for a profitable, growing specialty pharma.

#### Objective

Assess the quality of ADMA's reported financials through statement adjustments and an adversarial research sweep covering short-seller reports, investigations, and regulatory concerns.

#### Narrative Analysis

**Statement quality assessment:**

Revenue recognition uses ASC 606 (contracts with customers). ADMA sells to specialty distributors under contracts with standard commercial terms. Revenue is recognized when control transfers to the distributor — typically when product ships [S3]. Under this model, revenue can be pulled forward by shipping more product near quarter-end than the distributor would normally order. The key evidence of this:

- FY2025 accounts receivable: $158.4M vs. $50.0M at FY2024 year-end — a $108.4M increase [S1]
- FY2025 revenue growth: $83.7M (+19.6% YoY) [S1]
- The AR increase ($108M) was **larger** than the revenue increase ($84M), meaning ADMA collected less cash from revenue in FY2025 than in FY2024. This is anomalous.
- DSO calculation: $158.4M / $510.2M × 365 = 113.4 days. For context, the prior year (FY2024) DSO was $50.0M / $426.5M × 365 = 42.8 days — essentially unchanged from FY2023 (~38.7 days). The jump from 43 to 113 is a 2.6x increase in one year [S1].

Management has not provided a satisfactory public explanation (per Tavily research). Possible legitimate explanations: (1) Revised distributor payment terms extended from standard net-30 to net-60 or net-90; (2) A large new distributor relationship with different payment timing; (3) Specialty pharmacy reimbursement timing shifts. None of these have been confirmed [S4].

**Adversarial Research Sweep:**

*Short-seller report — Culper Research (March 26, 2026):*
Culper alleged that ADMA "channel stuffed" distributors with ASCENIV inventory in Q3 and Q4 2025 to manufacture revenue growth metrics that would sustain management's >$635M FY2026 guidance. Key allegations:
1. DSO jumped from 43 to 113 days — product shipped but not yet paid
2. Management guided for >$635M in FY2026 while internally knowing distributor inventory was elevated
3. CEO and Chairman were selling stock actively in 2025 while guidance was set at unsustainable levels
4. BIVIGAM pricing was under extreme pressure but not communicated transparently
The stock fell ~28% in two sessions following the report [S7].

*Securities fraud investigations:*
Following the Q1 2026 earnings miss and guidance cut (May 6, 2026), multiple securities plaintiff law firms (Bernstein Liebhard, etc.) announced investigations into potential securities fraud claims on behalf of ADMA shareholders. These investigations are in their early stages and no formal complaint has been filed, to Tavily's knowledge as of June 2026 [S7].

*Regulatory concerns (product quality):*
No FDA warning letters or consent decrees found for ADMA's Boca Raton manufacturing facility as of 2026 [S2][S3]. ADMA received FDA approval for a yield enhancement process in FY2025, which contributed to the gross margin step-up in Q4 2025 / Q1 2026 (from ~53% to 64–70%). This explains some of the gross margin improvement but does not address the AR build.

*Management credibility:*
CEO Adam Grossman's credibility is at a nadir post-Culper/guidance-cut. However, the Grossman family (Adam + Jerrold) founded the company in 2004 and has significant skin in the game. Jerrold Grossman bought 12,500 shares at $8.01 in May 2026, post-selloff [S8]. If the channel-stuffing allegations were accurate, buying at these prices would be irrational.

**Positive financial quality markers:**
1. Minimal goodwill ($3.5M) — no acquisition overhang [S6]
2. Low D&A relative to EBITDA — manufacturing is carried at book value, not inflated
3. R&D is minimal ($4.8M FY2025) — company is not burning cash on unproven pipeline [S6]
4. CapEx is modest ($14.4M FY2025) — the fractionation facility is already built [S6]
5. Inventory ($206.5M at FY2025) is high but reflects manufacturing cycle times — plasma to finished product takes 9–12 months [S3]

#### Assumption Register Updates

| ID | Assumption | Type | Value | Sensitivity | Sources |
|----|-----------|------|-------|------------|---------|
| A-18 | DSO spike is partially due to pull-forward but Q1 2026 collection suggests normalization | Judgment | — | High | [S1][S4] |
| A-19 | FY2025 revenue may include $50–100M of pull-forward demand; base case uses FY2025 as reported | Estimate | 50–100M | High | [S7][S4] |
| A-20 | No FDA warning letters or consent decree found as of June 2026 | Fact | N/A | High | [S2][S3] |

#### Tables and Calculations

##### DSO Analysis

| Period | Revenue ($M) | AR ($M) | DSO (Days) | YoY Change |
|--------|-------------|---------|-----------|-----------|
| FY2022 | 154.1 | 15.5 | 36.7 | — |
| FY2023 | 258.2 | 27.4 | 38.7 | +2 days |
| FY2024 | 426.5 | 50.0 | 42.8 | +4 days |
| FY2025 | 510.2 | 158.4 | 113.4 | **+71 days** |
| Q1 2026 | 114.5 (qtrly) | 135.9 | ~433** | — |

*Q1 2026 annualized AR/Rev would overstate DSO — on a TTM basis: $135.9M / $509.9M TTM × 365 = ~97 days. AR declining from FY2025's $158.4M is evidence of ongoing collection.*

##### Key Financial Quality Metrics

| Metric | FY2024 | FY2025 | Signal |
|--------|--------|--------|--------|
| GAAP Net Income ($M) | 197.7 | 146.9 | ✓ Real (tax benefit in FY2024) |
| FCF ($M) | 110.5 | 27.8 | ⚠️ Large divergence from NI |
| FCF / Net Income | 56% | 19% | ⚠️ AR build consuming cash |
| FCF / EBITDA | 75% | 14% | ⚠️ Warning flag |
| Goodwill ($M) | 3.5 | 3.5 | ✓ No acquisition distortion |
| Net Debt ($M) | (19.7) | (7.8) | ✓ Near net cash |
| CapEx / Revenue | 2.3% | 2.8% | ✓ Asset-light for pharma |
| SBC ($M) | 13.6 | 20.0 | Monitor — growing |

##### Adversarial Sweep Summary

| Allegation | Evidence For | Evidence Against | Verdict |
|-----------|-------------|-----------------|---------|
| Channel stuffing (Culper) | DSO 43→113 days; FY2026 guidance cut | AR declining Q1 2026; no confirmed distributor overstock | Unresolved — warrants monitoring |
| Management credibility | Heavy insider selling FY2025 | Founder buyback May 2026 | Mixed |
| Revenue overstatement | Q1 2026 miss vs guidance | New yield enhancement drives GM to 70% — legitimate positive | Unclear magnitude |
| Regulatory/manufacturing risk | None identified | No FDA warning letters | CLEAR |
| Securities fraud | Multiple investigations launched | No formal complaint filed | Early stage |

#### Open Questions and Data Gaps

1. What are ADMA's payment terms with specialty distributors? Any changes in FY2025?
2. What is the current distributor inventory level for ASCENIV? Management should address this on Q2 2026 call.
3. Will Q2 2026 AR continue to normalize?

#### Source Index

| Source Tag | Document | Section | Date | Notes |
|------------|----------|---------|------|-------|
| [S1] | ADMA_financials/xbrl/xbrl_summary.md + stockanalysis | Balance sheet, AR | 2026-06-03 | XBRL + StockAnalysis |
| [S2] | ADMA_financials/sec_filings/filing_inventory.md | Filing history | 2026-06-03 | SEC EDGAR |
| [S3] | ADMA_financials/sec_filings/10K_FY2025_summary.md | Revenue recog, MD&A | 2026-06-03 | 10-K FY2025 |
| [S4] | ADMA_financials/other/consensus.md | Q1 2026, guidance | 2026-06-03 | Earnings / Tavily |
| [S6] | ADMA_financials/other/stockanalysis_summary.md | Financial statements | 2026-06-03 | StockAnalysis |
| [S7] | ADMA_financials/other/consensus.md; proxy/insider_transactions.md | Culper report, investigations | 2026-06-03 | Short report + news |
| [S8] | ADMA_financials/proxy/insider_transactions.md | Insider buys | 2026-06-03 | Form 4 data |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/ADMA/fundamental

## Navigation

- Overview: /stocks/ADMA
- Financials (this page): /stocks/ADMA/financials
- Thesis: /stocks/ADMA/thesis
- Investment Memo: /stocks/ADMA/memo
- Coverage universe: /stocks