Stock Analysis on Net
Stock Analysis on Net

AbbVie Inc. (NYSE:ABBV)

Common-Size Income Statement

AbbVie Inc., common-size consolidated income statement

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12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Net revenues 100.00 100.00 100.00 100.00 100.00
Cost of products sold -29.76 -30.01 -37.58 -30.00 -31.04
Gross margin 70.24% 69.99% 62.42% 70.00% 68.96%
Selling, general and administrative -22.91 -26.19 -23.70 -26.29 -21.97
Research and development -14.87 -22.71 -14.13 -11.21 -12.61
Acquired IPR&D and milestones -8.20 -4.89 -1.43 -1.20 -1.71
Other operating income (expense), net 0.39 0.01 0.33 -0.10 -0.77
Operating earnings 24.65% 16.22% 23.49% 31.21% 31.89%
Interest expense -4.73 -4.98 -4.09 -3.84 -4.31
Interest income 0.43 1.15 0.99 0.32 0.07
Interest expense, net -4.30% -3.83% -3.10% -3.52% -4.24%
Net foreign exchange loss -0.09 -0.04 -0.27 -0.25 -0.09
Other expense, net -9.47 -5.75 -8.61 -4.22 -4.45
Earnings before income tax expense 10.79% 6.60% 11.51% 23.21% 23.11%
Income tax (expense) benefit -3.87 1.01 -2.54 -2.81 -2.56
Net earnings 6.92% 7.61% 8.97% 20.40% 20.55%
Net earnings attributable to noncontrolling interest -0.01 -0.01 -0.02 -0.02 -0.01
Net earnings attributable to AbbVie Inc. 6.91% 7.59% 8.95% 20.39% 20.54%

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 common-size income statement reveals significant fluctuations in profitability and expense management over the five-year period. Net revenues are consistently represented as 100%, allowing for a clear comparison of expense and earnings components as percentages of sales. A notable trend is the volatility in operating performance, driven by changes in both cost of goods sold and operating expenses.

Gross Profitability
Gross margin initially improved from 68.96% in 2021 to 70.00% in 2022, indicating enhanced production efficiency or pricing power. However, it declined substantially to 62.42% in 2023, before partially recovering to 69.99% in 2024 and 70.24% in 2025. This suggests potential challenges in managing production costs in 2023, followed by corrective actions or favorable shifts in the cost structure.
Operating Expenses
Selling, general, and administrative expenses increased from 21.97% to 26.29% of net revenues between 2021 and 2022, then decreased to 23.70% in 2023, increased again to 26.19% in 2024, and decreased to 22.91% in 2025. This indicates fluctuating control over these expenses. Research and development expenses also exhibited an increasing trend, rising from 12.61% in 2021 to 22.71% in 2024, before decreasing to 14.87% in 2025. The most substantial increase was observed in acquired IPR&D and milestones, growing from 1.71% to 8.20% over the period, suggesting increased reliance on external innovation or larger acquisition-related costs. These expense increases collectively contributed to the decline in operating earnings.
Operating Performance
Operating earnings as a percentage of net revenues decreased significantly from 31.89% in 2021 to 16.22% in 2024, before recovering somewhat to 24.65% in 2025. This decline reflects the combined impact of increased cost of products sold and operating expenses. The fluctuations in other operating income (expense), net, while relatively small, shifted from negative to positive, contributing marginally to the overall operating performance.
Non-Operating Items & Net Earnings
Interest expense remained relatively stable as a percentage of net revenues, fluctuating between 3.52% and 4.98%. Interest income showed some volatility, peaking at 1.15% in 2024. Other expense, net, experienced a significant increase in 2023 (8.61%) and 2025 (9.47%), negatively impacting earnings before income tax. The income tax rate also fluctuated considerably, moving from an expense of 2.56% to a benefit of 1.01% in 2024, and then back to an expense of 3.87% in 2025. Consequently, net earnings declined from 20.55% in 2021 to 6.92% in 2025, demonstrating a substantial reduction in overall profitability.

In summary, the period was characterized by increasing expenses, particularly in research and development and acquired IPR&D, coupled with fluctuations in the cost of products sold and other expenses. These factors led to a significant decrease in net earnings as a percentage of net revenues, despite some recovery in operating performance in the final year of the analyzed period.

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