MRK · 8-K · 20260804PR090045
Operating Expense Trends
Merck & Co., Inc. · 2026-08-04 · Importance 83 · Surprise 82 · No source text
GAAP SG&A expense increased 10% year over year to $2.904 billion in the second quarter of 2026 from $2.649 billion. The SG&A increase reflected higher administrative costs, including IT investments, and higher promotional spending supporting product launches. R&D expense rose to $9.741 billion from $4.048 billion, including a $5.7 billion Terns acquisition charge and higher clinical development spending. A $200 million reduction tied to a Blackstone Life Sciences funding agreement partially offset the R&D increase, while second-quarter 2025 included a $200 million Hengrui Pharma upfront-license charge.
Key facts
- Full-year 2026 updated non-GAAP operating expenses are expected to be $42.0 billion to $42.7 billion, up from prior $36.0 billion to $36.8 billion; includes one-time R&D charges of $9.0 billion for acquisition of Cidara and $5.7 billion for acquisition of Terns source
- Research and development expenses were $9.7 billion in Q2 2026 compared with $4.0 billion in Q2 2025; increase largely due to a $5.7 billion charge for the acquisition of Terns and higher clinical development spending, partially offset by $200 million reduction from Blackstone funding agreement source
- Full-year 2026 updated non-GAAP other (income) expense, net is approximately $1.4 billion expense (prior approximately $1.3 billion expense) source
- Share count (assuming dilution) for full-year 2026 guidance is approximately 2.48 billion shares source
- Selling, general and administrative expenses were $2.9 billion in Q2 2026, an increase of 10% compared with Q2 2025, primarily due to higher administrative costs (including IT) and higher promotional costs source
- The company recorded average shares outstanding assuming dilution of 2,470 million for Q2 2026 and 2,513 million for Q2 2025 source
- GAAP net loss attributable to the company was $(1,335) million in Q2 2026 source
- Other (income) expense, net was $99 million expense in Q2 2026 compared with $7 million income in Q2 2025, primarily due to higher net interest expense source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -34.3% | Research and development expenses were $9.7 billion in Q2 2026 compared with $4.0 billion in Q2 2025; increase largely due to a $5.7… |
| operating_income | negative | committed | -30.4% | Full-year 2026 updated non-GAAP operating expenses are expected to be $42.0 billion to $42.7 billion, up from prior $36.0 billion to $36.8… |
| operating_income | negative | realized | -1.6% | Selling, general and administrative expenses were $2.9 billion in Q2 2026, an increase of 10% compared with Q2 2025, primarily due to… |
| net_income | negative | realized | -0.6% | Other (income) expense, net was $99 million expense in Q2 2026 compared with $7 million income in Q2 2025, primarily due to higher net… |
| operating_income | negative | committed | -0.5% | Full-year 2026 updated non-GAAP other (income) expense, net is approximately $1.4 billion expense (prior approximately $1.3 billion expense) |
| net_income | negative | realized | — | GAAP net loss attributable to the company was $(1,335) million in Q2 2026 |