Gilead Sciences (GILD) Q2 2026: Revenue Growth Amidst Losses — Cautiously Optimistic

Gilead Sciences, Inc. (Nasdaq: GILD) reported its second quarter 2026 financial results, revealing a total revenue increase of $7.8 billion, which marks a growth of $0.7 billion or +10% compared to $7.1 billion in the same period last year. This growth was primarily driven by higher sales in its HIV portfolio, Trodelvy, and Livdelzi, despite a significant decline in Veklury sales.

The quarter presents a mixed bag for shareholders. While revenue growth is a positive indicator, the company reported a diluted loss per share of $(8.45), a stark contrast to earnings of $1.56 per share in Q2 2025. This substantial loss is largely attributed to $11.2 billion in acquired in-process research and development (IPR&D) expenses related to recent acquisitions, which overshadowed the revenue gains.

Key Financial Metrics:

• Total Revenue: $7.8 billion, up $0.7 billion or +10% YoY
• Product Sales: $7.6 billion, up $0.6 billion or +8% YoY
• HIV Product Sales: $5.7 billion, up $0.6 billion or +12% YoY
• Biktarvy Sales: $3.8 billion, up $0.3 billion or +7% YoY
• Diluted Loss Per Share: $(8.45) compared to $1.56 in Q2 2025
• Non-GAAP Diluted Loss Per Share: $(6.75) compared to $2.01 in Q2 2025
• Operating Cash Flow: $3.6 billion
• Cash, Cash Equivalents, and Marketable Securities: $3.2 billion as of June 30, 2026

Shareholder Perspective

This quarter is disappointing for shareholders due to the significant losses reported. The diluted loss per share of $(8.45) reflects the impact of substantial IPR&D expenses, which are not expected to recur at the same level in future quarters. While the revenue growth is encouraging, the losses indicate that Gilead is still navigating through the financial implications of its recent acquisitions. The company’s cash position has also decreased significantly from $10.6 billion at the end of 2025 to $3.2 billion, raising concerns about liquidity and financial stability.

Dividend and Share Buyback

Gilead paid dividends of $1.0 billion during the quarter and repurchased $355 million of common stock. The Board has declared a quarterly dividend of $0.82 per share for Q3 2026, payable on September 29, 2026. This commitment to returning capital to shareholders is a positive sign, but the sustainability of such dividends may come into question given the current financial performance.

Guidance and Future Outlook

For the full year 2026, Gilead has updated its guidance, projecting product sales to be between $30.1 billion and $30.4 billion, with diluted loss per share expected to be between $(3.75) and $(3.40). The company anticipates that the impact of IPR&D expenses will continue to affect its financials, with approximately $9.08 per share attributed to these costs.

Investors should watch for the upcoming FDA action date of February 2, 2027, for Yeztugo, a potential once-weekly oral formulation for HIV PrEP, as well as the anticipated launches in oncology and HIV in the second half of the year. These developments could provide a much-needed boost to Gilead's revenue and help mitigate the impact of the recent losses.

In summary, while Gilead Sciences has demonstrated revenue growth in Q2 2026, the substantial losses and cash outflows raise concerns for shareholders. The company's focus on innovation and strategic acquisitions may yield long-term benefits, but the immediate financial outlook remains challenging. Investors will need to closely monitor upcoming product launches and the company's ability to stabilize its financial position in the coming quarters.

Note: The following tables present amounts in millions.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended	Six Months Ended
	June 30, 2026	2025	June 30, 2026	2025
Product sales	$7,600	$7,054	$14,500	$13,008
Royalty, contract and other revenues	176	27	189	81
Total revenues	7,776	7,082	14,689	13,089
Cost of goods sold	1,500	1,501	3,023	3,029
Research and development expenses	1,741	1,491	3,136	2,848
Acquired in-process research and development expenses	11,241	61	11,213	315
Selling, general and administrative expenses	1,900	1,365	3,372	2,605
Total cost and expenses	18,427	4,608	22,726	9,000
Operating (loss) income	-10,651	2,474	-7,974	4,740
Interest expense	247	254	487	513
Other (income) expense, net	-387	-208	-621	120
(Loss) income before income tax	-10,511	2,429	-7,608	4,005
Income tax expense	242	468	801	802
Net (loss) income	$-10,753	$1,960	$-8,409	$3,203
Basic (loss) earnings per share	$-8.62	$1.57	$-6.82	$2.63
Diluted (loss) earnings per share	$-8.45	$1.56	$-6.75	$2.61
Shares used in basic (loss) earnings per share	1,243	1,245	1,243	1,225
Shares used in diluted (loss) earnings per share	1,255	1,255	1,243	1,225
Cash dividends declared per share	$0.82	$0.79	$1.64	$1.58
Product gross margin	79.3%	78.7%	79.3%	77.7%
Research and development expenses as a % of revenues	22.6%	21.1%	21.2%	20.9%
Selling, general and administrative expenses as a % of revenues	24.6%	19.3%	22.8%	19.1%
Operating margin	-13.7%	34.9%	-52.9%	34.3%
Effective tax rate	-2.4%	19.3%	-10.4%	19.7%

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2026	December 31, 2025
Assets
Cash, cash equivalents and marketable debt securities	$3,179	$10,605
Accounts receivable, net	5,055	4,913
Inventories(1)	4,298	4,368
Property, plant and equipment, net	5,833	5,606
Intangible assets, net	14,032	16,978
Goodwill	8,314	8,314
Other assets	8,652	8,239
Total assets	$49,362	$59,023
Liabilities and Stockholders’ Equity
Current liabilities	$11,020	$11,813
Long-term liabilities	26,598	24,592
Stockholders’ equity(2)	11,744	22,618
Total liabilities and stockholders’ equity	$49,362	$59,023

(1) Includes current and long-term inventories, which are disclosed separately in the notes to our financial statements in Form 10-K and Form 10-Q.
(2) As of June 30, 2026, and December 31, 2025, there were 1,241 shares of common stock issued and outstanding.

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