Merck & Co (MRK) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $15.8 billion, down 2% year-over-year, with strong growth in Oncology (KEYTRUDA up 9%), Animal Health (up 11%), and new launches like WINREVAIR and CAPVAXIVE, offset by a $1.3 billion GARDASIL decline in China.

• Announced $10 billion acquisition of Verona Pharma, adding Ohtuvayre for COPD, expected to close in Q4 2025.

• Launched a multi-year $3 billion optimization and restructuring initiative to reallocate resources from mature to high-growth areas, with savings reinvested in R&D and commercial launches.

• Multiple regulatory approvals received, including FDA approval for ENFLONSIA (RSV prevention), KEYTRUDA (new indications), and WELIREG (VHL disease, RCC).

• Maintained confidence in long-term growth, supported by pipeline innovation and business development.

Financial highlights

• Q2 2025 revenue: $15.8 billion, down 2% year-over-year; excluding China GARDASIL, global growth was 7%.

• KEYTRUDA sales: $8.0 billion, up 9% year-over-year; Animal Health sales: $1.6 billion, up 11%.

• GARDASIL/GARDASIL 9 sales: $1.1 billion, down 55% due to China and Japan; U.S. sales grew 2%.

• WINREVAIR global sales: $336 million in Q2; cumulative sales exceeded $1 billion since launch.

• Gross margin: 82.2% (non-GAAP), up 1.3 percentage points; GAAP gross margin: 77.5%.

• EPS: $2.13 (non-GAAP), $1.76 (GAAP), both including a $0.07 per share charge for a license agreement.

Outlook and guidance

• Full-year 2025 revenue guidance: $64.3–$65.3 billion, 1–2% growth, excluding a 0.5% FX headwind.

• EPS guidance: $8.87–$8.97 (non-GAAP), including a $0.15–$0.16 negative FX/one-time impact.

• Gross margin expected at ~82% (non-GAAP); non-GAAP tax rate 15.0–16.0%.

• No GARDASIL shipments to China through year-end; Japan expected to be a headwind in H2.

• Continued investment in pipeline and launches; Verona Pharma acquisition not included in guidance.