Merck & Co (MRK) Q4 2025 earnings summary

Executive summary

• Achieved Q4 2025 sales of $16.4B (up 5% year-over-year) and full-year 2025 sales of $65.0B (up 1%), driven by Oncology, Animal Health, and new product launches, with over 20 new growth drivers in the pipeline.

• Strategic acquisitions of Verona Pharma and Cidara Therapeutics expanded the pipeline and portfolio, notably adding MK-1406.

• Portfolio transformation underway, with over $70B in potential commercial opportunity by mid-2030s.

• Pipeline advanced with 18 positive Phase 3 trial results and key regulatory milestones, including FDA and EC approvals for KEYTRUDA and WINREVAIR.

• Continued focus on breakthrough science, innovation, and sustainable long-term value for patients and shareholders.

Financial highlights

• Q4 2025 revenues reached $16.4B, up 5% year-over-year; non-GAAP EPS was $2.04 (up 19%), GAAP EPS was $1.19 (down 20%).

• Full-year 2025 non-GAAP EPS was $8.98; GAAP EPS was $7.28 (up 8%).

• KEYTRUDA/KEYTRUDA QLEX sales reached $31.7B for the year (up 7%); GARDASIL/GARDASIL 9 sales declined 39% to $5.2B due to lower demand in China and Japan.

• Animal Health sales grew 8% to $6.4B, led by livestock products and new launches.

• WINREVAIR and CAPVAXIVE contributed $1.4B and $759M in annual sales, respectively.

Outlook and guidance

• 2026 revenue guidance: $65.5B–$67.0B (1–3% growth, including ~1% FX benefit); non-GAAP EPS projected at $5.00–$5.15, including a one-time Cidara charge of $3.65–$3.95/share.

• Non-GAAP gross margin for 2026 expected at ~82%; effective tax rate at 23.5–24.5%.

• Operating expenses expected at $35.9–$36.9B, including a $9B one-time Cidara charge.

• Headwinds include ~$2.5B from generic competition, IRA price setting, and Koselugo agreement restructuring.

• $3B in share repurchases planned; continued commitment to dividend growth.