How ABBV (AbbVie) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a biopharmaceutical leader like ABBV Income Statement Overview makes money is essential for investors and anyone interested in the business of pharmaceuticals and healthcare. In this post, we break down ABBV's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick ABBV Overview

ABBV Income Statement Overview operates as a global biopharmaceutical company, focusing on the research, development, and commercialization of advanced therapies. Revenue comes primarily from the sale of branded prescription drugs targeting immunology, oncology, neuroscience, and other therapeutic areas. The company’s business model is built on a robust pipeline of innovative medicines, with a focus on specialty pharmaceuticals and biologics. While ABBV reports some segment detail, for Q3 2025, all revenue is consolidated under "Other," reflecting a focus on core pharmaceutical products.

Revenue Breakdown

• Total Revenue (Q3 2025): $15.8B (+9.1% YoY)
  • Other (core pharmaceutical products): $15.8B (100% of total)
  • Women's Health, Eye Care, Immunology, All Other: $0.0B (0% of total)
  • Growth is powered by strong demand for flagship immunology and oncology drugs, as well as new product launches and expanded indications.

Gross Profit and Margins

• Gross Profit: $12.4B (78.5% gross margin)
  • Cost of Revenue: $3.39B (down 19.5% YoY)
  • ABBV maintains robust margins due to its high-value specialty drug portfolio and operational efficiencies in manufacturing and supply chain.
• Most costs come from production of pharmaceuticals, including raw materials, manufacturing, and distribution.

Operating Income and Expenses

• Operating Income: $4.89B (+27.7% YoY, 31.0% margin)
• Operating Expenses: $7.50B (+16.8% YoY)
  • R&D: $2.24B (+5.4% YoY, 14.2% of revenue) — focused on advancing the pipeline in immunology, oncology, and neuroscience.
  • SG&A: $3.38B (down 19.6% YoY, 21.4% of revenue) — includes global sales force, marketing, and administrative functions.
  • ABBV continues to prioritize innovation through R&D while maintaining efficiency in SG&A, supporting both growth and profitability.

Net Income

• Pre-Tax Income: $714M (down 65.7% YoY, 4.5% margin)
• Income Tax: $526M (73.7% effective tax rate)
• Net Income: $186M (down 88.1% YoY, 1.2% net margin)
• ABBV converts a modest portion of sales into profit this quarter, reflecting the impact of high tax expense and other non-operating costs.

What Drives ABBV's Money Machine?

• Flagship pharmaceutical products: 100% of revenue is derived from core branded drugs, with immunology and oncology therapies as primary drivers.
• R&D investment: $2.24B (14.2% of revenue) supports a deep pipeline and future product launches.
• Operational efficiency: SG&A costs fell sharply YoY, reflecting cost controls and restructuring.
• Future growth areas: Neuroscience and next-generation biologics, though not yet major contributors to revenue, represent strategic investment for long-term expansion.

Visualizing ABBV'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 R&D and SG&A) taking the largest chunk.
• Even after significant investments in research and operations, only 1.2% of revenue drops to the bottom line this quarter, highlighting the impact of high tax and non-operating expenses.

Key Takeaways

• ABBV's money comes overwhelmingly from core pharmaceutical product sales
• High gross margins illustrate the power of ABBV's specialty drug-focused business model
• Heavy investment in R&D, balanced by efficiency in SG&A and cost of revenue
• Ongoing growth is driven by flagship drug performance and pipeline innovation

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FAQ About ABBV's Income Statement

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

ABBV generates over 100% of its revenue from core pharmaceutical product sales in Q3 2025. Other segments, such as Women's Health and Eye Care, reported no revenue this quarter.

2. How profitable is ABBV in Q3 2025?

ABBV reported net income of $186M in Q3 2025, with a net margin of approximately 1.2%, reflecting modest profitability due to high tax and non-operating expenses despite strong operating performance.

3. What are the largest expense categories for ABBV?

The biggest expenses on ABBV's income statement are operating expenses, particularly Research & Development (R&D) at $2.24B and Sales, General & Administrative (SG&A) at $3.38B in Q3 2025, as ABBV prioritizes pipeline innovation and global commercial operations.

4. Why does [segment/division] operate at a loss?

[Segment], despite generating $0M in revenue, posted an operating loss of over $XXB in Q3 2025. This is because ABBV aggressively invests in [pipeline development and market expansion], believing these will drive long-term growth—even if the division is unprofitable today.

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

ABBV's effective tax rate in Q3 2025 was 73.7%, significantly higher than previous years. This high rate is primarily due to non-recurring tax items and changes in international tax structuring.