How PFE (Pfizer) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a global pharmaceutical leader like Pfizer (PFE) makes money is essential for investors and anyone interested in the business of healthcare and biopharma. In this post, we break down Pfizer'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 Pfizer Overview

Pfizer operates as a multinational pharmaceutical company, developing, manufacturing, and marketing prescription medicines, vaccines, and consumer healthcare products. Revenue comes primarily from the sale of branded pharmaceuticals across therapeutic areas such as oncology, vaccines, internal medicine, and rare diseases.
Pfizer’s business segments include Global Pharmaceuticals (core prescription drugs) and Business Innovation (Pfizer CentreOne), which provides contract development and manufacturing services.

Revenue Breakdown

• Total Revenue (Q3 2025): $16.7B (−5.9% YoY)
  • Global Pharmaceuticals: $16.3B (97.9% of total, −6.2% YoY)
  • Business Innovation (Pfizer CentreOne): $344M (2.1% of total, +20.7% YoY)
  • Growth is powered by ongoing demand for key branded drugs and expansion in contract manufacturing, though overall revenue declined due to lower COVID-related sales and patent expirations.

Gross Profit and Margins

• Gross Profit: $12.5B (74.9% gross margin)
  • Cost of Revenue: $4.17B (−36.5% YoY)
  • Pfizer maintains robust margins due to its scalable pharmaceutical model, high-value branded products, and operational efficiencies in manufacturing.
• Most costs come from manufacturing, supply chain logistics, and royalties.

Operating Income and Expenses

• Operating Income: $3.55B (−32.8% YoY, 21.3% margin)
• Operating Expenses: $8.93B (+52.9% YoY)
  • R&D: $3.94B (+51.5% YoY, 23.6% of revenue) — Focused on oncology, vaccines, rare diseases, and next-generation therapeutics.
  • SG&A: $3.19B (−1.8% YoY, 19.1% of revenue) — Includes sales, marketing, administrative, and support functions.
  • Pfizer continues to prioritize innovation and invest heavily in research while maintaining efficiency in commercial operations.

Net Income

• Pre-Tax Income: $3.33B (−29.3% YoY, 20.0% margin)
• Income Tax: [Data not disclosed for Q3 2025]
• Net Income: $3.54B (−20.7% YoY, 21.3% net margin)
• Pfizer converts a significant portion of sales into profit due to its scale, pricing power, and focus on high-margin therapeutics.

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What Drives Pfizer's Money Machine?

• Global Pharmaceuticals: 97.9% of revenue — Driven by blockbuster drugs, vaccines, and specialty medicines.
• R&D Investment: $3.94B (23.6% of revenue) — Strategic focus on pipeline expansion, next-gen therapies, and innovation.
• Contract Manufacturing (Pfizer CentreOne): $344M (+20.7% YoY) — Growth area, though still a small portion of total revenue.
• Future Growth Areas: Oncology, mRNA vaccines, and rare disease treatments, though some segments remain unprofitable as investments ramp up.

Visualizing Pfizer'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 innovation, 21.3% of revenue drops to the bottom line.

Key Takeaways

• Pfizer's money comes overwhelmingly from Global Pharmaceuticals (branded prescription drugs)
• High gross and net margins illustrate the power of Pfizer's scalable, patent-driven business model
• Heavy investment in R&D, balanced by efficiency in SG&A and manufacturing costs
• Ongoing growth is driven by pipeline innovation, contract manufacturing, and expansion into new therapeutic areas

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FAQ About Pfizer's Income Statement

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

Pfizer generates over 97% of its revenue from Global Pharmaceuticals, selling branded prescription drugs and vaccines. The remaining revenue comes from contract manufacturing via Pfizer CentreOne.

2. How profitable is Pfizer in Q3 2025?

Pfizer reported net income of $3.54B in Q3 2025, with a net margin of approximately 21.3%, reflecting strong profitability driven by high-margin branded drugs and operational scale.

3. What are the largest expense categories for Pfizer?

The biggest expenses on Pfizer's income statement are operating expenses, particularly Research & Development (R&D) at $3.94B in Q3 2025 (23.6% of revenue), and Sales, General & Administrative (SG&A) at $3.19B (19.1% of revenue). R&D investment is focused on expanding the drug pipeline and next-generation therapies.

4. Why does Business Innovation (Pfizer CentreOne) operate at a loss?

Business Innovation, despite generating $344M in revenue, posted an operating loss due to aggressive investment in expanding contract manufacturing capabilities and innovation, with the expectation of long-term growth—even if the division is unprofitable today.

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

Pfizer's effective tax rate for Q3 2025 was [not disclosed], but historically, the rate has been moderate due to tax benefits from international structuring and share-based compensation. Investors should monitor future filings for updated tax rate disclosures.