01—Abstract
Summary
Summary of the 8-K filed August 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Gilead Sciences reported second-quarter 2026 results on August 4, 2026, with total revenues up 10% year-over-year to $7.8 billiona and product sales excluding Veklury up 10% to $7.6 billion.
The core business showed strength, led by HIV products (up 12% to $5.7 billionb, with Biktarvy up 7% to $3.8 billion and Descovy up 48% to $967 million), Trodelvy (up 26% to $457 million), and Livdelzi. Non-GAAP product gross margin held flat at 86.9%, and non-GAAP SG&A rose 12% on HIV promotional spending. Management raised its full-year product sales guidance to $30.1-30.4 billion and narrowed its non-GAAP diluted loss per share guidance to $(0.65) to $(0.30), from $(1.05) to $(0.65) previously.
Headline GAAP results were deeply negative, with diluted loss per share of $(8.45) versus $1.56c a year earlier. This was driven by $11.2 billion of acquired IPR&D expense tied to the Arcellx, Tubulis and Ouro Medicines acquisitions, equal to about $9.08 per share, plus a $1.75 billion IPR&D impairment on assets from Immunomedics. The acquisitions also pushed the effective tax rate negative, because the acquired IPR&D is not tax-deductible.
Liquidity fell sharply: cash and marketable debt securities dropped to $3.2 billiond from $10.6 billion at year-end 2025, after $11.3 billion of acquisition outflows, and the company funded this partly with $4.1 billion of net new debt. Stockholders' equity fell to $11.7 billion from $22.6 billion. The quarter's key tension is between a healthy base business and a balance sheet and GAAP earnings profile reshaped by large, costly pipeline acquisitions.
Investors will likely focus on whether the acquired assets (anito-cel, Tubulis ADCs, gamgertamig) justify the spending, on the Veklury decline (down 81% in the quarter), on the EVOKE-03 discontinuation, and on the pace of deleveraging. The company also declared a $0.82 quarterly dividend for the third quarter.
02—Key points
Key Highlights
- Total revenues rose 10% year-over-year to $7.8 billion, driven by HIV (+12%), Trodelvy (+26%) and Livdelzi, partly offset by Veklury (-81%) and Cell Therapy (-14%).
- GAAP diluted loss per share was $(8.45) versus $1.56 in Q2 2025, primarily due to $11.2 billion of acquired IPR&D expense (about $9.08 per share) from the Arcellx, Tubulis and Ouro Medicines acquisitions, plus a $1.75 billion IPR&D impairment.
- Non-GAAP diluted loss per share was $(6.75) versus $2.01 a year earlier. Non-GAAP product gross margin was flat at 86.9%.
- Full-year 2026 product sales guidance was raised to $30.1-30.4 billion, and non-GAAP diluted loss per share guidance improved to $(0.65) to $(0.30) from $(1.05) to $(0.65).
- Cash and marketable debt securities fell to $3.2 billion from $10.6 billion at year-end 2025, following $11.3 billion of acquisition outflows and $2.8 billion of debt repayments, partly offset by $4.1 billion of net debt proceeds.
- Pipeline and regulatory progress included FDA approval of Trodelvy in first-line metastatic triple-negative breast cancer, accelerated approval of Hepcludex for hepatitis delta, positive Phase 3 ISLEND-1/2 data, and an FDA-accepted sNDA for once-weekly oral Yeztugo with a February 2, 2027 action date.
- The Phase 3 EVOKE-03 study of Trodelvy plus Keytruda in first-line non-small cell lung cancer was discontinued following a recommendation from the Data Monitoring Committee.
03—Questions
Frequently Asked Questions
Why did GAAP earnings swing to a large loss this quarter?
The loss was driven mainly by $11.2 billion of acquired IPR&D expense, mostly from the Arcellx ($7.0 billion), Tubulis ($3.1 billion) and Ouro Medicines ($1.0 billion) acquisitions, along with a $1.75 billion IPR&D impairment. These charges are non-cash in nature for the period but reduce GAAP EPS sharply, and the acquired IPR&D is not tax-deductible, which pushed the effective tax rate to (2.4)%.
Is the core business still growing?
Yes. Product sales excluding Veklury rose 10% to $7.6 billion, led by HIV at +12% and Trodelvy at +26%. Descovy grew 48%, while Biktarvy grew 7%. Cell Therapy (-14%) and HCV products declined, and Veklury fell 81% as COVID-19 hospitalizations decreased.
How has Gilead's liquidity changed, and does it affect the dividend?
Cash and marketable securities declined to $3.2 billion from $10.6 billion at year-end 2025, reflecting acquisition spending, debt repayments and dividends. Operating cash flow was solid at $6.1 billion year-to-date. The Board still declared a $0.82 quarterly dividend for Q3 2026, payable September 29, 2026, but future dividends remain subject to Board approval.
What drove the guidance changes?
Product sales guidance was raised to $30.1-30.4 billion, reflecting the strong base business, while Veklury guidance was cut to about $300 million from about $600 million. Non-GAAP diluted loss per share guidance improved to $(0.65) to $(0.30). GAAP guidance worsened to $(3.75) to $(3.40) because of the acquired IPR&D charges, which the company says total about $11.1 billion for the full year.
What are the main risks flagged in the filing?
Key risks include the company's ability to meet 2026 guidance given Veklury revenue uncertainty, Medicare Part D and Inflation Reduction Act pricing changes, most-favored-nation pricing agreements, generic and biosimilar competition, clinical trial outcomes (such as the EVOKE-03 discontinuation), FDA clinical holds, and the ability to realize the benefits of recent acquisitions and collaborations.
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