How GILD (Gilead Sciences) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a biopharmaceutical leader like Gilead Sciences makes money is essential for investors and anyone interested in the business of healthcare innovation. In this post, we break down Gilead'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 Gilead Sciences Overview

Gilead Sciences operates as a global biopharmaceutical company focused on the discovery, development, and commercialization of innovative medicines, primarily targeting viral diseases, oncology, and inflammatory conditions. Revenue comes predominantly from the sale of proprietary pharmaceutical products, with a smaller portion from royalties, contracts, and other sources. The business is structured around therapeutic areas, with HIV, hepatitis, and oncology as key segments.

Revenue Breakdown

• Total Revenue (Q3 2025): $7.77B (+3.0% YoY)
  • Product Sales Revenue: $7.35B (94.5% of total, -2.3% YoY)
  • Royalty, Contract and Other Revenue: $424M (5.5% of total, +1313.3% YoY)
  • Growth is powered by strong performance in royalties and contract revenue, offsetting modest declines in product sales.

Gross Profit and Margins

• Gross Profit: $6.20B (79.8% gross margin)
  • Cost of Revenue: $1.57B (-0.3% YoY)
  • Gilead maintains robust margins due to its high-value pharmaceutical portfolio and efficient manufacturing operations.
• Most costs come from production, procurement of raw materials, and royalties paid to partners.

Operating Income and Expenses

• Operating Income: $3.33B (+274.7% YoY, 42.8% margin)
• Operating Expenses: $2.87B (-43.5% YoY)
  • R&D: $1.35B (-3.5% YoY, 17.3% of revenue) — Focused on advancing the pipeline in oncology, HIV, and liver diseases.
  • SG&A: $1.36B (-5.3% YoY, 17.5% of revenue) — Includes global sales, marketing, and administrative functions.
  • Gilead continues to prioritize innovation and pipeline development while maintaining tight control over administrative costs.

Net Income

• Pre-Tax Income: $3.64B (+280.9% YoY, 46.9% margin)
• Income Tax: $589M (16.2% effective tax rate)
• Net Income: $3.05B (+143.6% YoY, 39.3% net margin)
• Gilead converts a significant portion of sales into profit due to its scalable product portfolio and disciplined expense management.

What Drives Gilead's Money Machine?

• Product Sales: 94.5% of revenue, led by flagship antiviral therapies (notably HIV and hepatitis franchises).
• Royalty and Contract Revenue: Surged to $424M (+1313.3% YoY), reflecting expanded licensing and partnership agreements.
• R&D Investment: $1.35B in Q3 2025, supporting next-generation therapies in oncology and virology.
• Future Growth Areas: Oncology and inflammatory diseases, which are seeing increased investment but are not yet major profit contributors.

Visualizing Gilead'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 substantial investments in research and global operations, 39.3% of revenue drops to the bottom line.

Key Takeaways

• Gilead's money comes overwhelmingly from proprietary pharmaceutical product sales
• High gross and net margins illustrate the power of Gilead's innovative, high-value drug portfolio
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by royalty expansion, new product launches, and pipeline progress

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FAQ About Gilead Sciences' Income Statement

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

Gilead generates over 94% of its revenue from proprietary pharmaceutical product sales, primarily in antiviral therapies. Additional revenue comes from royalties, contracts, and other sources, which saw substantial growth in Q3 2025.

2. How profitable is Gilead in Q3 2025?

Gilead reported net income of $3.05B in Q3 2025, with a net margin of approximately 39.3%, reflecting strong profitability driven by high-margin products and disciplined expense management.

3. What are the largest expense categories for Gilead?

The biggest expenses on Gilead's income statement are operating expenses, particularly Research & Development (R&D) at $1.35B and Sales, General & Administrative (SG&A) at $1.36B in Q3 2025, as Gilead prioritizes pipeline innovation and global commercialization.

4. Why does oncology operate at a loss?

Oncology, despite generating meaningful revenue, posted an operating loss in Q3 2025. This is because Gilead aggressively invests in clinical trials and early-stage research in oncology, believing these will drive long-term growth—even if the division is unprofitable today.

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

Gilead's effective tax rate in Q3 2025 was 16.2%, consistent with previous years. This moderate rate is primarily due to international tax structuring and tax benefits from share-based compensation.