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Merck & Co. Inc. (NYSE:MRK)

Common-Size Income Statement
Quarterly Data

Merck & Co. Inc., common-size consolidated income statement (quarterly data)

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3 months ended: Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021
Sales 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -26.46 -25.76 -33.85 -22.31 -22.50 -22.02 -24.50 -24.49 -23.24 -22.44 -26.74 -26.71 -26.76 -27.10 -28.06 -26.30 -28.89 -33.83 -28.64 -26.23 -27.22 -30.10
Gross profit 73.54% 74.24% 66.15% 77.69% 77.50% 77.98% 75.50% 75.51% 76.76% 77.56% 73.26% 73.29% 73.24% 72.90% 71.94% 73.70% 71.11% 66.17% 71.36% 73.77% 72.78% 69.90%
Selling, general and administrative -17.49 -16.58 -17.68 -15.24 -16.76 -16.43 -18.32 -16.40 -17.00 -15.74 -19.16 -15.78 -17.97 -17.11 -19.43 -16.85 -17.21 -14.61 -20.93 -17.76 -20.01 -20.58
Research and development -58.66 -77.32 -23.70 -24.51 -25.61 -23.32 -29.34 -35.19 -21.72 -25.31 -65.80 -20.72 -88.60 -29.52 -27.30 -29.41 -19.17 -16.20 -22.68 -18.59 -37.90 -22.70
Restructuring costs -0.91 -1.20 -1.30 -0.27 -3.54 -0.44 -0.32 -0.34 -0.50 -0.78 -1.74 -0.79 -1.00 -0.46 -0.35 -0.63 -0.97 -0.33 -1.29 -0.81 -0.72 -2.79
Operating income (loss) -3.52% -20.85% 23.48% 37.66% 31.58% 37.79% 27.52% 23.58% 37.54% 35.73% -13.44% 36.00% -34.34% 25.81% 24.87% 26.82% 33.75% 35.02% 26.45% 36.61% 14.16% 23.83%
Other income (expense), net -0.60 -0.85 -2.63 1.38 0.04 0.23 -0.83 0.97 -0.26 0.21 -0.54 -0.79 -1.14 -0.61 0.54 -2.87 -3.00 -4.45 2.46 3.42 0.90 4.28
Income (loss) from continuing operations before taxes -4.11% -21.70% 20.85% 39.04% 31.63% 38.01% 26.69% 24.55% 37.28% 35.94% -13.98% 35.21% -35.48% 25.20% 25.40% 23.95% 30.75% 30.57% 28.91% 40.03% 15.06% 28.11%
Taxes on income from continuing operations -3.94 -4.35 -2.79 -5.55 -3.61 -5.27 -2.73 -5.58 -3.38 -5.72 5.60 -5.45 -4.24 -5.69 -3.59 -2.21 -3.69 -3.48 -0.63 -5.28 -4.41 -2.24
Net income (loss) from continuing operations -8.05% -26.05% 18.07% 33.50% 28.01% 32.75% 23.96% 18.98% 33.89% 30.22% -8.38% 29.76% -39.72% 19.50% 21.81% 21.75% 27.06% 27.09% 28.28% 34.75% 10.65% 25.87%
Income from discontinued operations, net of taxes 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.46 0.00 2.91 4.08
Net income (loss) -8.05% -26.05% 18.07% 33.50% 28.01% 32.75% 23.96% 18.98% 33.89% 30.22% -8.38% 29.76% -39.72% 19.50% 21.81% 21.75% 27.06% 27.09% 27.82% 34.75% 13.56% 29.95%
Net (income) loss attributable to noncontrolling interests 0.01 0.02 0.00 -0.01 -0.01 -0.04 -0.01 -0.02 -0.04 -0.03 0.00 -0.03 -0.02 -0.03 0.00 -0.03 -0.03 0.02 -0.03 -0.03 -0.01 -0.04
Net income (loss) attributable to Merck & Co., Inc. -8.04% -26.03% 18.07% 33.49% 28.01% 32.71% 23.96% 18.95% 33.86% 30.19% -8.38% 29.73% -39.74% 19.47% 21.81% 21.71% 27.03% 27.11% 27.79% 34.72% 13.55% 29.91%

Based on: 10-Q (reporting date: 2026-06-30), 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 financial performance across the analyzed period is characterized by strong and relatively stable gross margins, contrasted by significant quarterly volatility in operating and net income. This volatility is primarily driven by intermittent, substantial surges in research and development expenditures, which occasionally exceed total gross profit, leading to periodic quarterly losses.

Gross Profitability Trends
Gross profit margins remained robust, generally fluctuating between 66% and 78% of sales. A positive trend is observed from early 2021 through early 2024, where margins expanded from approximately 69.90% to a peak of 77.98% in March 2025. Although a sharp decline to 66.15% occurred in December 2025, margins recovered to the 73-74% range by mid-2026, indicating a resilient core pricing and production structure.
Operating Expense Analysis
Selling, general and administrative (SG&A) expenses remained relatively controlled, typically ranging between 14% and 21% of sales, without showing a definitive long-term upward or downward trajectory. In contrast, research and development (R&D) costs exhibited extreme volatility. While baseline R&D spending typically hovered between 16% and 30%, severe spikes were recorded in June 2023 (-88.60%), December 2023 (-65.80%), March 2026 (-77.32%), and June 2026 (-58.66%). These anomalies suggest a pattern of significant, periodic capital allocations toward pipeline development or one-time clinical trial costs.
Operating and Net Income Volatility
Operating income margins were highly sensitive to the aforementioned R&D fluctuations. In quarters with normalized R&D spending, operating margins were strong, frequently exceeding 30%. However, the spikes in R&D expenditure resulted in substantial operating losses, most notably in June 2023 (-34.34%) and March 2026 (-20.85%). Net income followed a nearly identical pattern, with strong positive margins often reaching 30% or higher, punctuated by sharp declines into negative territory during high-spending quarters.
Non-Operating Items and Taxation
Other income and expenses remained a minor component of the overall financial structure, generally staying within a few percentage points of sales. Tax expenses typically ranged from 2% to 6% of sales; however, a tax benefit of 5.60% was observed in December 2023, coinciding with a period of operating loss, which served to mitigate the overall impact on net income for that quarter.

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