How ABBV (AbbVie) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a pharmaceutical giant like AbbVie makes money is essential for investors and anyone interested in the business of biopharmaceuticals. In this post, we break down AbbVie's quarterly income statement (Q4 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick AbbVie Overview

AbbVie operates as a leading biopharmaceutical company focused on discovering, developing, and delivering innovative medicines. Revenue comes primarily from sales of blockbuster drugs in immunology, neuroscience, oncology, and other therapeutic areas. The company benefits from a diversified portfolio anchored by high-margin specialty pharmaceuticals.

Revenue Breakdown

• Total Revenue (Q4 2025): $16.6B (+10.0% YoY)
  • Immunology Revenue: $8.6B (51.9% of total)
  • Neuroscience Revenue: $3.0B (17.8% of total)
  • Oncology Revenue: $1.7B (10.0% of total)
  • Other: $3.4B
  • Growth is powered by strong demand in immunology and neuroscience segments, with 18.3% and 18.0% YoY increases respectively, offsetting a slight decline in oncology.

Gross Profit and Margins

• Gross Profit: $14.0B (84.0% gross margin)
  • Cost of Revenue: $2.7B (+-39.6% YoY)
  • AbbVie maintains robust margins due to its scalable biopharmaceutical business model, high pricing power on patented drugs, and significant reductions in cost of revenue.
• Most costs come from manufacturing, raw materials, and supply chain for drug production.

Operating Income and Expenses

• Operating Income: $5.8B (+0.0% YoY, 35.0% margin)
• Operating Expenses: $8.2B (+-33.2% YoY)
  • R&D: $2.6B (+-61.9% YoY, 15.5% of revenue) — focused on pipeline development in immunology, oncology, and neuroscience therapies
  • SG&A: $3.9B (+1.0% YoY, 23.4% of revenue) — covers sales force activities, marketing, and administrative functions
  • AbbVie continues to prioritize innovation while maintaining efficiency through cost controls and streamlined operations.

Net Income

• Pre-Tax Income: $2.7B (+0.0% YoY, 16.1% margin)
• Income Tax: $0.9B (32.0% effective tax rate)
• Net Income: $1.8B (+0.0% YoY, 10.9% net margin)
• AbbVie converts a significant portion of sales into profit due to scalability, efficiency, and strong pricing power in its specialty drug portfolio.

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What Drives AbbVie's Money Machine?

• Immunology: 51.9%+ of revenue / Led by blockbuster drugs like Humira successors and Skyrizi/Rinvoq, driving 18.3% YoY growth
• Key metric: Gross margin of 84.0%, reflecting low variable costs in biologics production
• Investment area: R&D spending on next-generation therapies in immunology and oncology to sustain pipeline
• Future growth areas: Neuroscience and oncology expansion, with 18.0% and -1.6% YoY revenue shifts, though not yet fully offsetting immunology reliance

Visualizing AbbVie's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant R&D investments, 10.9% of revenue drops to the bottom line.

Key Takeaways

• AbbVie's money comes overwhelmingly from immunology products
• High gross and net margins illustrate the power of AbbVie's patent-protected biopharma model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by segment expansion in neuroscience and immunology

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FAQ About AbbVie's Income Statement

1. What is the main source of AbbVie's revenue in 2025?

AbbVie generates over 51.9% of its revenue from immunology. Additional significant sources include neuroscience (17.8%) and oncology (10.0%).

2. How profitable is AbbVie in Q4 2025?

AbbVie reported net income of $1.8B in Q4 2025, with a net margin of approximately 10.9%, reflecting strong profitability driven by high gross margins and cost efficiencies.

3. What are the largest expense categories for AbbVie?

The biggest expenses on AbbVie's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $2.6B in Q4 2025, as AbbVie prioritizes pipeline development in key therapeutic areas.

4. Why does Other operate at a loss?

Other, despite generating $3.4B in revenue, contributes to overall dynamics with varied profitability. This is because AbbVie aggressively invests in emerging areas, believing these will drive long-term growth—even if the category shows mixed short-term results.

5. How does AbbVie's effective tax rate compare to previous years?

AbbVie's effective tax rate in Q4 2025 was 32.0%, consistent with previous years. This moderate rate is primarily due to standard corporate tax structures and international operations.