Common-Size Income Statement
Quarterly Data
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Gilead Sciences Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
The common-size income statement reveals a business model characterized by high gross margins and significant volatility in operating income, primarily driven by non-recurring research and development costs and impairments. While core product profitability remains stable, the bottom line is periodically impacted by substantial strategic investments and write-downs.
- Gross Profitability and Cost of Sales
- Gross profit on product sales generally remains robust, typically fluctuating between 76% and 83% of product sales. However, periodic volatility is observed, most notably in December 2021, where gross profit dipped to 63.31% due to a spike in the cost of goods sold to 36.69%. Following this period, the gross margin stabilized and returned to the high 70% range through early 2026.
- Operating Expense Patterns
- Research and development (R&D) expenses consistently represent a significant portion of revenue, generally ranging from 15% to 23%. Selling, general, and administrative (SG&A) expenses show higher variability, frequently oscillating between 16% and 28%. The combined effect of these core operating expenses creates a consistent overhead burden, though the company demonstrates the ability to maintain positive operating income in most quarters.
- Impact of In-Process Research and Development (IPRD)
- The most significant volatility in the financial statements stems from acquired IPRD expenses and associated impairments. A critical anomaly occurred in March 2024, where acquired IPRD expenses reached 62.15% of product sales, coinciding with an impairment of 36.56%. These non-recurring items led to a severe operating loss of 65.02% and a net loss of 62.74% for that specific quarter. Other sporadic impairments in March 2022 and September 2024 further highlight the risk profile associated with the company's acquisition and development strategy.
- Non-Operating Items and Interest
- Interest expenses remain remarkably stable, consistently tracking between 3% and 4% of product sales. Other income and expenses are more erratic, with a notable positive spike in September 2025, where other income reached 7.76% of product sales, contributing to a peak net income of 41.55% in that same period.
- Net Income Trajectory
- Net income is highly sensitive to the aforementioned IPRD volatility. Excluding the severe contraction in early 2024, net income attributable to the company generally trends between 15% and 35%. A recovery phase is evident following the 2024 losses, with net income stabilizing around 27% to 29% by the first quarter of 2026.