10-K – 2026-02-17 – krys-20251231.htm

Years Ended December 31,
(in thousands) 2025 2024 2023
U.S. $ 187,938   $ 93,808   $ 7,795  
Foreign 1,533   1,548   5,102  
Income before income taxes
$ 189,471   $ 95,356   $ 12,897  

F-22

Krystal Biotech, Inc.
Notes to Consolidated Financial Statements—Continued

The benefit (expense) for income taxes consists of the following:

Years Ended December 31,
(in thousands) 2025 2024 2023
Current:

Federal $ ( 2,987 ) $ ( 1,445 ) $ ( 125 )
State ( 8,257 ) ( 4,599 ) ( 1,702 )
Foreign ( 671 ) ( 153 ) ( 138 )
Total current tax (expense)
$ ( 11,915 ) $ ( 6,197 ) $ ( 1,965 )
Deferred:

Federal $ 19,637   $ —   $ —  
State 7,188   —   —  
Foreign 450   —   —  
Total deferred tax benefit
$ 27,275   $ —   $ —  
Total:

Federal $ 16,650   $ ( 1,445 ) $ ( 125 )
State ( 1,069 ) ( 4,599 ) ( 1,702 )
Foreign ( 221 ) ( 153 ) ( 138 )
Total benefit (expense) for income taxes
$ 15,360   $ ( 6,197 ) $ ( 1,965 )

Income taxes paid, net of refunds, consisted of the following:

Years Ended December 31,
(in thousands) 2025 2024 2023
Federal $ 12,210   $ 1,740   $ —  
State:
     Kentucky 3,055   1,158   —  
     Pennsylvania ( 880 ) 880   —  
     California —   276   —  
     Other States 149   1,611   —  
Total State 2,324   3,925   —  

Foreign
259   —   —  
Total Taxes Paid (Net of Refunds) $ 14,793   $ 5,665   $ —  

F-23

Krystal Biotech, Inc.
Notes to Consolidated Financial Statements—Continued

A reconciliation of income tax (benefit) expense computed at the statutory federal and state income tax rate for the year to income tax expense as reflected in our financial statements for years ended December 31, 2025, 2024 and 2023 are as follows:

Years Ended December 31,
(in thousands, except percentages)
2025 2024 2023
Amount
Percent
Amount Percent Amount Percent
Federal Income Tax Expense at Statutory Rate $ 39,791   21.0   % $ 20,025   21.0   % $ 2,708   21.0   %
State and Local Income Taxes, Net of Federal Income Tax Effect (a)
( 5,227 ) ( 2.8 ) ( 547 ) ( 0.6 ) 1,340   10.4  
Change in Valuation Allowance ( 51,231 ) ( 27.1 ) ( 8,833 ) ( 9.3 ) 1,258   9.8  
Nontaxable or Nondeductible Items
     Stock compensation ( 2,721 ) ( 1.4 ) ( 4,793 ) ( 5.0 ) ( 1,715 ) ( 13.3 )
     Executive compensation 4,570   2.4   2,645   2.8   2,675   20.7  
     Other nontaxable or nondeductible items 81   —   71   0.1   95   0.7  
Effect of Cross Border Tax Laws
     Global Intangible Low-taxed Income (GILTI) 1   —   ( 220 ) ( 0.2 ) 623   4.8  

     Foreign Derived Intangible Income (FDII) ( 1,178 ) ( 0.6 ) ( 635 ) ( 0.7 ) —   —  
Tax Credits
     R&D tax credits ( 3,596 ) ( 1.9 ) ( 3,150 ) ( 3.3 ) ( 2,782 ) ( 21.6 )
     Orphan drug credits ( 931 ) ( 0.5 ) ( 1,416 ) ( 1.5 ) ( 1,570 ) ( 12.2 )
     Other credits —   —   16   —   ( 106 ) ( 0.8 )
Change in Unrecognized Tax Benefits 5,227   2.8   3,316   3.5   —   —  
Other Adjustments
     Other comprehensive income —   —   ( 114 ) ( 0.1 ) 389   3.0  
     Other adjustments ( 45 ) —   5   —   ( 16 ) ( 0.1 )
Foreign Tax Effects
     Australia
          Other nondeductible expenses —   —   ( 137 ) ( 0.1 ) 137   1.1  
          Valuation allowance —   —   ( 52 ) ( 0.1 ) ( 140 ) ( 1.1 )
          Other Australia —   —   57   0.1   11   0.1  
     Switzerland
          Foreign rate differential ( 69 ) —   ( 62 ) ( 0.1 ) ( 470 ) ( 3.6 )
          Valuation allowance —   —   —   —   ( 475 ) ( 3.7 )
          Other Switzerland 31   —   ( 2 ) —   —   —  
     Other Foreign Jurisdictions ( 63 ) —   23   —   3   —  
Total Tax (Benefit) Expense
$ ( 15,360 ) ( 8.1 ) % $ 6,197   6.5   % $ 1,965   15.2   %

(a) In 2025 and 2024, state and local income taxes in Kentucky comprised the majority of the state and local income taxes, net of federal effect category. In 2023, state and local income taxes in Kentucky and Pennsylvania comprised the majority of the state and local income taxes, net of federal category.
F-24

Krystal Biotech, Inc.
Notes to Consolidated Financial Statements—Continued

The significant components of the Company’s deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows:

  December 31,
(in thousands) 2025 2024
Deferred tax assets:
Net operating loss carryforwards $ 13,245   14,539  
Stock compensation 11,432   9,090  
Lease liability 2,205   1,784  

Accrued expenses 2,419   1,929  
Section 174 R&D capitalization 4,382   27,230  
Intangible assets 15,946   17,632  
Credits 1,855   10,376  
Inventory 1,018   558  
Other
16   —  
Deferred tax assets 52,518   83,138  
Valuation allowance ( 14,214 ) ( 68,094 )
Deferred tax assets 38,304   15,044  
Deferred tax liabilities:
Depreciation ( 11,761 ) ( 11,771 )
Right-of-use assets ( 1,750 ) ( 1,543 )
Prepaid expenses ( 1,388 ) ( 1,647 )
Unrealized gain on marketable securities ( 581 ) ( 83 )
Total deferred tax liabilities ( 15,480 ) ( 15,044 )
Net deferred tax assets $ 22,824   $ —  

The Company has evaluated the positive and negative evidence bearing upon the realizability of its net U.S. deferred tax assets. Under the applicable accounting standards, management has considered the Company’s history of operating losses and the uncertainty around any sustained future profitability. The Company has concluded that it is more likely than not that the Company will realize the benefits of its net deferred tax assets. Accordingly, the Company has decreased the valuation allowance for deferred tax assets from $ 68.0  million as of December 31, 2024 to $ 14.2  million as of December 31, 2025.
As of December 31, 2025 and 2024, the Company had federal research and development credit carryforwards of $ 0.5 million and $ 6.6 million, respectively. The federal tax credit carryforwards will begin to expire in 2042 if not utilized.
As of December 31, 2025 and 2024, the Company also had orphan drug tax credit carryforwards of $ 0.1 million and $ 3.8 million, respectively. The orphan drug tax credit carryforwards will begin to expire in 2042 if not utilized.
As of December 31, 2025 and 2024, the Company had state research and development credit carryforwards of $ 1 million and $ 0.7 million respectively. The state research and development credit carryforwards will begin to expire in 2038 if not utilized.
As of December 31, 2025, the Company had cumulative U.S. state net operating loss carryforwards of $ 166.2 million. The state net operating losses are available to offset future state income tax liabilities and will begin to expire in 2037.
Under the provisions of the Internal Revenue Code, the net operating loss carryforwards and tax credits utilized during the year are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 %, as defined under Internal Revenue Code Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities.
At December 31, 2025, deferred tax assets have been recognized on our consolidated balance sheets related to federal research and development credits and orphan drug credits. The Company fully utilized its federal net operating losses in 2025. If we have previously had, or have in the future, one or more Section 382 or 383 “ownership changes,” including in connection with our initial public offering or another offering, or if we do not generate sufficient taxable income, we may not be able to utilize a material portion of our federal tax credits.
F-25

Krystal Biotech, Inc.
Notes to Consolidated Financial Statements—Continued

The "One Big Beautiful Bill Act" (OBBBA) enacted on July 4, 2025, introduced notable changes to the U.S. Internal Revenue Code, including immediate expensing of domestic Section 174 costs. Section 174 costs are expenditures which represent research and development costs that are incident to the development or improvement of a product, process, formula, invention, computer software, or technique. As previously required under the Tax Cuts and Jobs Act, we capitalized research and development expenditures in the years ended December 31, 2022 through December 31, 2024. With the enactment of OBBBA, we began deducting 2025 and cumulative domestic Section 174 costs.
As of December 31, 2025, we have a deferred tax asset of $ 4.4  million related to capitalized Section 174 expenditures.
The Company files income tax returns in the United States at the federal and state level and in foreign jurisdictions in which the Company conducts business activities. The federal and state income tax returns are subject to tax examinations for the tax years ended December 31, 2022 through December 31, 2025. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Federal or state tax authorities to the extent utilized in a future period. Additionally, the Company is subject to tax examinations by taxing authorities in foreign jurisdictions where it has business operations. At this time, the Company is not undergoing examination by the Internal Revenue Service or any state or foreign taxing authorities.
The Company is subject to income taxes in U.S. federal, various state, and foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining the provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite the belief that the tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. We do not anticipate significant increases or decreases to the amount of unrecognized tax benefits within the next twelve months.
As of December 31, 2025, 2024, and 2023 the Company had unrecognized tax benefits of $ 10.0  million, $ 4.2  million and zero , respectively, of which $ 8.0  million, $ 3.3  million, and zero , respectively, if fully recognized would decrease the Company’s effective tax rate. A reconciliation of unrecognized tax benefits for the years ended December 31, 2025, 2024, and 2023 are as follows:

Years Ended December 31,
(in thousands) 2025 2024 2023
Unrecognized tax benefits - January 1 $ 4,152   $ —   $ —  
Gross increases to tax positions in prior periods 34  
Gross increases to current period tax positions 5,863   4,152   —  
Settlements with tax authorities —   —   —  
Lapse in statute of limitations $ —   $ —   $ —  
Unrecognized tax benefits - December 31 $ 10,049   $ 4,152   $ —  

As of December 31, 2025, 2024, and 2023 the Company had accrued interest and penalties related to unrecognized tax benefits of $ 0.8  million, $ 0.2  million, and zero , respectively. The Company recognizes interest expense and any related penalties from unrecognized tax benefits in income tax expense.
The Company is also subject to taxation in various states and other foreign jurisdictions including Switzerland, Netherlands, France, Germany, Japan, United Kingdom, Italy and Spain.

12.     Gain on Sale of Priority Review Voucher
In August 2023, the Company entered into an agreement to sell the rare pediatric disease priority review voucher (“PRV”), which was awarded to the Company in connection with the FDA’s approval of VYJUVEK. The transaction closed in August 2023 and was not subject to any commissions or closing costs. The proceeds of $ 100.0  million from the sale of the PRV were recorded as a gain from sale of priority review voucher on the Company’s consolidated statement of operations and comprehensive income as it did not have a carrying value at the time of the sale.

13. Segment Information

The Company operates as one operating segment, which is focused on the discovery, development, manufacturing and commercialization of genetic medicines to treat diseases with high unmet medical needs. The Company’s chief operating decision maker (“CODM”), its chief executive officer, utilizes financial information presented on a consolidated basis to
F-26

Krystal Biotech, Inc.
Notes to Consolidated Financial Statements—Continued

manage and allocate resources. The CODM uses consolidated gross margin, operating margin, net income and total research and development expenses by product candidate or program to assess performance, forecast future financial results and allocate resources.
The following table presents selected financial information with respect to the Company’s single operating segment for the years ended December 31, 2025, 2024, and 2023:

Years Ended December 31,
(in thousands) 2025 2024 2023

Product revenues, net
$ 389,130   $ 290,515   $ 50,699  
Less:

Cost of goods sold
23,049   20,061   3,094  
Gross margin
366,081   270,454   47,605  
Gross margin percentage
94   % 93   % 94   %
B-VEC 6,690   8,760   9,039  
KB111
1,837   —   —  
KB301 184   635   485  
KB304
960   1,342   66  
KB407 1,805   1,877   1,668  
KB408 882   1,630   1,043  
KB707 10,856   8,677   3,828  
KB801
2,175   1,314   —  
KB803 2,564   604   —  
Other dermatology programs 12   935   284  
Other ophthalmology programs 44   554   71  
Other programs
2,493   2,098   1,506  
Other research and development costs (1)
27,543   25,154   28,443  
Research and development
58,045   53,580   46,433  
Selling, general and administrative
146,741   113,626   98,289  
Litigation settlement
—   37,500   12,500  
Operating income (expense)
$ 161,295 $ 65,748 $ ( 109,617 )

Other income

Gain from sale of priority review voucher
—   —   100,000  
Interest and other income, net
28,176   29,608   22,514  
Income before income taxes
189,471   95,356   12,897  
Income tax benefit (expense)
15,360   ( 6,197 ) ( 1,965 )
Net income
204,831   89,159   10,932  

(1) Includes stock-based compensation, other manufacturing expenses related to our product candidates and other unallocated expenses which largely relates to depreciation and other facilities and equipment related costs

14.     Subsequent Events
The Company evaluates events or transactions that occur after the balance sheet date, but prior to the issuance of the financial statements, to identify matters that require disclosure. The Company concluded that no subsequent events have occurred that would require recognition or disclosure in the consolidated financial statements.
F-27

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.

Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision of our Chief Executive Officer and Chief Accounting Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2025. Based on that evaluation, our Chief Executive Officer and Chief Accounting Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2025 to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Accounting Officer, as appropriate to allow timely discussion regarding required disclosures. In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria established in  Internal Control - Integrated Framework  (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on the results of its evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025. The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by KPMG, an independent registered public accounting firm, as stated in their report which is included herein.
Inherent Limitations on Controls and Procedures
Our management, including the Chief Executive Officer and Chief Accounting Officer, do not expect that our disclosure controls and procedures and our internal controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can only provide reasonable assurances that the objectives of the control system are met. The design of a control system reflects resource constraints; the benefits of controls must be considered relative to their costs. Because there are inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been or will be detected. As these inherent limitations are known features of the financial reporting process, it is possible to design into the process safeguards to reduce, though not eliminate, these risks. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns occur because of simple error or mistake. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events. While our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, there can be no assurance that any design will succeed in achieving its stated goals under all future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
We intend to review and evaluate the design and effectiveness of our disclosure controls and procedures on an ongoing basis and to improve our controls and procedures over time and to correct any deficiencies that we may discover in the future. While our Chief Executive Officer and Chief Accounting Officer have concluded that, as of December 31, 2025, the design of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, was effective, future events affecting our business may cause us to significantly modify our disclosure controls and procedures.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) of the Exchange Act that occurred during the three months ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

110

Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Krystal Biotech, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Krystal Biotech, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 17, 2026 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ KPMG LLP

Pittsburgh, Pennsylvania
February 17, 2026

111

Item 9B. Other Information.
Insider Trading Arrangements
On November 6, 2025 , Kathryn Romano , our Chief Accounting Officer , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act for the sale of up to 20,000 shares of the Company’s common stock and a gift of up to 750 shares of the Company’s common stock. The Rule 10b5-1 trading arrangement will continue until August 31, 2026 , subject to early termination in accordance with the terms of the Rule 10b5-1 trading arrangement, including upon completion of the sale of all of the shares of the Company’s common stock subject to the Rule 10b5-1 trading arrangement.
On November 25, 2025 , Daniel Janney , a member of the Company’s Board of Directors , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act for the sale of up to 90,000 shares of the Company’s common stock, a portion of which will be issued upon exercise of stock options that if not exercised will expire in 2026. The Rule 10b5-1 trading arrangement will continue until November 5, 2026 , subject to early termination in accordance with the terms of the Rule 10b5-1 trading arrangement, including upon completion of the sale of all of the shares of the Company’s common stock subject to the Rule 10b5-1 trading arrangement.
During the three months ended December 31, 2025, other than as disclosed above, none of our directors or officers (as that term is defined by the SEC in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement.

Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.
Not Applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.
Information required by this Item is hereby incorporated by reference to our 2026 Definitive Proxy Statement, which will be filed prior to April 30, 2026.
We maintain a Code of Business Conduct and Ethics for our employees, officers, and directors, including our principal executive officer, principal financial officer, principal accounting officer or controller and other persons performing similar functions. To view this code of ethics free of charge, please visit the investors section of our website at www.krystalbio.com. (The website address is not intended to function as a hyperlink, and the information contained in our website is not intended to be a part of this filing.) We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to or a waiver from a provision of this Code of Business Conduct and Ethics, if any, by posting such information on our website as set forth above.

Item 11. Executive Compensation.
Information required by this Item is hereby incorporated by reference to our 2026 Definitive Proxy Statement, which will be filed prior to April 30, 2026.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Information required by this Item is hereby incorporated by reference to our 2026 Definitive Proxy Statement, which will be filed prior to April 30, 2026.

Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information required by this Item is hereby incorporated by reference to our 2026 Definitive Proxy Statement, which will be filed prior to April 30, 2026.

Item 14. Principal Accountant Fees and Services.
Information required by this Item is hereby incorporated by reference to our 2026 Definitive Proxy Statement, which will be filed prior to April 30, 2026.
112

PART IV

Item 15. Exhibits and Financial Statement Schedules.
(a) List the following documents filed as a part of the report:
(1) Financial statements
The response to this portion of Item 15 is set forth under Item 8 above.
(2) Financial statement schedule.
All schedules have been omitted because they are not required or because the required information is given in the financial statements or notes thereto set forth under Item 8 above.
(3) Exhibits.
A list of exhibits filed with this report or incorporated herein by reference can be found in the Exhibit Index of this Report.
Exhibit Index

Exhibit
Number   Description
3.1   Second Amended and Restated Certificate of Incorporation of Krystal Biotech, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on September 25, 2017)

3.2   Amended and Restated Bylaws of Krystal Biotech, Inc. (incorporate by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, as filed with the SEC on September 25, 2017

4.1   Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 14, 2017)

4.2   Form of Indenture (including form of Debt Securities) (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-3 (Reg. No. 333-2379 83 ), as filed with the SEC on May 4 , 2020 )

4.3
  Description of Common Stock (incorporated by reference to Exhibit 4.3 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 27, 2023)

10.1#   Form of Indemnification Agreement by and between Krystal Biotech, Inc. and each of its directors and executive officers (incorporated by reference to Exhibit 10.1 to the Company’s Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 14, 2017)

10.2#   Executive Employment Agreement, effective July 1, 2017, by and between Krystal Biotech, Inc. and Krish S. Krishnan (incorporated by reference to Exhibit 10.2 to the Company’s Amendment No. 1 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 7, 2017)

10.3#   Executive Employment Agreement, effective May 1, 2017, by and between Krystal Biotech, Inc. and Suma M. Krishnan (incorporated by reference to Exhibit 10.3 to the Company’s Amendment No. 1 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 7, 2017)

10.4#   Executive Employment Agreement, effective January 20, 2020, by and between Krystal Biotech, Inc. and Kathryn A. Romano (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K, as filed with the SEC on March 1, 2021)

10.5#
  Krystal Biotech, Inc. 2017 Stock Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company’s Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 14, 2017)

10.6#
Krystal Biotech, Inc. 2017 IPO Stock Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company’s Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 14, 2017)

10.7#
Form of Krystal Biotech, Inc. 2017 Stock Incentive Plan Notice of Stock Option Award (incorporated by reference to Exhibit 10.8 to the Company’s Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 14, 2017)

10.8#
Form of Krystal Biotech, Inc. 2017 IPO Stock Incentive Plan Notice of Stock Option Award (incorporated by reference to Exhibit 10.9 to the Company’s Amendment No. 2 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 14, 2017)

113

Exhibit
Number   Description
10.9
  Lease Agreement, dated as of May 26, 2016, by and between Wharton Lender Associates, L.P. and Krystal Biotech, LLC (incorporated by reference to Exhibit 10.10 to the Company’s Amendment No. 1 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 7, 2017)

10.10   Second Amendment to Lease Agreement, dated as of February 27, 2017, by and between Wharton Lender Associates, L.P. and Krystal Biotech, LLC (incorporated by reference to Exhibit 10.11 to the Company’s Amendment No. 1 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-220085), as filed with the SEC on September 7, 2017)

10.11   Third amendment to Lease Agreement, dated as of May 31, 2018, by and between Wharton Lender Associate, L.P. and Krystal Biotech, Inc. (incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K, as filed with the SEC on March 1, 2021)

10.12
  Fourth amendment to Lease Agreement, dated as of October 22, 2018, by and between Wharton Lender Associate, L.P. and Krystal Biotech, Inc. (incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K, as filed with the SEC on March 1, 2021)

10.13
  Fifth amendment to Lease Agreement, dated as of December 10, 2018, by and between Wharton Lender Associate, L.P. and Krystal Biotech, Inc. (incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K, as filed with the SEC on March 1, 2021)

10.14
  Sixth amendment to Lease Agreement and first amendment to storage space agreement, dated as of January 13, 2021, by and between Wharton Lender Associates, L.P. and Krystal Biotech, Inc. (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 28, 2022)

10.15
Seventh amendment to Lease Agreement, dated as of May 11, 2021, by and between Wharton Lender Associates, L.P. and Krystal Biotech, Inc. (incorporated by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 28, 2022)

10.16
Eighth amendment to Lease Agreement, dated as of July 21, 2021, by and between Wharton Lender Associates, L.P. and Krystal Biotech, Inc. (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 28, 2022)

10.17
Ninth amendment to Lease Agreement, dated as of January 4, 2022, by and between Wharton Lender Associates, L.P. and Krystal Biotech, Inc. (incorporated by reference to Exhibit 10.20 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 28, 2022)

10.18
Purchase and Sale Agreement, dated January 29, 2021, by and between Krystal Biotech, Inc. and Northfield I, LLC. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on February 2, 2021)

10.19#
Form of Krystal Biotech, Inc. 2017 IPO Stock Incentive Plan Notice of Restricted Stock Award and Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 27, 2023)

10.20#
Form of Time-Based Restricted Stock Unit Award Agreement under the 2017 IPO Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on May 8, 2023)

10.21#
Form of Performance-Based Restricted Stock Unit Award Agreement under the 2017 IPO Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on May 8, 2023)

10.22#
Krystal Biotech, Inc. Executive Change in Control Severance Plan, with an effective date of August 2, 2024 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on August 5, 2024)

10.23#
First Amendment to the Krystal Biotech, Inc. 2017 IPO Stock Incentive Plan, made and entered into effective as of August 2, 2024 (incorporated by reference to Exhibit 10. 2 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on August 5, 2024)

10.24
Twelfth amendment to Lease Agreement, dated as of September 27, 2024, by and between Wharton Lender Associates, L.P. and Krystal Biotech, Inc. (incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 19, 2025)

19.1
Krystal Biotech, Inc. Insider Trading Policy and Guidelines for Disclosure of Material Non-Public Information (incorporated by reference to Exhibit 19.1 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 19, 2025)

21.1*   Subsidiaries of Krystal Biotech, Inc.

23.1*   Consent of KPMG LLP

Exhibit
Number Description

114

24.1
Power of Attorney (included as part of signature page)

31.1*   Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*   Certification of Periodic Report by Chief Accounting Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*   Certification of Chief Executive Officer and Chief Accounting Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97.1
Executive Incentive Compensation Recoupment Policy , adopted August 4, 2023 (incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 10-K, as filed with the SEC on February 26 , 2024)

101 (i) XBRL Instance Document, (ii) XBRL Taxonomy Extension Schema Document, (iii) XBRL Taxonomy Extension Calculation Linkbase Document, (iv) XBRL Taxonomy Extension Definition Linkbase Document, (v) XBRL Taxonomy Extension Label Linkbase Document, (vi) XBRL Taxonomy Extension Presentation Linkbase Document.
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

*    Filed herewith.
#    Indicates a management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary.
The Company has elected to not include a summary.
115

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on February 17, 2026.

KRYSTAL BIOTECH, INC.
   
By:   /s/ Krish S. Krishnan
    Krish S. Krishnan
President and Chief Executive Officer
     
By:   /s/ Kathryn A. Romano
    Kathryn A. Romano
Chief Accounting Officer

POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Krish S. Krishnan and/or Kathryn A. Romano as his or her true and lawful attorney-in-fact and agent, with the full power of substitution, for him or her and in his or her name, place or stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature    Title Date
/s/ Krish S. Krishnan President and Chief Executive Officer and Director (Principal Executive Officer) February 17, 2026
Krish S. Krishnan

/s/ Kathryn A. Romano    Chief Accounting Officer (Principal Financial Officer) February 17, 2026
Kathryn A. Romano

/s/ Suma M. Krishnan President, R&D and Director February 17, 2026
Suma M. Krishnan

/s/ Daniel S. Janney Director February 17, 2026
Daniel S. Janney

/s/ Dino A. Rossi Director February 17, 2026
Dino A. Rossi      

/s/ Julian Gangolli   Director February 17, 2026
Julian Gangolli      

/s/ Chris Mason Director February 17, 2026
Chris Mason

/s/ E. Rand Sutherland Director February 17, 2026
E. Rand Sutherland

/s/ Catherine Mazzacco
Director February 17, 2026
Catherine Mazzacco

116