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

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Understanding how a biopharmaceutical leader like ABBV makes money is essential for investors and anyone interested in the business of healthcare innovation. In this post, we break down ABBV's quarterly income statement (Q2 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 operates as a global biopharmaceutical company, focusing on the research, development, and commercialization of advanced therapies. Its portfolio spans immunology, neuroscience, oncology, and aesthetics, with flagship products addressing chronic and complex diseases. Revenue comes primarily from prescription drug sales across these therapeutic areas, with immunology and neuroscience as the largest contributors. The business is organized into segments including Immunology, Neuroscience, Oncology, Aesthetics, and Other, each representing a distinct set of products and markets.

Revenue Breakdown

• Total Revenue (Q2 2025): $15.4B (+6.6% YoY)
  • Immunology Revenue: $7.63B (49.5% of total, +9.5% YoY)
  • Neuroscience Revenue: $2.68B (17.4% of total, +24.1% YoY)
  • Oncology Revenue: $1.68B (10.9% of total, +2.6% YoY)
  • Aesthetics Revenue: $1.28B (8.3% of total, -8.0% YoY)
  • Other: $2.15B (remaining share)
• Growth is powered by strong immunology and neuroscience sales, offsetting softness in aesthetics.

Gross Profit and Margins

• Gross Profit: $13.0B (84.4% gross margin)
  • Cost of Revenue: $2.40B (+10.4% YoY)
  • ABBV maintains robust margins due to its high-value, patent-protected drug portfolio and operational scale.
• Most costs come from manufacturing, supply chain, and royalties associated with product sales.

Operating Income and Expenses

• Operating Income: $5.86B (+46.6% YoY, 38.0% margin)
• Operating Expenses: $7.16B (-0.7% YoY)
  • R&D: $2.10B (+9.5% YoY, 13.6% of revenue) — Focused on advancing pipeline assets in immunology, neuroscience, and oncology.
  • SG&A: $3.22B (-3.7% YoY, 20.9% of revenue) — Includes sales force, marketing, and administrative costs.
  • ABBV continues to prioritize innovation and invest in growth while maintaining cost discipline.

Net Income

• Pre-Tax Income: $1.55B (-27.6% YoY, 10.1% margin)
• Income Tax: $613M (39.4% effective tax rate)
• Net Income: $944M (-31.1% YoY, 6.1% net margin)
• ABBV converts a moderate portion of sales into profit due to high R&D investment and elevated tax rate in the quarter.

What Drives ABBV's Money Machine?

• Immunology therapies: Nearly 50% of revenue, led by blockbuster drugs in autoimmune diseases.
• Neuroscience growth: 24.1% YoY increase, reflecting successful expansion in neurological treatments.
• R&D investment: $2.10B in Q2 2025, fueling future product launches and lifecycle management.
• Future growth areas: Oncology and next-generation immunology, though some segments (e.g., Aesthetics) faced headwinds and are not yet back to growth.

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 SG&A and R&D) taking the largest chunk.
• Even after large investments in R&D and high SG&A, 6.1% of revenue drops to the bottom line.

Key Takeaways

• ABBV's money comes overwhelmingly from immunology drug sales
• High gross and operating margins illustrate the power of ABBV's patent-protected, specialty pharma model
• Heavy investment in R&D, balanced by efficiency in SG&A and cost controls
• Ongoing growth is driven by immunology and neuroscience, with oncology and aesthetics as future opportunities

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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 49% of its revenue from immunology therapies, with neuroscience and oncology also contributing significantly. Other revenue streams include aesthetics and miscellaneous product sales.

2. How profitable is ABBV in Q2 2025?

ABBV reported net income of $944M in Q2 2025, with a net margin of approximately 6.1%, reflecting moderate profitability driven by strong gross margins but offset by high R&D investment and a higher effective tax rate.

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 $2.10B and Sales, General & Administrative (SG&A) at $3.22B in Q2 2025. R&D investment is focused on pipeline innovation, while SG&A covers sales, marketing, and administration.

4. Why does Aesthetics operate at a loss?

Aesthetics, despite generating $1.28B in revenue, posted a YoY decline of 8% in Q2 2025. This is because ABBV continues to invest in product launches 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 Q2 2025 was 39.4%, higher than previous years. This elevated rate is primarily due to changes in geographic earnings mix and lower tax benefits from share-based compensation.