Heritage Financial (NASDAQ: HFWA) saw its stock price plummet by 5.05% in Thursday's trading session, following the release of its second-quarter 2025 financial results. Despite reporting better-than-expected earnings, the company's significant revenue miss appears to have spooked investors.

The financial services company reported adjusted earnings per share of $0.53 for the quarter, surpassing the analyst consensus estimate of $0.49 by 7.29%. This represents a 17.78% increase from the $0.45 per share earned in the same period last year. However, Heritage Financial's quarterly sales of $56.50 million fell short of expectations, missing the analyst consensus estimate of $63.48 million by 11.00%. The revenue figure showed only a marginal increase of 0.25% compared to the $56.36 million reported in the same quarter of the previous year.

The substantial revenue miss likely overshadowed the earnings beat, leading to the sharp decline in Heritage Financial's stock price. Investors may be concerned about the company's ability to grow its top line in a challenging economic environment. Despite the market's negative reaction, Heritage Financial maintained its quarterly dividend at $0.24 per share, payable on August 20 to shareholders of record as of August 6. The company also reported a net interest margin of 3.51% for the quarter, though it's unclear how this compares to previous periods or industry benchmarks.