Merck & Co Inc
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.15%.
Did MRK Beat Earnings? Q2 2025 Results
Merck delivered a mixed second quarter, beating on the bottom line while falling just short on revenue, as a collapse in China GARDASIL sales overshadowed continued strength from its flagship cancer drug. The drugmaker posted non-GAAP EPS of $2.13, clearing the $2.03 consensus estimate by 5.04%, even as total revenue of $15.81 billion slipped 1.9% year-over-year and came in fractionally below the $15.87 billion Wall Street had expected. The story behind the numbers was largely a tale of two franchises: KEYTRUDA generated $7.96 billion in sales, up 9%, while GARDASIL plunged 55% to $1.13 billion after demand in China evaporated entirely. Restructuring charges of $649 million and a $200 million Hengrui Pharma licensing payment also weighed on GAAP results. Looking ahead, Merck narrowed its full-year 2025 sales guidance to $64.30 billion to $65.30 billion and non-GAAP EPS to $8.87 to $8.97, with the pending $10 billion acquisition of Verona Pharma and its COPD therapy Ohtuvayre excluded from that outlook.
- KEYTRUDA 9% growth driven by strong global demand in metastatic indications and increased uptake in earlier-stage cancers
- GARDASIL/GARDASIL 9 declined 55% primarily due to lower demand in China where sales fell to zero
- Animal Health grew 11% driven by higher livestock demand, Elanco aqua business acquisition, higher pricing, and improved supply
- WINREVAIR continued rapid uptake since second-quarter 2024 U.S. launch
- Non-GAAP gross margin improved to 82.2% from 80.9% due to favorable product mix
- R&D expenses increased 16% driven by Hengrui Pharma license payment, increased clinical development spending, and higher compensation
- Restructuring charges of $649 million related to new multiyear optimization initiative
“Earlier this month, we were pleased to announce our pending acquisition of Verona Pharma, which augments our portfolio and pipeline and is another example of acting decisively when science and value align. Today, we announced a multiyear optimization initiative that will redirect investment and resources from more mature areas of our business to our burgeoning array of new growth drivers, further enable the transformation of our portfolio, and drive our next chapter of productive, innovation-driven growth. With these actions, I am confident that we are well positioned to generate near- and long-term value for our shareholders and, most importantly, deliver for our patients.”
Merck CEO, on the earnings call
Forward Guidance & Outlook
Merck narrowed its full-year 2025 sales guidance to $64.3 billion to $65.3 billion (from prior $64.1–$65.6 billion), including a revised negative foreign exchange impact of approximately 0.5%. Non-GAAP EPS is now expected between $8.87 and $8.97 (from prior $8.82–$8.97), including approximately $0.15 per share negative foreign exchange impact and $0.16 per share aggregate impact from one-time charges for Hengrui Pharma ($200 million, recorded Q2) and LaNova technology transfer ($300 million, expected Q3). Non-GAAP gross margin approximately 82%, non-GAAP operating expenses $25.6–$26.4 billion, non-GAAP effective tax rate 15.0%–16.0%. Outlook excludes the anticipated impact of the Verona Pharma acquisition and includes $200 million in tariff-related costs pending outcome of additional government actions.
MRK YoY Financials
MRK Revenue by Segment
MRK Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.