Merck & Co (MRK) Q4 2024 earnings summary

Executive summary

• Achieved strong commercial and financial performance in 2024, with sales up 7% to $64.2B, driven by oncology, animal health, and new product launches, while GARDASIL sales declined due to China headwinds.

• Reached nearly half a billion people globally with medicines and vaccines, emphasizing commitment to innovation and pipeline advancement.

• Created long-term value for patients and shareholders, supported by a diversified portfolio and robust late-stage pipeline.

• Temporarily paused GARDASIL shipments to China due to elevated inventory and weak demand, but remain optimistic about long-term potential in China.

• Confidence in navigating Keytruda LOE period remains high, supported by a robust and diversified pipeline.

Financial highlights

• Q4 2024 revenues were $15.6B, up 7% year-over-year (9% ex-FX); full-year 2024 sales reached $64.2B, up 7% (10% ex-FX).

• Q4 2024 non-GAAP EPS was $1.72 (GAAP EPS $1.48); full-year non-GAAP EPS was $7.65 (GAAP EPS $6.74), both including charges for business development.

• Oncology sales, led by KEYTRUDA, grew 21% year-over-year to $7.8B in Q4 2024; KEYTRUDA annual sales reached $29.5B, up 18%.

• Animal Health sales rose 13% to $1.4B in Q4 2024, with full-year sales up 4% to $5.9B.

• GARDASIL sales declined 18% year-over-year to $1.6B in Q4 2024, mainly due to lower demand in China; full-year sales down 3% to $8.6B.

Outlook and guidance

• 2025 revenue guidance: $64.1B–$65.6B (2–4% growth ex-FX, ~2% FX headwind); Non-GAAP EPS guidance: $8.88–$9.03, including a $0.09/share one-time charge.

• Excluding GARDASIL China and FX, expected company growth is 7–9%.

• Guidance assumes no further GARDASIL shipments to China at the low end; less than $1B at the high end.

• Non-GAAP gross margin for 2025 projected at ~82.5%; effective tax rate 16–17%.

• Medicare Part D redesign expected to negatively impact sales by ~$400M, mainly affecting WINREVAIR and oral oncology.