Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Amgen Inc., profitability ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The profitability metrics demonstrate a period of fluctuation between 2021 and 2025. Initial years showed strong performance, followed by a decline in 2023, with a partial recovery observed in 2024 and 2025. A detailed examination of individual ratios reveals specific trends and potential areas of concern.
- Gross Profit Margin
- The gross profit margin exhibited an initial increase from 73.44% in 2021 to 74.17% in 2022. However, a significant decrease to 68.60% occurred in 2023, followed by a further decline to 59.85% in 2024. A partial recovery to 65.75% was noted in 2025, though it did not reach the levels observed in the earlier period. This suggests potential pressures on cost of goods sold or pricing strategies.
- Operating Profit Margin
- The operating profit margin increased substantially from 31.44% in 2021 to 38.57% in 2022. A subsequent decrease to 29.35% in 2023 was followed by a more pronounced drop to 22.66% in 2024. The metric showed improvement in 2025, rising to 25.83%, but remained below the 2022 peak. This indicates increasing operating expenses relative to revenue, or a combination of factors affecting both gross profit and operating expenses.
- Net Profit Margin
- The net profit margin followed a similar pattern to the operating profit margin, increasing from 24.25% in 2021 to 26.42% in 2022, decreasing to 24.96% in 2023, and then experiencing a substantial decline to 12.77% in 2024. A notable recovery occurred in 2025, with the margin increasing to 21.94%, though still below the levels seen in 2021 and 2022. This suggests that factors beyond operating income, such as interest expense or taxes, may have contributed to the 2024 decline.
- Return on Equity (ROE)
- Return on equity demonstrated significant volatility. It increased dramatically from 87.96% in 2021 to 178.97% in 2022, before decreasing to 107.78% in 2023 and a substantial drop to 69.59% in 2024. A recovery to 89.06% was observed in 2025. The high volatility suggests significant changes in net income and/or shareholder equity.
- Return on Assets (ROA)
- Return on assets showed a more moderate, but still noticeable, trend. It increased slightly from 9.63% in 2021 to 10.06% in 2022, then decreased to 6.91% in 2023 and further to 4.45% in 2024. A recovery to 8.51% was observed in 2025. This indicates a declining ability to generate profit from its assets, followed by a partial improvement.
Overall, the period between 2021 and 2025 was characterized by initial strength in profitability, followed by a marked decline in 2023 and 2024, and a partial recovery in 2025. The consistent downward trend in gross and operating margins, coupled with the volatility in ROE and ROA, warrants further investigation into the underlying drivers of these changes.
Return on Sales
Return on Investment
Gross Profit Margin
Amgen Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit from product sales | 23,111) | 19,168) | 18,459) | 18,395) | 17,843) | |
| Product sales | 35,148) | 32,026) | 26,910) | 24,801) | 24,297) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 65.75% | 59.85% | 68.60% | 74.17% | 73.44% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 70.24% | 69.99% | 62.42% | 70.00% | 68.96% | |
| Bristol-Myers Squibb Co. | 71.08% | 71.08% | 76.24% | 78.04% | 78.57% | |
| Danaher Corp. | 59.11% | 59.50% | 58.74% | 60.21% | 60.95% | |
| Eli Lilly & Co. | 83.04% | 81.31% | 79.25% | 76.77% | 74.18% | |
| Gilead Sciences Inc. | 78.44% | 78.15% | 75.87% | 79.03% | 75.56% | |
| Johnson & Johnson | 67.88% | 69.07% | 68.82% | 67.26% | 68.16% | |
| Merck & Co. Inc. | 74.80% | 76.32% | 73.17% | 70.63% | 72.02% | |
| Pfizer Inc. | 74.33% | 71.94% | 58.10% | 66.05% | 62.48% | |
| Regeneron Pharmaceuticals Inc. | 85.35% | 86.13% | 86.16% | 87.18% | 84.83% | |
| Thermo Fisher Scientific Inc. | 40.93% | 41.28% | 39.90% | 42.24% | 50.08% | |
| Vertex Pharmaceuticals Inc. | 86.24% | 86.11% | 87.21% | 87.90% | 88.06% | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Gross profit margin = 100 × Gross profit from product sales ÷ Product sales
= 100 × 23,111 ÷ 35,148 = 65.75%
2 Click competitor name to see calculations.
The gross profit margin exhibited considerable fluctuation over the five-year period. While initially demonstrating improvement, a significant decline was observed before a partial recovery.
- Gross Profit from Product Sales
- Gross profit from product sales generally increased throughout the period, moving from US$17,843 million in 2021 to US$23,111 million in 2025. The rate of increase was not consistent, with a notably larger jump between 2024 and 2025.
- Product Sales
- Product sales also showed an upward trend, rising from US$24,297 million in 2021 to US$35,148 million in 2025. Similar to gross profit, the increase was not linear, with a substantial rise between 2023 and 2024, and again between 2024 and 2025.
- Gross Profit Margin
- The gross profit margin began at 73.44% in 2021 and increased to 74.17% in 2022. A marked decrease was then observed, falling to 68.60% in 2023 and further to 59.85% in 2024. The margin partially recovered in 2025, reaching 65.75%. This suggests increasing costs of goods sold relative to product sales between 2022 and 2024, followed by some stabilization in 2025. The largest single-year decline in the gross profit margin occurred between 2023 and 2024.
The divergence between the increasing gross profit from product sales and the fluctuating gross profit margin indicates that while revenue is growing, the cost of producing those sales is also impacting profitability. The recovery in margin during 2025, while positive, does not fully offset the earlier declines.
Operating Profit Margin
Amgen Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 9,080) | 7,258) | 7,897) | 9,566) | 7,639) | |
| Product sales | 35,148) | 32,026) | 26,910) | 24,801) | 24,297) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 25.83% | 22.66% | 29.35% | 38.57% | 31.44% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 24.65% | 16.22% | 23.49% | 31.21% | 31.89% | |
| Bristol-Myers Squibb Co. | 20.75% | -15.50% | 16.18% | 17.96% | 15.91% | |
| Danaher Corp. | 19.09% | 20.37% | 21.77% | 27.61% | 25.35% | |
| Eli Lilly & Co. | 40.35% | 28.64% | 18.92% | 24.97% | 22.45% | |
| Gilead Sciences Inc. | 34.66% | 5.81% | 28.24% | 27.17% | 36.72% | |
| Johnson & Johnson | 26.85% | 23.42% | 24.90% | 24.63% | 24.95% | |
| Merck & Co. Inc. | 32.64% | 31.03% | 3.92% | 30.27% | 25.74% | |
| Pfizer Inc. | 22.76% | 19.51% | 2.15% | 35.37% | 24.70% | |
| Regeneron Pharmaceuticals Inc. | 24.95% | 28.10% | 30.85% | 38.93% | 55.67% | |
| Thermo Fisher Scientific Inc. | 17.38% | 17.11% | 16.00% | 18.69% | 25.57% | |
| Vertex Pharmaceuticals Inc. | 34.77% | -2.11% | 38.83% | 48.23% | 36.73% | |
| Operating Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 27.24% | 17.84% | 18.01% | 28.59% | 26.98% | |
| Operating Profit Margin, Industry | ||||||
| Health Care | 15.09% | 12.50% | 12.79% | 18.74% | 18.04% | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Operating profit margin = 100 × Operating income ÷ Product sales
= 100 × 9,080 ÷ 35,148 = 25.83%
2 Click competitor name to see calculations.
The operating profit margin exhibited considerable fluctuation over the five-year period. Initial values demonstrated strong profitability, followed by a decline and subsequent recovery.
- Operating Profit Margin Trend
- The operating profit margin began at 31.44% in 2021, increasing substantially to 38.57% in 2022. This represents a significant improvement in operational efficiency or pricing power. However, a marked decrease was observed in 2023, with the margin falling to 29.35%. This decline continued into 2024, reaching a low of 22.66%. The most recent year, 2025, shows a partial recovery, with the operating profit margin rising to 25.83%.
The movement in operating profit margin does not appear directly correlated with product sales. While product sales increased consistently throughout the period, the operating profit margin did not follow the same trajectory. Product sales increased from US$24,297 million in 2021 to US$35,148 million in 2025, yet the operating profit margin peaked in 2022 before declining.
- Operating Income and Margin Relationship
- Operating income increased from US$7,639 million in 2021 to US$9,566 million in 2022, aligning with the increase in the operating profit margin. However, despite continued growth in product sales, operating income decreased to US$7,897 million in 2023 and further to US$7,258 million in 2024. The subsequent increase in operating income to US$9,080 million in 2025 suggests a potential stabilization or improvement in cost management or pricing strategies, though not a full return to the 2022 levels of profitability.
The fluctuations in operating profit margin suggest potential shifts in the cost structure, pricing environment, or a combination of both. Further investigation into the underlying drivers of these changes would be necessary to fully understand the observed trends.
Net Profit Margin
Amgen Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 7,711) | 4,090) | 6,717) | 6,552) | 5,893) | |
| Product sales | 35,148) | 32,026) | 26,910) | 24,801) | 24,297) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 21.94% | 12.77% | 24.96% | 26.42% | 24.25% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 6.91% | 7.59% | 8.95% | 20.39% | 20.54% | |
| Bristol-Myers Squibb Co. | 14.64% | -18.53% | 17.83% | 13.71% | 15.08% | |
| Danaher Corp. | 14.71% | 16.33% | 19.94% | 22.91% | 21.84% | |
| Eli Lilly & Co. | 31.67% | 23.51% | 15.36% | 21.88% | 19.71% | |
| Gilead Sciences Inc. | 29.43% | 1.68% | 21.03% | 17.02% | 23.05% | |
| Johnson & Johnson | 28.46% | 15.84% | 41.28% | 18.90% | 22.26% | |
| Merck & Co. Inc. | 28.08% | 26.68% | 0.61% | 24.49% | 26.79% | |
| Pfizer Inc. | 12.42% | 12.62% | 3.56% | 31.01% | 26.76% | |
| Regeneron Pharmaceuticals Inc. | 31.41% | 31.07% | 30.14% | 35.64% | 50.25% | |
| Thermo Fisher Scientific Inc. | 15.05% | 14.77% | 13.99% | 15.47% | 19.70% | |
| Vertex Pharmaceuticals Inc. | 32.94% | -4.86% | 36.68% | 37.20% | 30.92% | |
| Net Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 21.54% | 12.30% | 17.95% | 22.55% | 23.38% | |
| Net Profit Margin, Industry | ||||||
| Health Care | 11.79% | 8.84% | 11.49% | 14.65% | 15.24% | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net profit margin = 100 × Net income ÷ Product sales
= 100 × 7,711 ÷ 35,148 = 21.94%
2 Click competitor name to see calculations.
The net profit margin exhibited fluctuations over the five-year period. Initial increases were followed by a significant decline and subsequent recovery.
- Overall Trend
- The net profit margin demonstrated an initial upward trajectory from 2021 to 2022, peaking at 26.42%. This was followed by a substantial decrease in 2024, reaching a low of 12.77%. The final year observed, 2025, showed a considerable recovery, with the margin increasing to 21.94%.
- Year-over-Year Changes
- From 2021 to 2022, the net profit margin increased by 2.17 percentage points. A subsequent decrease of 1.46 percentage points occurred between 2022 and 2023. The most significant change was observed between 2023 and 2024, with a decline of 12.19 percentage points. Finally, a substantial increase of 9.17 percentage points was recorded from 2024 to 2025.
- Relationship to Product Sales
- Product sales generally increased throughout the period. However, the net profit margin did not consistently follow this trend. While product sales increased from 2021 to 2022, the net profit margin also increased. Despite continued growth in product sales from 2022 to 2023, the net profit margin decreased. The largest increase in product sales occurred between 2023 and 2024, but this coincided with the largest decrease in net profit margin. The final period, 2024 to 2025, saw continued product sales growth alongside a significant improvement in net profit margin.
- Key Observations
- The considerable decline in net profit margin in 2024, despite increasing product sales, suggests potential issues with cost control or increased operating expenses during that year. The recovery in 2025 indicates that these issues may have been addressed or were temporary in nature. The relationship between product sales and net profit margin is not consistently positive, indicating that factors beyond revenue generation significantly influence profitability.
Return on Equity (ROE)
Amgen Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 7,711) | 4,090) | 6,717) | 6,552) | 5,893) | |
| Stockholders’ equity | 8,658) | 5,877) | 6,232) | 3,661) | 6,700) | |
| Profitability Ratio | ||||||
| ROE1 | 89.06% | 69.59% | 107.78% | 178.97% | 87.96% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| AbbVie Inc. | — | 128.66% | 46.94% | 68.60% | 74.91% | |
| Bristol-Myers Squibb Co. | 38.19% | -54.78% | 27.27% | 20.37% | 19.46% | |
| Danaher Corp. | 6.88% | 7.87% | 8.91% | 14.39% | 14.24% | |
| Eli Lilly & Co. | 77.78% | 74.62% | 48.65% | 58.64% | 62.16% | |
| Gilead Sciences Inc. | 37.48% | 2.48% | 24.81% | 21.62% | 29.55% | |
| Johnson & Johnson | 32.87% | 19.68% | 51.11% | 23.36% | 28.20% | |
| Merck & Co. Inc. | 34.70% | 36.96% | 0.97% | 31.57% | 34.17% | |
| Pfizer Inc. | 8.99% | 9.11% | 2.38% | 32.79% | 28.47% | |
| Regeneron Pharmaceuticals Inc. | 14.41% | 15.03% | 15.22% | 19.14% | 43.03% | |
| Thermo Fisher Scientific Inc. | 12.55% | 12.78% | 12.83% | 15.80% | 18.94% | |
| Vertex Pharmaceuticals Inc. | 21.18% | -3.26% | 20.59% | 23.88% | 23.19% | |
| ROE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 26.63% | 15.57% | 20.65% | 27.99% | 29.75% | |
| ROE, Industry | ||||||
| Health Care | 21.47% | 15.74% | 19.40% | 24.82% | 25.44% | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 7,711 ÷ 8,658 = 89.06%
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited significant fluctuations over the five-year period. Net income and stockholders’ equity both influenced the observed trends in ROE, with substantial changes occurring in both metrics.
- Overall Trend
- ROE began at 87.96% in 2021, increased dramatically to 178.97% in 2022, then decreased over the subsequent two years before rising again in 2025 to 89.06%. This indicates a period of high volatility in profitability relative to equity.
- 2021 to 2022
- A substantial increase in ROE was observed from 2021 to 2022. This was driven by a moderate increase in net income (from US$5,893 million to US$6,552 million) coupled with a significant decrease in stockholders’ equity (from US$6,700 million to US$3,661 million). The decrease in equity had a disproportionately large positive impact on the ROE calculation.
- 2022 to 2023
- ROE decreased from 178.97% in 2022 to 107.78% in 2023. This decline occurred despite a slight increase in net income (from US$6,552 million to US$6,717 million). The primary driver of the decrease was a substantial increase in stockholders’ equity (from US$3,661 million to US$6,232 million), which offset the gains in net income.
- 2023 to 2024
- A further decrease in ROE was noted, falling to 69.59% in 2024. This decrease was primarily attributable to a significant decline in net income (from US$6,717 million to US$4,090 million). Stockholders’ equity experienced a smaller decrease, from US$6,232 million to US$5,877 million, which partially mitigated the impact of the lower net income.
- 2024 to 2025
- ROE increased to 89.06% in 2025. This increase was driven by a substantial increase in net income (from US$4,090 million to US$7,711 million) and a corresponding increase in stockholders’ equity (from US$5,877 million to US$8,658 million). The increase in net income was the more significant driver of the ROE improvement.
The volatility in ROE suggests that the company’s profitability relative to equity is sensitive to changes in both net income and equity levels. Further investigation into the factors driving these fluctuations in both net income and stockholders’ equity is warranted.
Return on Assets (ROA)
Amgen Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 7,711) | 4,090) | 6,717) | 6,552) | 5,893) | |
| Total assets | 90,586) | 91,839) | 97,154) | 65,121) | 61,165) | |
| Profitability Ratio | ||||||
| ROA1 | 8.51% | 4.45% | 6.91% | 10.06% | 9.63% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| AbbVie Inc. | 3.15% | 3.17% | 3.61% | 8.53% | 7.88% | |
| Bristol-Myers Squibb Co. | 7.83% | -9.66% | 8.43% | 6.53% | 6.40% | |
| Danaher Corp. | 4.33% | 5.03% | 5.64% | 8.55% | 7.73% | |
| Eli Lilly & Co. | 18.35% | 13.45% | 8.19% | 12.62% | 11.44% | |
| Gilead Sciences Inc. | 14.42% | 0.81% | 9.12% | 7.27% | 9.16% | |
| Johnson & Johnson | 13.46% | 7.81% | 20.98% | 9.57% | 11.47% | |
| Merck & Co. Inc. | 13.34% | 14.62% | 0.34% | 13.30% | 12.35% | |
| Pfizer Inc. | 3.73% | 3.76% | 0.94% | 15.91% | 12.11% | |
| Regeneron Pharmaceuticals Inc. | 11.11% | 11.69% | 11.95% | 14.85% | 31.75% | |
| Thermo Fisher Scientific Inc. | 6.08% | 6.51% | 6.07% | 7.15% | 8.12% | |
| Vertex Pharmaceuticals Inc. | 15.42% | -2.38% | 15.92% | 18.30% | 17.44% | |
| ROA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 9.28% | 5.30% | 7.25% | 10.67% | 10.42% | |
| ROA, Industry | ||||||
| Health Care | 7.89% | 5.73% | 7.19% | 9.66% | 9.46% | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 7,711 ÷ 90,586 = 8.51%
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited fluctuating performance over the five-year period. Initial increases were followed by a significant decline and subsequent recovery.
- Overall Trend
- The ROA demonstrated an initial upward trajectory from 2021 to 2022, peaking at 10.06%. This was followed by a substantial decrease in 2023 and 2024, reaching a low of 4.45% in 2024. A notable recovery occurred in 2025, with the ROA increasing to 8.51%.
- Year-over-Year Changes
- From 2021 to 2022, the ROA increased by 0.43 percentage points, indicating improved profitability relative to asset utilization. The period from 2022 to 2023 saw a decrease of 3.15 percentage points, suggesting a decline in efficiency. The most significant decrease occurred between 2023 and 2024, with a drop of 2.46 percentage points. Finally, the ROA increased by 4.06 percentage points from 2024 to 2025.
- Relationship to Net Income and Total Assets
- The increase in ROA from 2021 to 2022 coincided with increases in both net income and total assets. However, the larger increase in total assets from 2022 to 2023, coupled with a modest increase in net income, contributed to the decline in ROA. The substantial decrease in net income in 2024, despite a slight decrease in total assets, resulted in the lowest ROA during the observed period. The strong recovery in ROA in 2025 was driven by a significant increase in net income, while total assets remained relatively stable.
The fluctuations in ROA suggest a sensitivity to changes in both profitability and asset management. The company’s ability to generate income from its assets varied considerably over the period, with 2024 representing a period of notably lower efficiency.