Gilead Sciences Inc. (NASDAQ:GILD)

Overall inventory levels exhibited a general increasing trend from 2021 to 2025. However, a closer examination of the components reveals differing patterns within raw materials, work in process, finished goods, and adjustments for long-term assets. The reported current inventories show a more volatile pattern, with an initial decrease followed by stabilization and a slight increase.

Raw Materials

Raw materials consistently increased from US$1,112 million in 2021 to US$1,414 million in 2025. This represents a cumulative increase of approximately 27.2% over the five-year period, indicating a potential increase in anticipated production needs or rising input costs. The growth appears relatively steady year-over-year.

Work in Process

Work in process inventory demonstrated a more significant fluctuation. It initially decreased from US$590 million in 2021 to US$577 million in 2022, before increasing substantially to US$847 million in 2023 and remaining constant in 2024. A further increase to US$1,306 million was observed in 2025. This suggests potential shifts in production cycles, bottlenecks, or strategic decisions to increase production staging. The substantial increase in 2023 and 2025 warrants further investigation.

Finished Goods

Finished goods inventory also showed a consistent upward trend, rising from US$1,032 million in 2021 to US$1,648 million in 2025. This represents a cumulative increase of approximately 59.7% over the period. This increase could be attributed to increased sales, production outpacing demand, or a deliberate strategy to build inventory buffers.

Total Inventories & Long-Term Asset Adjustment

Total inventories increased from US$2,734 million in 2021 to US$4,368 million in 2025, a cumulative increase of 60%. However, a corresponding increase was observed in the deduction for other long-term assets, moving from a reduction of US$1,116 million in 2021 to US$2,594 million in 2025. This suggests a growing portion of inventory is being classified as long-term, potentially due to obsolescence, strategic reserves, or changes in production planning horizons.

Current Inventories

Current inventories decreased from US$1,618 million in 2021 to US$1,507 million in 2022, then increased to US$1,787 million in 2023, decreased to US$1,710 million in 2024, and finally increased slightly to US$1,774 million in 2025. This volatility suggests a dynamic balance between production, sales, and inventory management practices. The relatively stable levels in the latter years indicate a potential stabilization of short-term inventory holdings.

The increasing trend in both total and finished goods inventories, coupled with the growing deduction for long-term assets, suggests a need for further analysis regarding inventory turnover, obsolescence risk, and the effectiveness of inventory management strategies.