# Merck & Co. Inc. (MRK) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-12  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/MRK/thesis · /stocks/MRK/memo

## Financial Snapshot

---
ticker: MRK
step: 04
generated: 2026-05-11
source: quick-research
---

### Merck & Co., Inc. (MRK) — Financial Snapshot

#### Income Statement Summary

| Metric | FY2023 | FY2024 | FY2025 | YoY (FY25) |
|--------|--------|--------|--------|------------|
| Revenue | $60.1B | $64.2B | $65.0B | +1.3% |
| Keytruda Revenue | $25.0B | $29.5B | $31.7B | +7% |
| Adjusted Operating Margin | ~40% | ~42% | ~43% | +100 bps |
| GAAP EPS | $0.14* | $6.74 | $7.28 | +8% |
| Adjusted EPS | $6.74 | $7.65 | $8.98 | +17% |

*FY2023 GAAP EPS depressed by ~$10B Prometheus + ~$5.5B Daiichi-Sankyo IPR&D charges.

#### Top Products (FY2025)

| Product | FY25 Sales | YoY | Notes |
|---------|------------|-----|-------|
| Keytruda + Keytruda QLEX | $31.7B | +7% | QLEX SC contributed $35M in Q4 (early launch) |
| Gardasil 9 | ~$8.2B | -5% | China shipment freeze pressure |
| WINREVAIR (PAH) | $1.4B | NM | Ramping toward multi-billion peak |
| Animal Health | $6.4B | +8% | Strong companion + livestock |
| Lagevrio (Covid) | declining | NM | Endemic phase |

#### Cash Flow & Balance Sheet (FY2025)

| Metric | Value |
|--------|-------|
| Operating Cash Flow | ~$18B |
| Capital Expenditures | ~$5B |
| Free Cash Flow | $12.4B (FY25) |
| Free Cash Flow Target (FY27) | ~$24B |
| Dividend (Quarterly) | $0.81 |
| Annual Dividend Yield | ~2.9% |
| Dividend Payout Ratio | ~44% (earnings); ~68% (cash) |
| Cash & Marketable Securities | ~$13B |
| Total Debt | ~$36B |
| Major Recent Acquisitions | Verona ($10B), Terns ($6.7B), Cidara (~$9B charge in Q1 2026) |

#### Key Ratios (approximate)
- P/E: ~9x (FY25 adjusted EPS) | EV/EBITDA: ~8x | FCF Yield: ~6% (depressed by IPR&D charges)
- Revenue Growth (FY25): +1.3% | Adjusted EPS Growth: +17%
- Dividend Yield: ~2.9%; payout ratio ~44% of earnings
- Operating Margin: ~43% (adjusted)

#### Growth Profile
2025 was the last "clean" year before the 2028 Keytruda patent cliff dominates the narrative. Revenue +1.3% nominally (Gardasil China + Lagevrio Covid both significant drags); adjusted EPS +17% on operating leverage and lower charges. Key forward dynamics:

**2026–27**: Keytruda continues growing toward ~$32B+ peak (2026); Keytruda QLEX (subcutaneous) launching to convert IV patients ahead of biosimilars. WINREVAIR ramping; Ohtuvayre (from Verona) launching; pipeline asset readouts. ~$24B FCF target for 2027.

**2028+**: Keytruda US loss of exclusivity. Bear case: ~50%+ of Keytruda IV revenue lost over 2028–32 to biosimilars; revenue declines 15–25% from peak. Bull case: 30–40% conversion to Keytruda QLEX (12-yr biologic exclusivity) preserves $9–12B; pipeline (WINREVAIR, Ohtuvayre, MK-7240 TL1A, Terns CML, oral PCSK9) replaces lost revenue.

#### Forward Estimates
2026 Guide (initial):
- Revenue: $65.5–67B (vs. $67.6B consensus — modest miss)
- Adjusted EPS: $5.00–5.15 (vs. $5.36 consensus — includes ~$3.65 one-time Cidara acquisition charge)
- Underlying EPS (ex-Cidara charge): $8.65–8.80, roughly flat YoY

Sell-side estimates have material divergence on 2028+. Bull case: $24B+ FCF / share at 2027 trough, recovery to growth by 2030 via pipeline. Bear case: 2028–30 trough in EPS at ~$5–6/share with multiple compression to ~8x P/E.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/MRK/fundamental

## Navigation

- Overview: /stocks/MRK
- Financials (this page): /stocks/MRK/financials
- Thesis: /stocks/MRK/thesis
- Investment Memo: /stocks/MRK/memo
- Coverage universe: /stocks