Health Care · NYSE: MRK
Merck: how the business works
Merck sells prescription medicines, vaccines and animal health products, with $65.0 billion of sales in FY2025, about half of it from one cancer medicine, Keytruda.
By Hardik Bhandare · Checked against filings: . Editorial policy. Corrections
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Merck & Co., Inc. · Rahway, New Jersey
Updated for Q3 FY2026 · checked
- Sales, FY2025
- $65.0B
- Net income, FY2025
- $18.3B
- Keytruda's share of FY2025 sales (company-stated)
- 49%
- Net loss, nine months to Sep 30, 2026
- -$510M
- Employees, end of 2025
- About 75,000
The short version
Merck in 5 points
1 · What it sells
Merck sells prescription medicines, vaccines and animal health products, and Keytruda, a cancer medicine, brought in $31.6 billion of its $65.0 billion of FY2025 sales.
2 · Who pays it
Merck reports no sales by customer or final payer; by location, in FY2025 the US paid 56.2% of sales, Europe, the Middle East and Africa 22.4% and other regions 21.4%.
3 · What it keeps from $100
Of every $100 of FY2025 sales, Merck kept $28.1 as net income after $24.3 of research, and operating income, a Cityfort calculation from the FY2025 10-K, was $32.6.
4 · Where the operating profit comes from
Pharmaceutical segment profit was $45.8 billion in FY2025 and Animal Health's $2.1 billion, before $26.8 billion of costs Merck keeps outside its segments, such as most research and amortization.
5 · The one thing to watch
Keytruda was 49% of Merck's FY2025 sales, and Merck expects a Medicare set price for it from Jan 1, 2029, after its key US patent runs out in 2028.
Sources: From Merck's FY2025 10-K, Q3 FY2026 10-Q and earnings releases · checked
See the full receipt and the management scorecard below
01Where the money goes · FY2025
Where does $100 of Merck's money go?
Merck · FY2025
Receipt for every $100
| Cost of making products | $25.2 |
|---|---|
| Research and development | $24.3 |
| Selling, general and administrative | $16.5 |
| Restructuring and other items | $1.6 |
| Income tax and small items | $4.3 |
| Kept as net income | $28.1 |
| Total | $100 |
Each line = amount ÷ total money in × 100. Lines may not add to exactly $100 because of rounding.
How this is worked out
Cityfort calculation from the FY2025 10-K. Of every $100 of sales in FY2025: each line = line ÷ $65.0 billion × 100. Other items were a net cost, so no other income is added. Lines are rounded and add to 100.
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02The business in one line
What does Merck do?
Wholesalers, governments, vets and other buyers pay Merck for medicines, vaccines and animal health products; most of the money goes on making them and on research, and what is left is profit.
- In FY2025 Keytruda, a cancer medicine that helps the immune system attack tumors, brought in $31.6 billion of Merck's $65.0 billion of sales. Customers in the US were 56.2%.
- Merck kept $18.3 billion as net income in FY2025. In 2026, charges of about $9.0 billion and $5.7 billion for buying two drug developers turned the first two quarters into net losses.
03Who pays it
Who pays Merck?
Customers in the US
56%
of revenue
56.2% of FY2025 sales ($36.5 billion). Most US sales go through wholesalers. Shares here are by location, because Merck does not report sales by customer or final payer.
Europe, Middle East and Africa
22%
of revenue
22.4% of FY2025 sales ($14.6 billion).
Asia Pacific, including Japan and China
12%
of revenue
11.7% of FY2025 sales: Japan $2.7 billion, China $1.9 billion and the rest of Asia Pacific $3.0 billion. China fell from $6.8 billion in FY2023.
Latin America
5%
of revenue
5.2% of FY2025 sales ($3.4 billion).
Other
4%
of revenue
4.4% of FY2025 sales ($2.9 billion), the remainder Merck does not assign to these regions.
- Customers in the US56%
- Europe, Middle East and Africa22%
- Asia Pacific, including Japan and China12%
- Latin America5%
- Other4%
How spread out the customers are
Merck gives no share of sales by customer. Three US wholesalers, McKesson (about 22%), Cencora (about 21%) and Cardinal Health (about 13%), were the largest parts of accounts receivable at Dec 31, 2025. They are distributors, not final payers. Customers outside the US and Europe, the Middle East and Africa were 21.4% of FY2025 sales. By product, Keytruda was 49% of FY2025 sales, as Merck states.
04Why it makes money
Why does Merck make money?
A patented medicine costs far less to make than it sells for, and Keytruda's growth has made Merck depend more on one product.
Merck kept $74.8 of gross profit per $100 of FY2025 sales. That margin pays for research and for buying drug developers. Keytruda's share of sales rose from 35.3% in FY2021 to 48.7% in FY2025, so its patents and US prices shape profits.
Keytruda's share of sales (Cityfort calculation from the FY2023 and FY2025 10-Ks)
35.3%48.7%
FY2021 to FY2025
- Merck discovers, licenses or buys a medicine
- Patents limit direct copies for years
- Sales run through wholesalers, hospitals and governments
- Cost of sales was $25.2 per $100 of sales in FY2025
- Cash pays for research, deals, dividends and buybacks
- Patents end, and new products must replace old ones
↺ Step 6 feeds back into step 1.
05Business segments · FY2025
Which businesses make up Merck?
Pharmaceutical
89%Human medicines and vaccines. Segment profit was $45.8 billion in FY2025, before most research, amortization and restructuring costs, which Merck keeps outside its segments.
Revenue $58.1B · Operating profit $45.8B
Animal Health
10%Medicines, vaccines and devices for livestock and pets. Segment profit was $2.1 billion in FY2025.
Revenue $6.4B · Operating profit $2.1B
Other
1%Other sales, including revenue hedging results. Costs Merck keeps outside its segments, such as most research, amortization and restructuring, were $26.8 billion in FY2025.
Revenue $515M
How the mix changed
- Pharmaceutical
- Animal Health
- Other
Revenue by segment, FY2021 to FY2025.
US$
See the numbers
06The numbers · Consolidated · US$
How has Merck done?
Revenue
$65.0BFY2025
Sales rose every year from $48.7 billion in FY2021 to $65.0 billion in FY2025, and Merck states that Q3 FY2026 sales of $18.1 billion were up 5% from a year earlier; FY2021 is continuing operations, after the Organon spin-off.
US$
See the numbers
Net profit
$18.3BFY2025
Net income fell to $365 million in FY2023 after $11.4 billion of charges for bought research; Q1 and Q2 FY2026 were net losses of $4.2 billion and $1.3 billion after the Cidara and Terns charges; FY2021 net income ($13.0 billion, $5.14 a share) includes $704 million from Organon, reported as discontinued operations, and continuing operations alone earned $12.3 billion, or $4.86 a share.
US$
See the numbers
Profit kept per $100 of revenue
$28.1FY2025
Net income per $100 of sales was $28.1 in FY2025, and operating income per $100 was $32.6; Merck reports no operating income line, so operating income and EBITDA are a Cityfort calculation from the FY2023 and FY2025 10-Ks.
$ of profit per $100 of revenue (net margin)
See the numbers
Free cash flow
$12.4BFY2025
Free cash flow here is cash from operations minus capital spending; it was $12.4 billion in FY2025, down from $18.1 billion in FY2024 as cash taxes rose to $6.1 billion from $3.9 billion and, Merck says, upfront, milestone and similar payments for partnerships, licensing agreements and acquisitions rose to $3.0 billion from $1.1 billion.
US$ · cash from operations minus spending on plants and equipment
See the numbers
See all yearly numbers
EBITDA here = operating income plus depreciation and amortization (from the cash flow statement). Fiscal years are the company's own (December 31; quarters end Mar 31, Jun 30 and Sep 30). Net profit is the share belonging to the company's owners.
Download Merck's yearly and quarterly numbers (CSV, with source ids)
Learn: Stock-based compensation and dilution: pay that becomes shares
Sources (17)
- Form 10-K for fiscal year 2023
- Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
- Earnings release, Q4 FY2024 and full year 2024 (8-K Ex. 99.1)
- Financial tables, Q4 FY2025 (8-K Ex. 99.2)
- Earnings release, Q1 FY2025 (8-K Ex. 99.1)
- Form 10-Q for Q1 FY2025 (ended Mar 31, 2025)
- Earnings release, Q2 FY2025 (8-K Ex. 99.1)
- Form 10-Q for Q2 FY2025 (ended Jun 30, 2025)
- Earnings release, Q3 FY2025 (8-K Ex. 99.1)
- Form 10-Q for Q3 FY2025 (ended Sep 30, 2025)
- Earnings release, Q4 FY2025 and full year 2025 (8-K Ex. 99.1)
- Earnings release, Q1 FY2026 (8-K Ex. 99.1)
- Form 10-Q for Q1 FY2026 (ended Mar 31, 2026)
- Earnings release, Q2 FY2026 (8-K Ex. 99.1)
- Form 10-Q for Q2 FY2026 (ended Jun 30, 2026)
- Earnings release, Q3 FY2026 (8-K Ex. 99.1)
- Form 10-Q for Q3 FY2026 (ended Sep 30, 2026)
07Who runs it
Who runs Merck, and did they deliver?
Robert M. Davis
Chairman, CEO and President · since 2021
CEO and President since July 2021 and chairman since December 2022; CFO from April 2016 to July 2021. FY2025 total pay was $20,797,845, or 191 times the median employee's $108,614.
Caroline Litchfield
Executive Vice President and CFO · since 2021
CFO since April 2021.
What they said, and what happened
1 delivered · 2 too early to tell
Said on Feb 4, 2025
FY2025 sales of $64.1 billion to $65.6 billion.
DeliveredWhat happened
FY2025 sales were $65.0 billion.
Said on Feb 3, 2026
FY2026 sales of $65.5 billion to $67.0 billion.
Too early to tellWhat happened
Merck narrowed the range to $66.8 billion to $67.3 billion on Oct 29, 2026. Sales were $51.0 billion for the first nine months.
Said on Nov 4, 2026
About $1.7 billion of yearly savings from the 2025 restructuring program by the end of 2027, at a pretax cost of about $3.0 billion.
Too early to tellWhat happened
The deadline is the end of 2027. Restructuring costs were $889 million in FY2025.
Sources (6)
- Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
- Proxy statement (DEF 14A) for the 2026 annual meeting
- Earnings release, Q4 FY2024 and full year 2024 (8-K Ex. 99.1)
- Earnings release, Q4 FY2025 and full year 2025 (8-K Ex. 99.1)
- Earnings release, Q3 FY2026 (8-K Ex. 99.1)
- Form 10-Q for Q3 FY2026 (ended Sep 30, 2026)
08What could go wrong
What could go wrong for Merck?
- Concentration
Half of sales from one medicine
Keytruda was 49% of FY2025 sales, as Merck states. Its key US patent runs to 2028, with two more to 2029, and Merck expects litigation over them.
Watch Keytruda and Keytruda Qlex sales each quarter, and any patent litigation.
- Pricing
US drug price setting
Medicare set a Januvia price from Jan 1, 2026. Merck's FY2025 10-K says it expects Keytruda to be selected in 2027, with a set price from Jan 1, 2029. Merck expects US Keytruda sales to decline materially after that.
Watch Medicare's 2027 list of drugs selected for price setting.
- Demand
Gardasil sales in China and the US
China sales fell from $6.8 billion in FY2023 to $1.9 billion in FY2025 after Gardasil shipments there were suspended. Merck expects a 2026 US public-sector purchasing benefit to largely unwind in 2027.
Watch Gardasil sales, $2.0 billion in Q3 FY2026.
- Competition
Generics for older medicines
US generics arrived for Bridion and Januvia in 2026. In Q3 FY2026 Bridion fell 67% to $144 million and Januvia and Janumet fell 39%.
Watch Bridion and Januvia sales in the FY2026 10-K.
- Execution
Large charges for bought research
Merck charges most bought drug programs to research at once. These charges cut FY2023 net income to $365 million and caused 2026 losses of $4.2 billion in Q1 and $1.3 billion in Q2.
Watch Charges for asset acquisitions and licenses in each earnings release.
- Debt
Debt after acquisitions
Total debt rose from $37.1 billion at Dec 31, 2024 to $53.8 billion at Sep 30, 2026, after the Verona, Cidara and Terns deals. Net debt was $44.2 billion.
Watch Net debt and operating cash flow in the FY2026 10-K.
- Legal
Securities lawsuit
A putative class action alleges that Merck made false and misleading statements about demand for Gardasil in China. Related derivative lawsuits are on hold.
Watch The motion to dismiss argument scheduled for Dec 14, 2026.
09Both sides
What do supporters and critics point to?
What supporters point to
- Sales rose every year from $48.7 billion in FY2021 to $65.0 billion in FY2025.
- Keytruda Qlex, with a US patent to 2043, reached $830 million of sales in Q3 FY2026.
- Winrevair sales rose 93% in Q3 FY2026 to $694 million.
- Merck narrowed its FY2026 sales range to $66.8 billion to $67.3 billion on Oct 29, 2026.
- Merck returned $13.3 billion to shareholders in 2025, as dividends and buybacks.
What critics point to
- Keytruda was 49% of FY2025 sales, and its key US patent runs to 2028.
- Merck expects US Keytruda sales to decline materially after a Medicare set price from 2029.
- China sales fell from $6.8 billion in FY2023 to $1.9 billion in FY2025.
- Net debt rose from $34.8 billion at Dec 31, 2025 to $44.2 billion at Sep 30, 2026.
- Merck had a net loss of $510 million in the first nine months of 2026.
10What to watch next
What should you watch next at Merck?
Next event
Q4 FY2026 results
Date not announced yet.
Keytruda and the move to Qlex
Keytruda and Keytruda Qlex brought in $8.6 billion in Q3 FY2026, with Qlex at $830 million. Keytruda's key US patent runs to 2028, and Qlex's to 2043.
Gardasil after 2026
Gardasil had $2.0 billion of sales in Q3 FY2026, up 14%. Merck expects the US purchasing benefit to largely unwind in 2027.
Debt and deal charges
Net debt was $44.2 billion at Sep 30, 2026. Charges of about $9.0 billion and $5.7 billion for Cidara and Terns caused the Q1 and Q2 FY2026 losses.
11Key dates
What are the key dates for Merck?
| Event | Date | Source |
|---|---|---|
| Court argument on the motion to dismiss the Gardasil securities caseScheduled, as stated in Merck's Q3 FY2026 10-Q. | Form 10-Q for Q3 FY2026 (ended Sep 30, 2026) | |
| Expected start of a Medicare set price for KeytrudaMerck's own expectation, if Keytruda is selected in 2027 as it expects. | Form 10-K for fiscal year 2025 (ended Dec 31, 2025) |
12Key facts
Key facts about Merck
- What does Merck do?
- Merck & Co. (MRK), based in Rahway, New Jersey, discovers, makes and sells prescription medicines, vaccines and animal health products. Merck's sales were $65.0 billion in FY2025 (calendar 2025) and $18.1 billion in Q3 FY2026. Outside the US and Canada it is known as MSD.
- How does Merck make money?
- Merck makes money by selling patented medicines and vaccines, and animal health products. In FY2025 Merck's Pharmaceutical segment had $58.1 billion of sales (89.4%) and its Animal Health segment $6.4 billion (9.8%).
- What is Merck's business model?
- Merck's business model is to discover, license or buy medicines, protect them with patents and sell them while that protection lasts. In FY2025 Merck spent $24.3 of every $100 of sales on research and development, and kept $28.1 as net income.
- Is Merck profitable?
- Merck reported net income of $18.3 billion in FY2025 and $5.1 billion in Q3 FY2026. Merck had a net loss of $510 million in the first nine months of 2026. That followed charges of about $9.0 billion for Cidara and $5.7 billion for Terns, two acquired drug developers.
- What is Merck's revenue by segment?
- Merck reports two segments. In FY2025 Merck's Pharmaceutical segment had sales of $58.1 billion and segment profit of $45.8 billion. Animal Health had sales of $6.4 billion and segment profit of $2.1 billion. Segment profit leaves out most research, amortization and restructuring costs.
- Who are Merck's customers?
- Merck sells human health products mainly to wholesalers, retailers, hospitals, governments and managed care companies. At Dec 31, 2025, McKesson, Cencora and Cardinal Health were about 22%, 21% and 13% of Merck's accounts receivable. Merck does not disclose sales by customer. Customers in the US were 56.2% of FY2025 sales.
- Who owns Merck?
- Merck is widely held, with one class of common stock and one vote per share. BlackRock reported 8.17% in a January 2024 filing and Vanguard Capital Management 7.53% in an April 2026 filing. Merck's directors and executive officers as a group held less than 1% on Feb 28, 2026.
- How much does Merck earn from Keytruda?
- Merck's cancer medicine Keytruda had sales of $31.6 billion in FY2025, up from $17.2 billion in FY2021, and Merck states that Keytruda was 49% of its total sales in 2025. Keytruda Qlex, the version given as an injection under the skin, added $40 million of FY2025 sales.
- How much does Merck earn from vaccines such as Gardasil?
- Merck's HPV vaccines Gardasil and Gardasil 9 had sales of $5.2 billion in FY2025, down from $8.9 billion in FY2023, after shipments to China were suspended in February 2025. Merck's pneumococcal vaccine Capvaxive had $759 million of FY2025 sales.
- How much does Merck earn from animal health?
- Merck's Animal Health segment had sales of $6.4 billion in FY2025: $3.9 billion from livestock products and $2.5 billion from companion animal products. Animal Health was 9.8% of Merck's FY2025 sales.
Sources (8)
- Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
- Earnings release, Q3 FY2026 (8-K Ex. 99.1)
- Form 10-Q for Q3 FY2026 (ended Sep 30, 2026)
- Earnings release, Q2 FY2026 (8-K Ex. 99.1)
- Earnings release, Q1 FY2026 (8-K Ex. 99.1)
- Proxy statement (DEF 14A) for the 2026 annual meeting
- Schedule 13G, Vanguard Capital Management, event Mar 31, 2026
- Form 10-K for fiscal year 2023
Terms on this page
- Capital expenditures (capex)
- Debt-to-equity
- Dividend payout ratio
- Earnings per share (EPS)
- EBITDA
- Free cash flow
- Market cap
- Net debt
- Net margin
- P/E ratio
Each explains the term in plain English, with the same number from other companies on Cityfort.
Go deeper
More detail from the same filings. Open any section.
13What it sells
13What it sells
What does Merck sell?
Keytruda ($31.6B in FY2025)
A cancer immunotherapy, which helps the body's immune system attack tumors, used for many cancer types. Keytruda Qlex, a version injected under the skin, had $40 million of sales in its first year.
Vaccines
Gardasil and Gardasil 9 against HPV ($5.2 billion in FY2025) and the ProQuad, M-M-R II and Varivax childhood vaccines ($2.5 billion). Pneumococcal vaccines Vaxneuvance and Capvaxive had $825 million and $759 million.
Other medicines
Bridion, which reverses muscle relaxants after surgery ($1.8 billion in FY2025), and Januvia for diabetes ($1.6 billion). Winrevair treats high blood pressure in the lungs ($1.4 billion), and Ohtuvayre treats COPD, a lung disease ($178 million from October 2025).
Partner medicines
Merck shares Lynparza and Lenvima with partners and books its share of their profits as alliance revenue: $1.5 billion and $1.1 billion in FY2025.
Animal Health ($6.4B in FY2025)
Medicines, vaccines and devices for livestock ($3.9 billion) and pets ($2.5 billion), sold to vets, distributors, farmers and pet owners.
What it does
- Does: Researches, makes and sells its own medicines and vaccines
- Does: Buys drug developers and licenses drugs from others, such as Verona Pharma in 2025 and Cidara and Terns in 2026
- Does: Sells animal health products in a separate segment
What it does not do
- Does not: Does not own women's health, biosimilar or older established brands: these went to Organon in a Jun 2, 2021 spin-off
- Does not: Does not report profit by product
- Does not: Does not sell much Gardasil in China now: shipments were suspended in February 2025, and Merck said in its FY2025 10-K that it expects Gardasil sales in China will not materially increase in 2026
14How the money flows
14How the money flows · FY2025
How does money flow through Merck?
Money in
- Sales$65.0B
The company
Merck
$65.0B came in
Money out
- Cost of making products (cost of sales)$16.4B
- Selling, general and administrative$10.7B
- Research and development$15.8B
- Restructuring and other items, net$1.0B
- Income tax and noncontrolling interests$2.8B
- Net income$18.3B
- Buyers paid Merck $65.0 billion for medicines, vaccines and animal health products in FY2025.
- Making the products cost $16.4 billion, and selling and running the company took $10.7 billion.
- Research and development took $15.8 billion, the second-largest cost.
- Restructuring took $889 million, and other items, such as interest and investment results, a net $151 million.
- Income tax took $2.8 billion, and $18.3 billion was left as net income.
15What it needs to run
15What it needs to run
What does Merck need to run?
Research
Research and development cost $15.8 billion in FY2025, and about 24,700 employees worked in research. Bought drug programs are often charged to research at once, as with Cidara's $9.0 billion in 2026.
Patents
Keytruda's key US patent runs to 2028, with two more to 2029 through term adjustment; Merck expects litigation. Keytruda Qlex's US patent runs to 2043, and Gardasil 9's to 2028.
People
About 75,000 employees at the end of 2025, about 30,000 of them in the US including Puerto Rico, plus about 15,000 contractors. Merck had about 68,000 employees in 2021.
Bought businesses
Goodwill and other intangible assets, mostly from deals, were $48.3 billion at Dec 31, 2025, of $136.9 billion of total assets. Verona Pharma added about $10.4 billion of consideration in 2025.
16Where it sells
16Where it sells · FY2025
Where does Merck sell?
- United States56%
- Europe, Middle East and Africa22%
- Latin America5%
- Asia Pacific (excluding Japan and China)5%
- Other4%
- Japan4%
- China3%
17Where growth could come from
17Where growth could come from
Where could Merck's growth come from?
Merck said in its Q3 FY2026 earnings release (Oct 29, 2026) that it expects FY2026 sales of $66.8 billion to $67.3 billion. On Feb 3, 2026 it had said $65.5 billion to $67.0 billion.
Keytruda and Keytruda Qlex
Working$8.6B in Q3 FY2026, up 6%
Merck ties the rise to use in earlier-stage cancers and metastatic demand. Keytruda alone fell from $8.1 billion to $7.8 billion as Qlex sales grew.
Status: Working, on track against what the company said.
Keytruda Qlex (under the skin)
New$830M in Q3 FY2026
First sales were $5 million in Q3 FY2025. Its US patent runs to 2043, against 2028 for Keytruda.
Status: New, recently announced.
Winrevair
Working$694M in Q3 FY2026, up 93%
A medicine for pulmonary arterial hypertension, first sold in FY2024. Sales rose from $419 million in FY2024 to $1.4 billion in FY2025.
Status: Working, on track against what the company said.
Capvaxive
Mixed$263M in Q3 FY2026, up 8%
A pneumococcal vaccine for adults, first sold in FY2024. Sales reached $759 million in FY2025 but fell to $142 million in Q1 FY2026.
Status: Mixed, partly on track.
Gardasil
Mixed$2.0B in Q3 FY2026, up 14%
Merck ties the rise to US public-sector purchasing and pricing, and expects that purchasing benefit to largely unwind in 2027. FY2025 sales were $5.2 billion, down from $8.9 billion in FY2023.
Status: Mixed, partly on track.
Ohtuvayre (from Verona Pharma)
New$184M in Q3 FY2026
A COPD medicine Merck gained by buying Verona Pharma in October 2025, for about $10.4 billion of consideration.
Status: New, recently announced.
Bought drug programs
Early$9.2B and $6.8B deals in 2026
Cidara's lead program, a long-acting flu preventive, is in Phase 3. Terns' program for a type of leukemia (CML) is in Phase 1/2.
Status: Early, too early to judge.
Status compares progress with what the company itself said it would do: Working = on track against what the company said; Mixed = partly on track; Behind = behind the company's own plan; New = recently announced; Early = too early to judge.
Sources (8)
- Earnings release, Q3 FY2026 (8-K Ex. 99.1)
- Earnings release, Q4 FY2025 and full year 2025 (8-K Ex. 99.1)
- Form 10-Q for Q3 FY2026 (ended Sep 30, 2026)
- Form 10-Q for Q3 FY2025 (ended Sep 30, 2025)
- Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
- Form 10-Q for Q1 FY2026 (ended Mar 31, 2026)
- Earnings release, Q1 FY2026 (8-K Ex. 99.1)
- Earnings release, Q2 FY2026 (8-K Ex. 99.1)
18The company's own measures (non-GAAP)
18The company's own measures · FY2025, Q1 FY2026 to Q3 FY2026
What do Merck's own measures show?
Official (GAAP): Diluted EPS, FY2025
$7.28
Company's own measure: Non-GAAP EPS, FY2025
$8.98
Merck leaves out acquisition- and divestiture-related costs, restructuring costs and gains or losses on equity investments. It keeps charges for buying or licensing drug programs, $0.20 a share in FY2025.
Official (GAAP): Diluted EPS, Q1 FY2026
−$1.72
Company's own measure: Non-GAAP EPS, Q1 FY2026
−$1.28
Includes the Cidara charge of $3.62 a share, which Merck does not leave out.
Official (GAAP): Diluted EPS, Q2 FY2026
−$0.54
Company's own measure: Non-GAAP EPS, Q2 FY2026
−$0.13
Includes the Terns charge of $2.31 a share.
Official (GAAP): Net income, Q3 FY2026
$5.1B
Company's own measure: Non-GAAP net income, Q3 FY2026
$6.2B
Same exclusions. It keeps the $400 million SciBrunch license charge.
Official (GAAP): Diluted EPS, Q3 FY2026
$2.04
Company's own measure: Non-GAAP EPS, Q3 FY2026
$2.49
On Oct 29, 2026 Merck said it expects FY2026 non-GAAPThe company's own "adjusted" numbers, not the official (GAAP) ones. Always read them next to the official figure. Learn more EPS of $2.77 to $2.82, including charges of $3.62 for Cidara, $2.31 for Terns and $0.12 for SciBrunch. It gives no GAAP EPS guidance.
These are the company's own measures, defined by the company. They are not comparable across companies, and they are not added together. Each sits beside the nearest official (GAAP) figure.
Learn: Non-GAAP measures: what a company's "adjusted" numbers leave out
19Financial strength and debt
19Financial strength · Sep 30, 2026
How much debt does Merck have?
- Total debt$53.8B
- Cash and investments$9.6B
- Net debt (debt minus cash)$44.2B
- Net worth (shareholders' money)$44.9B
- Debt to equity
- 1.2×
- $ of debt for every $1 of shareholders' money
- Net debt is total debt minus cash and cash equivalents (Cityfort calculation from the Q3 FY2026 10-Q). Debt excludes $1.2 billion of operating lease liabilities at Dec 31, 2025.
- Total debt rose from $33.1 billion at the end of FY2021 to $49.3 billion at the end of FY2025, after the Verona Pharma deal. It reached $53.8 billion at Sep 30, 2026.
- Merck states that total debt was 40.5% of total liabilities and equity at Sep 30, 2026, against 36.0% at Dec 31, 2025.
- In May 2026 Merck sold $6.0 billion of notes due 2028 to 2056 and used the money to repay a bridge loan taken for the Terns deal.
- Net worth here is total equity: $44.9 billion at Sep 30, 2026, down from $52.7 billion at Dec 31, 2025. Merck had 2026 net losses and paid dividends and bought back shares.
Sources (6)
20Who owns it
20Who owns it · ownership as of Feb 28, 2026
Who owns Merck?
- Officers and directors (as a group), shares
- 0.2%
Share classes
Holders of 5% or more
From the company's proxy statement (DEF 14A), later Schedule 13G filings and the share counts on its latest annual or quarterly report. Each holder row shows the date of its own filing.
Learn: How to read a proxy statement (DEF 14A): Nvidia's 2026 proxy · Form 4 insider filings: who files, the codes and the footnotes
21What it does with profit
21What it does with profit
What does Merck do with its profit?
Dividend per share
$3.28FY2025
Dividend paid for each share, by financial year.
$ per share
See the numbers
Buyback · Dec 31, 2025
Bought about 59 million of its own shares for $5.1 billion in 2025. This was under a $10 billion authorization from January 2025 with no time limit, and $7.3 billion remained at Dec 31, 2025.
$5.1B
Buyback · Sep 30, 2026
Bought $2.3 billion of its own shares in the first nine months of 2026.
$2.3B
Money raised · Dec 31, 2025
Issued $13.9 billion of debt in 2025, the year it bought Verona Pharma for $10.0 billion net of cash.
$13.9B
Money raised · May 22, 2026
Completed a $6.0 billion offering of seven series of senior notes due 2028 to 2056, to repay the bridge loan used for the Terns deal.
$6.0B
22Governance signals
22Governance signals
What do Merck's governance filings show?
- Auditor
- PricewaterhouseCoopers LLP, since 2002
- Auditor changes
- None in the period covered
- Audit qualifications
- None reported
- Related-party dealings
- Merck's 2026 proxy says its Governance Committee found no transactions in 2025 that require disclosure as related person transactions.
- Credit rating
- Moody's and S&P (expected ratings of the May 2026 notes, per Merck's pricing term sheet) Aa3 and A+ (Stable), May 18, 2026
A credit rating describes the company's ability to repay debt. It is not a rating of the share.
Flags to know about
other
Chairman and CEO are one person
Robert M. Davis is Chairman, CEO and President. Thomas H. Glocer is independent Lead Director.
other · Nov 4, 2026
Securities class action over Gardasil in China
A putative class action, Cronin v. Merck, alleges that Merck made materially false and misleading statements about demand for Gardasil in China. It covers buyers of Merck stock from Oct 26, 2023 to Feb 3, 2025. The court scheduled argument on Merck's motion to dismiss for Dec 14, 2026.
disclosure
No sales by customer, operating income line or product profit
Merck gives no share of sales by customer, no operating income line and no profit by product.
other · Oct 13, 2026
Pay vote and a new director
At the May 26, 2026 annual meeting, 1,730.2 million shares voted for executive pay and 109.3 million against. Paul J. Diaz joined the board on Nov 1, 2026.
other
Insider share rules
Merck's policy bars directors and management-level employees from hedging its stock or using it as collateral for loans.
Sources (6)
- Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
- Proxy statement (DEF 14A) for the 2026 annual meeting
- Pricing term sheet (FWP) for $6.0 billion senior notes, May 18, 2026
- Form 10-Q for Q3 FY2026 (ended Sep 30, 2026)
- Form 8-K Item 5.07, 2026 annual meeting vote results
- Form 8-K Item 5.02, Paul J. Diaz elected a director
23What the market paid
23What the market paid · price as of Nov 5, 2026
What did the market pay for Merck on Nov 5, 2026?
Price as of Nov 5, 2026 (shown for education; prices change daily).
Price as of Nov 5, 2026: Merck closed at $146.94, from Nasdaq's historical price table; Merck's shares are listed on the NYSE. The market value of about $362.2 billion (Cityfort calculation from the Nov 5, 2026 closing price and the Q3 FY2026 10-Q) uses the 2,465.2 million shares on the 10-Q cover (Oct 31, 2026). P/E is price ÷ earnings per share: 20.2 on FY2025 diluted EPS of $7.28. On $0.98 for the four quarters to Q3 FY2026 it is 149.9, because 2026 earnings include the Cidara and Terns charges (Cityfort calculation from the FY2025 10-K and Q3 FY2026 10-Q). Merck's $0.85 quarterly dividend is $3.40 over four quarters, or 2.31% of that price.
- Share price
- $146.94
- Market value (market cap)
- $362.2B
- P/E
- 20.2×
More price-based ratios · as of Nov 5, 2026
Each ratio divides a number from the company's filings by the market value or share price on Nov 5, 2026. Prices change daily, so these ratios do too.
Price to sales (P/S)
5.4×
$362.2B market value ÷ $67.4B revenue (four quarters to Sep 30, 2026) = 5.4×
Cityfort calculation from the Nov 5, 2026 closing price and the Q4 FY2025 to Q3 FY2026 10-Ks and 10-Qs. Source: Nasdaq historical quotes for MRK (closing price Nov 5, 2026); Form 10-Q for Q3 FY2026 (ended Sep 30, 2026); Form 10-K for fiscal year 2025 (ended Dec 31, 2025) and 7 more
How price ratios workDividend yield
2.23%
$3.28 dividends per share (FY2025) ÷ $146.94 share price = 2.23%
Cityfort calculation from the FY2025 10-K and the Nov 5, 2026 closing price. Source: Nasdaq historical quotes for MRK (closing price Nov 5, 2026); Form 10-Q for Q3 FY2026 (ended Sep 30, 2026); Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
What dividend yield meansFree cash flow yield
3.4%
$12.4B free cash flow (FY2025) ÷ $362.2B market value = 3.4%
Cityfort calculation from the FY2025 10-K and the Nov 5, 2026 closing price. Source: Nasdaq historical quotes for MRK (closing price Nov 5, 2026); Form 10-Q for Q3 FY2026 (ended Sep 30, 2026); Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
What free cash flow means
Shares used for the market value: 2,465.25 million ($146.94 × 2,465.25 million shares ≈ $362.2B). Source: Form 10-Q for Q3 FY2026 (ended Sep 30, 2026); Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
Source: Nasdaq historical quotes for MRK (closing price Nov 5, 2026); Form 10-Q for Q3 FY2026 (ended Sep 30, 2026); Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
Sources (10)
- Nasdaq historical quotes for MRK (closing price Nov 5, 2026)
- Form 10-Q for Q3 FY2026 (ended Sep 30, 2026)
- Form 10-K for fiscal year 2025 (ended Dec 31, 2025)
- Earnings release, Q4 FY2025 and full year 2025 (8-K Ex. 99.1)
- Financial tables, Q4 FY2025 (8-K Ex. 99.2)
- Earnings release, Q1 FY2026 (8-K Ex. 99.1)
- Form 10-Q for Q1 FY2026 (ended Mar 31, 2026)
- Earnings release, Q2 FY2026 (8-K Ex. 99.1)
- Form 10-Q for Q2 FY2026 (ended Jun 30, 2026)
- Earnings release, Q3 FY2026 (8-K Ex. 99.1)
24How it got here
24How it got here
How did Merck get here?
2021
Business-model change
Organon spin-off
On Jun 2, 2021 Merck spun off women's health, biosimilars and established brands into Organon & Co.
2021
Milestone
Acceleron bought
Merck paid $11.2 billion, net of cash, for Acceleron and $1.6 billion for Pandion.
2023
Crisis
Profit falls on bought research
Merck bought Prometheus and Imago. Net income fell to $365 million after $11.4 billion of charges for research asset acquisitions.
2024
Milestone
Winrevair and Capvaxive launch
Both had first sales in FY2024: $419 million and $97 million.
2025
Crisis
Gardasil shipments to China suspended
Merck suspended shipments in February 2025, citing low demand and high stock in the channel. China sales fell to $1.9 billion in FY2025.
2025
Business-model change
Verona Pharma and Keytruda Qlex
Merck bought Verona Pharma, maker of the COPD medicine Ohtuvayre, in October 2025. Keytruda Qlex, injected under the skin, had first sales in Q3 FY2025.
2026
Crisis
Two deals, two quarterly losses
Merck bought Cidara in January for $9.2 billion and Terns in May for $6.8 billion. Their charges led to net losses in Q1 and Q2 FY2026.
25Sources and changes
Where every number on this page comes from
Sources (27 documents)
- S1Form 10-K for fiscal year 2025 (ended Dec 31, 2025) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 24, 2026
- S3Form 10-K for fiscal year 2023 · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 26, 2024
- S4Form 10-K for fiscal year 2022 · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 24, 2023
- S5Form 10-K for fiscal year 2021 · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 25, 2022
- S6Form 10-Q for Q3 FY2026 (ended Sep 30, 2026) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Nov 4, 2026
- S7Form 10-Q for Q2 FY2026 (ended Jun 30, 2026) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Aug 7, 2026
- S8Form 10-Q for Q1 FY2026 (ended Mar 31, 2026) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · May 4, 2026
- S9Form 10-Q for Q3 FY2025 (ended Sep 30, 2025) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Nov 5, 2025
- S10Form 10-Q for Q2 FY2025 (ended Jun 30, 2025) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Aug 5, 2025
- S11Form 10-Q for Q1 FY2025 (ended Mar 31, 2025) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · May 2, 2025
- S12Earnings release, Q3 FY2026 (8-K Ex. 99.1) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Oct 29, 2026
- S14Earnings release, Q2 FY2026 (8-K Ex. 99.1) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Aug 4, 2026
- S15Earnings release, Q1 FY2026 (8-K Ex. 99.1) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Apr 30, 2026
- S16Earnings release, Q4 FY2025 and full year 2025 (8-K Ex. 99.1) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 3, 2026
- S17Financial tables, Q4 FY2025 (8-K Ex. 99.2) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 3, 2026
- S18Earnings release, Q3 FY2025 (8-K Ex. 99.1) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Oct 30, 2025
- S19Earnings release, Q2 FY2025 (8-K Ex. 99.1) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Jul 29, 2025
- S20Earnings release, Q1 FY2025 (8-K Ex. 99.1) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Apr 24, 2025
- S21Earnings release, Q4 FY2024 and full year 2024 (8-K Ex. 99.1) · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Feb 4, 2025
- S22Proxy statement (DEF 14A) for the 2026 annual meeting · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Apr 8, 2026
- S23Schedule 13G, Vanguard Capital Management, event Mar 31, 2026 · Vanguard Capital Management (SEC EDGAR) · Tier 1: company or exchange filing · Apr 30, 2026
- S24Schedule 13G/A, The Vanguard Group, event Mar 13, 2026 · The Vanguard Group (SEC EDGAR) · Tier 1: company or exchange filing · Mar 27, 2026
- S25Form 8-K Item 5.07, 2026 annual meeting vote results · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · May 28, 2026
- S26Pricing term sheet (FWP) for $6.0 billion senior notes, May 18, 2026 · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · May 19, 2026
- S27Form 8-K Item 8.01, senior notes offering closed May 22, 2026 · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · May 22, 2026
- S28Form 8-K Item 5.02, Paul J. Diaz elected a director · Merck & Co., Inc. (SEC EDGAR) · Tier 1: company or exchange filing · Oct 13, 2026
- S29Nasdaq historical quotes for MRK (closing price Nov 5, 2026) · Nasdaq · Tier 1: company or exchange filing · Nov 5, 2026
Changes to this page (v1 · Nov 6, 2026)
- v1 · Nov 6, 2026First version. (first version)
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