MRK · 8-K · 20260804PR090045
Gross Margin Drivers
Merck & Co., Inc. · 2026-08-04 · Importance 53 · Surprise 48 · No source text
GAAP gross margin declined to 73.5% in the second quarter of 2026 from 77.5% in the second quarter of 2025. Cost of sales increased 24% to $4.395 billion from $3.557 billion. The margin decline was primarily caused by higher amortization of intangible assets and inventory write-downs. Non-GAAP gross margin also decreased to 81.1% from 82.2%, primarily because of higher inventory write-downs.
Key facts
- Full-year 2026 updated non-GAAP gross margin is approximately 81%, down from prior approximately 82% source
- GAAP gross margin was 73.5% for Q2 2026 compared with 77.5% for Q2 2025; decrease primarily due to higher amortization of intangible assets and inventory write-downs source
- Non-GAAP gross margin was 81.1% for Q2 2026 compared with 82.2% for Q2 2025; decrease primarily due to higher inventory write-downs source
- Second-quarter cost of sales was $4,395 million for GAAP and non-GAAP cost of sales was $3,144 million after adjustments source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| margin | negative | realized | -4.0% | GAAP gross margin was 73.5% for Q2 2026 compared with 77.5% for Q2 2025; decrease primarily due to higher amortization of intangible… |
| margin | negative | realized | -1.1% | Non-GAAP gross margin was 81.1% for Q2 2026 compared with 82.2% for Q2 2025; decrease primarily due to higher inventory write-downs |
| margin | negative | committed | -0.8% | Full-year 2026 updated non-GAAP gross margin is approximately 81%, down from prior approximately 82% |