Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to provide material information around events and uncertainties known to management that are relevant to an assessment of the financial condition and results of operations of Gilead and should therefore be read in conjunction with our audited Consolidated Financial Statements and the related notes thereto and other disclosures included as part of our Annual Report on Form 10-K for the year ended December 31, 2024 and our unaudited Condensed Consolidated Financial Statements for the three and six months ended June 30, 2025 and the related notes thereto and other disclosures (including the disclosures under Part II, Item 1A. Risk Factors) included in this Quarterly Report on Form 10-Q.

Management Overview

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, coronavirus disease 2019 (“COVID-19”), cancer and inflammation. We operate in more than 35 countries worldwide, with headquarters in Foster City, California.

Key Business Updates

The following represents a summary of notable business updates and events since the filing of our Annual Report on Form 10-K for the year ended December 31, 2024, including certain items from our press releases, which readers are encouraged to review in full as available on our website at www.gilead.com. The content on the referenced website does not constitute a part of and is not incorporated by reference into this Quarterly Report on Form 10-Q.

Virology

Received U.S. Food and Drug Administration (“FDA”) approval for Yeztugo (lenacapavir) for pre-exposure prophylaxis (“PrEP”) to reduce the risk of sexually acquired HIV in adults and adolescents weighing at least 35kg. Yeztugo is the first and only twice-yearly HIV PrEP option available in the U.S.
Received a positive opinion under accelerated review from the European Medicines Agency’s Committee for Medicinal Products for Human Use (“CHMP”) recommending lenacapavir for use as PrEP to reduce the risk of sexually acquired HIV-1 in adults and adolescents with increased HIV-1 acquisition risk. We also received a positive EU-Medicines for All opinion from the CHMP, which will facilitate national regulatory evaluations in low- and lower-middle-income countries.
Announced that FDA had placed a clinical hold on the HIV treatment trials of GS-1720 and/or GS-4182, including the WONDERS-1 and WONDERS-2 trials. These drug candidates are investigational and not approved anywhere globally.

Oncology

Announced positive topline results from the Phase 3 ASCENT-03 trial evaluating Trodelvy in patients with 1L metastatic triple-negative breast cancer (“mTNBC”) who are not candidates for PD-1/PD-L1 checkpoint inhibitors. Additionally, presented results from the Phase 3 ASCENT-04 trial evaluating Trodelvy plus Keytruda in 1L PD-L1+ mTNBC at the American Society of Clinical Oncology (“ASCO”) meeting. Trodelvy is not approved in either of these settings.
Entered into an exclusive option and license agreement with Kymera Therapeutics, Inc. to develop novel oral molecular glue CDK2 degraders with broad oncology treatment potential.

Inflammation

Received conditional marketing authorization from the European Commission for seladelpar for the treatment of primary biliary cholangitis (“PBC”) in combination with ursodeoxycholic acid (“UDCA”) in adults who have an inadequate response to UDCA alone, or as monotherapy in those unable to tolerate UDCA.

Key Financial Results

The following table summarizes our key financial results for the period and period-over-period changes:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions, except percentages and per share amounts)	2025		2024		Change		2025		2024		Change
Total revenues	$	7,082	$	6,954	2	%	$	13,749	$	13,640	1	%
Net income (loss) attributable to Gilead	$	1,960	$	1,614	21	%	$	3,275	$	(2,556)	NM
Diluted earnings (loss) per share attributable to Gilead	$	1.56	$	1.29	21	%	$	2.61	$	(2.05)	NM

NM - Not Meaningful

Total revenues increased 2% to $7.1 billion for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher HIV, Livdelzi and Trodelvy sales, partially offset by lower chronic hepatitis C virus (“HCV”) and Veklury sales.

Total revenues increased 1% to $13.7 billion for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher HIV and Livdelzi sales, partially offset by lower Veklury and HCV sales.

Net income attributable to Gilead was $2.0 billion and diluted earnings per share attributable to Gilead was $1.56 for the three months ended June 30, 2025, compared to net income attributable to Gilead of $1.6 billion and diluted earnings per share attributable to Gilead of $1.29 for the same period in 2024. The increase was primarily due to:

Net unrealized gains on equity securities compared to net unrealized losses in 2024; and
Higher product sales; partially offset by
A pre-tax in-process research and development (“IPR&D”) partial impairment charge of $190 million related to IPR&D assets acquired from MYR GmbH (“MYR”); and
Higher research and development (“R&D”) expenses.

Net income attributable to Gilead was $3.3 billion and diluted earnings per share attributable to Gilead was $2.61 for the six months ended June 30, 2025, compared to net loss attributable to Gilead of $2.6 billion and diluted loss per share attributable to Gilead of $2.05 for the same period in 2024. The increase was primarily due to:

A $3.9 billion acquired IPR&D expense related to the acquisition of CymaBay Therapeutics, Inc. (“CymaBay”) during the three months ended March 31, 2024, which did not repeat; and
A pre-tax IPR&D partial impairment charge of $2.4 billion during the three months ended March 31, 2024 related to Trodelvy IPR&D assets acquired from Immunomedics, Inc., which did not repeat; partially offset by
Higher income tax expense.

Please refer to “Results of Operations” below for further information on results for the three and six months ended June 30, 2025.

Results of Operations

Revenues

The following table summarizes our Total revenues and period-over-period changes:


	Three Months Ended June 30, 2025								Three Months Ended June 30, 2024
(in millions, except percentages)	U.S.		Europe		Rest of World		Total		U.S.		Europe		Rest of World		Total		Change
Product sales:
HIV
Biktarvy	$	2,799	$	429	$	302	$	3,530	$	2,585	$	370	$	277	$	3,232	9	%
Descovy	601		24		28		653		434		25		26		485		35	%
Genvoya	322		40		16		377		372		45		23		440		(14)	%
Odefsey	221		66		11		298		233		72		10		315		(5)	%
Symtuza - Revenue share(1)	88		33		3		124		131		34		3		168		(26)	%
Other HIV(2)	65		33		9		107		65		25		15		105		2	%
Total HIV	4,096		624		368		5,088		3,821		571		353		4,745		7	%

Liver Disease
Sofosbuvir/Velpatasvir(3)	184		81		76		342		267		84		126		476		(28)	%
Vemlidy	122		13		117		252		117		11		115		243		4	%
Other Liver Disease(4)	106		76		19		201		47		47		19		113		77	%
Total Liver Disease	413		170		211		795		431		142		259		832		(4)	%

Veklury	51		19		50		121		76		53		85		214		(44)	%

Oncology
Cell Therapy
Tecartus	41		41		9		92		63		37		7		107		(14)	%
Yescarta	162		154		77		393		186		169		58		414		(5)	%
Total Cell Therapy	203		196		86		485		250		206		66		521		(7)	%

Trodelvy	224		96		44		364		224		69		26		320		14	%
Total Oncology	427		291		131		849		474		275		92		841		1	%

Other
AmBisome	7		65		56		129		17		69		65		151		(14)	%
Other(5)	44		8		21		73		98		8		24		130		(44)	%
Total Other	52		73		77		202		115		77		88		280		(28)	%
Total product sales	5,038		1,178		838		7,054		4,916		1,118		878		6,912		2	%
Royalty, contract and other revenues	13		10		4		27		25		15		1		41		(34)	%
Total revenues	$	5,051	$	1,189	$	842	$	7,082	$	4,941	$	1,133	$	879	$	6,954	2	%


	Six Months Ended June 30, 2025								Six Months Ended June 30, 2024
(in millions)	U.S.		Europe		Rest of World		Total		U.S.		Europe		Rest of World		Total		Change
Product sales:
HIV
Biktarvy	$	5,272	$	804	$	603	$	6,679	$	4,900	$	735	$	542	$	6,177	8	%
Descovy	1,139		45		55		1,239		805		51		55		911		36	%
Genvoya	627		79		35		741		704		95		44		843		(12)	%
Odefsey	436		123		20		579		457		148		21		626		(7)	%
Symtuza - Revenue share(1)	170		62		6		238		236		67		6		309		(23)	%
Other HIV(2)	115		63		19		198		125		70		27		222		(11)	%
Total HIV	7,760		1,177		738		9,675		7,226		1,167		695		9,088		6	%

Liver Disease
Sofosbuvir/Velpatasvir(3)	351		161		175		687		515		163		203		881		(22)	%
Vemlidy	222		24		257		504		212		22		233		467		8	%
Other Liver Disease(4)	175		152		35		362		89		94		38		221		64	%
Total Liver Disease	748		338		467		1,553		816		279		474		1,569		(1)	%

Veklury	250		41		132		423		391		123		255		769		(45)	%

Oncology
Cell Therapy
Tecartus	82		72		17		171		118		73		16		207		(18)	%
Yescarta	321		304		154		779		357		327		110		794		(2)	%
Total Cell Therapy	403		376		171		949		475		400		126		1,001		(5)	%

Trodelvy	405		171		81		657		429		137		62		628		5	%
Total Oncology	808		547		252		1,606		904		537		188		1,629		(1)	%

Other
AmBisome	13		132		123		268		31		139		124		294		(9)	%
Other(5)	91		16		35		143		156		18		36		209		(32)	%
Total Other	104		149		158		410		188		156		160		504		(19)	%
Total product sales	9,669		2,251		1,747		13,668		9,525		2,262		1,772		13,559		1	%
Royalty, contract and other revenues	49		21		10		81		49		30		2		81		1	%
Total revenues	$	9,719	$	2,273	$	1,757	$	13,749	$	9,574	$	2,292	$	1,774	$	13,640	1	%

(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.

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

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

HIV

HIV product sales increased 7% to $5.1 billion for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher demand and higher average realized price, inclusive of the U.S. Medicare Part D program redesign impact. In particular:

Biktarvy sales increased 9% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products; and
Descovy sales increased 35% primarily due to higher average realized price and higher demand.

HIV product sales increased 6% to $9.7 billion for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher demand and higher average realized price, inclusive of the U.S. Medicare Part D program redesign impact. In particular:

Biktarvy sales increased 8% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products; and
Descovy sales increased 36% primarily due to higher average realized price and higher demand.

Liver Disease

Liver Disease product sales decreased 4% to $795 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to lower average realized price, inclusive of the U.S. Medicare Part D program redesign impact, and demand for HCV products. This decrease was partially offset by higher demand for Livdelzi, Hepcludex and chronic hepatitis B virus (“HBV”) products.

Liver Disease product sales decreased 1% to $1.6 billion for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower average realized price, inclusive of the U.S. Medicare Part D program redesign impact, and demand for HCV products. This decrease was partially offset by higher demand for Livdelzi, HBV products and Hepcludex.

Veklury

Veklury product sales decreased 44% to $121 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to lower rates of COVID-19-related hospitalizations.

Veklury product sales decreased 45% to $423 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower rates of COVID-19-related hospitalizations.

Oncology

Cell Therapy

Cell Therapy product sales decreased 7% to $485 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to lower demand reflecting ongoing competitive headwinds, partially offset by higher average realized price.

Cell Therapy product sales decreased 5% to $949 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to lower demand reflecting ongoing competitive headwinds, partially offset by higher average realized price.

Trodelvy

Trodelvy product sales increased 14% to $364 million for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to higher demand and inventory dynamics.

Trodelvy product sales increased 5% to $657 million for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher demand.

Foreign Currency Exchange Impact

We generally face exposure to movements in foreign currency exchange rates, primarily in the Euro. We use foreign currency exchange contracts to hedge a portion of our foreign currency exposures.

Approximately 27% and 26% of our product sales were denominated in foreign currencies during the three months ended June 30, 2025 and 2024, respectively. Foreign currency exchange, net of hedges, had a favorable impact on our total product sales of $41 million for the three months ended June 30, 2025, based on a comparison using foreign currency exchange rates from the three months ended June 30, 2024.

Approximately 27% and 28% of our product sales were denominated in foreign currencies during the six months ended June 30, 2025 and 2024, respectively. Foreign currency exchange, net of hedges, had an unfavorable impact on our total product sales of $39 million for the six months ended June 30, 2025, based on a comparison using foreign currency exchange rates from the six months ended June 30, 2024.

Costs and Expenses

The following table summarizes our costs and expenses and period-over-period changes:


	Three Months Ended								Six Months Ended
	June 30,								June 30,
(in millions, except percentages)	2025			2024			Change		2025			2024			Change
Cost of goods sold	$	1,501		$	1,544		(3)	%	$	3,041		$	3,096		(2)	%
Product gross margin	78.7		%	77.7		%	106 bps		77.7		%	77.2		%	58 bps
Research and development expenses	$	1,491		$	1,351		10	%	$	2,870		$	2,871		—	%
Acquired in-process research and development expenses	$	61		$	38		61	%	$	315		$	4,169		(92)	%
In-process research and development impairments	$	190		$	—		NM		$	190		$	2,430		(92)	%
Selling, general and administrative expenses	$	1,365		$	1,377		(1)	%	$	2,623		$	2,752		(5)	%

NM - Not Meaningful

Product Gross Margin

Product gross margin increased to 78.7% for the three months ended June 30, 2025, compared to the same period in 2024, primarily driven by product mix.

Product gross margin remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024.

Research and Development Expenses

Research and development expenses 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 and our collaboration partners and other outside services.

We manage these expenses by identifying the research and development (“R&D”) activities we expect to be performed during a given period and then prioritizing efforts based on scientific data, probability of successful technical development and regulatory approval, market potential, available human and capital resources and other considerations. We regularly review our R&D activities based on unmet medical need and, as necessary, reallocate resources among our internal R&D portfolio and external opportunities that we believe will best support the long-term growth of our business. We do not track total R&D expenses by product candidate, therapeutic area or development phase.

The following table provides a breakout of expenses by major cost type:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions, except percentages)	2025		2024		Change		2025		2024		Change
Personnel, infrastructure and other support costs	$	855	$	830	3	%	$	1,709	$	1,793	(5)	%
Clinical studies and other costs	636		520		22	%	1,160		1,077		8	%
Research and development expenses	$	1,491	$	1,351	10	%	$	2,870	$	2,871	—	%

Research and development expenses increased 10% to $1.5 billion for the three months ended June 30, 2025, compared to the same period in 2024. Personnel, infrastructure and other support costs remained relatively flat. Clinical studies and other costs increased primarily due to higher spend on clinical manufacturing and studies as well as fair value adjustments to the MYR-related contingent consideration.

Research and development expenses remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024. Personnel, infrastructure and other support costs decreased primarily due to the impact of stock-based compensation expenses and other integration costs related to the acquisition of CymaBay during the six months ended June 30, 2024, which did not repeat, as well as lower restructuring costs. Clinical studies and other costs increased primarily due to fair value adjustments to the MYR-related contingent consideration and higher spend related to new and progressing clinical studies.

Acquired In-Process Research and Development Expenses

Acquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed 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.

Acquired in-process research and development expenses were $61 million for the three months ended June 30, 2025. Acquired in-process research and development expenses were $315 million for the six months ended June 30, 2025, primarily related to $250 million associated with the LEO Pharma A/S collaboration in January 2025.

Acquired in-process research and development expenses were $38 million for the three months ended June 30, 2024. Acquired in-process research and development expenses were $4.2 billion for the six months ended June 30, 2024, primarily related to $3.9 billion associated with the CymaBay acquisition in March 2024 and $100 million associated with the Arcus Biosciences, Inc. collaboration amendment in January 2024.

See Note 6. Acquisitions, Collaborations and Other Arrangements of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

In-Process Research and Development Impairment

2025 Impairment

During the three months ended June 30, 2025, additional competitive clinical data became available indicating a potentially 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, we performed an interim impairment test and determined that the revised estimated fair value of the bulevirtide IPR&D intangible asset was below its carrying value. As a result, we recognized a partial impairment charge of $190 million in In-process research and development impairments on our Condensed Consolidated Statements of Operations for the three months ended June 30, 2025.

To arrive at the revised estimated fair value as of June 30, 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 European Union (“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. Our revised discounted cash flows for the June 30, 2025 fair value estimation primarily reflected the updated expectations for bulevirtide’s potential market share outside of the EU.

2024 Impairment

In January 2024, we received data from our Phase 3 EVOKE-01 study of Trodelvy evaluating sacituzumab govitecan-hziy (“SG”) indicating that the study did not meet its primary endpoint of overall survival in previously treated metastatic non-small cell lung cancer (“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 currently available, and in connection with the preparation of the financial statements for the first quarter, 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 Condensed Consolidated Statements of Operations for the three months ended March 31, 2024.

To arrive at the revised estimated fair value as of March 31, 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. Our revised discounted cash flows for the March 31, 2024 fair value estimation primarily reflected the smaller addressable market that Trodelvy could serve among metastatic NSCLC patients and a delay in expected launch timing for second-line plus patients.

If future events result in adverse changes in the key assumptions used in determining fair value, including the timing of product launches, information on the competitive landscape of treatments in this indication, changes to the probability of technical or regulatory success, failure to obtain anticipated regulatory approval or discount rate, among others, additional impairments may be recorded and could be material to our financial statements.

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.

The following table summarizes our Selling, general and administrative expenses and period-over-period changes:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions, except percentages)	2025		2024		Change		2025		2024		Change
Selling and marketing expenses	$	864	$	805	7	%	$	1,617	$	1,548	4	%
General and administrative expenses	501		572		(12)	%	1,006		1,204		(16)	%
Selling, general and administrative expenses	$	1,365	$	1,377	(1)	%	$	2,623	$	2,752	(5)	%

Selling, general and administrative expenses remained relatively flat for the three months ended June 30, 2025, compared to the same period in 2024. Selling and marketing expenses increased mainly due to higher promotional and outside service expenses as well as higher compensation costs. General and administrative expenses decreased mainly due to lower spend on corporate initiatives.

Selling, general and administrative expenses decreased 5% to $2.6 billion for the six months ended June 30, 2025, compared to the same period in 2024. Selling and marketing expenses increased mainly due to higher promotional expenses. General and administrative expenses decreased mainly due to lower spend on corporate initiatives as well as stock-based compensation expenses related to the acquisition of CymaBay during the six months ended June 30, 2024, which did not repeat.

Interest Expense and Other (Income) Expense, Net

The following table summarizes our Interest expense and Other (income) expense, net and period-over-period changes:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions, except percentages)	2025		2024		Change		2025		2024		Change
Interest expense	$	254	$	237	7	%	$	513	$	491	5	%
Other (income) expense, net	$	(208)	$	355	NM		$	120	$	265	(55)	%
(Gain) loss from equity securities, net	$	(142)	$	392	NM		$	284	$	405	(30)	%
Interest income	$	(73)	$	(35)	NM		$	(166)	$	(144)	16	%
Other, net	$	6	$	(1)	NM		$	2	$	3	(44)	%

NM - Not Meaningful

Interest expense increased slightly for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to higher debt balances and higher weighted-average interest rates on the debt.

Favorable movements in Other (income) expense, net for the three months ended June 30, 2025, compared to the same period in 2024, primarily related to net unrealized gains from equity securities compared to net unrealized losses in 2024 as well as higher interest income.

Favorable movements in Other (income) expense, net for the six months ended June 30, 2025, compared to the same period in 2024, primarily related to lower net unrealized losses from equity securities and higher interest income.

Income Taxes

The following table summarizes our Income tax expense and period-over-period changes:


	Three Months Ended								Six Months Ended
	June 30,								June 30,
(in millions, except percentages)	2025			2024			Change		2025			2024			Change
Income (loss) before income taxes	$	2,429		$	2,053		18	%	$	4,077		$	(2,433)		NM
Income tax expense	$	468		$	438		7	%	$	802		$	123		NM
Effective tax rate	19.3		%	21.4		%	-207 bps		19.7		%	(5.1)		%	NM

NM - Not Meaningful

Our effective tax rate decreased for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to favorable changes in the fair value of our equity securities that are non-taxable for income tax purposes, partially offset by a settlement with a tax authority during the second quarter of 2024.

Our effective tax rate increased for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to the non-deductible acquired IPR&D expense recorded in connection with our first quarter 2024 acquisition of CymaBay, partially offset by tax benefits from stock-based compensation.

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 legislation’s provisions have varying effective dates, some of which begin in 2025. While we are still assessing the full impact of the new legislation, we do not expect it to have a material impact on our result of operations.

Liquidity and Capital Resources

We regularly analyze our ability to generate and obtain adequate amounts of cash to meet our short-term and long-term requirements and plans. Our capital priorities include: (i) investing in our business and R&D pipeline, (ii) continuing select partnerships and business development transactions, (iii) growing our dividend over time, and (iv) repurchasing shares to offset dilution and opportunistically reduce share count. Based on our evaluation of our current position of liquidity, available capital resources and our material cash requirements, we believe that we can satisfy our capital needs for the next 12 months and the foreseeable future.

Liquidity

Cash and cash equivalents were $5.1 billion and marketable debt securities were $2.0 billion as of June 30, 2025. The table below summarizes our cash flow activities, followed by our analysis of changes and trends:


	Six Months Ended
	June 30,
(in millions, except percentages)	2025		2024		Change
Net cash provided by (used in):
Operating activities	$	2,584	$	3,544	(27)	%
Investing activities	(2,531)		(2,514)		1	%
Financing activities	(4,993)		(4,314)		16	%
Effect of exchange rate changes on cash and cash equivalents	92		(29)		NM
Net change in cash and cash equivalents	$	(4,848)	$	(3,313)	46	%

NM - Not Meaningful

Operating Activities

Net cash provided by operating activities is our primary source of funds, driven mainly by collections on product sales, partially offset by operating spend. Changes in working capital balances, generally associated with the timing of collections and payments, as well as unanticipated payments related to litigation, taxes or other matters, may create some variation in any given year. Net cash provided by operating activities decreased for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to higher income tax payments as well as higher operating payments, partially due to timing, and higher inventory purchases. During the six months ended June 30, 2025, we paid the final $1.3 billion federal income tax payment for transition tax on the mandatory deemed repatriation of foreign earnings related to the Tax Cuts and Jobs Act.

As a result of the OBBB Act, we anticipate a reduction in income tax payments for the remainder of the year ending December 31, 2025.

Investing Activities

Net cash used in investing activities remained relatively flat for the six months ended June 30, 2025, compared to the same period in 2024. During the six months ended June 30, 2025, we utilized cash primarily for purchases of marketable debt securities. Net cash used in investing activities for the six months ended June 30, 2024 primarily related to the $3.9 billion net cash payment for the CymaBay acquisition and purchases of equity securities, partially offset by proceeds from the liquidation of marketable debt securities. Net cash used in investing activities may vary in any given year depending on the favorability of strategic opportunities for the business.

Financing Activities

The change in Net cash used in financing activities for the six months ended June 30, 2025, compared to the same period in 2024, was due mostly to higher common stock repurchases. During the six months ended June 30, 2025, we utilized cash of $2.0 billion for dividend payments, $1.8 billion for repayment of debt and $1.3 billion for common stock repurchases. During the six months ended June 30, 2024, we utilized cash of $2.0 billion for dividend payments, $1.9 billion for repayment of debt and other obligations, and $500 million for common stock repurchases. Net cash used in financing activities may vary in any given year depending primarily on the timing of debt repayments and proceeds from debt offerings and the amount of common stock repurchases.

In August 2025, we announced that our Board of Directors declared a quarterly dividend of $0.79 per share of our common stock, with a payment date of September 29, 2025 to all stockholders of record as of the close of business on September 15, 2025. Future dividends are subject to declaration by our Board of Directors.

Capital Resources

A summary of our capital resources and material cash requirements is presented in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Other than as disclosed in the Liquidity section above and in Notes 4. Available-for-Sale Debt Securities and Equity Securities, 6. Acquisitions, Collaborations and Other Arrangements, 9. Debt and Credit Facilities, 10. Commitments and Contingencies and 12. Income Taxes of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no material changes to our capital resources and material cash requirements during the six months ended June 30, 2025.

Critical Accounting Estimates

A summary of our critical accounting estimates is presented in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Other than as disclosed in Notes 2. Revenues, 7. Intangible Assets, 10. Commitments and Contingencies and 12. Income Taxes of the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, there were no material changes to our critical accounting estimates during the six months ended June 30, 2025.

Information Available on Our Website

Our company website is www.gilead.com. We routinely post important information for investors in the “Investors” section of our website, https://investors.gilead.com. Among other things, an estimate of Acquired IPR&D expenses is expected to be made available on the Quarterly Results page within the first ten days after the end of each quarter. The content on the referenced websites does not constitute a part of and is not incorporated by reference into this Quarterly Report on Form 10-Q.

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