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 continued momentum expected into 2026.

• Over 20 new growth drivers advanced, including successful launches and strategic acquisitions of Verona Pharma and Cidara Therapeutics, expanding the pipeline and portfolio.

• Significant clinical progress with 18+ positive Phase 3 readouts and multiple regulatory approvals across oncology, infectious disease, and cardiometabolic areas.

Financial highlights

• Q4 2025 revenues reached $16.4B, up 5% year-over-year (4% ex-FX); full-year non-GAAP EPS was $8.98, GAAP EPS $7.28.

• Oncology sales, led by KEYTRUDA, rose 5% to $8.4B; WELIREG sales increased 37% to $220M.

• Animal Health sales grew 6–8%, with livestock up 9% and companion animal sales flat.

• GARDASIL sales declined 35–39% to $1B in Q4 and $5.2B for the year, mainly due to lower demand in China and Japan.

• WINREVAIR and CAPVAXIVE contributed $467M and $279M in Q4, and $1.4B and $759M for the year, respectively.

Outlook and guidance

• 2026 revenue guidance: $65.5–$67.0B (1–3% growth, including ~1% FX benefit); non-GAAP EPS: $5.00–$5.15, including a ~$3.95/share negative impact from the Cidara acquisition.

• Gross margin expected at ~82%; operating expenses $35.9–$36.9B, including a $9B one-time Cidara charge.

• Tax rate expected at 23.5–24.5% in 2026 due to non-deductible Cidara charge.

• Headwinds include ~$2.5B from generic competition, IRA price setting, and lower LAGEVRIO sales.

• $3B in share repurchases planned; continued commitment to dividend growth and capital allocation priorities.