Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GILEAD SCIENCES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Years Ended December 31, 2025, 2024 and 2023

CONTENTS


Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)						51
Audited Consolidated Financial Statements:
Consolidated Balance Sheets						53
Consolidated Statements of Operations						54
Consolidated Statements of Comprehensive Income						55
Consolidated Statements of Stockholders’ Equity						56
Consolidated Statements of Cash Flows						57
Notes to Consolidated Financial Statements						58

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Gilead Sciences, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Gilead Sciences, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 24, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.


						Government and commercial rebates
Description of the Matter						As more fully described in Note 1, the Company estimates reductions to its revenues for amounts payable to payers and healthcare providers in the United States under various government and commercial rebate programs in the period that the related sales occur. Rebates may vary by product, payer and individual payer plans, some of which may not be known at the point of sale. Estimated reductions to revenue are based on product sales, historical and expected payer mix, discount rates, and various other estimated and actual data, adjusted for current period expectations. Auditing the Company’s estimated reductions to revenue for rebates was complex and involved significant judgment, particularly in assessing the reasonableness of estimated payer mix applied to sales during the period. This estimate relies heavily on historical data that is adjusted for changes in payer mix expectations over time.


How We Addressed the Matter in Our Audit						We evaluated and tested the design and operating effectiveness of the Company’s internal controls over management’s estimation and review of reductions from revenue for rebate programs, including controls to assess the payer mix assumption. We also tested the completeness and accuracy of data utilized in the controls, and the accuracy of calculations supporting management’s estimates. To test management’s estimation methodology for determining the payer mix, our audit procedures included, among others, analytically evaluating management’s estimates, evaluating evidence contrary to the estimated amounts, performing a sensitivity analysis on the rates used in the estimates and performing a comparison of actual payments related to amounts accrued during the current and prior years.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1988.

San Mateo, California

February 24, 2026

GILEAD SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS


	December 31,
(in millions, except per share amounts)	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	7,564	$	9,991
Short-term marketable debt securities	68		—
Accounts receivable, net	4,913		4,420
Inventories	1,774		1,710
Prepaid and other current assets	4,024		3,052
Total current assets	18,342		19,173
Property, plant and equipment, net	5,606		5,414
Long-term marketable debt securities	2,974		—
Intangible assets, net	16,978		19,948
Goodwill	8,314		8,314
Deferred tax assets	1,964		2,378
Other long-term assets	4,845		3,769
Total assets	$	59,023	$	58,995
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	715	$	833
Accrued rebates	4,337		3,892
Current portion of long-term debt, net	2,807		1,815
Other current liabilities	3,953		5,464
Total current liabilities	11,813		12,004
Long-term debt, net	22,129		24,896
Long-term income taxes payable	896		830
Deferred tax liabilities	402		724
Other long-term liabilities	1,165		1,295
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, par value $0.001 per share; 5 shares authorized; none outstanding	—		—
Common stock, par value $0.001 per share; 5,600 authorized; 1,241 and 1,246 shares issued and outstanding, respectively	1		1
Additional paid-in capital	8,932		7,700
Accumulated other comprehensive income	39		132
Retained earnings	13,730		11,497
Total Gilead stockholders’ equity	22,703		19,330
Noncontrolling interest	(84)		(84)
Total stockholders’ equity	22,618		19,246
Total liabilities and stockholders’ equity	$	59,023	$	58,995

See accompanying notes.

GILEAD SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS


	Year Ended December 31,
(in millions, except per share amounts)	2025		2024		2023
Revenues:
Product sales	$	28,915	$	28,610	$	26,934
Royalty, contract and other revenues	527		144		182
Total revenues	29,443		28,754		27,116
Costs and expenses:
Cost of goods sold	6,234		6,251		6,498
Research and development expenses	5,799		5,907		5,718
Acquired in-process research and development expenses	1,024		4,663		1,155
In-process research and development impairments	590		4,180		50
Selling, general and administrative expenses	5,774		6,091		6,090
Total costs and expenses	19,421		27,092		19,511
Operating income	10,022		1,662		7,605
Interest expense	1,024		977		944
Other (income) expense, net	(798)		(6)		(198)
Income before income taxes	9,796		690		6,859
Income tax expense	1,286		211		1,247
Net income	8,510		480		5,613
Net loss attributable to noncontrolling interest	—		—		(52)
Net income attributable to Gilead	$	8,510	$	480	$	5,665

Basic earnings per share attributable to Gilead	$	6.84	$	0.38	$	4.54
Diluted earnings per share attributable to Gilead	$	6.78	$	0.38	$	4.50

Shares used in basic earnings per share attributable to Gilead calculation	1,244		1,247		1,248
Shares used in diluted earnings per share attributable to Gilead calculation	1,255		1,255		1,258

See accompanying notes.

GILEAD SCIENCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Year Ended December 31,
(in millions)	2025		2024		2023
Net income	$	8,510	$	480	$	5,613
Other comprehensive (loss) income, net of reclassifications and taxes:
Net gain (loss) on foreign currency translation	38		(26)		60
Net gain on available-for-sale debt securities	8		5		28
Net (loss) gain on cash flow hedges	(139)		125		(62)
Other comprehensive (loss) income, net	(93)		104		26
Comprehensive income, net	8,418		584		5,639
Comprehensive loss attributable to noncontrolling interest, net	—		—		(52)
Comprehensive income attributable to Gilead, net	$	8,418	$	584	$	5,691

See accompanying notes.

GILEAD SCIENCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


(in millions, except per share amounts)		Gilead Stockholders' Equity													Noncontrolling Interest		Total Stockholders' Equity
	Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Income			Retained Earnings
	Shares		Amount
Balance as of December 31, 2022		1,247		$	1		$	5,550		$	2		$	15,687	$	(31)	$	21,209
Net income (loss)		—		—			—			—			5,665		(52)		5,613
Other comprehensive income, net		—		—			—			26			—		—		26
Issuances under employee stock purchase plan		2		—			129			—			—		—		129
Issuances under equity incentive plans		13		—			99			—			—		—		99
Stock-based compensation		—		—			767			—			—		—		767
Repurchases of common stock under repurchase programs ($79.52 average price per share)		(13)		—			(45)			—			(955)		—		(1,000)
Repurchases of common stock for employee tax withholding under equity incentive plans and other		(4)		—			—			—			(279)		—		(279)
Dividends declared ($3.00 per share)		—		—			—			—			(3,814)		—		(3,814)
Balance as of December 31, 2023		1,246		1			6,500			28			16,304		(84)		22,749
Net income		—		—			—			—			480		—		480
Other comprehensive income, net		—		—			—			104			—		—		104
Issuances under employee stock purchase plan		2		—			139			—			—		—		139
Issuances under equity incentive plans		16		—			282			—			—		—		282
Stock-based compensation		—		—			834			—			—		—		834
Repurchases of common stock under repurchase programs ($79.54 average price per share)		(14)		—			(55)			—			(1,095)		—		(1,150)
Repurchases of common stock for employee tax withholding under equity incentive plans and other		(4)		—			—			—			(280)		—		(280)
Dividends declared ($3.08 per share)		—		—			—			—			(3,911)		—		(3,911)
Balance as of December 31, 2024		1,246		1			7,700			132			11,497		(84)		19,246
Net income		—		—			—			—			8,510		—		8,510
Other comprehensive loss, net		—		—			—			(93)			—		—		(93)
Issuances under employee stock purchase plan		2		—			143			—			—		—		143
Issuances under equity incentive plans		15		—			265			—			—		—		265
Stock-based compensation		—		—			899			—			—		—		899
Repurchases of common stock under repurchase programs ($107.50 average price per share)		(18)		—			(74)			—			(1,848)		—		(1,922)
Repurchases of common stock for employee tax withholding under equity incentive plans and other		(4)		—			—			—			(441)		—		(441)
Dividends declared ($3.16 per share)		—		—			—			—			(3,989)		—		(3,989)
Balance as of December 31, 2025		1,241		$	1		$	8,932		$	39		$	13,730	$	(84)	$	22,618

See accompanying notes.

GILEAD SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended December 31,
(in millions)	2025		2024		2023
Operating Activities:
Net income	$	8,510	$	480	$	5,613
Adjustments to reconcile Net income to Net cash provided by operating activities:
Depreciation expense	370		381		354
Amortization expense	2,390		2,386		2,339
Stock-based compensation expense	894		835		766
Deferred income taxes	160		(1,844)		(962)
Net (gain) loss from equity securities	(451)		274		167
Acquired in-process research and development expenses	1,024		4,663		1,155
In-process research and development impairments	590		4,180		50
Other, net	480		353		826
Changes in operating assets and liabilities:
Accounts receivable, net	(367)		139		157
Inventories	(1,036)		(426)		(842)
Prepaid expenses and other	(311)		(259)		39
Accounts payable	(132)		290		(347)
Income tax assets and liabilities, net	(2,108)		(732)		(1,768)
Accrued and other liabilities	6		108		458
Net cash provided by operating activities	10,019		10,828		8,006

Investing Activities:
Purchases of marketable debt securities	(3,939)		(244)		(1,930)
Proceeds from sales of marketable debt securities	854		2,265		510
Proceeds from maturities of marketable debt securities	55		327		1,334
Acquisitions, including in-process research and development, net of cash acquired	(1,070)		(4,840)		(1,152)
Purchases of equity securities	(133)		(492)		(442)
Purchases of property, plant and equipment	(563)		(523)		(585)
Other investing activities, net	2		58		(1)
Net cash used in investing activities	(4,793)		(3,449)		(2,265)

Financing Activities:
Proceeds from debt financing, net of issuance costs	—		3,464		1,980
Proceeds from issuances of common stock	408		422		232
Repurchases of common stock under repurchase programs	(1,922)		(1,150)		(1,000)
Repayments of debt and other obligations	(1,788)		(1,970)		(2,250)
Payments of dividends	(4,003)		(3,918)		(3,809)
Other financing activities, net	(440)		(281)		(279)
Net cash used in financing activities	(7,745)		(3,433)		(5,125)
Effect of exchange rate changes on cash and cash equivalents	92		(40)		57
Net change in cash and cash equivalents	(2,428)		3,906		673
Cash and cash equivalents at beginning of period	9,991		6,085		5,412
Cash and cash equivalents at end of period	$	7,564	$	9,991	$	6,085

See accompanying notes.

GILEAD SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Business

Gilead Sciences, Inc. (including its consolidated subsidiaries, referred to as “Gilead,” the “company,” “we,” “our” or “us”) is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people. We are committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis, COVID-19 and cancer. We operate in more than 35 countries worldwide, with headquarters in Foster City, California.

Our portfolio of marketed products includes AmBisome®, Atripla®, Biktarvy®, Cayston®, Complera®, Descovy®, Descovy for PrEP®, Emtriva®, Epclusa®, Eviplera®, Genvoya®, Harvoni®, Hepcludex®, Hepsera®, Jyseleca®, Letairis®, Livdelzi®/Lyvdelzi®, Odefsey®, Sovaldi®, Stribild®, Sunlenca®, Tecartus®, Trodelvy®, Truvada®, Truvada for PrEP®, Tybost®, Veklury®, Vemlidy®, Viread®, Vosevi®, Yescarta®, Yeztugo®/Yeytuo® and Zydelig®. The approval status of Hepcludex and Jyseleca vary worldwide, and Hepcludex and Jyseleca are not approved in the U.S. We also sell and distribute authorized generic versions of Epclusa and Harvoni in the U.S. through our separate subsidiary, Asegua Therapeutics LLC (“Asegua”). In addition, we sell and distribute certain products through our corporate partners under collaborative agreements. See Note 2. Revenues for a summary of disaggregated revenues by product and geographic region.

We have one operating segment which primarily focuses on the discovery, development and commercialization of innovative medicines in areas of unmet medical need. See Note 16. Segment Information for further details.

Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of Gilead, our wholly-owned subsidiaries and any variable interest entities (“VIEs”) for which we are the primary beneficiary. All intercompany transactions have been eliminated. For any consolidated entities where we own or are exposed to less than 100% of the economics, we record net income or loss attributable to noncontrolling interests in our Consolidated Statements of Operations equal to the attributable economic or ownership interest retained in such entities by the respective noncontrolling parties.

When we obtain a variable interest in another entity, we assess at the inception of the relationship and upon occurrence of certain significant events whether the entity is a VIE and, if so, whether we are the primary beneficiary of the VIE based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The preparation of these Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing basis, we evaluate our significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ significantly from these estimates.

Beginning with this Annual Report on Form 10-K, in Note 2. Revenues, we have disclosed our revenues related to major customers as a percentage of gross product sales rather than as a percentage of Total revenues. Prior periods have been revised to reflect this change.

We have evaluated subsequent events through the report issuance date and determined that there are no further events or transactions to be disclosed other than those already disclosed elsewhere in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Certain amounts and percentages herein may not sum or recalculate due to rounding.

Revenue Recognition

Product Sales

We recognize revenue from product sales when control of the product transfers to the customer, which is generally upon shipment or delivery, or in certain cases, upon the corresponding sales by our customer to a third party. Revenues are recognized net of estimated rebates and chargebacks, patient co-pay assistance, prompt pay discounts, distributor fees, sales return provisions and other related deductions. These deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur. Our payment terms to customers generally range from 30 to 90 days; however, payment terms differ by jurisdiction, by customer and, in some instances, by type of product. Revenues from product sales, net of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring when the uncertainty associated with gross-to-net deductions is subsequently resolved. Taxes assessed by governmental authorities and collected from customers are excluded from product sales. If we expect, at contract inception, that the period between the transfer of control and corresponding payment from the customer will be one year or less, we do not adjust the amount of consideration for the effects of a financing component. Shipping and handling activities are considered to be fulfillment activities and not a separate performance obligation.

Gross-to-Net Deductions

Rebates and Chargebacks

Rebates and chargebacks include amounts due to payers and healthcare providers under various programs based on contractual arrangements or statutory requirements, which may vary by product, payer and individual plans. Providers qualified under certain programs can purchase our products through wholesalers or other distributors at a discount. The wholesalers or distributors then charge the discount back to us.

Rebates and chargebacks are estimated primarily based on product sales, including product mix and pricing, historical and estimated payer mix and discount rates, among other inputs, which require significant estimates and judgment. We assess and update our estimates each reporting period to reflect actual claims and other current information.

Chargebacks that are payable to our direct customers are generally classified as reductions of Accounts receivable on our Consolidated Balance Sheets. Rebates that are payable to third party payers and healthcare providers are recorded in Accrued rebates on our Consolidated Balance Sheets.

Patient Co-Pay Assistance

Co-pay assistance represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance. Our accrual for co-pay is based on an estimate of claims and the cost per claim that we expect to receive associated with inventory that exists in the distribution channel at period end.

Cash Discounts

We estimate cash discounts based on contractual terms, historical customer payment patterns and our expectations regarding future customer payment patterns.

Distributor Fees

Under our inventory management agreements with our significant U.S. wholesalers, we pay the wholesalers a fee primarily for compliance with certain contractually-determined covenants such as the maintenance of agreed-upon inventory levels. These distributor fees are based on a contractually-determined fixed percentage of sales.

Allowance for Sales Returns

We typically permit returns if the product is damaged, defective, or otherwise cannot be used by the customer. In the U.S., we typically permit returns six months prior to and up to one year after the product expiration date. Outside the U.S., returns are only allowed in certain countries on a limited basis.

Our estimates of sales returns are based primarily on analysis of our historical product return patterns, industry information reporting the return rates for similar products and contractual agreement terms. We also take into consideration known or expected changes in the marketplace specific to each product.

Royalty, Contract and Other Revenues

Royalty revenue on licensed intellectual property is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partners occur, using the sales- and usage-based royalty exception. Contract and other revenues are recognized when the performance obligation is satisfied to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring.

Research and Development Expenses

Research and development expenses are recorded when incurred and consist primarily of personnel costs including salaries, benefits and stock-based compensation expense, infrastructure, materials and supplies and other support costs, research and clinical studies performed by contract research organizations (“CROs”) and our collaboration partners and other outside services. From time to time, we enter into development and collaboration agreements in which we share expenses with a collaboration partner. We record payments received from our collaborative partners for their share of the development costs as a reduction of Research and development expenses.

Clinical study costs are a significant component of Research and development expenses. Most of our clinical studies are performed by third-party CROs. We monitor levels of performance under each significant contract including the extent of patient enrollment and other activities through communications with our CROs. We accrue costs for clinical studies performed by CROs over the service periods specified in the contracts and adjust our estimates, if required, based upon our ongoing review of the level of effort and costs actually incurred by the CROs. All of our material CRO contracts are terminable by us upon written notice and we are generally only liable for actual services completed by the CRO and certain non-cancelable expenses incurred at any point of termination. Payments we make for research and development (“R&D”) services prior to the services being rendered are recorded as prepaid assets within Prepaid and other current assets on our Consolidated Balance Sheets and are expensed as the services are provided.

Acquired In-Process Research and Development Expenses

Acquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed in-process research and development (“IPR&D”) projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and pre-commercialization milestone payments related to various collaborations and the costs of rights to IPR&D projects.

Selling, General and Administrative Expenses

Selling, general and administrative expenses are recorded when incurred and consist primarily of personnel costs, facilities and overhead costs, and selling, marketing and advertising expenses, as well as other general and administrative costs related to finance, human resources, legal and other administrative activities.

Advertising expenses within Selling, general and administrative expenses, including promotional expenses, are recorded when incurred and were $1.0 billion, $869 million and $826 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Stock-Based Compensation

We provide stock-based compensation in the form of various types of equity-based awards, including restricted stock units (“RSUs”), performance share units (“PSUs”) and stock options, and through our Employee Stock Purchase Plan and the International Employee Stock Purchase Plan (together, as amended, the “ESPP”). Stock-based compensation expense is based on the estimated fair value of the award on the grant date, or the first date of the ESPP purchase period, and recognized over the requisite service periods on our Consolidated Statements of Operations using the straight-line expense attribution approach, reduced for estimated forfeitures. We estimate forfeitures based on our historical experience. The requisite service period could be shorter than the vesting period if an employee is retirement eligible or if an employee terminates due to death or disability.

The estimated fair value of RSUs is based on the closing price of our common stock on the grant date. For PSUs, depending on the terms of the award, estimated fair value is based on either the Monte Carlo valuation methodology or the closing stock price on the grant date. For stock option and ESPP awards, estimated fair value is based on the Black-Scholes option valuation model. Estimated inputs to that model include (i) expected volatility, based on a blend of historical volatility of our common stock price along with implied volatility for traded options on our common stock, (ii) expected term in years, based on the weighted-average period awards are expected to remain outstanding using historical cancellation and exercise data, contractual terms and vesting terms of the award, (iii) risk-free interest rate, based on observed interest rates appropriate for the term of the stock-based awards, and (iv) expected dividend yield, based on our history and expectation of dividend payments.

Earnings Per Share

Basic earnings per share attributable to Gilead is calculated based on Net income attributable to Gilead on our Consolidated Statements of Operations divided by the weighted-average number of shares of our common stock outstanding during the period. Diluted earnings per share attributable to Gilead is calculated based on Net income attributable to Gilead on our Consolidated Statements of Operations divided by the weighted-average number of shares of our common stock and other dilutive securities outstanding during the period. The potentially dilutive shares of our common stock resulting from the assumed exercise of outstanding stock options and equivalents are determined under the treasury stock method.

Cash and Cash Equivalents

We consider highly liquid investments with insignificant interest rate risk and an original maturity of three months or less on the purchase date to be cash equivalents.

Marketable Debt Securities

All of our marketable debt securities are classified as available-for-sale and recorded at fair value. We determine the appropriate classification of our marketable debt securities at the time of purchase and reevaluate such designation at each balance sheet date. We regularly review our investments for declines in fair value below their amortized cost basis to determine whether the impairment is due to credit-related factors or noncredit-related factors. Our review includes the creditworthiness of the security issuers, the severity of the unrealized losses, whether we have the intent to sell the securities and whether it is more likely than not that we will be required to sell the securities before the recovery of their amortized cost bases. When we determine that a portion of the unrealized loss is due to an expected credit loss, we recognize the loss amount in Other (income) expense, net, with a corresponding allowance against the carrying value of the security we hold. The portion of any unrealized loss related to factors other than credit losses, as well as any unrealized gains, are recognized in Accumulated other comprehensive income on our Consolidated Balance Sheets until realized, at which point they are reclassified into Other (income) expense, net on our Consolidated Statements of Operations. Interest and amortization of purchase premiums and discounts are also recorded in Other (income) expense, net on our Consolidated Statements of Operations. The cost of securities sold and the related tax impact is based on the specific identification method.

Accounts Receivable

Trade accounts receivable are recorded net of allowances for wholesaler chargebacks related to government and other programs, cash discounts for prompt payment and estimated credit losses. Estimates of our allowance for credit losses consider a number of factors, including existing contractual payment terms, individual customer circumstances, historical payment patterns of our customers, a review of the local economic environment and its potential impact on expected future customer payment patterns and government funding and reimbursement practices.

Inventories

Inventories are recorded at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We periodically review our inventories to identify obsolete, slow-moving, excess or otherwise unsaleable items. If obsolete, slow-moving, excess or unsaleable items are observed and there are no alternate uses for the inventory, we record a write-down to net realizable value through a charge to Cost of goods sold on our Consolidated Statements of Operations. The determination of net realizable value requires judgment, including consideration of many factors, such as estimates of future product demand, product net selling prices, current and future market conditions and potential product obsolescence, among others. Inventories that are not expected to be sold within 12 months are classified in Other long-term assets on our Consolidated Balance Sheets.

When future commercialization of a product is considered probable and the future economic benefit is expected to be realized, based on management’s judgment, we capitalize pre-launch inventory costs prior to regulatory approval. A number of factors are considered, including the current status in the regulatory approval process, potential impediments to the approval process such as safety or efficacy, anticipated R&D initiatives that could impact the indication in which the compound will be used, viability of commercialization and marketplace trends.

Equity Securities

Equity securities with readily determinable fair values, including those for which we have elected the fair value option, are recorded at fair market value, and unrealized and realized gains and losses are included in Other (income) expense, net on our Consolidated Statements of Operations.

Equity securities without readily determinable fair values are recorded using the measurement alternative of cost less impairment, if any, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. Any impairments or adjustments are recorded in Other (income) expense, net on our Consolidated Statements of Operations.

For investments in entities over which we have significant influence but do not meet the requirements for consolidation and have not elected the fair value option, we use the equity method of accounting, with our share of the underlying income or loss of such entities reported in Other (income) expense, net on our Consolidated Statements of Operations.

Our investments in equity securities are classified in Prepaid and other current assets or Other long-term assets on our Consolidated Balance Sheets, generally depending on marketability and whether the securities are subject to lock-up provisions. We regularly review our securities for indicators of impairment.

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized using the straight-line method. Repairs and maintenance costs are expensed as incurred. Estimated useful lives in years are generally as follows:


Description						Estimated Useful Life
Buildings and improvements						Up to 45
Leasehold improvements						Lease term or shorter
Laboratory and manufacturing equipment						4-10
Internal-use software						3-9
Other						3-15

See “Impairment of Long-Lived Assets” for additional information.

Leases

We determine if an arrangement contains a lease at inception and classify each lease as operating or financing. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term, which is the non-cancelable period stated in the contract adjusted for any options to extend or terminate when it is reasonably certain that we will exercise that option. Right-of-use assets are adjusted for prepaid lease payments, lease incentives and initial direct costs incurred. Operating lease expense for the minimum lease payments is recognized on a straight-line basis over the lease term.

We account for lease and nonlease components in our lease agreements as a single lease component in determining lease assets and liabilities. In addition, we do not recognize the right-of-use assets and liabilities for leases with lease terms of one year or less.

As most of our operating leases do not provide an implicit interest rate, we generally utilize a collateralized incremental borrowing rate, applied in a portfolio approach when relevant, based on the information available at the commencement date to determine the lease liability.

Acquisitions, including Goodwill, Intangible Assets and Contingent Consideration

We account for business combinations using the acquisition method of accounting, which generally requires that assets acquired, including IPR&D projects, and liabilities assumed be recorded at their fair values as of the acquisition date on our Consolidated Balance Sheets. Any excess of consideration over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires us to make significant estimates and assumptions. As a result, we may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period, which may be up to one year from the acquisition date, with the corresponding offset to goodwill. Transaction costs associated with business combinations are expensed as they are incurred.

Intangible assets related to IPR&D projects are considered to be indefinite-lived until the abandonment or completion of the associated R&D efforts, which generally occurs when regulatory approval is obtained. Goodwill and indefinite-lived intangible assets are not amortized and, instead, are tested for impairment annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired.

Intangible assets with finite useful lives are amortized over their estimated useful lives, primarily on a straight-line basis, and are also periodically reviewed for changes in facts or circumstances resulting in a reduction to the estimated useful life of the asset, requiring the acceleration of amortization. See “Impairment of Long-Lived Assets” for additional information.

In determining the initial fair value of an intangible asset, or when quantitative analysis is required to determine any impairment, we use a probability-weighted income approach that discounts expected future cash flows to present value using a discount rate that is based on the estimated weighted-average cost of capital for companies with profiles similar to ours and represents the rate that market participants would use to value the intangible assets. These cash flow models require the use of Level 3 fair value measurements and inputs, including estimated revenues, which, for example, include significant inputs such as addressable patient population, treatment duration, projected market share, assessment of the asset’s life cycle, and competitive trends impacting the asset; costs and probability of technical and regulatory success, among other factors.

In connection with certain acquisitions, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. We record contingent consideration resulting from a business combination at its fair value on the acquisition date. Each reporting period thereafter, we revalue these obligations and record increases or decreases in their fair value on our Consolidated Statements of Operations until such time that the payment is made. Increases or decreases in fair value of the contingent consideration liabilities can result from updates to assumptions such as the expected timing or probability of achieving the specified milestones, changes in projected revenues or changes in discount rates.

When we determine net assets acquired do not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and, therefore, no goodwill is recorded and contingent consideration generally is not recognized at the acquisition date. In an asset acquisition, upfront payments allocated to IPR&D projects at the acquisition date and subsequent pre-commercialization milestone payments are expensed as incurred on our Consolidated Statements of Operations unless there is an alternative future use.

Impairment of Long-Lived Assets

Long-lived assets, including property, plant and equipment and finite-lived intangible assets, are reviewed for impairment whenever facts or circumstances either internally or externally may indicate that the carrying value of an asset may not be recoverable. Should there be an indication of impairment, we test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset over its useful life to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

Derivatives

We recognize all derivative instruments as either assets or liabilities at fair value on our Consolidated Balance Sheets. Unrealized changes in the fair value of derivatives designated as part of a hedge transaction related to forecasted product sales, net of the related tax impact, are recorded in Accumulated other comprehensive income. The unrealized gains or losses in Accumulated other comprehensive income are reclassified into Product sales, as well as the related tax impact into Income tax (benefit) expense, on our Consolidated Statements of Operations when the respective hedged transactions affect earnings. Changes in the fair value of derivatives that are not part of a hedge transaction are recorded each period in Other (income) expense, net on our Consolidated Statements of Operations.

Using regression analysis, we assess, both at inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are effective in offsetting the changes in cash flows or fair values of the hedged items. If we determine that a forecasted transaction is probable of not occurring, we discontinue hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the contract is recognized in Other (income) expense, net on our Consolidated Statements of Operations.

Contingencies

We recognize accruals for loss contingencies to the extent that we conclude that a loss is both probable and reasonably estimable. We accrue the best estimate of loss within a range; however, if no estimate in the range is better than any other, then we accrue the minimum amount in the range. If we determine that a material loss is reasonably possible, we disclose the possible loss or range of loss, or that the amount of loss cannot be estimated at this time.

Income Taxes

Our income tax provision is computed under the liability method. Significant estimates are required in determining our provision for income taxes. Some of these estimates are based on interpretations of applicable tax laws or regulations.

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance to reduce our deferred tax assets to the amounts that are more likely than not to be realized. We consider future taxable income, ongoing tax planning strategies and our historical financial performance in assessing the need for a valuation allowance. If we expect to realize deferred tax assets for which we have previously recorded a valuation allowance, we will reduce the valuation allowance in the period in which such determination is first made.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by tax authorities based on the technical merits of the position. The tax benefit recognized in the Consolidated Financial Statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. The amount of unrecognized tax benefits is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by tax authorities, new information obtained during a tax examination or resolution of an examination. We recognize both accrued interest and penalties, where appropriate, related to unrecognized tax benefits in Income tax expense on our Consolidated Statements of Operations.

We have elected to account for the tax on Global Intangible Low-Taxed Income as a component of tax expense in the period in which the tax is incurred.

Stock Repurchases

We use the par value method of accounting for our stock repurchases made under repurchase programs. Under the par value method, we record the par value of the shares repurchased to Common stock and the historical issuance cost over par value of the shares repurchased to Additional paid-in capital. The excess of the cost of the shares repurchased over these two amounts is then recorded to Retained earnings.

Foreign Currency Translation and Transactions

Our Consolidated Financial Statements are presented in U.S. dollars. The functional currency for most of our foreign subsidiaries is their local currency. Revenues, expenses, gains and losses for non-U.S. dollar functional currency entities are translated into U.S. dollars using average currency exchange rates for the period. Assets and liabilities for such entities are translated using exchange rates that approximate the rate at the balance sheet date. Foreign currency translation adjustments are recorded as a component of Accumulated other comprehensive income on our Consolidated Balance Sheets. Foreign currency transaction gains and losses on transactions not denominated in functional currency are recorded in Other (income) expense, net, on our Consolidated Statements of Operations.

Fair Value Measurements

We apply fair value accounting for all financial and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risks.

We determine the fair value using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows:

Level 1 inputs include quoted prices in active markets for identical assets or liabilities;
Level 2 inputs include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and
Level 3 inputs include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Our Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation.

Recently Adopted Accounting Pronouncements

In December 2023, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires incremental annual disclosures around income tax rate reconciliations, income taxes paid and other related disclosures. Beginning with this Annual Report on Form 10-K, we adopted this standard using a retrospective approach, resulting in increased disclosures in our Notes to Consolidated Financial Statements. See Note 15. Income Taxes for additional information.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, FASB issued ASU No. 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses, and can be applied prospectively or retrospectively. We plan to adopt this guidance beginning with our 2027 annual report to be filed in early 2028 and all quarterly and annual reports thereafter. We expect the adoption of this standard to result in increased disclosures in our Notes to Consolidated Financial Statements.

2. REVENUES

Disaggregation of Revenues

The following table summarizes our Total revenues:


	Year Ended December 31, 2025								Year Ended December 31, 2024								Year Ended December 31, 2023
(in millions)	U.S.		Europe(6)		Rest of World(6)		Total		U.S.		Europe(6)		Rest of World(6)		Total		U.S.		Europe(6)		Rest of World(6)		Total
Product sales:
HIV
Biktarvy	$	11,467	$	1,676	$	1,190	$	14,334	$	10,855	$	1,509	$	1,060	$	13,423	$	9,692	$	1,253	$	905	$	11,850
Descovy	2,559		93		105		2,758		1,902		100		110		2,113		1,771		100		114		1,985
Genvoya	1,281		148		69		1,498		1,498		180		84		1,762		1,752		205		103		2,060
Odefsey	881		246		40		1,167		957		290		41		1,288		1,012		294		44		1,350
Symtuza - Revenue share(1)	363		120		12		495		450		130		12		592		382		133		13		529
Other HIV(2)	352		109		40		500		257		129		48		434		238		116		47		401
Total HIV	16,904		2,392		1,456		20,752		15,918		2,339		1,355		19,612		14,848		2,102		1,226		18,175

Liver Disease
Sofosbuvir/Velpatasvir(3)	636		292		344		1,272		922		299		374		1,596		859		323		355		1,537
Vemlidy	507		49		514		1,070		486		44		428		959		410		38		414		862
Other Liver Disease(4)	476		330		69		874		192		202		73		467		152		150		83		385
Total Liver Disease	1,619		671		927		3,217		1,601		545		876		3,021		1,421		511		852		2,784

Veklury	470		151		290		911		892		284		623		1,799		972		408		805		2,184

Oncology
Cell Therapy
Tecartus	153		158		32		344		234		138		31		403		245		110		15		370
Yescarta	595		598		303		1,495		662		666		242		1,570		811		547		140		1,498
Total Cell Therapy	748		755		335		1,839		896		804		274		1,973		1,055		658		156		1,869

Trodelvy	877		347		173		1,397		902		294		119		1,315		777		217		68		1,063
Total Oncology	1,626		1,102		508		3,236		1,798		1,098		393		3,289		1,833		875		224		2,932

Other
AmBisome	20		267		221		509		44		276		212		533		43		260		189		492
Other(5)	177		32		81		290		255		34		68		356		261		40		66		367
Total Other	197		300		302		799		299		310		280		889		304		301		255		859
Total product sales	20,816		4,617		3,483		28,915		20,508		4,576		3,526		28,610		19,377		4,197		3,361		26,934
Royalty, contract and other revenues	60		447		20		527		82		58		4		144		62		114		7		182
Total revenues	$	20,876	$	5,064	$	3,503	$	29,443	$	20,591	$	4,634	$	3,529	$	28,754	$	19,438	$	4,310	$	3,368	$	27,116

(1) Represents our revenue from cobicistat (“C”), emtricitabine (“FTC”) and tenofovir alafenamide (“TAF”) in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland Unlimited Company (“Janssen”). See Note 7. Collaborations and Other Arrangements for additional information.

(2) Includes Atripla, Complera/Eviplera, Emtriva, Stribild, Sunlenca, Truvada, Tybost and Yeztugo/Yeytuo.

(3) Includes Epclusa and the authorized generic version of Epclusa sold by Gilead’s separate subsidiary, Asegua.

(4) Includes ledipasvir/sofosbuvir (Harvoni and the authorized generic version of Harvoni sold by Asegua), Hepcludex, Hepsera, Livdelzi/Lyvdelzi, Sovaldi, Viread and Vosevi.

(5) Includes Cayston, Jyseleca, Letairis and Zydelig.

(6) All individual international locations accounted for less than 10% of Total revenues.

Revenues from Major Customers

The following table summarizes the revenues from each of our customers who individually accounted for 10% or more of our total gross product sales:


	Year Ended December 31,
(as a percentage of total gross product sales)	2025		2024		2023
Cardinal Health, Inc. (“Cardinal Health”)	29	%	29	%	28	%
Cencora, Inc. (“Cencora”)	21	%	21	%	22	%
McKesson Corporation (“McKesson”)	24	%	23	%	24	%

Revenues Recognized from Performance Obligations Satisfied in Prior Years

The following table summarizes revenues recognized from performance obligations satisfied in prior years:


	Year Ended December 31,
(in millions)	2025		2024		2023
Revenue share with Janssen(1) and royalties for licenses of intellectual property	$	612	$	727	$	680
Changes in estimates(2)	$	903	$	452	$	340

(1) See Note 7. Collaborations and Other Arrangements for additional information.

(2) Changes in estimates increased during the year ended December 31, 2025 primarily due to recognition of $400 million in the third quarter of previously constrained revenues from the sale of certain intellectual property.

Contract Balances

The following table summarizes our contract balances:


	December 31,
(in millions)	2025		2024
Contract assets(1)	$	629	$	277
Contract liabilities(2)	$	48	$	58

(1) The increase in contract assets during the year ended December 31, 2025 primarily related to recognition of $400 million in the third quarter of previously constrained revenues from the sale of certain intellectual property.

(2) Future revenues recognized from contract liabilities are not expected to be material in any one year.

3. FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following table summarizes the types of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy:


	December 31, 2025								December 31, 2024
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Available-for-sale debt securities:
U.S. treasury securities	$	1,224	$	—	$	—	$	1,224	$	—	$	—	$	—	$	—
U.S. government agencies securities	—		15		—		15		—		—		—		—
Corporate debt securities	—		1,398		—		1,398		—		—		—		—
Residential mortgage and asset-backed securities	—		407		—		407		—		—		—		—
Equity securities:
Money market funds	6,150		—		—		6,150		8,502		—		—		8,502
Publicly traded equity securities	1,961		—		—		1,961		1,561		—		—		1,561
Deferred compensation plan	406		—		—		406		343		—		—		343
Foreign currency derivative contracts	—		56		—		56		—		128		—		128
Total	$	9,741	$	1,875	$	—	$	11,616	$	10,405	$	128	$	—	$	10,533
Liabilities:
Contingent consideration liability	$	—	$	—	$	278	$	278	$	—	$	—	$	206	$	206
Deferred compensation plan	406		—		—		406		343		—		—		343
Foreign currency derivative contracts	—		72		—		72		—		3		—		3
Total	$	406	$	72	$	278	$	757	$	343	$	3	$	206	$	552

Level 2 Inputs

Available-for-Sale Debt Securities

For our available-for-sale debt securities, we estimate the fair values by reviewing trading activity and pricing as of the measurement date and by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate the fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.

Foreign Currency Derivative Contracts

Our foreign currency derivative contracts have maturities of 18 months or less and all are with counterparties that have a minimum credit rating of A- or equivalent by S&P Global Ratings, Moody’s Investors Service, Inc. or Fitch Ratings, Inc. We estimate the fair values of these contracts by utilizing an income-based industry standard valuation model for which all significant inputs are observable, either directly or indirectly. These inputs include foreign currency exchange rates, Secured Overnight Financing Rate (“SOFR”) and swap rates. These inputs, where applicable, are observable at commonly quoted intervals.

Level 3 Inputs

Contingent Consideration Liability

In connection with our first quarter 2021 acquisition of MYR GmbH, we are subject to a potential contingent consideration payment of up to €300 million, subject to customary adjustments, which is revalued each reporting period using probability-weighted scenarios for U.S. Food and Drug Administration (“FDA”) approval of bulevirtide until the related contingency is resolved.

The following table summarizes the change in fair value of our contingent consideration liability:


	Year Ended December 31,
(in millions)	2025		2024		2023
Beginning balance	$	206	$	228	$	275
Changes in valuation assumptions(1)	43		(7)		(60)
Effect of foreign exchange remeasurement(2)	29		(14)		12
Ending balance(3)	$	278	$	206	$	228

(1) Included in Research and development expenses on our Consolidated Statements of Operations. The changes in 2025 primarily related to changes in assumptions around probability. The changes in 2023 primarily related to changes in assumptions around probability and timing of regulatory approval.

(2) Included in Other (income) expense, net on our Consolidated Statements of Operations.

(3) Included in Other current liabilities as of December 31, 2025 and in Other long-term liabilities as of December 31, 2024 and 2023 on our Consolidated Balance Sheets, respectively.

Fair Value Level Transfers

There were no transfers between Level 1, Level 2 and Level 3 in the periods presented.

Nonrecurring Fair Value Measurements

In 2025, 2024 and 2023, we recorded partial impairment charges of $590 million, $4.2 billion and $50 million, respectively, related to certain acquired IPR&D assets. See Note 8. Goodwill and Intangible Assets for additional information.

In 2023, we recorded a $51 million write-off of our finite-lived intangible asset related to filgotinib as discussed in Note 8. Goodwill and Intangible Assets, as well as a $381 million write-off of manufacturing assets related to changes in our manufacturing strategy as discussed in Note 9. Other Financial Information. Both charges were recorded within Cost of goods sold on our Consolidated Statements of Operations.

Other Fair Value Disclosures

Senior Unsecured Notes

The following table summarizes the total estimated fair value and carrying value of our senior unsecured notes, determined using Level 2 inputs based on their quoted market values:


	December 31,
(in millions)	2025		2024
Fair value	$	22,342	$	23,335
Carrying value	$	23,827	$	25,562

Liability Related to Future Royalties

We recorded a liability related to future royalties as part of our 2020 acquisition of Immunomedics, Inc. (“Immunomedics”), which is subsequently amortized using the effective interest method over the remaining estimated life. The fair value of the liability related to future royalties, determined using Level 3 inputs, was approximately $0.8 billion and $0.9 billion as of December 31, 2025 and 2024, respectively, and the carrying value was $1.1 billion as of December 31, 2025 and 2024. See Note 10. Debt and Credit Facilities for additional information.

4. AVAILABLE-FOR-SALE DEBT SECURITIES AND EQUITY SECURITIES

Available-for-Sale Debt Securities

The following table summarizes our available-for-sale debt securities:


	December 31, 2025
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. treasury securities	$	1,222	$	3	$	—	$	1,224
U.S. government agencies securities	15		—		—		15
Corporate debt securities	1,392		7		—		1,398
Residential mortgage and asset-backed securities	405		2		—		407
Total	$	3,033	$	11	$	(1)	$	3,044

There were no available-for-sale debt securities balances as of December 31, 2024.

The total gross unrealized losses in the table above relate to available-for-sale debt securities, primarily corporate debt securities and U.S. treasury securities, with an estimated fair value of approximately $724 million that have been in a continuous unrealized loss position for less than 12 months as of December 31, 2025. No allowance for credit losses was recognized for investments with unrealized losses as of December 31, 2025 as the unrealized losses were primarily driven by broader change in interest rates with no adverse conditions identified that would prevent the issuer from making scheduled principal and interest payments. We do not currently intend to sell, and it is not more likely than not that we will be required to sell, such investments before recovery of their amortized cost bases.

The following table summarizes the classification of our available-for-sale debt securities on our Consolidated Balance Sheets:


(in millions)	December 31, 2025
Cash and cash equivalents	$	2
Short-term marketable debt securities	68
Long-term marketable debt securities	2,974
Total	$	3,044

The following table summarizes our available-for-sale debt securities by contractual maturity:


	December 31, 2025
(in millions)	Amortized Cost		Fair Value
Within one year	$	70	$	70
After one year through five years	2,931		2,941
After five years through ten years	32		32
Total	$	3,033	$	3,044

Equity Securities

The following table summarizes the classification of our equity securities on our Consolidated Balance Sheets, including certain equity method investments for which we elected and applied the fair value option as we believe it best reflects the underlying economics of these investments:


(in millions)	December 31, 2025		December 31, 2024
Equity securities measured at fair value:
Cash and cash equivalents:
Money market funds	$	6,150	$	8,502
Prepaid and other current assets:
Equity method investment in Galapagos NV (“Galapagos”) – fair value option	551		462
Equity method investment in Arcus Biosciences, Inc. (“Arcus”) – fair value option	749		448
Other equity method investments – fair value option(1)	183		53
Other	499		614
Other long-term assets	386		327
Equity method investments and other equity securities without readily determinable fair values:
Other long-term assets(2)	393		386
Total	$	8,909	$	10,791

(1) Mostly comprised of our equity interest in Assembly Biosciences, Inc. (“Assembly”), which was approximately 29% of outstanding Assembly stock at the time of our latest purchase of shares.

(2) Mostly comprised of equity interests in certain collaboration partners and investment funds that are considered to be variable interest entities (“VIEs”) for which we are not the primary beneficiary. Our maximum exposure to loss as a result of our involvement in these VIEs is limited to the value of our investment.

The following table summarizes net unrealized gains and losses related to equity securities still held as of the respective ending balance sheet dates for the periods below, included in Other (income) expense, net on our Consolidated Statements of Operations:


	Year Ended December 31,
(in millions)	2025		2024		2023
Unrealized (gain) loss, net, related to fair value option investments	$	(440)	$	377	$	68
Unrealized loss (gain), net, related to all other equity investments	35		(93)		(8)
Total unrealized (gain) loss, net	$	(404)	$	284	$	60

Related Party Transaction

In 2025, we donated certain equity securities at fair value to the Gilead Foundation, a California nonprofit public benefit corporation for which certain of our officers serve as directors, and recorded a related expense of $89 million in Selling, general and administrative expenses on our Consolidated Statements of Operations.

5. DERIVATIVE FINANCIAL INSTRUMENTS

Our operations in foreign countries expose us to risk associated with foreign currency exchange rate fluctuations between the U.S. dollar and various foreign currencies, primarily the Euro. To partially mitigate the impact of changes in currency exchange rates on net cash flows from our foreign currency denominated sales as well as outstanding monetary assets and liabilities, we enter into foreign currency exchange forward contracts. In general, the risk of foreign currency fluctuations related to our operations is offset by corresponding gains and losses from our derivative instruments. By working only with major banks and closely monitoring current market conditions, we seek to limit the credit risk that counterparties to these contracts may be unable to perform. We enter into contracts that permit net settlement at maturity. In addition, our overall risk of loss in the event of counterparty default is limited to the amount of any net unrealized gains on outstanding contracts (i.e., including the impact of offsetting unrealized losses). We do not enter into derivative contracts for trading purposes.

The derivative instruments we use to mitigate our exposures for certain monetary assets and liabilities that are denominated in a non-functional currency are not designated as hedges. The derivative instruments we use to mitigate our exposures for forecasted product sales are designated as cash flow hedges and have maturities of 18 months or less.

We held foreign currency exchange contracts with outstanding notional amounts of $3.9 billion and $2.9 billion as of December 31, 2025 and 2024, respectively.

While all our derivative contracts allow us the right to offset assets and liabilities, we have presented amounts on our Consolidated Balance Sheets on a gross basis. Further, our contracts generally do not require financial collateral. The following table summarizes the classification and fair values of derivative instruments, including the potential effect of offsetting:


	December 31, 2025
(in millions)	Prepaid and other current assets		Other long-term assets		Total Derivative Assets		Other current liabilities		Other long-term liabilities		Total Derivative Liabilities
Foreign currency exchange contracts designated as hedges	$	18	$	2	$	20	$	62	$	3	$	65
Foreign currency exchange contracts not designated as hedges	36		—		36		7		—		7
Total derivatives presented gross on the Consolidated Balance Sheets					$	56					$	72
Total derivatives not offset on the Consolidated Balance Sheets					(40)						(40)
Net amount (legal offset)					$	16					$	32


	December 31, 2024
(in millions)	Prepaid and other current assets		Other long-term assets		Total Derivative Assets		Other current liabilities		Other long-term liabilities		Total Derivative Liabilities
Foreign currency exchange contracts designated as hedges	$	90	$	10	$	100	$	—	$	—	$	—
Foreign currency exchange contracts not designated as hedges	28		—		28		3		—		3
Total derivatives presented gross on the Consolidated Balance Sheets					$	128					$	3
Total derivatives not offset on the Consolidated Balance Sheets					(3)						(3)
Net amount (legal offset)					$	125					$	—

The following table summarizes the effect of our derivative contracts on our Consolidated Financial Statements:


	Year Ended December 31,
(in millions)	2025		2024		2023
Derivatives designated as hedges:
Net (loss) gain recognized in Accumulated other comprehensive income	$	(164)	$	171	$	(14)
Net (loss) gain reclassified from Accumulated other comprehensive income into Product sales	$	(5)	$	27	$	58
Derivatives not designated as hedges:
Net gain recognized in Other (income) expense, net	$	20	$	44	$	57

Approximately $58 million of pre-tax net losses related to the hedged forecasted transactions reported in Accumulated other comprehensive income as of December 31, 2025 are expected to be reclassified to Product sales within 12 months. There were no discontinuances of cash flow hedges for the years ended December 31, 2025, 2024 and 2023.

The cash flow effects of our derivative contracts for the years ended December 31, 2025, 2024 and 2023 were included within Net cash provided by operating activities on our Consolidated Statements of Cash Flows.

6. ACQUISITIONS

Interius

In October 2025, we closed an agreement to acquire all outstanding shares of Interius BioTherapeutics, Inc. (“Interius”), a privately held biotechnology company developing in vivo chimeric antigen receptor (“CAR”) therapeutics, for approximately $350 million in cash consideration. As a result, Interius became our wholly-owned subsidiary.

We accounted for the transaction as an asset acquisition and recorded a $311 million charge to Acquired in-process research and development expenses on our Consolidated Statements of Operations in 2025. The remaining purchase price related to various other assets acquired and liabilities assumed, consisting primarily of deferred tax assets.

CymaBay

In March 2024, we completed the acquisition of CymaBay Therapeutics, Inc. (“CymaBay”) for total consideration of $3.9 billion, net of cash acquired. Upon closing, CymaBay became our wholly-owned subsidiary.

We accounted for this transaction as an asset acquisition since the lead asset, seladelpar, an investigational, oral, peroxisome proliferator-activated receptor delta agonist shown to regulate critical metabolic and liver disease pathways, represented substantially all of the fair value of the gross assets acquired. In 2024, we recorded a $3.8 billion charge, representing an acquired IPR&D asset with no alternative future use, to Acquired in-process research and development expenses, as well as stock-based compensation expense of $133 million related to the cash settlement of unvested CymaBay employee stock awards attributable to post-acquisition services, with $67 million being recorded in Research and development expenses and $67 million in Selling, general and administrative expenses on our Consolidated Statements of Operations. In connection with this acquisition, we recorded $333 million of assets acquired, primarily consisting of net deferred tax assets, and $228 million of liabilities assumed, primarily related to an assumed financing arrangement which we subsequently settled in 2024 through various payments totaling $209 million.

In July 2024, we paid $320 million to Janssen Pharmaceutica NV to extinguish a future royalty obligation related to seladelpar, which was recorded to Acquired in-process research and development expenses on our Consolidated Statements of Operations.

In August 2024, FDA granted accelerated approval for Livdelzi (seladelpar) for the treatment of primary biliary cholangitis in combination with ursodeoxycholic acid (“UDCA”) in adults who have had an inadequate response to UDCA, or as monotherapy in patients unable to tolerate UDCA.

XinThera

In May 2023, we closed an agreement to acquire XinThera, Inc. (“XinThera”), a privately held biotechnology company focused on small molecule drugs to treat cancer and immunologic diseases, for approximately $200 million in cash consideration, net of cash acquired. As a result, XinThera became our wholly-owned subsidiary.

We accounted for the transaction as an asset acquisition and recorded a $170 million charge to Acquired in-process research and development expenses on our Consolidated Statements of Operations in 2023. The remaining purchase price related to various other assets acquired and liabilities assumed. Under the agreement, the former shareholders of XinThera are eligible to receive performance-based development and regulatory milestone payments of up to approximately $760 million, with the first $50 million of such milestones paid and charged primarily to Acquired in-process research and development expenses in October 2023.

Tmunity

In February 2023, we closed an agreement to acquire Tmunity Therapeutics, Inc. (“Tmunity”), a clinical-stage, private biotechnology company focused on next-generation CAR T-cell therapies and technologies. Under the terms of the agreement, we acquired all outstanding shares of Tmunity other than those already owned by Gilead for approximately $300 million in cash consideration. As a result, Tmunity became our wholly-owned subsidiary.

We accounted for the transaction as an asset acquisition and recorded a $244 million charge to Acquired in-process research and development expenses on our Consolidated Statements of Operations in 2023. The remaining purchase price related to various other assets acquired and liabilities assumed, consisting primarily of deferred tax assets. Under the agreement, the former shareholders of Tmunity and the University of Pennsylvania are eligible to receive a mix of up to approximately $1.0 billion in potential future payments upon achievement of certain development, regulatory and sales-based milestones, as well as royalty payments on sales, with the first $25 million of milestones charged to Acquired in-process research and development expenses in 2023 and paid in January 2024. In 2024, we paid an additional $47 million for development milestones met, which was charged to Acquired in-process research and development expenses on our Consolidated Statements of Operations.

7. COLLABORATIONS AND OTHER ARRANGEMENTS

We enter into licensing and strategic collaborations and other similar arrangements with third parties for the research, development and commercialization of certain products and product candidates. The collaborations involve two or more parties who are active participants in the operating activities of the collaboration and are exposed to significant risks and rewards depending on the commercial success of the activities. The financial terms of these arrangements may include non-refundable upfront payments, expense reimbursements, payments by us for options to acquire certain rights, contingent obligations by us for potential development and regulatory milestone payments and/or sales-based milestone payments, royalty payments, revenue or profit-sharing arrangements and cost-sharing arrangements. Certain payments are contingent upon the occurrence of various future events that have a high degree of uncertainty. Development milestone payments are recorded in our Consolidated Statements of Operations as incurred. Regulatory milestone payments are capitalized as intangible assets and amortized to Cost of goods sold over the term of the respective collaboration arrangement. In conjunction with these arrangements, we occasionally purchase shares of the collaboration partner and record such equity investments in either Prepaid and other current assets or Other long-term assets on our Consolidated Balance Sheets, generally depending on marketability and whether the securities are subject to lock-up provisions.

Pregene

In September 2025, we entered into a strategic license and collaboration agreement with Shenzhen Pregene Biopharma Co., Ltd. (“Pregene”) to develop next-generation in vivo therapies. Upon closing of the agreement, we made a $120 million upfront payment, and in the fourth quarter of 2025, we made an $80 million milestone payment to Pregene, both of which were charged to Acquired in-process research and development expenses on our Consolidated Statements of Operations. In addition, Pregene is eligible to receive additional payments up to approximately $1.5 billion upon the achievement of certain development, regulatory, and sales-based milestones as well as up to tiered mid-single digit royalties on annual net sales.

LEO Pharma

In January 2025, we entered into a strategic partnership with LEO Pharma A/S (“LEO Pharma”) to accelerate the development and commercialization of LEO Pharma’s small molecule oral signal transducer and activator of transcription 6 (“STAT6”) programs for the potential treatment of patients with inflammatory diseases. Gilead will have global rights to develop, manufacture, and commercialize the small molecule oral STAT6 program. LEO Pharma will have the option to potentially co-commercialize oral programs for dermatology outside the U.S. LEO Pharma will hold exclusive global rights to STAT6 topical formulations in dermatology. Upon closing of the agreement, we made a $250 million upfront payment to LEO Pharma, which was charged to Acquired in-process research and development expenses on our Consolidated Statements of Operations in 2025. In addition, LEO Pharma is eligible to receive up to approximately $1.5 billion in additional milestone payments and may also receive tiered royalties on sales of oral STAT6 products.

Abingworth

In December 2023, we entered into an arrangement with funds managed by Abingworth LLP (“Abingworth”) under which we will receive up to $210 million to co-fund our development costs for Trodelvy for non-small cell lung cancer in 2023 through 2026. As there is substantive transfer of risk to the financial partner, the development funding is recognized by us as an obligation to perform contractual services. We are recognizing the funding as a reduction of Research and development expenses using an attribution model over the period of the related expenses, with $62 million and $78 million of such reductions recorded during the years ended December 31, 2025 and 2024, respectively. If successful, upon regulatory approval in the U.S. for the specified indication, Abingworth will be eligible to receive an approval-based fixed milestone payment of up to $84 million and royalties based on the applicable net sales.

Arcellx

In January 2023, we closed an agreement to enter into a global strategic collaboration with Arcellx, Inc. (“Arcellx”), a public biotechnology company focused on delivering a new class of innovative immunotherapies for patients with cancer and other incurable diseases, to co-develop and co-commercialize Arcellx’s lead late-stage product candidate, CART-ddBCMA, for the treatment of patients with relapsed or refractory multiple myeloma, and potential future next-generation autologous and non-autologous products. In December 2023, we amended the agreement and expanded the scope of the collaboration to include lymphomas and exercised our option to negotiate a license for Arcellx’s ARC-SparX program, ACLX-001, in multiple myeloma. In conjunction with the collaboration, we recorded a combined $313 million charge to Acquired in-process research and development expenses on our Consolidated Statements of Operations in 2023, primarily related to upfront payments. We also made various purchases of Arcellx shares for which we recorded an equity investment of $299 million on our Consolidated Balance Sheets in 2023. As of December 31, 2025, the investment is included in Prepaid and other current assets. The companies share development, clinical trial and commercialization costs for CART-ddBCMA and will jointly commercialize the product and split U.S. profits 50/50. Outside the U.S., we will commercialize the product and Arcellx will receive royalties on sales. Under the agreement, Arcellx is eligible to receive performance-based development and regulatory milestone payments of up to $1.5 billion related to CART-ddBCMA, a potential future next-generation autologous product and a potential future non-autologous product, with further commercial milestone payments, profit split payments on co-promoted products and royalties on at least a portion of worldwide net sales, depending on whether Arcellx opts in to co-promote the future products. In 2024, we paid $68 million for development milestones met, which was charged to Acquired in-process research and development expenses on our Consolidated Statements of Operations. If additional future products are developed, Arcellx would be eligible to receive additional milestone payments, profit split payments on co-promoted products and royalties on at least a portion of worldwide net sales, depending on whether Arcellx opts in to co-promote these additional future products as well.

In February 2026, we entered into a definitive agreement to acquire Arcellx for an estimated $7.0 billion excluding our pre-existing common stock holdings, providing us with full control of its leading pipeline candidate, anitocabtagene autoleucel (“anito-cel”), an investigational BCMA-directed CAR-T cell therapy for patients with relapsed and/or refractory multiple myeloma. Under the terms of the merger agreement, a wholly-owned subsidiary of Gilead will commence a tender offer to acquire all of the outstanding shares of Arcellx’s common stock that Gilead does not already own for an offer price of $115 per share in cash and one non-transferable contingent value right of $5 per share upon the achievement of cumulative global net sales of anito-cel of at least $6.0 billion from launch through year-end 2029. Following successful completion of the tender offer, Gilead will acquire all remaining shares of Arcellx not tendered in the offer through a second step merger at the same price as in the tender offer. Consummation of the tender offer is subject to a minimum tender of at least a majority of then-outstanding Arcellx shares, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. Gilead plans to pay all cash consideration for the transaction. The tender offer is not subject to a financing condition. Upon closing, which is anticipated in the second quarter of 2026, Arcellx will become a wholly-owned subsidiary.

Merck

In March 2021, we entered into a license and collaboration agreement with Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc. (“Merck”) to jointly develop and commercialize long-acting investigational treatments in HIV that combine Gilead’s investigational capsid inhibitor, lenacapavir, and Merck’s investigational nucleoside reverse transcriptase translocation inhibitor, islatravir, with other formulations potentially added to the collaboration as mutually agreed. The collaboration is initially focused on long-acting oral and injectable formulations.

Under the terms of the agreement, as amended, Gilead and Merck will mostly share global development and commercialization costs at 60% and 40%, respectively, across the oral and injectable formulation programs. For long-acting oral products, if approved, Gilead would lead commercialization in the U.S., and Merck would lead commercialization in the European Union (“EU”) and rest of the world. For long-acting injectable products, if approved, Merck would lead commercialization in the U.S. and Gilead would lead commercialization in the EU and rest of the world. Under the terms of the agreement, Gilead and Merck would jointly promote the combination products in the U.S. and certain other major markets. If successful, we would share global product revenues with Merck equally until product revenues surpass certain pre-determined per formulation revenue tiers. Upon passing $2.0 billion in net product sales for the oral combination in a given calendar year, our share of revenue would increase to 65% for any revenues above the threshold for such calendar year. Upon passing $3.5 billion in net product sales for the injectable combination in a given calendar year, our share of revenue will increase to 65% for any revenues above the threshold for such calendar year. Reimbursements of R&D costs to or from Merck are recorded within Research and development expenses on our Consolidated Statements of Operations. Expenses recognized under the agreement were not material for the years ended December 31, 2025, 2024 and 2023. No revenues have been recognized under the agreement for the years ended December 31, 2025, 2024 and 2023.

We will also have the option to license certain of Merck’s investigational oral integrase inhibitors to develop in combination with lenacapavir. Reciprocally, Merck will have the option to license certain of Gilead’s investigational oral integrase inhibitors to develop in combination with islatravir. Each company may exercise its option for such investigational oral integrase inhibitor of the other company within the first five years after execution of the agreement, following completion of the first Phase 1 clinical trial of that integrase inhibitor. Upon exercise of an option, the companies will split development costs and revenues, unless the non-exercising company decides to opt out, in which case the non-exercising company will be paid a royalty.

Arcus

In May 2020, we entered into a transaction, and have since entered into various amending transactions, with Arcus, a publicly traded oncology-focused biopharmaceutical company, which included entry into an option, license and collaboration agreement (as amended, the “Collaboration Agreement”), with Gilead having the right to opt in to all current and future clinical-stage product candidates for up to ten years following the closing of the initial transaction, and a common stock purchase agreement and an investor rights agreement (together, as amended, the “Stock Purchase Agreements”).

As part of the May 2023 amendment, we paid a $35 million upfront fee to initiate research programs against targets jointly selected by the parties that are applicable to inflammatory diseases, which was charged to Acquired in-process research and development expenses on our Consolidated Statements of Operations.

As part of the January 2024 amendment, we committed to a $100 million continuation fee, which was charged to Acquired in-process research and development expenses on our Consolidated Statements of Operations and paid later in 2024. Our number of designees on Arcus’ board of directors was also increased to three.

Under the Collaboration Agreement, the companies co-develop and share the global costs related to these clinical programs. We recorded $218 million, $243 million and $189 million of such costs primarily in Research and development expenses on our Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023, respectively. If the optioned molecules achieve regulatory approval, the companies will co-commercialize and equally share profits in the U.S. Gilead will hold exclusive commercialization rights outside the U.S., subject to any rights of Arcus’s existing collaboration partners, and will pay to Arcus tiered royalties as a percentage of net sales ranging from the mid teens to low twenties. For the research programs applicable to inflammatory diseases, Gilead may exercise an option to license each program at two separate, prespecified time points. If Gilead exercises its option at the earlier time point, Arcus would be eligible to receive up to $420 million in future option and milestone payments and tiered royalties for each optioned program. If Gilead exercises its option at the later time point, the parties would have rights to co-develop and share global development costs and to co-commercialize and share profits in the U.S. for optioned programs. We may also pay as much as an additional $100 million at our option in 2026 and again in 2028, unless terminated early, to maintain the rights to opt in to future Arcus programs for the duration of the contact term.

We have made various purchases of shares since the original closing of the Stock Purchase Agreements, including a purchase of shares at a premium for $320 million in 2024 whereby we recorded $233 million for the fair value of the equity investment in Prepaid and other current assets on our Consolidated Balance Sheets and $87 million for the premium in Other (income) expense, net on our Consolidated Statements of Operations for the year ended December 31, 2024. As of December 31, 2025, we held 31.4 million shares, or approximately 30% of the issued and outstanding voting stock of Arcus at the time of our latest purchase of shares.

Galapagos

In August 2019, we closed a 10-year option, license and collaboration agreement (the “OLCA”) and a subscription agreement (the “Subscription Agreement”), each with Galapagos, a clinical-stage biotechnology company based in Belgium, pursuant to which the parties entered into a global collaboration that covers certain programs in Galapagos’ current and future product portfolio.

Under the OLCA, if we exercise our option to a program, we will pay a $150 million option exercise fee per program. In addition, Galapagos will receive tiered royalties ranging from 20% to 24% on net sales in our territories of each Galapagos product optioned by us. If we exercise our option for a program, the parties will share equally in development costs and mutually agreed commercialization costs incurred subsequent to our exercise of the option. We may terminate the collaboration in its entirety or on a program-by-program and country-by-country basis with advance notice as well as following other customary termination events.

Pursuant to the Subscription Agreement, we purchased new ordinary shares of Galapagos and were issued warrants that confer the right to subscribe, from time to time, for a number of new shares to be issued by Galapagos sufficient to bring the number of shares owned by us to 29.9% of the issued and outstanding shares at the time of our exercises. We currently own 16.7 million shares or approximately 25.8% of the shares issued and outstanding at the time of last purchase in 2019. We are subject to a 10-year standstill restricting our ability to acquire voting securities of Galapagos exceeding more than 29.9% of the then-issued and outstanding voting securities of Galapagos. We have two designees appointed to Galapagos’ board of directors as of December 31, 2025.

Janssen

Complera/Eviplera and Odefsey

In 2009, we entered into a license and collaboration agreement with Janssen to develop and commercialize a fixed-dose combination of our Truvada and Janssen’s non-nucleoside reverse transcriptase inhibitor, rilpivirine. This combination was approved in the U.S. and EU in 2011 and is sold under the brand name Complera in the U.S. and Eviplera in the EU. The agreement was amended in 2014 to expand the collaboration to include another product containing Janssen’s rilpivirine and our emtricitabine and tenofovir alafenamide (“Odefsey”).

Under the amended agreement, Janssen granted us an exclusive license to Complera/Eviplera and Odefsey worldwide, but retained rights to distribute both combination products in certain countries outside of the U.S. Neither party is restricted from combining its drugs with any other drug products except those which are similar to the components of Complera/Eviplera and Odefsey.

We are responsible for manufacturing Complera/Eviplera and Odefsey and have the lead role in registration, distribution and commercialization of both products except in the countries where Janssen distributes. Janssen has exercised a right to co-detail the combination product in some of the countries where we are the selling party.

Under the financial provisions of the 2014 amendment, the selling party sets the price of the combined products and the parties share revenues based on the ratio of the net selling prices of the party’s component(s), subject to certain restrictions and adjustments. We retain a specified percentage of Janssen’s share of revenues, including up to 30% in major markets. Sales of these products amounted to approximately $1.3 billion, $1.4 billion and $1.5 billion for the years ended December 31, 2025, 2024 and 2023, respectively, and are included in Product sales on our Consolidated Statements of Operations. Janssen’s share of these revenues was $369 million, $403 million and $430 million for the years ended December 31, 2025, 2024 and 2023, respectively, and are included in Cost of goods sold on our Consolidated Statements of Operations.

Symtuza

In 2014, we amended a license and collaboration agreement with Janssen to develop and commercialize a fixed-dose combination of Janssen’s darunavir and our cobicistat, emtricitabine and tenofovir alafenamide (“Gilead Compounds”). This combination was approved in the U.S. and EU in July 2018 and September 2017, respectively, and is sold under the brand name Symtuza.

Under the terms of the 2014 amendment, we granted Janssen an exclusive license to Symtuza worldwide. Janssen is responsible for manufacturing, registration, distribution and commercialization of Symtuza worldwide. We are responsible for the intellectual property related to the Gilead Compounds and are the exclusive supplier of the Gilead Compounds. Neither party is restricted from combining its drugs with any other drug products except those which are similar to the components of Symtuza.

Janssen sets the price of Symtuza and the parties share revenue based on the ratio of the net selling prices of the party’s component(s), subject to certain restrictions and adjustments. The intellectual property license and supply obligations related to the Gilead Compounds are accounted for as a single performance obligation. As the license was deemed to be the predominant item to which the revenue share relates, we recognize our share of the Symtuza revenue in the period when the corresponding sales of Symtuza by Janssen occur. We record our share of the Symtuza revenue as Product sales on our Consolidated Statements of Operations primarily because we supply the Gilead Compounds to Janssen for Symtuza.

Termination of the agreement may be on a product or country basis and will depend on the circumstances, including withdrawal of a product from the market, material breach by either party or expiry of the revenue share payment term. Janssen may terminate the agreement without cause on a country-by-country basis, in which case Gilead has the right to become the selling party for such country(ies) if the product has launched but has been on the market for fewer than 10 years. Janssen may also terminate the entire agreement without cause.

Japan Tobacco / Shionogi

In 2005, Japan Tobacco, Inc. (“Japan Tobacco”) granted us exclusive rights to develop and commercialize elvitegravir, a novel HIV integrase inhibitor, in all countries of the world, excluding Japan, where Japan Tobacco retained such rights. In 2018, we entered into an agreement with Japan Tobacco to acquire the rights to market and distribute certain products in our HIV portfolio in Japan and to expand our rights to develop and commercialize elvitegravir to include Japan. Under the terms of the agreement, we paid Japan Tobacco $559 million in cash and recognized an intangible asset of $550 million reflecting the estimated fair value of the marketing-related rights acquired from Japan Tobacco. The intangible asset is being amortized over nine years, representing the period over which the majority of the benefits are expected to be derived from the applicable products in our HIV portfolio. The amortization expense is classified as selling expense and recorded in Selling, general and administrative expenses on our Consolidated Statements of Operations.

In 2025, Japan Tobacco was acquired by Shionogi & Co., Ltd. (“Shionogi”), and Shionogi assumed all rights and obligations of Japan Tobacco under our agreements. We are responsible for seeking regulatory approval in our territories and are required to use diligent efforts to commercialize elvitegravir for the treatment of HIV infection. We bear all costs and expenses associated with such commercialization efforts and pay a royalty to Shionogi, as successor to Japan Tobacco, based on our product sales. Our sales of these products, namely Genvoya and Stribild, amounted to approximately $1.6 billion, $1.8 billion and $2.2 billion for the years ended December 31, 2025, 2024 and 2023, respectively, and are included in Product sales on our Consolidated Statements of Operations. We expensed royalties due to Japan Tobacco (and beginning in 2025, Shionogi as its successor) of $112 million, $139 million and $167 million for the years ended December 31, 2025, 2024 and 2023, respectively, in Cost of goods sold on our Consolidated Statements of Operations.

Termination of the agreement may be on a product or country basis and will depend on the circumstances, including material breach by either party or expiry of royalty payment term. We may also terminate the entire agreement without cause.

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill

There were no changes in the carrying value of goodwill for the years ended December 31, 2025 and 2024. In addition, as of December 31, 2025, there were no accumulated goodwill impairment losses.

Intangible Assets

The following table summarizes our Intangible assets, net:


	December 31, 2025								December 31, 2024
(in millions)	Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation Adjustment		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Foreign Currency Translation Adjustment		Net Carrying Amount
Finite-lived assets:
Intangible asset – sofosbuvir	$	10,720	$	(8,448)	$	—	$	2,272	$	10,720	$	(7,749)	$	—	$	2,971
Intangible asset – axicabtagene ciloleucel	7,110		(3,127)		—		3,983		7,110		(2,721)		—		4,389
Intangible asset – Trodelvy	11,730		(4,164)		—		7,566		11,730		(3,083)		—		8,647
Intangible asset – Hepcludex	845		(415)		—		430		845		(329)		—		516
Other	1,483		(1,056)		—		428		1,474		(940)		1		535
Total finite-lived assets	31,888		(17,211)		—		14,678		31,879		(14,822)		1		17,058
Indefinite-lived assets – IPR&D(1)	2,300		—		—		2,300		2,890		—		—		2,890
Total intangible assets	$	34,188	$	(17,211)	$	—	$	16,978	$	34,769	$	(14,822)	$	1	$	19,948

(1) The Indefinite-lived assets – IPR&D balance as of December 31, 2025 was comprised of $1.75 billion related to sacituzumab govitecan-hziy (“SG”) for non-small cell lung cancer (“NSCLC”) and $550 million related to bulevirtide. The balance as of December 31, 2024 was comprised of $1.75 billion related to SG for NSCLC and $1.1 billion related to bulevirtide. See “2025 Impairment” below for 2025 activity.

Amortization Expense

Aggregate amortization expense related to finite-lived intangible assets was $2.4 billion for the years ended December 31, 2025 and 2024 and $2.3 billion for the year ended December 31, 2023, primarily included in Cost of goods sold on our Consolidated Statements of Operations.

The following table summarizes the estimated future amortization expense associated with our finite-lived intangible assets as of December 31, 2025:


(in millions)	Amount
2026	$	2,383
2027	2,380
2028	2,319
2029	1,791
2030	1,605
Thereafter	4,199
Total	$	14,678

Impairment Assessments

No indicators of impairment resulting in an adjustment to the carrying value of intangible assets were identified for the years ended December 31, 2025, 2024 and 2023, except as described below.

There were no quantitative assessments for IPR&D intangible assets during the year ended December 31, 2025, other than the assessments described below. The weighted-average discount rates used in our quantitative assessments for IPR&D intangible assets during the years ended December 31, 2024 and 2023, other than for the assessments described below, were 7.25% and 7.5%, respectively.

2025 Impairments

In the second quarter of 2025 and again in the fourth quarter of 2025, additional data became available indicating a more competitive market for bulevirtide where it is not yet approved. Based on our evaluation of the data, and in connection with the preparation of the financial statements for the second quarter of 2025 and again for the year ended December 31, 2025, we performed impairment tests and determined that the revised estimated fair value of the bulevirtide IPR&D intangible asset was below its carrying value in both periods. As a result, we recognized partial impairment charges of $190 million and $400 million in In-process research and development impairments on our Consolidated Statements of Operations for the second and fourth quarters of 2025, respectively, for a total of $590 million for the year ended December 31, 2025.

To arrive at the revised estimated fair values as of June 30, 2025 and December 31, 2025, we used a probability-weighted income approach that discounts expected future cash flows to present value, which requires the use of Level 3 fair value measurements and inputs, including critical estimated inputs, such as: revenues and operating profits related to the planned utilization of bulevirtide outside of the EU, which includes inputs such as addressable patient population, projected market share, treatment duration, and the life of the potential commercialized product; the probability of technical and regulatory success; the time and resources needed to complete the development and approval of bulevirtide outside of the EU; an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile; and risks related to the viability of and potential alternative treatments in any future target markets. We used discount rates of 8.25% and 7.75% for the second and fourth quarters of 2025, respectively, which are based on the estimated weighted-average cost of capital for companies with profiles similar to ours.

2024 Impairments

In January 2024, we received data from our Phase 3 EVOKE-01 study of Trodelvy evaluating SG indicating that the study did not meet its primary endpoint of overall survival in previously treated metastatic NSCLC, thus triggering a review for potential impairment of the NSCLC IPR&D intangible asset. Based on our evaluation of the study results and all other data available at the time, and in connection with the preparation of the financial statements for the first quarter of 2024, we performed an interim impairment test and determined that the revised estimated fair value of the NSCLC IPR&D intangible asset was below its carrying value. As a result, we recognized a partial impairment charge of $2.4 billion in In-process research and development impairments on our Consolidated Statements of Operations for the first quarter of 2024.

In September 2024, based on discussions with regulators and external opinion leaders and the completed evaluation of the Phase 3 EVOKE-01 study data, we made a strategic decision to discontinue our clinical development program in metastatic NSCLC for Trodelvy in the second-line indication. This decision triggered a review for potential impairment of the NSCLC IPR&D intangible asset. Based on our evaluation, and in connection with the preparation of the financial statements for the third quarter of 2024, we performed an interim impairment test and determined that the revised estimated fair value of the NSCLC IPR&D intangible asset was below its carrying value. As a result, we recognized a partial impairment charge of $1.8 billion in In-process research and development impairments on our Consolidated Statements of Operations for the third quarter of 2024.

To arrive at the revised estimated fair values as of March 31, 2024 and September 30, 2024, we used a probability-weighted income approach that discounts expected future cash flows to present value, which requires the use of Level 3 fair value measurements and inputs, including critical estimated inputs, such as: revenues and operating profits related to the planned utilization of SG in NSCLC, which includes inputs such as addressable patient population, projected market share, treatment duration, and the life of the potential commercialized product; the probability of technical and regulatory success; the time and resources needed to complete the development and approval of SG in NSCLC; an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile; and risks related to the viability of and potential alternative treatments in any future target markets. We used a discount rate of 7.00% which is based on the estimated weighted-average cost of capital for companies with profiles similar to ours.

2023 Impairments

In 2023, we wrote off the remaining $51 million balance of a finite-lived intangible asset, charged to Cost of goods sold on our Consolidated Statements of Operations, due to the termination of a global development cost-sharing arrangement with Galapagos related to filgotinib and their obligation to pay tiered royalties to us on net sales in Europe.

Due to a change in anticipated timing of FDA approval, we also recognized a $50 million partial impairment of our bulevirtide IPR&D intangible asset in In-process research and development impairments on our Consolidated Statements of Operations in 2023.

9. OTHER FINANCIAL INFORMATION

Accounts Receivable, Net

The following table summarizes our Accounts receivable, net:


	December 31,
(in millions)	2025		2024
Accounts receivable(1)	$	5,895	$	5,319
Less: allowances for chargebacks	843		759
Less: allowances for cash discounts and other	97		89
Less: allowances for credit losses	41		52
Accounts receivable, net	$	4,913	$	4,420

(1) As of December 31, 2025, the majority of our Accounts receivable balance arises from product sales in the U.S. and Europe and approximately 60% relates to three wholesalers—Cardinal Health, Cencora and McKesson—and their specialty distributor affiliates.

Inventories

The following table summarizes our Inventories:


	December 31,
(in millions)	2025		2024
Raw materials	$	1,414	$	1,295
Work in process	1,306		847
Finished goods	1,647		1,447
Total	$	4,368	$	3,589

Reported as:
Inventories	$	1,774	$	1,710
Other long-term assets(1)	2,594		1,879
Total	$	4,368	$	3,589

(1) As of December 31, 2025, this amount primarily consists of raw materials and work in process.

As of December 31, 2025, we held approximately $613 million of pre-commercial Trodelvy inventory for which the manufacturing process has not yet been approved by FDA.

Prepaid and Other Current Assets

The following table summarizes the components of Prepaid and other current assets:


	December 31,
(in millions)	2025		2024
Prepaid taxes	$	899	$	480
Equity securities	1,981		1,577
Other	1,144		995
Prepaid and other current assets	$	4,024	$	3,052

Property, Plant and Equipment, Net

The following table summarizes our Property, plant and equipment, net by asset type:


	December 31,
(in millions)	2025		2024
Land and land improvements	$	561	$	561
Buildings and improvements (including leasehold improvements)	4,622		4,539
Laboratory and manufacturing equipment	1,241		1,192
Internal-use software	666		692
Other	466		397
Construction in progress	745		501
Subtotal	8,302		7,884
Less: accumulated depreciation	2,696		2,470
Total	$	5,606	$	5,414

The following table summarizes our Property, plant and equipment, net by geography:


	December 31,
(in millions)	2025		2024
U.S.	$	4,975	4,787
International(1)	631		627
Total	$	5,606	$	5,414

(1) All individual international locations accounted for less than 10% of the total balances.

The following table summarizes Depreciation expense:


	Year Ended December 31,
(in millions)	2025		2024		2023
Depreciation expense	$	370	$	381	$	354

Other Current Liabilities

The following table summarizes the components of Other current liabilities:


	December 31,
(in millions)	2025		2024
Compensation and employee benefits	$	1,298	$	1,228
Income taxes payable	92		1,646
Allowance for sales returns	321		321
Other	2,243		2,269
Other current liabilities	$	3,953	$	5,464

Accumulated Other Comprehensive Income

The following table summarizes the changes in Accumulated other comprehensive income by component, net of tax:


(in millions)	Foreign Currency Translation		Available-for-Sale Debt Securities		Cash Flow Hedges		Total
Balance as of December 31, 2022	$	2	$	(33)	$	33	$	2
Net unrealized gain (loss), net of income tax benefit of $0, $0, and $(2), respectively	$	60	$	26	$	(12)	$	75
Loss (gain) reclassified to net income, net of income tax expense of $0, $0, and $7, respectively	—		2		(51)		(49)
Other comprehensive income (loss), net	60		28		(62)		26
Balance as of December 31, 2023	$	62	$	(5)	$	(29)	$	28
Net unrealized (loss) gain, net of income tax expense of $0, $0, and $21, respectively	$	(26)	$	—	$	149	$	124
Loss (gain) reclassified to net income, net of income tax expense of $0, $0, and $3, respectively	—		5		(24)		(19)
Other comprehensive (loss) income, net	(26)		5		125		104
Balance as of December 31, 2024	$	36	$	—	$	96	$	132
Net unrealized gain (loss), net of income tax expense (benefit) of $0, $3, and $(20), respectively	$	38	$	9	$	(143)	$	(97)
(Gain) loss reclassified to net income, net of income tax expense (benefit) of $0, $0, and $(1), respectively	—		—		5		4
Other comprehensive income (loss), net	38		8		(139)		(93)
Balance as of December 31, 2025	$	74	$	8	$	(43)	$	39

The following table summarizes the reclassifications out of Accumulated other comprehensive income and into Net income, including the affected line items from our Consolidated Statements of Operations:


	Year Ended December 31,
(in millions)	2025		2024		2023		Line Item Affected
Net (loss) gain related to cash flow hedges	$	(5)	$	27	$	58	Product sales
Net (gain) loss related to available-for-sale debt securities	$	(1)	$	5	$	2	Other (income) expense, net
Income tax (benefit) expense	$	(1)	$	3	$	7	Income tax (benefit) expense

Restructuring

In 2025 and 2024, we incurred restructuring charges primarily related to reductions in our workforce. In 2023, we incurred restructuring charges primarily related to changes in our manufacturing strategy which included a decision to no longer utilize certain facilities. As a result of this decision, we determined that the related assets were fully impaired based on the difference between fair value and the carrying amount. The total charges in 2023 consisted of write-offs of manufacturing assets of $381 million, write-offs of inventory of $89 million and other costs of $57 million.

The following table summarizes the affected line items from our Consolidated Statements of Operations:


	Year Ended December 31,
(in millions)	2025		2024		2023
Cost of goods sold	$	4	$	—	$	479
Research and development expenses	68		98		20
Selling, general and administrative expenses	66		91		28
Restructuring charges	$	138	$	188	$	527

As of December 31, 2025, we had a remaining liability of $61 million on our Consolidated Balance Sheets associated with restructuring charges, a majority of which we anticipate will be paid in the next 12 months.

Other (Income) Expense, Net

The following table summarizes the components of Other (income) expense, net:


	Year Ended December 31,
(in millions)	2025		2024		2023
(Gain) loss from equity securities, net	$	(451)	$	274	$	167
Interest income	(349)		(281)		(376)
Other, net	1		2		11
Other (income) expense, net	$	(798)	$	(6)	$	(198)

10. DEBT AND CREDIT FACILITIES

The following table summarizes the carrying amount of our borrowings under various financing arrangements:


(in millions)				Carrying Amount
Type of Borrowing	Issue Date	Maturity Date	Interest Rate	December 31, 2025		December 31, 2024
Senior Unsecured	November 2014	February 2025	3.50%	$	—	$	1,750
Senior Unsecured	September 2015	March 2026	3.65%	2,750		2,747
Senior Unsecured	September 2016	March 2027	2.95%	1,249		1,249
Senior Unsecured	September 2020	October 2027	1.20%	749		748
Senior Unsecured	November 2024	November 2029	4.80%	747		746
Senior Unsecured	September 2020	October 2030	1.65%	996		995
Senior Unsecured	September 2023	October 2033	5.25%	994		993
Senior Unsecured	November 2024	June 2035	5.10%	992		991
Senior Unsecured	September 2015	September 2035	4.60%	994		994
Senior Unsecured	September 2016	September 2036	4.00%	744		744
Senior Unsecured	September 2020	October 2040	2.60%	990		989
Senior Unsecured	December 2011	December 2041	5.65%	997		997
Senior Unsecured	March 2014	April 2044	4.80%	1,738		1,738
Senior Unsecured	November 2014	February 2045	4.50%	1,736		1,735
Senior Unsecured	September 2015	March 2046	4.75%	2,225		2,224
Senior Unsecured	September 2016	March 2047	4.15%	1,731		1,730
Senior Unsecured	September 2020	October 2050	2.80%	1,480		1,479
Senior Unsecured	September 2023	October 2053	5.55%	989		988
Senior Unsecured	November 2024	November 2054	5.50%	989		989
Senior Unsecured	November 2024	November 2064	5.60%	739		738
Total senior unsecured notes				23,827		25,562
Liability related to future royalties				1,110		1,148
Total debt, net				24,937		26,710
Less: Current portion of long-term debt, net				2,807		1,815
Total Long-term debt, net				$	22,129	$	24,896

Senior Unsecured Notes

In February 2025, we repaid $1.75 billion of principal balance related to our senior unsecured notes due February 2025.

Our senior unsecured notes may be redeemed at our option at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the sum, as determined by an independent investment banker, of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis at the Treasury Rate, plus a make-whole premium, which are defined in the terms of the notes. The senior unsecured notes also have a par call feature, exercisable at our option, to redeem the notes at par in whole, or in part, on dates ranging from one to six months prior to maturity. In each case, accrued and unpaid interest is also required to be redeemed to the date of redemption.

In the event of a change in control and a downgrade in the rating of our senior unsecured notes below investment grade by Moody’s Investors Service, Inc. and S&P Global Ratings, the holders may require us to purchase all or a portion of their notes at a price equal to 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest to the date of repurchase. We are required to comply with certain covenants under our note indentures governing our senior unsecured notes. As of December 31, 2025 and 2024, we were not in violation of any covenants.

Liability Related to Future Royalties

In connection with our acquisition of Immunomedics, we assumed a liability related to a funding arrangement, which was originally entered into by Immunomedics and RPI Finance Trust (“RPI”), prior to our acquisition of Immunomedics. Under the funding agreement, RPI has the right to receive certain royalty amounts, subject to certain reductions, based on the net sales of Trodelvy for each calendar quarter during the term of the agreement through approximately 2036. The liability is amortized using the effective interest rate method, resulting in recognition of interest expense over 16 years. The estimated timing and amount of future expected royalty payments over the estimated term are re-assessed each reporting period. The impact from changes in estimates is recognized in the liability and the related interest expense prospectively.

Revolving Credit Facility

In June 2024, we terminated our $2.5 billion revolving credit facility maturing in June 2025 (the “2020 Revolving Credit Facility”) and entered into a new $2.5 billion revolving credit facility maturing in June 2029 (the “2024 Revolving Credit Facility”), which has terms substantially similar to the 2020 Revolving Credit Facility. The 2024 Revolving Credit Facility can be used for working capital requirements and for general corporate purposes, including, without limitation, acquisitions. As of December 31, 2025 and 2024, there were no amounts outstanding under our revolving credit facility.

The 2024 Revolving Credit Facility contains customary representations, warranties, affirmative and negative covenants and events of default. As of December 31, 2025, we were in compliance with all covenants. Loans under the 2024 Revolving Credit Facility bear interest at either (i) Term SOFR plus the Applicable Percentage, (ii) the Alternative Currency Term Rate plus the Applicable Percentage, or (iii) the Base Rate plus the Applicable Percentage, each as defined in the 2024 Revolving Credit Facility agreement. We may terminate or reduce the commitments and may prepay any loans under the 2024 Revolving Credit Facility in whole or in part at any time without premium or penalty.

Interest Paid

The following table summarizes interest paid, net of amounts capitalized:


	Year Ended December 31,
(in millions)	2025		2024		2023
Interest paid, net of amounts capitalized	$	1,036	$	951	$	891

Contractual Maturities of Financing Obligations

The following table summarizes the aggregate future principal maturities of our senior unsecured notes as of December 31, 2025:


(in millions)	Amount
2026	$	2,750
2027	2,000
2028	—
2029	750
2030	1,000
Thereafter	17,500
Total	$	24,000

11. LEASES

Our operating leases consist primarily of properties and equipment for our administrative, manufacturing and R&D activities. Some of our leases contain options to extend the lease term, allowing for extensions of up to 15 additional years for certain leases, and some contain options to terminate the lease early with a sufficient number of months’ notice and/or if a given number of years have passed after the lease commencement date. We determine the lease term by assuming the exercise of any renewal and/or early-termination options that are reasonably certain. As of December 31, 2025 and 2024, we did not have material finance leases.

The following table summarizes balance sheet and other information related to our operating leases:


		December 31,
(in millions, except weighted average amounts)	Classification	2025			2024
Right-of-use assets, net	Other long-term assets	$	532		$	515
Lease liabilities – current	Other current liabilities	$	102		$	113
Lease liabilities – noncurrent	Other long-term obligations	$	503		$	498
Weighted average remaining lease term		8.1 years			8.0 years
Weighted average discount rate		3.53		%	3.37		%

The following table summarizes cost and other activity related to our operating leases:


	Year Ended December 31,
(in millions)	2025		2024		2023
Operating lease cost, including variable lease and short-term lease cost	$	169	$	163	$	165
Cash paid for amounts included in the measurement of lease liabilities	$	127	$	141	$	88
Right-of-use assets obtained in exchange for lease liabilities(1)	$	106	$	86	$	214

(1) These represent noncash activities and were therefore not included on our Consolidated Statements of Cash Flows.

The following table is a maturity analysis of our operating lease liabilities as of December 31, 2025:


(in millions)	Amount
2026	$	121
2027	99
2028	87
2029	75
2030	73
Thereafter	243
Total undiscounted lease payments	699
Less: imputed interest	94
Total discounted lease payments	$	605

12. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

We are a party to various legal actions. Certain significant matters are described below. We recognize accruals for such actions to the extent that we conclude that a loss is both probable and reasonably estimable. We accrue for the best estimate of a loss within a range; however, if no estimate in the range is better than any other, then we accrue the minimum amount in the range. If we determine that a material loss is reasonably possible and the loss or range of loss can be estimated, we disclose the possible loss. Unless otherwise noted, the outcome of these matters either is not expected to be material or is not possible to determine such that we cannot reasonably estimate the maximum potential exposure or the range of possible loss. As of December 31, 2025, we did not have any material accruals for the matters described herein. As of December 31, 2024, we had approximately $242 million of accruals on our Consolidated Balance Sheets for such matters, with approximately $200 million accrued for a potential settlement with the U.S. Attorney’s Office for the Southern District of New York, which we eventually entered into in April 2025 and subsequently paid.

Litigation with Generic Manufacturers

As part of the approval process for some of our products, FDA granted us a New Chemical Entity (“NCE”) exclusivity period during which other manufacturers’ applications for approval of generic versions of our products will not be approved. Generic manufacturers may challenge the patents protecting products that have been granted NCE exclusivity one year prior to the end of the NCE exclusivity period. Generic manufacturers have sought and may continue to seek FDA approval for a similar or identical drug through an abbreviated new drug application (“ANDA”), the application form typically used by manufacturers seeking approval of a generic drug. The sale of generic versions of our products prior to their patent expiration would have a significant negative effect on our revenues and results of operations. To seek approval for a generic version of a product having NCE status, a generic company may submit its ANDA to FDA four years after the branded product’s approval.

Starting in March 2022, we received letters from Lupin Ltd. (“Lupin”), Laurus Labs (“Laurus”) and Cipla Ltd. (“Cipla”), indicating that they have submitted ANDAs to FDA requesting permission to market and manufacture generic versions of the adult dosage strength of Biktarvy. Lupin, Laurus and Cipla have challenged the validity of four of the six patents listed in the Orange Book as associated with Biktarvy. We filed a lawsuit against Lupin, Laurus and Cipla in May 2022 in the U.S. District Court of Delaware to enforce and defend our intellectual property. Additionally, in November 2023, we received a letter from Cipla indicating that it has submitted an ANDA to FDA requesting permission to market and manufacture a generic version of the pediatric dosage strength of Biktarvy. Cipla challenged the validity of two of the patents listed in the Orange Book as associated with Biktarvy. We filed a separate lawsuit against Cipla in December 2023 in the U.S. District Court of Delaware. This lawsuit was consolidated with the first lawsuit. In October 2025, the consolidated lawsuit was dismissed based on negotiated settlement agreements with Lupin, Laurus and Cipla. Under the agreements, which are subject to standard acceleration provisions, no generic entry by the parties for Biktarvy tablets containing bictegravir (50 mg), tenofovir alafenamide (25 mg) and emtricitabine (200 mg) is expected prior to April 1, 2036 in the United States. Additionally, no generic entry by the parties for Biktarvy tablets containing bictegravir (30 mg), tenofovir alafenamide (15 mg) and emtricitabine (120 mg) is expected in the United States prior to November 19, 2035, if pediatric exclusivity has been granted, or by May 19, 2035, if pediatric exclusivity has not been granted.

In June 2025, we received a letter from Aspiro Pharma Ltd. (“Aspiro”), indicating that it had submitted an ANDA to FDA to request permission to market and manufacture a generic version of Veklury. Aspiro challenges six of the sixteen patents listed in the Orange Book for Veklury as not valid or not infringed by Aspiro’s proposed ANDA product. In July 2025, we filed a lawsuit against Aspiro in the U.S. District Court of New Jersey. We intend to enforce and defend our intellectual property.

In January 2026, we received a letter from Cipla indicating that it has submitted a new drug application under §505(b)(2) of the Federal Food, Drug, and Cosmetic Act (“505(b)(2) application”) for emtricitabine/tenofovir alafenamide tablets. The 505(b)(2) application references Descovy as the listed drug product. The 505(b)(2) application also includes a paragraph IV certification challenging two Orange Book patents for Descovy. In February 2026, we filed a lawsuit against Cipla in the U.S. District of Court of Delaware. We intend to enforce and defend our intellectual property.

Antitrust and Consumer Protection

We, along with Bristol-Myers Squibb Company (“BMS”), Johnson & Johnson, Inc. (“Johnson & Johnson”) and Teva Pharmaceutical Industries Ltd. (“Teva”) have been named as defendants in class action lawsuits filed in 2019 and 2020 related to various drugs used to treat HIV, including drugs used in combination antiretroviral therapy. Plaintiffs allege that we (and the other defendants) engaged in various conduct to restrain competition in violation of federal and state antitrust laws and state consumer protection laws. The lawsuits, which have been consolidated, are pending in the U.S. District Court for the Northern District of California. The lawsuits seek to bring claims on behalf of direct purchasers consisting largely of wholesalers and indirect or end-payor purchasers, including health insurers and individual patients. Plaintiffs seek damages, permanent injunctive relief and other relief. In the second half of 2021 and first half of 2022, several plaintiffs consisting of retail pharmacies, individual health plans and United Healthcare, filed separate lawsuits effectively opting out of the class action cases, asserting claims that are substantively the same as the classes. These cases have been coordinated with the class actions. In March 2023, the District Court granted our motion to hold separate trials as to (i) the allegations against us and Teva seeking monetary damages relating to Truvada and Atripla (“Phase I”) and (ii) the allegations against us and, in part, Johnson & Johnson, seeking monetary damages and injunctive relief relating to Complera (“Phase II”). In May 2023, we settled claims with the direct purchaser class and the retailer opt-out plaintiffs for $525 million, which we paid in the second half of 2023. The settlement agreements are not an admission of liability or fault by us. In June 2023, the jury returned a complete verdict in Gilead’s favor on the remaining plaintiffs’ Phase I allegations. In November 2023, the court denied plaintiffs’ motion to set aside the verdict, and in February 2024, the court entered final judgment on the Phase I verdict and certain summary judgment rulings. In September 2024, plaintiffs filed their opening appellate briefs challenging the Phase I verdict and those summary judgment rulings. We filed our responsive briefs in January 2025. Plaintiffs filed their reply briefs in March 2025. Oral argument took place in October 2025. The court has stayed Phase II pending the appeal of Phase I. While we intend to vigorously oppose the appeal and defend against the Phase II claims, we cannot predict the ultimate outcome. If plaintiffs are successful in their appeal or Phase II claims, we could be required to pay monetary damages or could be subject to permanent injunctive relief in favor of plaintiffs.

In January 2022, we, along with BMS and Janssen Products, L.P., were named as defendants in a lawsuit filed in the Superior Court of the State of California, County of San Mateo, by Aetna, Inc. on behalf of itself and its affiliates and subsidiaries that effectively opts the Aetna plaintiffs out of the above class actions. The allegations are substantively the same as those in the class actions. The Aetna plaintiffs seek damages, permanent injunctive relief and other relief. In March 2024, the court denied our motion for judgment on the pleadings to preclude Aetna from re-litigating claims that were dismissed at summary judgment in the above class action cases. We filed a writ petition appealing the denial of our motion for judgment on the pleadings, which the appellate court denied in May 2024. In April 2024, the court granted our motion to bifurcate the case to adjudicate the issue of preclusion before litigating the merits of the case. In July 2024, Aetna filed a request to voluntarily dismiss two of its claims with prejudice, which the court subsequently granted, leaving only the claims related to Truvada and Atripla. In September 2024, Aetna filed an amended complaint with respect to these claims. In October 2024, we filed a demurrer and motion to strike plaintiff’s claims. In April 2025, the court overruled the demurrer and stated in its order that an immediate appeal is warranted. In June 2025, we filed a writ petition to the Court of Appeal, which was denied in August 2025. Trial has been scheduled for March 2027.

We intend to vigorously defend ourselves in these actions, however, we cannot predict the ultimate outcome. If plaintiffs are successful in their claims, we could be required to pay significant monetary damages or could be subject to permanent injunctive relief awarded in favor of plaintiffs, which may result in a material, adverse effect on our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable.

Product Liability

We have been named as a defendant in one putative class action lawsuit and various product liability lawsuits related to Viread, Truvada, Atripla, Complera and Stribild. Plaintiffs allege that Viread, Truvada, Atripla, Complera and/or Stribild caused them to experience kidney, bone and/or tooth injuries. The lawsuits, which are pending in state or federal court in California and Missouri, involve approximately 23,000 active plaintiffs. Plaintiffs in these cases seek damages and other relief on various grounds for alleged personal injury and economic loss. The first bellwether trial in California state court was scheduled to begin in October 2022 but is currently stayed pending the conclusion of appellate proceedings in the California Supreme Court. In the California federal case, Gilead agreed to make a one-time payment of approximately $39 million to a group of plaintiffs (approximately 2,470 plaintiffs). The federal court set a trial date of March 2027 for the first bellwether trial of the remaining cases. In the putative class action pending in Missouri, the district court issued an order in January 2026 denying, among other things, plaintiffs’ motion for class certification. Plaintiffs have filed a petition for appellate review that is pending in the Eighth Circuit court of appeals. We intend to vigorously defend ourselves in these actions, however, we cannot predict the ultimate outcome. If plaintiffs are successful in their claims, we could be required to pay significant monetary damages, which may result in a material, adverse effect on our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable.

Qui Tam Litigation

A former sales employee filed a qui tam lawsuit against Gilead in March 2017 in U.S. District Court for the Eastern District of Pennsylvania. Following the government’s decision not to intervene in the suit, the case was unsealed in December 2020. The lawsuit alleges that certain of Gilead’s hepatitis C virus (“HCV”) sales and marketing activities and donations to an independent charitable foundation violated the federal False Claims Act and various state false claims acts. The lawsuit seeks all available relief under these statutes. In September 2025, the court granted Gilead’s motion for summary judgment and dismissed the case. Relator has appealed the court’s ruling.

Health Choice Advocates, LLC (“Health Choice”) filed a qui tam lawsuit against Gilead in May 2020 in Texas state court. The lawsuit alleged that Gilead violated the Texas Medicare Fraud Prevention Act (“TMFPA”) through our clinical educator programs for Sovaldi and Harvoni and our HCV and HIV patient support programs. The lawsuit sought all available relief under the TMFPA. Health Choice voluntarily dismissed the case without prejudice in August 2023, and commenced a new action in October 2023, asserting largely identical allegations and claims. In the newly filed action, the Texas Attorney General has intervened as a plaintiff. Trial is currently scheduled for August 2026.

We intend to vigorously defend ourselves in these actions, however, we cannot predict the ultimate outcomes. If any of these plaintiffs are successful in their claims, we could be required to pay significant monetary damages, which may result in a material, adverse effect on our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable.

Other Matters

We are a party to various legal actions that arose in the ordinary course of our business. We do not believe that it is probable or reasonably possible that these other legal actions will have a material adverse impact on our consolidated financial position, results of operations or cash flows.

13. EMPLOYEE BENEFITS

Stock-Based Compensation

Equity Incentive Plan and ESPP Summary

In May 2022, our stockholders approved and we adopted the Gilead Sciences, Inc. 2022 Equity Incentive Plan (the “2022 Plan”), a broad-based incentive plan that authorized the issuance of a total of 132 million shares of common stock and provides for the grant of equity-based awards, including RSUs, PSUs, stock options and other restricted stock and performance awards, to employees, directors and consultants. No awards may be granted under previous plans since the approval of the 2022 Plan. As of December 31, 2025, a total of 62 million shares remain available for future grant under the 2022 Plan.

A total of 104 million shares of common stock have been authorized for issuance under our ESPP, with 22 million shares still available for issuance as of December 31, 2025.

Stock-Based Compensation Expense

The following tables summarize total stock-based compensation expense included on our Consolidated Statements of Operations, classified by award type and expense type:


	Year Ended December 31,
(in millions)	2025		2024		2023
RSUs	$	790	$	732	$	666
PSUs	33		37		32
Stock options	30		30		30
ESPP	41		36		37
Acquisition-related expense(1)	—		133		29
Stock-based compensation expense included in total costs and expenses	$	894	$	969	$	796

(1) Represents accelerated post-acquisition stock-based compensation expenses, primarily related to CymaBay in 2024.


	Year Ended December 31,
(in millions)	2025		2024		2023
Cost of goods sold	$	60	$	61	$	57
Research and development expenses	433		458		377
Selling, general and administrative expenses	401		450		361
Stock-based compensation expense included in total costs and expenses	894		969		796
Income tax effect	(254)		(192)		(165)
Stock-based compensation expense, net of tax	$	640	$	777	$	630

RSUs

We grant time-based RSUs to certain employees as part of our annual employee equity compensation review program as well as to new hire employees and to non-employee members of our Board. RSUs are share-based awards that entitle the holder to receive freely tradable shares of our common stock upon vesting. RSUs generally vest over three or four years from the date of grant. RSUs have dividend equivalent rights entitling holders to dividend equivalents to be paid upon vesting for each share of the underlying unit.

The following tables summarize our RSU activity:


	RSUs
(in millions, except per share amounts)	Shares	Weighted- Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2024	21.8	$	73.52
Granted	8.9	$	116.62
Vested	(10.5)	$	71.80
Forfeited	(2.4)	$	85.42
Outstanding as of December 31, 2025	17.8	$	94.39


	Year Ended December 31,
(in millions, except per share amounts)	2025		2024		2023
Weighted-average grant date fair value of RSUs granted	$	116.62	$	74.82	$	79.66
Total fair value of RSUs vested	$	1,216	$	847	$	849

As of December 31, 2025, there was $1.1 billion of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 2.1 years.

PSUs

We grant PSUs that generally vest over a three-year performance period upon the achievement of specified market or performance goals, which include achieving a total shareholder return compared to a pre-determined peer group or achieving revenue or adjusted earnings per share growth targets. The actual number of common shares ultimately issued is calculated by multiplying the number of PSUs by a payout percentage ranging from 0% to 200%, and these awards generally vest only when a committee (or subcommittee) of our Board has determined that the specified market and performance goals have been achieved. PSUs have dividend equivalent rights entitling holders to dividend equivalents to be paid upon vesting for each share of the underlying unit.

The following tables summarize our PSU activity:


	PSUs
(in millions, except per share amounts)	Shares	Weighted- Average Grant Date Fair Value Per Share
Outstanding as of December 31, 2024	1.1	$	72.24
Granted	0.5	$	91.33
Vested	(0.7)	$	63.86
Forfeited	(0.2)	$	93.86
Outstanding as of December 31, 2025	0.7	$	100.00


	Year Ended December 31,
(in millions, except per share amounts)	2025		2024		2023
Weighted-average grant date fair value of PSUs granted	$	91.33	$	72.24	$	81.39
Total fair value of PSUs vested	$	73	$	43	$	35

As of December 31, 2025, there was $31 million of unrecognized compensation cost related to unvested PSUs, which is expected to be recognized over a weighted-average period of 1.0 years.

Stock Options

Option grants are designated as either non-statutory or incentive stock options. The exercise price of stock options may not be less than the fair market value of our common stock on the grant date and no stock option may have a term in excess of 10 years. Employee stock options generally vest over three or four years. Stock options may be settled in cash or in shares of our common stock, including a net issuance using shares otherwise purchasable under the option to pay the exercise price.

The following tables summarize activity and other information related to our stock options:


	Shares (in millions)	Weighted- Average Exercise Price (in dollars)		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)(1)
Outstanding as of December 31, 2024	11.8	$	69.85
Granted	1.5	$	116.55
Exercised	(3.8)	$	70.38
Forfeited	(0.7)	$	83.85
Expired	(0.1)	$	102.24
Outstanding as of December 31, 2025	8.7	$	76.08	6.21	$	407
Exercisable as of December 31, 2025	5.8	$	67.54	5.23	$	321
Expected to vest, net of estimated forfeitures as of December 31, 2025	2.8	$	92.88	8.14	$	82

(1) Aggregate intrinsic value represents the value of our closing stock price on the last trading day of the year in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable.


	Year Ended December 31,
(in millions, except per share amounts)	2025		2024		2023
Weighted-average grant date fair value of stock options granted	$	22.96	$	13.70	$	16.11
Total intrinsic value of options exercised	$	142	$	77	$	25

We used the following weighted-average assumptions in the Black-Scholes model to calculate the estimated fair value of the stock option awards:


	Year Ended December 31,
	2025		2024		2023
Expected volatility	24	%	25	%	26	%
Expected terms in years	5		5		5
Risk-free interest rate	3.9	%	4.1	%	4.1	%
Expected dividend yield	3.2	%	3.9	%	3.5	%

As of December 31, 2025, there was $40 million of unrecognized compensation cost related to stock options, which is expected to be recognized over an estimated weighted-average period of 1.9 years.

ESPP

Under our ESPP, employees can purchase shares of our common stock based on a percentage of their compensation subject to certain limits. The purchase price per share is equal to the lower of 85% of the fair market value of our common stock on the offering date or the purchase date. The ESPP offers a six-month look-back feature. ESPP purchases are settled with common stock from the ESPP’s previously authorized and available pool of shares.

The following table summarizes our ESPP activity:


	Year Ended December 31,
(in millions, except per share amounts)	2025		2024		2023
Shares issued	2		2		2
Amount paid by employees for shares	$	143	$	139	$	129
Weighted-average grant date fair value of ESPP shares granted	$	25.32	$	15.76	$	17.31
Total fair value of ESPP shares vested	$	75	$	27	$	45

We used the following weighted-average assumptions in the Black-Scholes model to calculate the estimated fair value of the ESPP awards:


	Year Ended December 31,
	2025		2024		2023
Expected volatility	28	%	25	%	24	%
Expected terms in years	0.5		0.5		0.5
Risk-free interest rate	4.2	%	5.2	%	5.1	%
Expected dividend yield	3.2	%	4.3	%	3.7	%

Deferred Compensation

We maintain a retirement saving plan under which eligible U.S. employees may defer compensation for income tax purposes under Section 401(k) of the Internal Revenue Code (the “Gilead Sciences 401k Plan”). In certain foreign subsidiaries, we maintain defined benefit plans as required by local regulatory requirements. Our total matching contribution expense under the Gilead Sciences 401k Plan and other defined benefit plans was $200 million, $204 million and $208 million for the years ended December 31, 2025, 2024 and 2023, respectively.

We maintain a deferred compensation plan under which our directors and key employees may defer compensation. Amounts deferred by participants are deposited into a rabbi trust. The total assets and liabilities associated with the deferred compensation plan were both approximately $406 million and $343 million as of December 31, 2025 and 2024, respectively.

14. EARNINGS PER SHARE

The following table shows the calculation of basic and diluted earnings per share attributable to Gilead:


	Year Ended December 31,
(in millions, except per share amounts)	2025		2024		2023
Net income attributable to Gilead	$	8,510	$	480	$	5,665
Shares used in basic earnings per share attributable to Gilead calculation	1,244		1,247		1,248
Dilutive effect of equity-based awards	11		8		10
Shares used in diluted earnings per share attributable to Gilead calculation	1,255		1,255		1,258

Basic earnings per share attributable to Gilead	$	6.84	$	0.38	$	4.54
Diluted earnings per share attributable to Gilead	$	6.78	$	0.38	$	4.50

Potential shares of common stock excluded from the computation of Diluted earnings per share attributable to Gilead because their effect would have been antidilutive were 2 million, 5 million and 4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

15. INCOME TAXES

Income before income taxes consists of the following:


	Year Ended December 31,
(in millions)	2025		2024		2023
Domestic	$	8,310	$	(876)	$	5,467
Foreign	1,486		1,566		1,392
Income before income taxes	$	9,796	$	690	$	6,859

Income tax expense consists of the following:


	Year Ended December 31,
(in millions)	2025		2024		2023
Federal:
Current	$	820	$	1,495	$	1,781
Deferred	424		(1,562)		(1,126)
	1,244		(67)		655
State:
Current	51		39		80
Deferred	(190)		(386)		170
	(139)		(347)		250
Foreign:
Current	256		519		381
Deferred	(75)		106		(39)
	181		625		342
Income tax expense	$	1,286	$	211	$	1,247

In July 2025, the U.S. enacted tax reform legislation through the One Big Beautiful Bill (“OBBB”) Act. Included in this legislation are provisions that restored immediate expensing of domestic R&D expenditures and certain capital expenditures and modified the U.S. taxation of profits derived from foreign operations. The OBBB Act had no material impact to our income tax expense for 2025.

The reconciliation between the federal statutory tax rate applied to Income before income taxes and our effective tax rate is summarized as follows(1):


	Year Ended December 31,
	2025				2024				2023
(in millions, except percentages)	Amount		Percent		Amount		Percent		Amount		Percent
Income tax expense at U.S. federal statutory tax rate	$	2,057	21.0	%	$	145	21.0	%	$	1,440	21.0	%
State taxes, net of federal benefit(2)	(138)		(1.4)	%	(159)		(23.0)	%	174		2.5	%
Foreign taxes:
Ireland:
Tax rate differential	(118)		(1.2)	%	(67)		(9.7)	%	(58)		(0.8)	%
Other	—		—	%	46		6.7	%	69		1.0	%
United Kingdom:
Tax rate differential	*		*		*		*		5		0.1	%
Intercompany asset transfer	*		*		*		*		92		1.3	%
Other	*		*		*		*		16		0.2	%
Australia:
Tax rate differential	*		*		7		1.0	%	*		*
Intercompany asset transfer	*		*		388		56.2	%	*		*
Valuation allowance	*		*		(101)		(14.6)	%	*		*
Other	*		*		(44)		(6.4)	%	*		*
Other foreign jurisdictions	(9)		(0.1)	%	41		5.9	%	(30)		(0.4)	%
Effect of cross-border tax laws:
Global intangible low-taxed income	85		0.9	%	66		9.6	%	23		0.3	%
Foreign-derived intangible income	(85)		(0.9)	%	(133)		(19.3)	%	(143)		(2.1)	%
U.S. taxation of foreign branches	9		0.1	%	(245)		(35.5)	%	—		—	%
Other	2		—	%	14		2.0	%	13		0.2	%
Tax credits:
R&D tax credits	(143)		(1.5)	%	(144)		(20.9)	%	(164)		(2.4)	%
Other	(9)		(0.1)	%	(13)		(1.9)	%	(56)		(0.8)	%
Changes in valuation allowance(3)	(538)		(5.5)	%	588		85.2	%	38		0.6	%
Nontaxable or nondeductible items:
Acquired IPR&D and related charges	65		0.7	%	810		117.4	%	88		1.3	%
Other	20		0.2	%	98		14.2	%	(2)		—	%
Changes in unrecognized tax benefits	61		0.6	%	(427)		(61.9)	%	(197)		(2.9)	%
Other adjustments:
Settlement of tax examinations	—		—	%	251		36.4	%	(67)		(1.0)	%
Legal entity restructuring	—		—	%	(884)		(128.1)	%	—		—	%
Other	27		0.3	%	(26)		(3.8)	%	6		0.1	%
Income tax expense / Effective tax rate	$	1,286	13.1	%	$	211	30.5	%	$	1,247	18.2	%

Amounts did not meet the disaggregation threshold and therefore are included in Other foreign jurisdictions for this year instead of being broken out separately.

(1) Recurring items in this rate reconciliation table for 2024 are significantly impacted by the lower Income before income taxes for that year.

(2) Majority of 2025 state taxes related to Louisiana. Majority of 2024 and 2023 state taxes related to Tennessee.

(3) The amount in 2025 primarily relates to changes in realizability of a tax loss attribute related to a prior year legal entity restructuring.

Significant components of our deferred tax assets and liabilities are as follows:


	December 31,
(in millions)	2025		2024
Deferred tax assets:
Net operating loss carryforwards	$	266	$	288
Stock-based compensation	83		84
Reserves and accruals not currently deductible	688		685
Excess of tax basis over book basis of intangible assets	776		910
Deductible acquired IPR&D payments	1,293		1,312
Research and other credit carryforwards	353		428
Equity investments	111		237
Liability related to future royalties	270		287
Capitalized R&D expenditures	1,773		2,173
Capital losses	187		590
Other, net	252		213
Total deferred tax assets before valuation allowance	6,052		7,207
Valuation allowance(1)	(676)		(1,217)
Total deferred tax assets	5,376		5,990
Deferred tax liabilities:
Property, plant and equipment	(288)		(276)
Excess of book basis over tax basis of intangible assets	(3,209)		(3,836)
Equity investments	(92)		(81)
Other	(225)		(143)
Total deferred tax liabilities	(3,814)		(4,336)
Net deferred tax assets	$	1,562	$	1,654

(1) The valuation allowance decreased $541 million in 2025 primarily due to changes in realizability of a tax loss attribute related to a prior year legal entity restructuring. The valuation allowance increased $554 million in 2024 primarily due to capital losses, state research credits, and unrealized losses on our equity investments, partially offset by utilization of foreign net operating losses.

As of December 31, 2025, we had U.S. federal net operating loss and tax credit carryforwards of approximately $355 million and $45 million, respectively, which will start to expire in 2026 if not utilized. In addition, we had state net operating loss and tax credit carryforwards of approximately $3.3 billion and $1.1 billion, respectively, which will start to expire in 2026 and 2027, respectively, if not utilized. Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code of 1986, as amended, and similar state provisions. This annual limitation may result in the expiration of the net operating losses and credits before utilization.

The following is a rollforward of our total gross unrecognized tax benefits:


	Year Ended December 31,
(in millions)	2025		2024		2023
Beginning balance	$	2,325	$	1,962	$	1,959
Tax positions related to current year:
Additions	180		743		265
Tax positions related to prior years:
Additions	243		190		109
Reductions	(669)		(298)		(315)
Settlements	—		(270)		(42)
Lapse of statute of limitations	(3)		(2)		(13)
Ending balance	$	2,076	$	2,325	$	1,962

Of our total unrecognized tax benefits, $0.9 billion and $1.4 billion as of December 31, 2025 and 2024, respectively, if recognized, would reduce our effective tax rate in the period of recognition. Interest and penalties related to unrecognized tax benefits included income tax expenses of $43 million for the year ended December 31, 2025, and income tax benefits of $46 million and $35 million for the years ended December 31, 2024 and 2023, respectively, on our Consolidated Statements of Operations. Accrued interest and penalties related to unrecognized tax benefits were $176 million and $133 million as of December 31, 2025 and 2024, respectively.

We file federal, state and foreign income tax returns in the U.S. and in many foreign jurisdictions. These returns are subject to audit by the respective tax authorities. There are differing interpretations of tax laws and regulations, and as a result, significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions. We periodically evaluate our exposures associated with our tax filing positions. We are currently under or subject to potential examination for tax years 2019 and onwards for federal income tax purposes and 2016 and onwards for California state income tax purposes. We also have various other state and foreign tax examinations ongoing. For certain acquired entities, the statute of limitations is open for all years from inception due to our utilization of their net operating losses and credits carried over from prior years.

Income taxes paid (net of refunds received), disaggregated by jurisdiction, were as follows:


	Year Ended December 31,
(in millions)	2025		2024		2023
Federal(1)	$	2,492	$	2,434	$	3,411
State	230		107		152
Foreign:
Australia(2)	253		*		*
Other	240		238		427
Total income taxes paid	$	3,215	$	2,779	$	3,990

Amounts did not meet the disaggregation threshold and therefore are included in Other for this year instead of being broken out separately.

(1) Includes payments of $1.3 billion in 2025, $1.2 billion in 2024 and $0.9 billion in 2023 related to the transition tax on the mandatory deemed repatriation of foreign earnings in connection with the Tax Cuts and Jobs Act, with the final payment being made in 2025.

(2) Australia tax payment in 2025 primarily relates to 2024 intercompany asset restructuring involving transfer of certain assets from a prior acquisition to the U.S.

16. SEGMENT INFORMATION

We have one operating segment which primarily focuses on the discovery, development and commercialization of innovative medicines in areas of unmet medical need. See Note 2. Revenues for disaggregation of our revenues by major products and by geography. Our Chief Executive Officer, as the chief operating decision-maker (“CODM”), uses Net income attributable to Gilead as the primary measure to evaluate performance, allocate resources to the operations of our company on an entity-wide basis and forecast future financial results. Managing and allocating resources on an entity-wide basis enables our CODM to assess the overall level of resources available and how to best deploy these resources across functions and R&D projects based on unmet medical need, scientific data, probability of technical and regulatory successful development, market potential and other considerations, and, as necessary, reallocate resources among our internal R&D portfolio and external opportunities to best support the long-term growth of our business. Our CODM is regularly provided with entity-wide expense categories similar to those found on our Consolidated Statements of Operations, as well as the following:


	Year Ended December 31,
(in millions)	2025		2024		2023
Selling and marketing expenses	$	3,522	$	3,453	$	3,272
General and administrative expenses	2,252		2,638		2,818
Selling, general and administrative expenses	$	5,774	$	6,091	$	6,090

Asset information is not regularly provided to the CODM for assessing performance and allocating resources other than consolidated cash, cash equivalents and marketable debt securities, which can be found on our Consolidated Balance Sheets.

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