Please wait

MERCK & CO., INC., RAHWAY, N.J., USA

CONSOLIDATED STATEMENT OF OPERATIONS - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

	2026									2025																		% Change
	1Q			2Q			June YTD			1Q			2Q			June YTD			3Q			4Q			Full Year			2Q			Full Year
Sales	$	16,286		$	16,607		$	32,893		$	15,529		$	15,806		$	31,335		$	17,276		$	16,400		$	65,011			5	%		5	%

Costs, Expenses and Other
Cost of sales		4,195			4,395			8,590			3,419			3,557			6,976			3,855			5,551			16,382			24	%		23	%
Selling, general and administrative		2,700			2,904			5,604			2,552			2,649			5,202			2,633			2,898			10,733			10	%		8	%
Research and development		12,592			9,741			22,333			3,621			4,048			7,669			4,234			3,886			15,789			*			*
Restructuring costs		195			151			346			69			560			629			47			213			889			-73	%		-45	%
Other (income) expense, net		138			99			237			(35	)		(7	)		(43	)		(238	)		432			151			*			*
(Loss) Income Before Taxes		(3,534	)		(683	)		(4,217	)		5,903			4,999			10,902			6,745			3,420			21,067			*			*
Income Tax Provision		709			654			1,363			818			571			1,388			958			458			2,804
Net (Loss) Income		(4,243	)		(1,337	)		(5,580	)		5,085			4,428			9,514			5,787			2,962			18,263			*			*
Less: Net (Loss) Income Attributable to Noncontrolling Interests		(3	)		(2	)		(5	)		6			1			8			2			(1	)		9
Net (Loss) Income Attributable to Merck & Co., Inc., Rahway, N.J., USA	$	(4,240	)	$	(1,335	)	$	(5,575	)	$	5,079		$	4,427		$	9,506		$	5,785		$	2,963		$	18,254			*			*

(Loss) Earnings per Common Share Assuming Dilution ⁽¹⁾	$	(1.72	)	$	(0.54	)	$	(2.26	)	$	2.01		$	1.76		$	3.77		$	2.32		$	1.19		$	7.28			*			*

Average Shares Outstanding Assuming Dilution ⁽¹⁾		2,472			2,470			2,471			2,531			2,513			2,522			2,498			2,488			2,507
Tax Rate		-20.1	%		-95.9	%		-32.3	%		13.9	%		11.4	%		12.7	%		14.2	%		13.4	%		13.3	%

* 100% or greater

Sum of quarterly amounts may not equal year-to-date amounts due to rounding.

⁽¹⁾Because the Company recorded a net loss in both the second quarter and first six months of 2026, no potential dilutive common shares were used in the computations of loss per common share assuming dilution as the effects would have been anti-dilutive.

MERCK & CO., INC., RAHWAY, N.J., USA

THREE AND SIX MONTHS ENDED JUNE 30, 2025 GAAP TO NON-GAAP RECONCILIATION

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2b

	GAAP			Acquisition- and Divestiture-Related Costs ⁽¹⁾			Restructuring Costs ⁽²⁾			(Income) Loss from Investments in Equity Securities			Certain Other Items			Adjustment Subtotal			Non-GAAP
Second Quarter
Cost of sales	$	3,557			576			165									741		$	2,816
Selling, general and administrative		2,649			15			1									16			2,633
Research and development		4,048			3			53									56			3,992
Restructuring costs		560						560									560			–
Other (income) expense, net		(7	)								(61	)					(61	)		54
Income Before Taxes		4,999			(594	)		(779	)		61						(1,312	)		6,311
Income Tax Provision (Benefit)		571			(102	)⁽³⁾		(139	)⁽³⁾		14	⁽³⁾		(146	)⁽⁴⁾		(373	)		944
Net Income		4,428			(492	)		(640	)		47			146			(939	)		5,367
Net Income Attributable to Merck & Co., Inc., Rahway, N.J., USA		4,427			(492	)		(640	)		47			146			(939	)		5,366
Earnings per Common Share Assuming Dilution	$	1.76			(0.20	)		(0.25	)		0.02			0.06			(0.37	)	$	2.13

Tax Rate		11.4	%																	15.0	%

June YTD
Cost of sales	$	6,976			1,196			201									1,397		$	5,579
Selling, general and administrative		5,202			38			1									39			5,163
Research and development		7,669			10			53									63			7,606
Restructuring costs		629						629									629			–
Other (income) expense, net		(43	)		(3	)					(168	)					(171	)		128
Income Before Taxes		10,902			(1,241	)		(884	)		168						(1,957	)		12,859
Income Tax Provision (Benefit)		1,388			(219	)⁽³⁾		(157	)⁽³⁾		36	⁽³⁾		(146	)⁽⁴⁾		(486	)		1,874
Net Income		9,514			(1,022	)		(727	)		132			146			(1,471	)		10,985
Net Income Attributable to Merck & Co., Inc., Rahway, N.J., USA		9,506			(1,022	)		(727	)		132			146			(1,471	)		10,977
Earnings per Common Share Assuming Dilution	$	3.77			(0.40	)		(0.29	)		0.05			0.06			(0.58	)	$	4.35

Tax Rate		12.7	%																	14.6	%

Only the line items that are affected by non-GAAP adjustments are shown.

The Company is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing non-GAAP information enhances investors’ understanding of the Company’s results because management uses non-GAAP measures to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.

⁽¹⁾Amounts included in cost of sales reflect expenses for the amortization of intangible assets and intangible asset impairment charges, partially offset by a decrease in the estimated fair value measurement of liabilities for contingent consideration. Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures. Amounts included in research and development expenses reflect the amortization of intangible assets.

⁽²⁾Amounts primarily include employee separation costs, accelerated depreciation and asset impairments associated with facilities to be closed or divested related to activities under the Company's formal restructuring programs.

⁽³⁾ Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.

⁽⁴⁾ Represents tax benefits primarily resulting from favorable audit reserve adjustments.

MERCK & CO., INC., RAHWAY, N.J., USA
FRANCHISE / KEY PRODUCT SALES
SECOND QUARTER 2026
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3a

	Global						U.S.						International
	2Q 2026		2Q 2025		% Change		2Q 2026		2Q 2025		% Change		2Q 2026		2Q 2025		% Change
TOTAL SALES ⁽¹⁾	$	16,607	$	15,806		5	$	9,367	$	8,836		6	$	7,240	$	6,969		4
PHARMACEUTICAL		14,760		14,050		5		8,827		8,328		6		5,933		5,722		4
Oncology
Keytruda		7,904		7,956		-1		4,611		4,749		-3		3,293		3,207		3
Keytruda Qlex		463				-		395				-		68				-
Alliance Revenue – Lynparza ⁽²⁾		365		370		-1		167		174		-4		198		195		2
Alliance Revenue – Lenvima ⁽²⁾		283		265		7		194		183		6		90		83		8
Welireg		271		162		67		214		138		55		57		24		133
Alliance Revenue – Reblozyl ⁽³⁾		122		107		15		98		88		11		25		19		31
Vaccines ⁽⁴⁾
Gardasil/Gardasil 9		1,169		1,126		4		542		545		-1		626		581		8
ProQuad/M-M-R II/Varivax		592		609		-3		438		481		-9		154		128		20
Capvaxive		184		129		42		138		129		7		45				-
Vaxneuvance		148		229		-35		69		136		-50		80		93		-14
RotaTeq		134		121		10		84		60		39		50		61		-18
Enflonsia		2				-								2				-
Cardiometabolic & Respiratory
Winrevair		588		336		75		522		323		61		66		12		*
Ohtuvayre		204				-		204				-
Alliance Revenue - Adempas/Verquvo ⁽⁵⁾		126		123		3		112		108		4		14		15		-1
Adempas ⁽⁶⁾		78		80		-2								78		80		-2
Infectious Diseases
Bridion		497		461		8		460		411		12		37		50		-25
Prevymis		295		228		29		147		115		28		148		113		31
Delstrigo		101		83		21		13		14		-7		88		70		27
Zerbaxa		77		74		4		44		45		-3		34		29		14
Isentress/Isentress HD		60		86		-30		36		48		-26		24		38		-36
Dificid		22		96		-77		11		83		-87		12		13		-11
Lagevrio		5		83		-95		1		30		-96		3		52		-94
Diabetes
Januvia		258		372		-31		149		216		-31		109		155		-30
Janumet		171		251		-32		28		68		-59		143		184		-22
Other Pharmaceutical ⁽⁷⁾		641		703		-9		150		184		-18		489		520		-6
ANIMAL HEALTH		1,775		1,646		8		535		499		7		1,240		1,147		8
Livestock		1,041		961		8		202		190		6		838		771		9
Companion Animal		734		685		7		333		309		8		402		376		7
Other Revenues ⁽⁸⁾		72		110		-35		5		9		-44		67		100		-33

*200% or greater

Sum of U.S. plus international may not equal global due to rounding.

⁽¹⁾ Only select products are shown.

⁽²⁾ Alliance Revenue represents the Company's share of profits, which are product sales net of cost of sales and commercialization costs.

⁽³⁾ Alliance Revenue represents royalties.

⁽⁴⁾ Total Vaccines sales were $2,361 million and $2,370 million on a global basis in the second quarter of 2026 and 2025, respectively.

⁽⁵⁾ Alliance Revenue represents the Company's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.

⁽⁶⁾ Net product sales in the Company's marketing territories.

⁽⁷⁾ Includes Pharmaceutical products not individually shown above. Also reflects total alliance revenue for Koselugo of $10 million and $43 million on a global basis in the second quarter of 2026 and 2025, respectively.

⁽⁸⁾ Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of milestone payments for out-licensed products were $0 million and $5 million on a global basis in the second quarter of 2026 and 2025, respectively.

MERCK & CO., INC., RAHWAY, N.J., USA
FRANCHISE / KEY PRODUCT SALES
JUNE YEAR-TO-DATE 2026
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3b

	Global						U.S.						International
	June YTD 2026		June YTD 2025		% Change		June YTD 2026		June YTD 2025		% Change		June YTD 2026		June YTD 2025		% Change
TOTAL SALES ⁽¹⁾	$	32,893	$	31,335		5	$	18,532	$	17,359		7	$	14,361	$	13,977		3
PHARMACEUTICAL		29,109		27,688		5		17,338		16,254		7		11,771		11,434		3
Oncology
Keytruda		15,810		15,161		4		9,210		9,057		2		6,600		6,104		8
Keytruda Qlex		590				-		501				-		89				-
Alliance Revenue – Lynparza ⁽²⁾		706		682		4		315		319		-1		391		363		8
Alliance Revenue – Lenvima ⁽²⁾		539		523		3		369		368		0		170		155		9
Welireg		470		300		57		366		261		40		103		39		166
Alliance Revenue – Reblozyl ⁽³⁾		270		226		20		226		189		20		45		37		21
Vaccines ⁽⁴⁾
Gardasil/Gardasil 9		2,238		2,453		-9		1,027		1,082		-5		1,211		1,371		-12
ProQuad/M-M-R II/Varivax		1,130		1,148		-2		847		903		-6		283		245		16
Capvaxive		325		236		38		256		235		9		69		1		*
Vaxneuvance		350		459		-24		192		275		-30		158		184		-14
RotaTeq		340		349		-3		249		225		11		91		125		-27
Enflonsia		3				-		-1				-		4				-
Cardiometabolic & Respiratory
Winrevair		1,114		615		81		999		591		69		114		24		*
Ohtuvayre		335				-		335				-
Alliance Revenue - Adempas/Verquvo ⁽⁵⁾		235		229		3		221		205		8		14		23		-40
Adempas ⁽⁶⁾		156		147		6								156		147		6
Infectious Diseases
Bridion		969		902		7		887		789		12		82		113		-27
Prevymis		568		436		30		282		217		30		285		219		30
Delstrigo		176		150		17		23		29		-21		153		121		26
Zerbaxa		159		145		10		95		87		9		64		57		12
Isentress/Isentress HD		119		176		-32		71		99		-29		49		77		-37
Dificid		56		179		-69		35		155		-77		21		24		-10
Lagevrio		32		185		-82		18		66		-73		15		119		-87
Diabetes
Januvia		625		921		-32		401		561		-29		224		360		-38
Janumet		378		498		-24		96		133		-28		283		366		-23
Other Pharmaceutical ⁽⁷⁾		1,416		1,568		-10		318		408		-22		1,097		1,160		-5
ANIMAL HEALTH		3,566		3,234		10		1,054		1,001		5		2,512		2,233		12
Livestock		2,105		1,885		12		414		384		8		1,691		1,501		13
Companion Animal		1,461		1,349		8		640		617		4		821		732		12
Other Revenues ⁽⁸⁾		218		413		-47		140		104		35		78		310		-75

*200% or greater

Sum of U.S. plus international may not equal global due to rounding.

⁽¹⁾ Only select products are shown.

⁽²⁾ Alliance Revenue represents the Company's share of profits, which are product sales net of cost of sales and commercialization costs.

⁽³⁾ Alliance Revenue represents royalties.

⁽⁴⁾ Total Vaccines sales were $4,675 million and $4,977 million on a global basis for June YTD 2026 and 2025, respectively.

⁽⁵⁾ Alliance Revenue represents the Company's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.

⁽⁶⁾ Net product sales in the Company's marketing territories.

⁽⁷⁾ Includes Pharmaceutical products not individually shown above. Also reflects total alliance revenue for Koselugo of $171 million and $87 million on a global basis for June YTD 2026 and 2025, respectively.

⁽⁸⁾ Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of milestone payments for out-licensed products were $132 million and $100 million on a global basis for June YTD 2026 and 2025, respectively.

MERCK & CO., INC., RAHWAY, N.J., USA
PHARMACEUTICAL GEOGRAPHIC SALES
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3c

	2026									2025																		% Change
	1Q			2Q			June YTD			1Q			2Q			June YTD			3Q			4Q			Full Year			2Q		June YTD
TOTAL PHARMACEUTICAL	$	14,349		$	14,760		$	29,109		$	13,638		$	14,050		$	27,688		$	15,611		$	14,843		$	58,142			5		5

United States		8,512			8,827			17,338			7,927			8,328			16,254			9,493			8,662			34,409			6		7
% Pharmaceutical Sales		59.3	%		59.8	%		59.6	%		58.1	%		59.3	%		58.7	%		60.8	%		58.4	%		59.2	%
Europe ⁽¹⁾		2,725			2,801			5,525			2,384			2,551			4,935			2,675			2,839			10,449			10		12
% Pharmaceutical Sales		19.0	%		19.0	%		19.0	%		17.5	%		18.2	%		17.8	%		17.1	%		19.1	%		18.0	%
Latin America		624			636			1,260			589			654			1,243			691			644			2,578			-3		1
% Pharmaceutical Sales		4.3	%		4.3	%		4.3	%		4.3	%		4.7	%		4.5	%		4.4	%		4.3	%		4.4	%
Asia Pacific (other than China and Japan)		569			636			1,205			535			609			1,144			593			586			2,323			5		5
% Pharmaceutical Sales		4.0	%		4.3	%		4.1	%		3.9	%		4.3	%		4.1	%		3.8	%		4.0	%		4.0	%
Japan		535			558			1,093			651			604			1,255			693			684			2,632			-8		-13
% Pharmaceutical Sales		3.7	%		3.8	%		3.8	%		4.8	%		4.3	%		4.5	%		4.4	%		4.6	%		4.5	%
Eastern Europe/Middle East/Africa		413			408			821			435			451			886			365			348			1,598			-10		-7
% Pharmaceutical Sales		2.9	%		2.8	%		2.8	%		3.2	%		3.2	%		3.2	%		2.3	%		2.3	%		2.7	%
China		353			368			721			668			407			1,075			377			364			1,816			-9		-33
% Pharmaceutical Sales		2.5	%		2.5	%		2.5	%		4.9	%		2.9	%		3.9	%		2.4	%		2.5	%		3.1	%
Canada		137			154			291			125			135			261			134			153			547			14		12
% Pharmaceutical Sales		1.0	%		1.0	%		1.0	%		0.9	%		1.0	%		0.9	%		0.9	%		1.0	%		0.9	%
Other		481			372			855			324			311			635			590			563			1,790			20		35
% Pharmaceutical Sales		3.3	%		2.5	%		2.9	%		2.4	%		2.1	%		2.4	%		3.9	%		3.8	%		3.2	%

Sum of quarterly amounts may not equal year-to-date amounts due to rounding.

(1) Europe represents all European Union countries, the European Union accession markets and the United Kingdom.

MERCK & CO., INC., RAHWAY, N.J., USA
OTHER (INCOME) EXPENSE, NET - GAAP
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 4

OTHER (INCOME) EXPENSE, NET

	2Q26			2Q25			June YTD 2026			June YTD 2025
Interest income	$	(35	)	$	(69	)	$	(70	)	$	(178	)
Interest expense		525			305			1,004			618
Exchange losses		37			78			75			167
Income from investments in equity securities, net ⁽¹⁾		(242	)		(100	)		(411	)		(189	)
Net periodic defined benefit plan (credit) cost other than service cost		(127	)		(152	)		(262	)		(300	)
Other, net		(59	)		(69	)		(99	)		(161	)
Total	$	99		$	(7	)	$	237		$	(43	)

⁽¹⁾Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. Unrealized gains and losses from investments that are directly owned are determined at the end of the reporting period, while gains and losses from ownership interests in investment funds are accounted for on a one quarter lag.