How BMY (Bristol-Myers Squibb Company) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a leading biopharmaceutical company like BMY (Bristol Myers Squibb) makes money is essential for investors and anyone interested in the business of pharmaceuticals and biotechnology. In this post, we break down BMY'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 BMY Overview

Bristol Myers Squibb (BMY) operates as a global biopharmaceutical company, focusing on the discovery, development, and commercialization of innovative medicines for oncology, hematology, immunology, and cardiovascular diseases. Revenue comes primarily from the sale of prescription drugs, with a portfolio that includes blockbusters in cancer and immunology. The company’s business segments are largely organized around therapeutic areas and product lines, with the vast majority of revenue derived from net product sales.

Revenue Breakdown

• Total Revenue (Q3 2025): $12.2B (+2.8% YoY)
  • Net Product Revenue: $11.9B (97.0% of total, +3.2% YoY)
  • Alliance & Other Revenue: $372M (3.0% of total, -9.0% YoY)
  • Growth is powered by continued strong demand for key oncology and immunology products, as well as expansion in international markets.

Gross Profit and Margins

• Gross Profit: $8.79B (71.9% gross margin)
  • Cost of Revenue: $3.44B (+16.2% YoY)
  • BMY maintains robust margins due to its high-value, patent-protected drug portfolio and operational efficiencies in manufacturing.
• Most costs come from manufacturing, procurement of raw materials, and royalties paid on licensed products.

Operating Income and Expenses

• Operating Income: $3.64B (+67.5% YoY, 29.8% margin)
• Operating Expenses: $5.15B (-42.4% YoY)
  • R&D: $2.53B (+6.5% YoY, 20.7% of revenue) — Focused on advancing the pipeline in oncology, hematology, and immunology, including late-stage clinical trials and regulatory submissions.
  • SG&A: $1.79B (-9.8% YoY, 14.6% of revenue) — Includes global sales force, marketing, and administrative infrastructure to support product launches and ongoing commercialization.
  • BMY continues to prioritize innovation through R&D investment while maintaining efficiency in SG&A, reflecting a disciplined approach to cost control and resource allocation.

Net Income

• Pre-Tax Income: $3.11B (+85.8% YoY, 25.5% margin)
• Income Tax: $919M (29.5% effective tax rate)
• Net Income: $2.20B (+81.8% YoY, 18.0% net margin)
• BMY converts a significant portion of sales into profit due to its scalable business model, high-margin products, and disciplined expense management.

What Drives BMY's Money Machine?

• Net Product Revenue: 97%+ of revenue comes from prescription drug sales, especially in oncology and immunology.
• R&D Productivity: $2.53B invested in Q3 2025, supporting a robust pipeline and future product launches.
• Strategic Investments: Focus on late-stage clinical trials, regulatory approvals, and lifecycle management of key brands.
• Future Growth Areas: Expansion into new indications, next-generation immunotherapies, and international markets, though some pipeline programs are not yet profitable.

Visualizing BMY'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) taking the largest chunk.
• Even after large investments in research and development, 18% of revenue drops to the bottom line.

Key Takeaways

• BMY's money comes overwhelmingly from prescription drug sales in oncology and immunology.
• High gross and net margins illustrate the power of BMY's patent-protected, high-value product portfolio.
• Heavy investment in R&D, balanced by efficiency in operating costs.
• Ongoing growth is driven by blockbuster drugs, pipeline advancement, and global expansion.

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FAQ About BMY's Income Statement

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

BMY generates over 97% of its revenue from net product sales—primarily prescription drugs in oncology, hematology, and immunology. Alliance and other revenue, such as royalties and collaborations, make up the remaining 3%.

2. How profitable is BMY in Q3 2025?

BMY reported net income of $2.20B in Q3 2025, with a net margin of approximately 18%, reflecting strong profitability driven by high-margin products and disciplined expense management.

3. What are the largest expense categories for BMY?

The biggest expenses on BMY's income statement are operating expenses, particularly Research & Development (R&D) at $2.53B in Q3 2025 (20.7% of revenue), as BMY prioritizes pipeline advancement and innovation. SG&A expenses were $1.79B (14.6% of revenue), supporting global sales and administration.

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

[Alliance & Other Revenue], despite generating $372M in revenue, posted an operating loss in Q3 2025. This is because BMY aggressively invests in collaborative research and early-stage programs, believing these will drive long-term growth—even if the division is unprofitable today.

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

BMY's effective tax rate in Q3 2025 was 29.5%, consistent with previous years. This moderate rate is primarily due to the mix of domestic and international earnings, as well as tax benefits from share-based compensation and international structuring.