Stock Analysis on Net
Stock Analysis on Net

Merck & Co. Inc. (NYSE:MRK)

$24.99

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Merck & Co. Inc., consolidated income statement

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Sales
Cost of sales
Gross profit
Selling, general and administrative
Research and development
Restructuring costs
Operating income
Interest income
Interest expense
Exchange losses
Income (loss) from investments in equity securities, net
Net periodic defined benefit plan credit other than service cost
Other, net
Other income (expense), net
Income from continuing operations before taxes
Taxes on income from continuing operations
Net income from continuing operations
Income from discontinued operations, net of taxes
Net income
Net income attributable to noncontrolling interests
Net income attributable to Merck & Co., Inc.

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 income statement reveals a period of fluctuating performance between 2021 and 2025. Sales demonstrated consistent growth overall, increasing from US$48.704 billion in 2021 to US$65.011 billion in 2025. However, profitability metrics experienced significant volatility, particularly in 2023, before recovering in subsequent years.

Revenue and Gross Profit
Sales increased steadily, with a notable jump from 2021 to 2022. Gross profit mirrored this trend, rising from US$35.078 billion in 2021 to US$48.975 billion in 2024, before a slight decrease to US$48.629 billion in 2025. Cost of sales generally increased alongside sales, but at a slower rate, contributing to the expanding gross profit margin until 2024.
Operating Income
Operating income exhibited the most pronounced fluctuations. It increased from US$12.538 billion in 2021 to US$17.945 billion in 2022, but then experienced a substantial decline to US$2.355 billion in 2023. A strong recovery followed, with operating income reaching US$19.912 billion in 2024 and further increasing to US$21.218 billion in 2025. This volatility was significantly influenced by changes in research and development expenses.
Research and Development
Research and development expenses were relatively stable between 2021 and 2022, but experienced a dramatic increase to US$30.531 billion in 2023, which heavily impacted operating income. These expenses decreased significantly in 2024 and 2025, to US$17.938 billion and US$15.789 billion respectively, coinciding with the recovery in operating income.
Non-Operating Items
Interest income showed a consistent upward trend, while interest expense also increased over the period. Exchange losses remained relatively stable, with minor fluctuations. Income (loss) from investments in equity securities was volatile, with a significant loss in 2022, followed by gains in 2023 and 2025. Net periodic defined benefit plan credit consistently increased throughout the period. Other income (expense), net, was also volatile, with a large expense in 2022 and a smaller expense in 2025.
Net Income
Net income followed a similar pattern to operating income, with a decline in 2023 and a subsequent recovery. Net income attributable to Merck & Co., Inc. increased from US$13.049 billion in 2021 to US$18.254 billion in 2025. The contribution from discontinued operations was only present in 2021, adding US$704 million to net income.
Tax Rate
The effective tax rate fluctuated, ranging from approximately 11.6% in 2021 to 10.4% in 2022, 13.2% in 2023, 14.2% in 2024, and 10.4% in 2025. These variations likely reflect changes in the geographic distribution of income and applicable tax laws.

In summary, the period was characterized by revenue growth, but with significant volatility in profitability, largely driven by substantial fluctuations in research and development spending. The company demonstrated a strong recovery in operating and net income in 2024 and 2025, following a challenging year in 2023.