Key Highlights

  • Worldwide sales of USD 18.09 billion rose 5%, ahead of the consensus estimate of USD 17.33 billion.
  • Non GAAP EPS of USD 2.49 topped the consensus estimate of USD 2.09, while GAAP EPS was USD 2.04.
  • Keytruda and Keytruda Qlex sales grew 6% to USD 8.6 billion, and Winrevair sales rose 93% to USD 694 million.
  • Full year non GAAP EPS guidance was raised to a range of USD 2.77 to USD 2.82.

Merck & Co., Inc. (NYSE:MRK) reported third quarter 2026 worldwide sales of USD 18,085 million, up 5% from USD 17,276 million and above the consensus estimate of USD 17.33 billion. Non GAAP Earnings Per Share were USD 2.49 against a consensus estimate of USD 2.09, down from USD 2.58 a year earlier, while GAAP earnings per share were USD 2.04 versus USD 2.32. Both measures include a one-time charge of USD 0.12 per share tied to a global license agreement with SciBrunch.

Chairman and Chief Executive Officer Robert Davis said the science-led strategy is transforming the business, pointing to oncology data presented at the ESMO congress for the antibody-drug conjugate sac-TMT and a first Phase 3 validation of a therapeutic cancer vaccine.

Product Sales and Margin Detail

Keytruda and Keytruda Qlex sales reached USD 8,601 million, up 6%, including USD 830 million from Keytruda Qlex. Gardasil sales rose 14% to USD 1,995 million, Welireg grew 56% to USD 307 million, and Animal Health sales rose 4% to USD 1,676 million. Januvia and Janumet fell 39% to USD 380 million and Bridion dropped 67% to USD 144 million on generic competition. The company noted that favorable purchase timing in the U.S. added roughly USD 550 million to quarterly pharmaceutical sales.

GAAP gross margin was 72.9% compared with 77.7%, on higher intangible asset amortization, restructuring and production costs, while non GAAP gross margin was 81.4% versus 81.9%. Research and Development expense was USD 4.5 billion, including a USD 400 million SciBrunch charge, partly offset by a USD 200 million reduction tied to a funding agreement with Blackstone Life Sciences. The effective tax rate was 8.9% on a GAAP basis and 10.9% on a non GAAP basis.

Full Year Guidance Narrowed and Raised

The company now projects 2026 sales of USD 66.8 billion to USD 67.3 billion, up from USD 66.3 billion to USD 67.3 billion, and non GAAP EPS of USD 2.77 to USD 2.82, up from USD 2.66 to USD 2.76. Other guidance items include non GAAP operating expenses of USD 42.4 billion to USD 42.9 billion, a non GAAP tax rate of 32.0% to 33.0%, and about 2.48 billion diluted shares. The EPS range carries one-time charges of USD 3.62 per share for the Cidara acquisition, USD 2.31 for Terns and USD 0.12 for SciBrunch.

For 2027, management referenced modest Revenue growth, with moderating Keytruda growth, German policy effects, Bridion generics and Vaccine hesitancy as factors, and underlying Operating Expense growth at a mid to high single digit rate. The company remains on course for about USD 3 billion of share repurchases this year.

Signposts for the Fourth Quarter and 2027

Several dated or numeric items frame the next reports. The purchase timing benefit of about USD 550 million is projected to unwind fully for Keytruda and Winrevair in the fourth quarter, with most of the vaccine portion unwinding next year. The FDA set a PDUFA date of June 15, 2027 for the sac-TMT application in endometrial cancer, and the company is in discussions about an earlier decision.

Other markers are Keytruda Qlex sales of USD 830 million, Winrevair sales of USD 694 million against USD 360 million a year ago, the guided 2.48 billion share count, and the 32.0% to 33.0% non GAAP tax rate range.