Gilead Sciences Inc (NASDAQ:GILD) reported third-quarter 2025 financial results that presented a mixed picture for investors, with strong bottom-line performance contrasting against revenue challenges and a cautious full-year outlook.
Quarterly Performance vs. Expectations
The biopharmaceutical company delivered $7.77 billion in third-quarter revenue, representing a 3% year-over-year increase. This figure came in approximately 2.3% above analyst expectations of $7.60 billion. The revenue beat was primarily driven by a $400 million increase in royalty, contract, and other revenues related to a previous sale of intellectual property that management noted is not expected to reoccur.
On the profitability front, Gilead significantly exceeded expectations with non-GAAP earnings per share of $2.47, beating analyst estimates of $2.17 by approximately 15.7%. The company's GAAP diluted EPS showed even more dramatic improvement, rising to $2.43 compared to $1.00 in the same period last year.
Key factors driving the earnings outperformance include:
- Absence of a $1.75 billion IPR&D impairment charge that impacted the prior year period
- The aforementioned $400 million increase in other revenue
- Lower acquired IPR&D expenses
- Higher net unrealized gains on equity investments
Product Sales Performance
While total revenues showed growth, underlying product sales revealed a more nuanced story. Total product sales decreased 2% year-over-year to $7.3 billion, with the decline largely attributable to the ongoing reduction in COVID-19 treatment Veklury sales, which fell 60% to $277 million due to lower rates of COVID-19-related hospitalizations.
Excluding Veklury, product sales increased 4% to $7.1 billion, demonstrating strength in the company's core therapeutic areas:
- HIV product sales grew 4% to $5.3 billion, driven by Biktarvy (up 6% to $3.7 billion) and Descovy (up 20% to $701 million)
- Liver Disease portfolio sales increased 12% to $819 million, primarily due to higher demand for Livdelzi
- Trodelvy sales rose 7% to $357 million
- Cell Therapy product sales decreased 11% to $432 million, reflecting ongoing competitive headwinds
Guidance and Market Reaction
The company's updated full-year 2025 guidance presented a cautious outlook that may be influencing investor sentiment. While Gilead raised its EPS guidance significantly, the revenue forecast came in slightly below expectations.
Full-year 2025 guidance highlights:
- Product sales guidance of $28.4-$28.7 billion (midpoint: $28.55 billion), approximately 1% below analyst estimates of $28.84 billion
- Diluted EPS guidance raised to $6.65-$6.85 from previous $5.85-$6.15
- Non-GAAP diluted EPS guidance of $8.05-$8.25, with the midpoint representing an increase from previous guidance
The market's initial reaction appears muted, with the stock showing minimal after-hours movement. This tepid response likely reflects the balancing act between strong earnings performance and the conservative revenue outlook, particularly as investors weigh the sustainability of the one-time items that boosted this quarter's results.
Strategic Developments
During the quarter, Gilead announced several significant developments that strengthen its long-term positioning:
- Patent litigation settlements extending Biktarvy's U.S. exclusivity to April 2036, more than two years beyond previous projections
- Positive regulatory developments for lenacapavir (Yeztugo/Yeytuo) for HIV prevention in both the U.S. and Europe
- Promising clinical data for Trodelvy in first-line metastatic triple-negative breast cancer
- Acquisition of Interius BioTherapeutics to enhance cell therapy capabilities
For detailed earnings estimates and future projections, view Gilead Sciences' earnings and estimates page.
Disclaimer: This article is not investment advice. Investors should conduct their own research and consult with financial advisors before making investment decisions.
