Merck & Co (MRK) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales rose 7% year-over-year to $16.1B, driven by oncology and vaccines, with strong demand for new launches like Winrevair and Capvaxive.

• Net income rebounded to $5.5B in Q2 2024, reversing a prior-year loss, and H1 2024 net income reached $10.2B.

• Major acquisitions of EyeBio and Elanco's aqua business were completed, expanding presence in ophthalmology and animal health.

• New restructuring program launched in 2024, targeting $4.0B in pretax costs and $750M annual savings by 2031.

• Maintained focus on R&D, pipeline expansion, and disciplined capital allocation to drive long-term value.

Financial highlights

• Q2 2024 revenue reached $16.1B, up 7% year-over-year (11% ex-FX); H1 2024 revenue was $31.9B, up 8%.

• Human Health sales were $14.4B (+7% y/y, +11% ex-FX); Animal Health sales grew 2% to $1.5B (+6% ex-FX).

• Keytruda sales rose 16% to $7.3B (21% ex-FX); Gardasil sales increased 4% to $2.5B, with U.S. growth offset by China.

• Gross margin improved to 76.8% (GAAP) and 80.9% (non-GAAP), up 4.3 points year-over-year.

• EPS was $2.14 (GAAP) and $2.28 (non-GAAP); effective tax rate was 9.1% (GAAP) and 14.1% (non-GAAP).

Outlook and guidance

• 2024 revenue guidance raised to $63.4–$64.4B, reflecting 5–7% growth and a ~3% FX headwind.

• 2024 non-GAAP EPS guidance is $7.94–$8.04, including one-time charges for EyeBio and Harpoon acquisitions.

• Guidance assumes less than full contracted Gardasil doses shipped to China in 2024.

• Non-GAAP gross margin projected at ~81%; effective tax rate expected at 15.5–16.5%.

• Outlook includes negative FX impact, mainly from Argentine peso devaluation.