10-K – 2026-02-24 – gild-20251231.htm

Further, how we manufacture and sell our products is subject to extensive regulation and review. For example, under FDA rules, we are often required to conduct post-approval clinical studies to assess a known serious risk, signals of serious risk or to identify an unexpected serious risk. In certain circumstances, we may be required to implement a Risk Evaluation and Mitigation Strategy program for our products, which could include a medication guide, patient package insert, a communication plan to healthcare providers, restrictions on distribution or use of a product and other elements FDA deems necessary to assure safe use of the drug. Discovery of previously unknown problems with our marketed products or product candidates, including serious safety, resistance or drug interaction issues, or problems with our manufacturing, safety reporting or promotional activities, may result in regulatory approvals being delayed, denied or granted with significant restrictions on our products, including limitations on or the withdrawal of the products from the market.
As additional studies are conducted after obtaining marketing approval for our products, and as our products are used over longer periods of time by many patients, including patients with underlying health problems or those taking other medicines, we expect to continue finding new issues related to safety, resistance or drug interactions. Any such issues may require changes to our product labels, such as additional warnings, contraindications or even narrowed indications, or the halt of product sales.
Regulatory authorities have been moving towards more active and transparent pharmacovigilance and are making greater amounts of stand-alone safety information and clinical trial data directly available to the public through websites and other means, such as periodic safety update report summaries, risk management plan summaries and various adverse event data. Safety information, without the appropriate context and expertise, may be misinterpreted and lead to misperception or legal action.
Failure to comply with these or other requirements imposed by FDA could result in significant civil monetary penalties, fines, suspensions of regulatory approvals, product recalls, seizure of products and criminal prosecutions.
We are impacted by evolving laws, regulations and legislative or regulatory actions applicable to the healthcare industry.
The healthcare industry is subject to various federal, state and international laws and regulations pertaining to drug approval, manufacturing, reimbursement, rebates, price reporting, healthcare fraud and abuse, and data privacy and security. In the U.S., these laws include anti-kickback and false claims laws, the Federal Food, Drug, and Cosmetic Act, laws and regulations relating to the Medicare and Medicaid programs and other federal and state programs, such as the Medicaid Rebate Statute and the 340B statute, laws that regulate written and verbal communications about our products, individual state laws relating to pricing and sales and marketing practices, the Health Insurance Portability and Accountability Act and other federal and state laws relating to the privacy and security of health information, including the Department of Justice Final Rule on Preventing Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, which impacts how and where clinical and other sensitive data is shared. Actual or alleged violations of these laws or any related regulations may be punishable by criminal and/or civil sanctions, including, in some instances, substantial fines, civil monetary penalties, exclusion from participation in federal and state healthcare programs, including Medicare, Medicaid and U.S. Department of Veterans Affairs and U.S. Department of Defense health programs, actions against executives overseeing our business and significant remediation measures, negative publicity or other consequences. These laws and regulations are broad in scope and subject to changing and evolving interpretations, including as a result of legal challenges, which may increase following the U.S. Supreme Court decision to overrule the Chevron doctrine, any of which could require us to incur substantial costs associated with compliance, alter one or more of our sales or marketing practices, adversely affect health insurance reimbursement of our products, or impact our ability to obtain or maintain regulatory approvals. The resulting impact on our business is uncertain and could be material. We may also become subject to new laws and regulations. For example, recently enacted and proposed legislation in the U.S., such as the BIOSECURE Act (which, among other things, prohibits U.S. executive agencies from contracting with, or expending loans or granting funds to, companies that use biotechnology equipment or services for certain activities from certain foreign-owned entities) and the ABC Safe Drug Act (which, among other things, could prohibit U.S. federal health care programs from purchasing drugs and drug ingredients manufactured in China), has the potential to adversely impact our ability to receive goods or services from such entities, including certain of which we use in connection with our clinical trials and our clinical and commercial manufacturing, which could increase the cost or limit the supply of material available to us, delay the procurement or supply of such material, delay or impact clinical trials and regulatory submissions, delay the launch of commercial products and adversely affect our financial condition and business prospects. In January 2026, the European Medicines Agency and FDA jointly established new artificial intelligence (“AI”) principles in drug development that provide broad guidance on AI use in evidence generation and monitoring across all phases of a medicine’s lifecycle - from early research and clinical trials to manufacturing and drug safety. These AI principles may lead to future regulatory guidance and requirements in various jurisdictions, which could affect the use of AI in our business.
In addition, government price reporting and payment regulations are complex, and we are continually assessing the methods by which we calculate and report pricing in accordance with these obligations. Our methodologies for calculations are inherently subject to assumptions and may be subject to review and challenge by various government agencies, which may disagree with our interpretation. If the government disagrees with our reported calculations, we may need to restate previously reported data and could be subject to additional financial and legal liability.
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There also continues to be enhanced scrutiny of company-sponsored patient assistance programs, including co-pay assistance programs and manufacturer donations to third-party charities that provide such assistance. There has also been enhanced scrutiny by governments on reimbursement support offerings and other patient support offerings, clinical education programs and promotional speaker programs. Despite our training and compliance program, our internal control policies and procedures may not protect us from unlawful acts committed by our employees or agents. If we, or our agents and vendors, are deemed to have failed to comply with laws, regulations or government guidance in any of these areas, we could be subject to criminal or civil sanctions. Any similar violations by our competitors could also negatively impact our industry’s reputation and increase scrutiny over our business and our products.
For a description of our government investigations and related litigation, see Note 12. Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Our success depends to a significant degree on our ability to obtain and defend our patents and other intellectual property rights both domestically and internationally, and to operate without infringing upon the patents or other proprietary rights of third parties.
Patents and other proprietary rights are very important to our business. As part of our business strategy, we actively seek patent protection both in the U.S. and internationally covering our compounds, products and technology. Our success depends to a significant degree on our ability to obtain patents and licenses to patent rights, enforce our patents and defend against infringement of our patents and efforts to invalidate them, operate without infringing on the intellectual property of others, and preserve trade secrets and internal know-how.
Our pending patent applications and the patent applications filed by our collaborative partners may not be able to prevent third parties from developing compounds or products that are closely related to those which we have developed or are developing. In addition, certain countries do not provide effective mechanisms for enforcement of our patents, and third-party manufacturers may be able to sell generic versions of our products in those countries. Because patent applications are confidential for a period of time after filing, we may not know if our competitors have filed applications for technology covered by our pending applications or if we were the first to file an application directed toward the technology that is the subject of our patent applications. If competitors file patent applications covering our technology, we may have to participate in litigation, post-grant proceedings before the U.S. Patent and Trademark Office or other proceedings to determine the right to a patent or validity of any patent granted. Such litigation and proceedings are unpredictable and expensive, and could divert management attention from other operations, such that, even if we are ultimately successful, we may be adversely impacted.
Patents covering our existing compounds, products and technology, and those that we will likely file in the future, may not provide complete or adequate protection. Filing patent applications is a fact-intensive and complex process. We may file patent applications that ultimately do not result in patents or have patents that do not provide adequate protection for the related product. Patent term extensions may be available for products we are developing, but we cannot be certain we will obtain them. Future litigation or other proceedings regarding the enforcement or validity of our existing patents or any future patents could result in the invalidation of our patents or substantially reduce their protection. In addition, we may face criticism as a result of our legitimate use of the patent systems to protect our investments in new and useful innovations in medicine. Further, incentives and exclusivities relating to our products and product candidates may change in the future. We are aware that several countries are considering changes to support sharing how to make and use new inventions that could impact the current patent systems and protections for innovation. Any such changes could also impact the voluntary licensing patent programs that we establish for our products to support access to medicines.
Generic manufacturers have sought, and may continue to seek, FDA approval to market generic versions of our products through an abbreviated new drug application (“ANDA”), the application process typically used by manufacturers seeking approval of a generic drug. For a description of our ANDA litigation, see Note 12. Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. ANDA litigation and related settlement and license agreements, in some cases, may result in a loss of exclusivity for our patents sooner than we would otherwise expect. In addition, loss of exclusivity may be earlier than expected under these settlement and license agreements under certain circumstances. For example, settlement and license agreements with generic manufacturers typically include acceleration clauses that permit generic entry before the agreed-upon entry date in certain circumstances, and generic manufacturers may continue to challenge the patents protecting our products. The entry of generic versions of our products has, and may in the future, lead to market share and price erosion.
If we are found to infringe the valid patents of third parties, we may be required to pay significant monetary damages or we may be prevented from commercializing products or may be required to obtain licenses from these third parties. We may not be able to obtain alternative technologies or any required license on commercially reasonable terms or at all. If we fail to obtain these licenses or alternative technologies, we may be unable to develop or commercialize some or all of our products. For example, we are aware of patents and patent applications owned by other parties that such parties may claim to cover the use of our products and research activities. For a description of our pending patent litigation, see Note 12. Commitments and
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Contingencies of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Furthermore, we also rely on unpatented trade secrets and improvements, unpatented internal know-how and technological innovation. We protect these rights mainly through confidentiality agreements with our corporate partners, employees, consultants and vendors. We cannot be certain that these parties will comply with these confidentiality agreements, that we have adequate remedies for any breach or that our trade secrets, internal know-how or technological innovation will not otherwise become known or be independently discovered by our competitors. Under some of our R&D agreements, inventions become jointly owned by us and our corporate partner and in other cases become the exclusive property of one party. In certain circumstances, it can be difficult to determine who owns a particular invention and disputes could arise regarding those inventions. We could be adversely affected if our trade secrets, internal know-how, technological innovation or confidential information became known or independently discovered by competitors or if we enter into disputes over ownership of inventions.
We face potentially significant liability and increased expenses from litigation and government investigations relating to our products and operations.
We are involved in a number of litigation, investigation and other dispute-related matters that require us to expend substantial internal and financial resources. From time to time, these matters require us to pay significant monetary amounts, including royalty payments for past and future sales. We expect these matters will continue to require a high level of internal and financial resources for the foreseeable future. These matters have reduced, and are expected to continue to reduce, our earnings and require significant management attention.
In addition, the testing, manufacturing, marketing and use of our commercial products, as well as product candidates in development, involve substantial risk of product liability claims. These claims may be made directly by consumers, healthcare providers, pharmaceutical companies or others. We have limited insurance for product liabilities that may arise and claims may exceed our coverage.
For a description of our litigation, investigation and other dispute-related matters, see Note 12. Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K. The outcome of such legal proceedings or any other legal proceedings that may be brought against us, the investigations or any other investigations that may be initiated and any other dispute-related matters, are inherently uncertain, and adverse developments or outcomes can result in significant expenses, monetary damages, penalties or injunctive relief against us.
Operational Risks
Our business has been, and may in the future be, adversely affected by outbreaks of epidemic, pandemic or contagious diseases.
Actual or threatened outbreaks of epidemic, pandemic or contagious diseases, or other public health emergencies, may significantly disrupt our global operations and adversely affect our business, financial condition and results of operations. As seen during the COVID-19 pandemic, outbreaks can result in global supply chain and logistics disruptions and distribution constraints. The impact of an outbreak or other public health crisis on our results of operations and financial condition would depend on numerous evolving factors, but could involve higher operating expenses, lower demand for our products as a result of governmental, business and individuals’ actions taken in response to such an event (including quarantines, travel restrictions and interruptions to healthcare services, which can impact enrollment in or operation of our clinical trials or limit patients’ ability or willingness to access and seek care), challenges associated with the safety of our employees and safe occupancy of our job sites, and financial market volatility and significant macroeconomic uncertainty in global markets. An outbreak or public health emergency also could amplify many of the other risks described throughout the “Risk Factors” section of this Annual Report on Form 10-K.
We face risks associated with our global operations.
Our global operations are accompanied by certain financial, political, economic and other risks, including those listed below:
• Foreign Currency Exchange: Because a significant percentage of our product sales is denominated in foreign currencies, primarily the Euro, we face exposure to adverse movements in foreign currency exchange rates. Overall, we are a net receiver of foreign currencies, and therefore, we benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar. Our hedging program does not eliminate our exposure to currency fluctuations. We may be adversely impacted if the U.S. dollar appreciates significantly against certain currencies and our hedging program does not sufficiently offset the effects of such appreciation. For example, see “Foreign Currency Exchange Impact” in Part II, Item 7 of this Annual Report on Form 10-K for a discussion of our exposure to movements in
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foreign currency exchange rates, primarily in the Euro, and the impacts from foreign currency exchange, net of hedges, for the year ended December 31, 2025.
• Interest Rates and Inflation: We have interest-generating assets and interest-bearing liabilities, including our senior unsecured notes and credit facilities. Fluctuations in interest rates could expose us to increased financial risk. In addition, high inflation, such as what we have seen in recent years, has adversely impacted and may in the future adversely impact our business and financial results.
• Anti-Bribery: We are subject to the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws that govern our international operations with respect to payments to government officials. Our international operations are heavily regulated and require significant interaction with foreign officials. We operate in parts of the world that have experienced governmental corruption to some degree. In certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices or may require us to interact with doctors and hospitals, some of which may be state-controlled, in a manner that is different than local custom. It is possible that certain of our practices may be challenged under these laws. In addition, our internal control policies and procedures may not protect us from reckless or criminal acts committed by our employees and agents. Enforcement activities under anti-bribery laws could subject us to administrative and legal proceedings and actions, which could result in civil and criminal sanctions, including monetary penalties and exclusion from healthcare programs.
Other risks inherent in conducting a global business include:
• Restrictive government actions against our intellectual property and other assets such as nationalization, expropriation, the imposition of compulsory licenses or similar actions, including waiver of intellectual property protections.
• Changes in trade policies by the U.S. or foreign governments, which may result in protectionist measures, such as new or increased sanctions, tariffs (such as the country-specific tariffs and related retaliatory actions implemented by the U.S. and other countries), embargoes, import and export licensing requirements or other trade restrictions, or the threat of such restrictions.
• Political instability or disruption in a geographic region where we operate, regardless of cause, including war, terrorism, social unrest and political changes, including in China, Russia, Ukraine, Israel and surrounding areas.
• Increasing use of social media platforms and modern technologies present new risks and challenges, and inappropriate or unauthorized use of these platforms can result in exposure of sensitive data or information and damage our brand and reputation.
Climate change and related natural disasters, as well as legal, regulatory, or market measures to address climate change, can negatively affect our business and operations.
Many of our operations and facilities, including those essential to our manufacturing, R&D and commercialization/distribution activities, are located in regions subject to natural or man-made disasters, such as climate change, earthquakes, hurricanes, rising sea levels and flooding, fires, extreme heat, drought or other extreme weather conditions, or efforts taken by third parties to prevent or mitigate such disasters, such as public safety power shutoffs and facility shutdowns. The severity and frequency of weather-related events has been amplified, and is expected to continue to be amplified, by climate change. Such natural disasters have caused, and in the future may cause, damage to and/or disrupt our operations, which may result in a material adverse effect on our business and financial results. Additionally, our corporate headquarters in Foster City and certain R&D and manufacturing facilities are located in California, a region that is seismically active and prone to wildfires. Our business continuity plans and contingencies, including periodic assessments of our natural disaster risk as part of our overall enterprise risk management program, may be insufficient, and a major earthquake or other natural disaster can result in significant recovery time and a prolonged interruption to our operational and business activities. We may be required to incur significant costs to remedy the effects of such natural disasters and to resume or restore our operations, which could adversely impact us.
In addition, laws and regulations relating to climate change continue to evolve and may impose new or modified requirements on our operations. These requirements, which can differ across jurisdictions, subject us to many transition risks, including, for example, new or expanded carbon pricing or taxes, increased compliance costs, restrictions on greenhouse gas emissions, investment in new technologies, increased sustainability disclosures and transparency, investments in data gathering and reporting systems, upgrades of facilities to meet new building codes and the redesign of utility systems, which could increase the company’s operating costs, including the cost of electricity and energy. For example, many nations, particularly in the EU, have communicated plans to decarbonize their healthcare systems and achieve net zero emissions by 2050, which may require us to incur material costs in order to do so. Failure to sufficiently decarbonize or comply with climate-related requirements may impede our ability to operate in certain geographies and negatively affect our business. Regulatory efforts, both internationally and in the U.S., are evolving, including the international alignment of such efforts, and we cannot determine what final regulations will be enacted, modified or reversed or what their ultimate impact on our business will be.
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Our suppliers and third-party manufacturers and corporate partners similarly face these risks that could have an adverse effect on our business, and any disruption to their operations could have an adverse effect on our manufacturing and supply chain.
Our aspirations, goals and disclosures related to corporate responsibility matters expose us to numerous risks, including risks to our reputation and stock price.
We are subject to evolving and sometimes conflicting investor and other stakeholder expectations concerning corporate responsibility matters, such as environmental sustainability and climate change and related targets or performance. These expectations and standards are varied and evolving, and may be inconsistent with our current practices. It is not possible for our practices to satisfy all investors and stakeholders, and our reputation, our ability to attract or retain employees and our attractiveness as an investment, business partner or acquiror could be negatively impacted. For example, we face public attention and scrutiny regarding global patient access to our medicines, which may negatively impact our corporate reputation. Similarly, our pursuit of certain corporate responsibility practices, as well as our failure or perceived failure to pursue or fulfill our goals, targets and objectives, or to satisfy various reporting standards within the timelines we announce, or at all, could also similarly adversely impact us and expose us to government enforcement actions, stakeholder criticism or negative campaigns, and private litigation.
We depend on relationships with third parties for sales and marketing performance, technology, development, logistics and commercialization of products. Failure to maintain these relationships, poor performance by these companies or disputes with these third parties could negatively impact our business.
We rely on a number of collaborative relationships with third parties for our sales and marketing performance in certain territories. In some countries, we rely on international distributors for sales of certain of our products. Some of these relationships also involve the clinical development of these products by our partners. Reliance on collaborative relationships poses a number of risks, including the risk that:
• we are unable to control the resources our corporate partners devote to our programs or products;
• disputes may arise with respect to the ownership of rights to technology developed with our corporate partners;
• disagreements with our corporate partners could cause delays in, or termination of, the research, development or commercialization of product candidates or result in litigation or arbitration;
• contracts with our corporate partners may fail to provide significant protection or may fail to be effectively enforced if one of these partners fails to perform;
• our corporate partners have considerable discretion in electing whether to pursue the development of any additional products and may pursue alternative technologies or products either on their own or in collaboration with our competitors;
• our corporate partners with marketing rights may choose to pursue competing technologies or to devote fewer resources to the marketing of our products than they do to products of their own development; and
• our distributors and our corporate partners may be unable to pay us.
Given these risks, there is a great deal of uncertainty regarding the success of our current and future collaborative efforts. If these efforts fail, our product development or commercialization of new products could be delayed or revenues from products could decline.
Due to the specialized and technical nature of our business, the failure to attract, develop and retain highly qualified personnel could adversely impact us.
Our future success will depend in large part on our continued ability to attract, develop and retain highly qualified scientific, technical and management personnel, as well as personnel with expertise in clinical testing, governmental regulation and commercialization. Our ability to do so also depends in part on how well we maintain a strong workplace culture that is attractive to employees. In addition, competition for qualified personnel in the biopharmaceutical field is intense, and there is a limited pool of qualified potential employees to recruit. We face competition for personnel from other companies, universities, public and private research institutions, government entities and other organizations. Furthermore, changes to immigration and work authorization laws and regulations could make it more difficult for employees to work in or transfer to one of the jurisdictions in which we operate. Additionally, we periodically make adjustments, including to the size and composition of our workforce, to reflect our personnel needs in response to changing macroeconomic conditions, market opportunities, management changes, acquisitions, cost levels and other internal and external considerations, which may adversely impact our workplace culture and ability to retain and incentivize employees.
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Information system service interruptions or breaches, including significant cybersecurity incidents, could give rise to legal liability and regulatory action under data protection and privacy laws and adversely affect our business and operations.
We are dependent upon information technology systems, infrastructure and data. For example, our Kite Konnect platform is critical to maintain chain of identity and chain of custody for our cell therapies. The multitude and complexity of our computer systems make them inherently vulnerable to service interruption or destruction, including those caused by failures during system upgrades or implementations, user error, network or hardware failure, malicious intrusion and ransomware attack. Likewise, data privacy or cybersecurity incidents or breaches by employees or others, including the unauthorized use of AI tools, can result in the exposure of or misuse of sensitive data, including our intellectual property or trade secrets or the personal information of our employees, patients, customers or other business partners to unauthorized persons or to the public. Additionally, businesses which we have acquired, or may in the future acquire, may have undiscovered vulnerabilities in their information technology systems, which could increase our risk of cybersecurity incidents. If our information systems or third-party information systems on which we rely suffer severe damage, disruption or shutdown, including during upgrades or new implementations, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, and we may lose revenue and profits as a result of our inability to timely manufacture, distribute, invoice and collect payments.
Cybersecurity attacks and incidents are increasing in their frequency, sophistication and intensity. Malicious actors seek to steal money, gain unauthorized access to, destroy or manipulate data, and disrupt operations, and some of their attacks may not be recognized or discovered until after a significant period of time well after initial entry into the environment, such as novel or zero-day attacks that are launched before patches are available and defenses can be readied. Malicious actors are also increasingly developing methods to avoid prevention, detection and alerting capabilities, including employing counter-forensic tactics making response activities more difficult. Such attacks and incidents include, for example, the deployment of harmful malware, exploitation of vulnerabilities, computer viruses, key loggers, ransomware, denial-of-service, social engineering and other means to affect service reliability and operations and threaten data confidentiality, integrity and availability. Recent developments in the threat landscape include the use of increasingly sophisticated and evolving AI and machine learning tools. Our business and technology partners face similar risks, and any security breach of their systems could adversely affect our security posture.
Like many companies, we have experienced and expect to continue to be the target of cybersecurity incidents, including data breaches and temporary service interruptions. When cybersecurity incidents occur, our policy is to respond and address them in accordance with applicable governmental regulations and other legal requirements, including our cybersecurity protocols. There can be no assurance that our efforts in response to cybersecurity incidents, as well as our investments to protect our information technology infrastructure and data, will shield us from significant losses, brand and reputational harm and potential liability or prevent any future interruption or breach of our systems. Additionally, it may take considerable time for us to investigate and evaluate the full impact of cybersecurity incidents, particularly for sophisticated attacks, which may inhibit our ability to provide prompt, full and reliable information about cybersecurity incidents to our customers, regulators and the public. Such cybersecurity incidents can cause the loss of critical or sensitive information, including personal information, and could give rise to legal liability and regulatory action under data protection and privacy laws. Financial, legal, business, or reputational losses may result from a cybersecurity incident or breach of our information technology systems.
Regulators globally are also imposing data privacy and security requirements, such as EU’s General Data Protection Regulation (“GDPR”) and other domestic data privacy and security laws, such as the California Consumer Privacy Act and the California Privacy Rights Act. These and other similar types of laws and regulations that have been or may be passed often include requirements with respect to personal information, and non-compliance with such laws may result in liability through private actions (subject to statutorily defined damages in the event of certain data breaches) and government enforcement. Other changes or new laws or regulations associated with the enhanced protection of personal information could greatly increase our cost of providing our products and services or even prevent us from offering certain services in jurisdictions in which we operate.
Strategic and Financial Risks
We are subject to risks associated with engaging in business acquisitions, licensing arrangements, collaborations, options, equity investments, asset divestitures and other strategic transactions.
We have engaged in, and may in the future engage in, such transactions as part of our business strategy. We may not identify suitable transactions in the future and, if we do, we may not complete such transactions in a timely manner, on a cost-effective basis, or at all, including the possibility that a governmental entity or regulatory body may delay or refuse to grant approval for the consummation of the transaction. If we are successful in making an acquisition or closing a licensing arrangement or collaboration, the products, intellectual property and technologies that are acquired or licensed may not be successful or may require significantly greater resources and investments than anticipated. As required by U.S. generally accepted accounting principles, we conduct annual impairment testing of our goodwill and other indefinite-lived intangible
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assets in the fourth quarter or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired. We have in the past and may in the future need to recognize impairment charges related to the products, intellectual property and technologies that are acquired or licensed as a result of such testing. For option structured deals, there is no assurance that we will elect to exercise our option right, and it is possible that disagreements, uncertainties or other circumstances may arise, including with respect to whether our option rights have been appropriately triggered, which may hinder our ability to realize the expected benefits. For equity investments in our strategic partners, such as in connection with our collaborations with Arcus Biosciences, Inc., Galapagos NV and Arcellx, Inc., the value of our equity investments may fluctuate and decline in value. If we are not successful in the execution or implementation of these transactions, our financial condition, cash flows and results of operations may be adversely affected, and our stock price could decline.
We have paid substantial amounts of cash and incurred additional debt to finance our strategic transactions. Additional indebtedness and a lower cash balance could result in a downgrade of our credit ratings, limit our ability to borrow additional funds or refinance existing debt on favorable terms, increase our vulnerability to adverse economic or industry conditions, and reduce our financial flexibility to continue with our capital investments, stock repurchases and dividend payments. We may be adversely impacted by any failure to overcome these additional risks.
Our U.S. manufacturing and R&D investments may not achieve their intended benefits and could adversely affect our business, results of operations and cash flows.
We are undertaking significant multi‑year capital investments to expand our U.S. manufacturing capabilities and accelerate R&D, including our initiative to invest $32 billion in the U.S. through 2030. These investments are subject to numerous risks, including construction and commissioning delays, cost inflation, supply chain constraints, contractor performance, permitting and zoning challenges and the availability of skilled labor, and we may not complete our announced investments on a timely basis or at all. New or expanded facilities must meet cGMP and other regulatory requirements, are subject to FDA and other inspections, process validation and qualification, and their construction depends on third-party suppliers and partners whose performance we do not control. Any failure, delay, observation or remediation requirement could defer or limit production, increase costs or result in enforcement actions or other liabilities. We may not realize anticipated economic, employment, productivity, scale or innovation benefits, anticipated cost savings or future growth, and our reputation may be damaged, if these projects are delayed or unable to be completed in a cost-effective manner. This could also lead to underutilized assets, inventory write‑offs or asset impairments. Changes in laws or policies, including drug pricing reform, tax credits and incentives, environmental, health and safety standards, or tariff, trade and sourcing rules, could reduce expected returns on our investments or increase investment or operating costs. In addition, these initiatives require significant attention from management, capital expenditures and ongoing operating expenses and may increase variability in our margins and cash flows. Any of the foregoing could materially adversely affect our business, financial condition, results of operations, cash flows and reputation.
Changes in our effective income tax rate could reduce our earnings.
We are subject to income taxes in the U.S. and various foreign jurisdictions. Due to economic and political conditions, various countries are actively considering and have made changes to existing tax laws, and we cannot predict the form or timing of such changes. Our effective tax rates are affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, the introduction of new taxes, and changes in tax laws, regulations, administrative practices and interpretations, including in the U.S., Germany and Ireland.
We are also subject to the examination of our tax returns and other tax matters by the U.S. Internal Revenue Service and tax authorities in various foreign jurisdictions. There are differing interpretations of tax laws and regulations and, as a result, significant disputes may arise with these tax authorities, including with respect to issues of the timing and amount of deductions and allocations of income among various tax jurisdictions. We may be adversely affected by the resolution of one or more of these exposures in any reporting period.

ITEM 1B.      UNRESOLVED STAFF COMMENTS
Not applicable.
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ITEM 1C.      CYBERSECURITY
Cybersecurity Risk Management and Strategy
Processes Used to Assess, Identify, and Manage Material Risks from Cybersecurity Threats
Risk Assessment and Management
We manage material risks from cybersecurity threats through a cross-functional and layered approach that is designed to detect, identify, respond to, recover from and protect against cybersecurity incidents, and which is informed by industry recognized standards.
Our security governance function, which includes key employees who work in Information Security, Legal, and Privacy teams, such as our Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”), are responsible for establishing and implementing cybersecurity policies and procedures, which includes developing and updating our enterprise Incident Response Plan (“IRP”), managing incident response, and overseeing any policy exceptions and potential compensating controls.
Additionally, we assess our cybersecurity program’s maturity annually and implement and maintain controls that are designed to evaluate and improve our cybersecurity program, such as vulnerability assessments and penetration tests, as needed. We also maintain employee cybersecurity training and awareness programs around various cybersecurity topics, including reporting incidents, phishing, ransomware, remote working, cloud security, privileged access and removable media.
Our process for assessing, identifying and managing material risks from cybersecurity threats is integrated into our overall risk management process. We have a robust enterprise risk management (“ERM”) program that plays an important role in seeking to manage and address existing and emerging risks, including cybersecurity risks, which are critical to our overall business goals and objectives. The ERM team updates our Chief Executive Officer (“CEO”) and his leadership team on cybersecurity risks as well as their potential impact, likelihood, potential mitigation plan and status.
Engagement of Third-Party Advisors
We engage third-party advisors, including assessors and cybersecurity consultants, to assess, validate and enhance our cybersecurity program. We benefit from engaging third parties to provide specialized skills, knowledge, tools and resources. These third parties also help reduce costs, increase efficiency, improve quality, mitigate risks and review cybersecurity strategy, trends and threat landscape.
Incident Response
We have a dedicated Information Security team, whose duties include managing and coordinating incident response efforts. This team collaborates closely with other teams within the company, including teams within information technology (“IT”), Legal and Privacy, in identifying, analyzing and responding to cybersecurity incidents, which includes tracking cybersecurity incidents to help identify any related incidents. When cybersecurity incidents are identified, our practice is to respond to and address them utilizing incident classifications and escalation protocols, in accordance with applicable governmental regulations and other legal requirements. Where necessary or appropriate, we also engage third-party advisors to assist in the incident response process.
We have an IRP designed to assist the company to prepare for and respond to cybersecurity incidents, and which also provides for escalation to management based on incident severity. Our IRP processes are regularly tested, including through tabletop exercises designed to help identify strengths and areas for improvement, and we update our IRP process as appropriate.
Third-Party Service Provider Risk Management
We have a process in place to oversee and identify risks from cybersecurity threats associated with our use of key third-party service providers during the course of engagement. The company uses an external risk management software program to identify, assess, monitor and mitigate risks associated with third-party relationships, including cybersecurity risks. Our vendor security assessment process evaluates key vendors and, where appropriate, assesses vendor controls for IT security, privacy, business continuity and other third-party risks. Following an evaluation, the company determines and prioritizes risks based on their potential impact, which helps inform the appropriate level of additional due diligence and ongoing compliance monitoring. The third-party risk assessment is a cross-functional effort involving our end-user, Legal, Privacy and Information Security teams.
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Material Risks from Cybersecurity Threats
Like many companies, we face cybersecurity threats and have experienced cybersecurity incidents, including data breaches and temporary service interruptions. Since the beginning of fiscal year 2025, the company has not identified risks from known cybersecurity threats or incidents that have materially affected us or are reasonably likely to materially affect us. Nevertheless, there can be no assurance that our efforts in response to cybersecurity incidents, as well as our investments to protect our IT infrastructure and data, will shield us from significant losses, brand and reputational harm and potential liability or prevent any future interruption or breach of our systems. Such cybersecurity incidents can cause the loss of critical or sensitive information, including personal information, and could give rise to legal liability and regulatory action under data protection and privacy laws. For additional information on cybersecurity risks we face, see Part I, Item 1A. Risk Factors of this Annual Report on Form 10-K under the heading “Information system service interruptions or breaches, including significant cybersecurity incidents, could give rise to legal liability and regulatory action under data protection and privacy laws and adversely affect our business and operations.”
Cybersecurity Governance
Board Oversight of Risks from Cybersecurity Threats
Our Board of Directors plays an important role in overseeing cybersecurity risks. Our Board of Directors has established an oversight structure for monitoring the effectiveness of, and risks related to, the cybersecurity program. The Audit Committee has been designated by the Board to oversee cybersecurity and information technology risks. The Audit Committee receives quarterly cybersecurity updates from our CISO, and the chair of the Audit Committee meets with the CISO individually on a quarterly basis. These updates often address topics such as ongoing efforts to improve our cybersecurity posture, operational metrics, incident metrics and mitigation actions, and may include key metrics such as those related to cybersecurity maturity, risk reduction, cybersecurity program health, and audit and compliance activities. The Audit Committee updates the Board on its activities at each regularly scheduled Board meeting. Updates related to cybersecurity are provided to the Board on an annual basis as part of an overall ERM update. In addition to this regular reporting, significant cybersecurity events may also be escalated on an as-needed basis through the company’s organizational structure in accordance with the IRP.
Management’s Role in Assessing and Managing Material Risks from Cybersecurity Threats
Our CIO and CISO, supported by a cross-functional team, have primary responsibility for assessing and managing our cybersecurity program and the related risks. Details of the risk management and escalation processes are discussed in “Cybersecurity Risk Management and Strategy” above. Our CIO has over 20 years of IT and cybersecurity experience in large biopharmaceutical and life sciences industries, having served in various roles of increasing leadership at a global biopharmaceutical company before joining the company in April 2025. In her current role, the CIO is responsible for implementing enterprise-wide IT and AI strategies for the company. Our CISO has over 30 years of IT and cybersecurity experience in large biopharmaceutical, life sciences, financial and technology industries, including over ten years with the company, and is responsible for managing the security architecture, engineering, technology operations, monitoring, incident response, risk, governance, quality and compliance at the company.
The company’s Information Security group, which reports to the CISO, is comprised of teams that engage in a range of cybersecurity activities such as security operations, security engineering, data privacy controls, validation, compliance and audit readiness. Leaders of each team are expected to collaborate to help increase visibility of key issues and alignment with strategy. As noted above, the company’s IRP includes standard processes for escalating significant cybersecurity incidents to management, including the CIO and CISO. The company engages external legal advisors, cybersecurity forensic firms, communication specialists and other third-party advisors, as appropriate, to assist and advise on cybersecurity program review, cybersecurity program testing and incident response.
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ITEM 2.      PROPERTIES
Our corporate headquarters are located in Foster City, California, where we house administrative, R&D and manufacturing activities. Our other significant owned and leased properties are in the following locations:
• Administrative facilities: Raleigh, North Carolina*; Parsippany, New Jersey*; Washington, D.C.*; and Cork, Ireland*;
• R&D facilities: Oceanside, California; Santa Monica, California; Frederick, Maryland; Philadelphia, Pennsylvania*; Edmonton, Canada; Dublin, Ireland*; Cambridge, United Kingdom*; and Oxford, United Kingdom*;
• Manufacturing facilities: El Segundo, California*; La Verne, California; Oceanside, California; Santa Monica, California; Frederick, Maryland; Edmonton, Canada; Cork, Ireland*; and Hoofddorp, Netherlands*. For more information about our manufacturing facilities, see the “Raw Materials and Manufacturing” section in Item 1. Business.
_______________________________
*      Leased property
We believe that our existing properties, including both owned and leased sites, are adequate and suitable for the conduct of our business. We believe our capital resources are sufficient to purchase, lease or construct any additional facilities required to meet our expected long-term growth needs.

ITEM 3.      LEGAL PROCEEDINGS
For a description of our significant pending legal proceedings, see Note 12. Commitments and Contingencies - Legal Proceedings of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.

ITEM 4.      MINE SAFETY DISCLOSURES
Not applicable.

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PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is traded on the Nasdaq Global Select Market under the symbol “GILD.”
Holders
As of February 13, 2026, we had approximately 1,305 stockholders of record of our common stock.
Dividends
For the years ended December 31, 2025 and 2024 , we paid quarterly dividends. We expect to continue to pay quarterly dividends, although the amount and timing of any future dividends are subject to declaration by our Board of Directors. Additional information is included in Consolidated Statements of Stockholders’ Equity of Part II, Item 8 of this Annual Report on Form 10-K and “Liquidity and Capital Resources” of Part II, Item 7 of this Annual Report on Form 10-K.
Securities Authorized For Issuance Under Equity Compensation Plans
The following table provides certain information with respect to our equity compensation plans in effect as of December 31, 2025:

(in millions, except exercise price) Number of Common Shares to be Issued Upon Exercise of Outstanding Options and Rights (1)
Weighted-average Exercise Price of Outstanding Options and Rights (1)
Number of Common Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category  (a)  (b) (c)
Equity compensation plans approved by security holders:
2022 Equity Incentive Plan 27.2  $ 76.08  61.6 
Employee Stock Purchase Plan (2)
—  $ —  21.8 
Total equity compensation plans approved by security holders 27.2  $ 76.08  83.4 
Equity compensation plans not approved by security holders —  $ —  — 
Total 27.2  $ 76.08  83.4 

_______________________________  
(1)     Includes 18 million restricted stock units and performance share units. These awards have no exercise price and are not included in the weighted-average exercise price of outstanding awards.
(2)     Under our Employee Stock Purchase Plan, participants are permitted to purchase our common stock at a discount on certain dates through payroll deductions within a pre-determined purchase period. Accordingly, these numbers are not determinable.
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Performance Graph (1)
The following graph compares our cumulative total stockholder return for the past five years to two indices: the Standard & Poor’s 500 Stock Index (“S&P 500 Index”) and the Nasdaq Biotechnology Index (“NBI Index”). The stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns.
Comparison of Cumulative Total Return on Investment for the Past Five Years (2)

_______________________________  
(1)     This section is not “soliciting material,” is not deemed “filed” with U.S. Securities and Exchange Commission and is not to be incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
(2)     Shows the cumulative return on investment assuming an investment of $100 in our common stock, the NBI Index and the S&P 500 Index on December 31, 2020, and assuming that all dividends were reinvested.
Issuer Purchases of Equity Securities
In the first quarter of 2020, our Board of Directors authorized a $5.0 billion stock repurchase program (“2020 Program”), under which we started repurchases in December 2022. In the third quarter of 2025, our Board of Directors authorized a $6.0 billion stock repurchase program (“2025 Program”), which will commence upon the completion of the 2020 Program.
Both the 2020 Program and 2025 Program have no fixed expiration, and purchases under these programs may be made in the open market or in privately negotiated transactions, but the programs do not obligate us to repurchase any specific number of shares and may be amended, suspended or discontinued at any time.
The table below summarizes our stock repurchase activity for the three months ended December 31, 2025:

Total Number of Shares Purchased (in thousands) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs (in thousands) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (in millions)
October 1 - October 31, 2025 1,235  $ 117.15  1,194  $ 6,892 
November 1 - November 30, 2025 402  $ 121.26  362  $ 6,848 
December 1 - December 31, 2025 818  $ 121.20  381  $ 6,802 
Total (1)
2,456  $ 119.17  1,936 

_______________________________  
(1)     The difference between the total number of shares purchased and the total number of shares purchased as part of a publicly announced program is due to shares of common stock withheld by us from employee restricted stock awards in order to satisfy applicable tax withholding obligations.

ITEM 6.      [RESERVED]
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ITEM 7.      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 this Annual Report on Form 10-K (including the disclosures under Part I, Item 1A. Risk Factors). Additional information related to the comparison of our results of operations and liquidity and capital resources between the years 2024 and 2023 is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2024 Form 10-K filed with U.S. Securities and Exchange Commission .

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, COVID-19 and cancer. We operate in more than 35 countries worldwide, with headquarters in Foster City, California.
Our strategic ambitions are to (i) bring 10+ transformative therapies to patients by 2030 (tracking since 2020); (ii) be a biotech employer and partner of choice; and (iii) deliver shareholder value in a sustainable and responsible manner. Our strategic priorities, as refreshed in late 2025, to deliver on these ambitions include: (i) maximize impact of long-acting HIV therapies; (ii) accelerate our pipeline build in oncology and inflammation; (iii) adopt and scale artificial intelligence to transform how we work; (iv) prioritize investments for highest impact; and (v) strengthen collaboration to accelerate innovation.
Year in Review
During 2025, we delivered growth in our HIV product sales, introduced Yeztugo, the first and only twice-yearly HIV pre-exposure prophylaxis (“PrEP”) option available in the U.S., and expanded Livdelzi’s market share in the treatment of primary biliary cholangitis (“PBC”). As evidenced by various late-stage clinical trial updates in HIV and oncology, we continued to invest in our business and research and development (“R&D”) pipeline through advancement of our portfolio and broadening of available therapies, including through acquisitions and collaborations. Meanwhile, we maintained our financial position by lowering operating expenses, repaying senior notes coming due and providing shareholder returns through dividends and share repurchases. 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 Annual Report on Form 10-K.
Virology
• Announced positive topline Phase 3 results from the ARTISTRY-1 and ARTISTRY-2 trial, evaluating our investigational daily oral single-tablet regimen of bictegravir 75mg and lenacapavir 50mg (“BIC/LEN”) for virologically suppressed adults with HIV. BIC/LEN met its primary endpoint, demonstrating non-inferiority to baseline multi-tablet antiviral regimens (ARTISTRY-1) and Biktarvy (ARTISTRY-2).
• Announced settlement agreements to resolve Biktarvy patent litigation with generic manufacturers Lupin Ltd., Cipla Ltd. and Laurus Labs Ltd. Under the agreements, the earliest date the three generic manufacturers can market a generic version of full dose Biktarvy in the U.S. is April 1, 2036, subject to standard acceleration provisions. This is more than two years later than our previous loss of exclusivity projection for Biktarvy (December 2033).
• Received a strong recommendation for the use of twice-yearly injectable Yeztugo (lenacapavir) for HIV PrEP in the new U.S. Centers for Disease Control and Prevention guidelines.
• Announced a partnership with the U.S. State Department and the U.S. President’s Emergency Plan for AIDS Relief (“PEPFAR”) to deliver lenacapavir for HIV PrEP for up to two million people over three years in countries supported by both PEPFAR and the Global Fund.
• Received European Commission (“EC”) marketing authorization for Yeytuo (lenacapavir) for PrEP to reduce the risk of sexually acquired HIV-1 in adults and adolescents with increased HIV-1 acquisition risk.
• Received U.S. Food and Drug Administration (“FDA”) approval for Yeztugo (lenacapavir) for PrEP to reduce the risk of sexually acquired HIV in adults and adolescents weighing at least 35kg.
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• 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 that we entered into a definitive agreement to acquire all of the outstanding common stock of Arcellx, Inc. (“Arcellx”), providing us with full control of its leading pipeline candidate, anitocabtagene autoleucel, an investigational BCMA-directed CAR-T cell therapy for patients with relapsed and/or refractory multiple myeloma. This transaction is anticipated to close during the second quarter of 2026, subject to the satisfaction or waiver of customary closing conditions.
• Announced the discontinuation of the Phase 3 STAR-221 study, in partnership with Arcus Biosciences, Inc. (“Arcus”), evaluating the anti-TIGIT antibody domvanalimab (“dom”) plus zimberelimab (“zim”) and chemotherapy in first-line HER2- advanced gastric and esophageal cancers. The decision was based on the recommendation of the Independent Data Monitoring Committee, following review of data from a pre-specified interim analysis. Additionally, Gilead and Arcus will discontinue the Phase 2 EDGE-Gastric study evaluating dom and zim regimens in upper gastrointestinal cancers. Dom and zim are investigational products and are not approved anywhere globally.
• Announced that our Phase 3 ASCENT-07 study of Trodelvy evaluating sacituzumab govitecan-hziy (“SG”) as a first-line treatment post-endocrine therapy in hormone receptor-positive, human epidermal growth factor receptor 2-negative (“HR+/HER2-”) metastatic breast cancer patients did not meet the primary endpoint of progression-free survival. Overall survival is a key secondary endpoint and was not mature at the time of the primary analysis; however, an early trend was observed favoring patients treated with Trodelvy compared to chemotherapy.
• Presented Phase 3 ASCENT-03 data for Trodelvy in 1L metastatic triple-negative breast cancer (“mTNBC”) patients who are not candidates for PD-1/PD-L1 checkpoint inhibitors at the 2025 European Society for Medical Oncology Congress. Trodelvy is not approved in this setting.
• Entered into a collaboration with Shenzhen Pregene Biopharma Co., Ltd. (“Pregene”) to develop next-generation in vivo therapies.
• Announced the acquisition of Interius BioTherapeutics, Inc. (“Interius”), a privately held biotechnology company developing in vivo chimeric antigen receptor therapeutics, for approximately $350 million.
• 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 meeting. Trodelvy is not approved in this setting.
• 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 EC for seladelpar for the treatment of 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.
• Entered into a strategic partnership with LEO Pharma A/S (“LEO Pharma”) to develop and commercialize their pre-clinical oral signal transducer and activator of transcription 6 programs for the potential treatment of inflammatory diseases.
Corporate
• Announced an agreement with the U.S. government to lower the cost of medicines for Americans, reinforcing a commitment to U.S.-based innovation, affordability and global health leadership.
• Announced ground-breaking on a new Pharmaceutical Development and Manufacturing Technical Development Center in Foster City, California as part of a planned $32 billion investment in the U.S. through 2030.
The following table summarizes our key financial results for the year and period-over-period changes:

Year Ended December 31,
(in millions, except percentages and per share amounts) 2025 2024 Change
Total revenues $ 29,443  $ 28,754  2  %
Net income attributable to Gilead $ 8,510  $ 480  NM
Diluted earnings per share attributable to Gilead $ 6.78  $ 0.38  NM
_______________________________
NM - Not Meaningful
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Total revenues increased 2% to $29.4 billion in 2025, compared to 2024, primarily due to:
• Higher product sales primarily driven by HIV and Liver Disease products, partially offset by lower sales of Veklury; and
• Higher royalty, contract and other revenues.
Net income attributable to Gilead was $8.5 billion and diluted earnings per share attributable to Gilead was $6.78 in 2025, compared to net income attributable to Gilead of $480 million and $0.38 diluted earnings per share attributable to Gilead in 2024. The increase was primarily due to:
• A $3.8 billion acquired in-process research and development (“IPR&D”) expense related to the acquisition of CymaBay Therapeutics, Inc. (“CymaBay”) in 2024, which did not repeat in 2025;
• Lower pre-tax IPR&D partial impairment charges, with $590 million in 2025 related to assets acquired from MYR GmbH (“MYR”) compared to $4.2 billion in 2024 related to assets acquired from Immunomedics, Inc.;
• Higher net unrealized gains on equity securities;
• Higher revenues; and
• Lower selling, general and administrative expenses; partially offset by
• Higher income tax expense.
Please refer to “Results of Operations” below for further information on 2025 results.
Outlook
As we look to 2026, we expect to see continued growth for our product sales overall, bolstered by increased demand in our HIV business. We anticipate that such growth will be partially offset by the impact of various policy-related developments in the U.S., as well as an expected decrease in our Veklury product sales due to lower rates of COVID-19-related hospitalizations and an expected decrease in our Cell Therapy product sales reflecting ongoing competitive headwinds.
Our R&D portfolio includes over 50 clinical-stage programs across our core therapeutic areas. We expect updates in 2026 on various clinical trials and certain regulatory filing submissions and decisions, including FDA decisions related to two first-line breast cancer therapies and an additional HIV treatment option. We plan to continue investing in our business and R&D pipeline both internally and externally through partnerships and select business development transactions. As part of our overall investment approach to fund the advancement of our pipeline and commercialization of our products, we will continue to focus on disciplined operating expense management.
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Results of Operations
Revenues
The following table summarizes our Total revenues and period-over-period changes:

Year Ended December 31, 2025 Year Ended December 31, 2024
(in millions, except percentages) U.S. Europe Rest of World Total U.S. Europe Rest of World Total Change
Product sales:
HIV
Biktarvy $ 11,467  $ 1,676  $ 1,190  $ 14,334  $ 10,855  $ 1,509  $ 1,060  $ 13,423  7  %
Descovy 2,559  93  105  2,758  1,902  100  110  2,113  31  %
Genvoya 1,281  148  69  1,498  1,498  180  84  1,762  (15) %
Odefsey 881  246  40  1,167  957  290  41  1,288  (9) %
Symtuza - Revenue share (1)
363  120  12  495  450  130  12  592  (16) %
Other HIV (2)
352  109  40  500  257  129  48  434  15  %
Total HIV 16,904  2,392  1,456  20,752  15,918  2,339  1,355  19,612  6  %

Liver Disease
Sofosbuvir/Velpatasvir (3)
636  292  344  1,272  922  299  374  1,596  (20) %
Vemlidy 507  49  514  1,070  486  44  428  959  12  %
Other Liver Disease (4)
476  330  69  874  192  202  73  467  87  %
Total Liver Disease 1,619  671  927  3,217  1,601  545  876  3,021  6  %

Veklury 470  151  290  911  892  284  623  1,799  (49) %

Oncology
Cell Therapy
Tecartus 153  158  32  344  234  138  31  403  (15) %
Yescarta 595  598  303  1,495  662  666  242  1,570  (5) %
Total Cell Therapy 748  755  335  1,839  896  804  274  1,973  (7) %

Trodelvy 877  347  173  1,397  902  294  119  1,315  6  %
Total Oncology 1,626  1,102  508  3,236  1,798  1,098  393  3,289  (2) %

Other
AmBisome 20  267  221  509  44  276  212  533  (5) %
Other (5)
177  32  81  290  255  34  68  356  (19) %
Total Other 197  300  302  799  299  310  280  889  (10) %
Total product sales 20,816  4,617  3,483  28,915  20,508  4,576  3,526  28,610  1  %
Royalty, contract and other revenues 60  447  20  527  82  58  4  144  NM
Total revenues $ 20,876  $ 5,064  $ 3,503  $ 29,443  $ 20,591  $ 4,634  $ 3,529  $ 28,754  2  %

_______________________________
NM - Not Meaningful
(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. See Note 7. Collaborations and Other Arrangements of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K.
(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 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 6% to $20.8 billion in 2025, compared to 2024, primarily due to higher demand for treatment and prevention, with average realized price being relatively flat despite the U.S. Medicare Part D program redesign impact. In particular:
• Biktarvy sales increased 7% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products, partially offset by lower average realized price due to the U.S. Medicare Part D program redesign; and
• Descovy sales increased 31% primarily due to higher demand and average realized price.
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Liver Disease
Liver Disease product sales increased 6% to $3.2 billion in 2025, compared to 2024, primarily due to higher demand for Livdelzi and products for chronic hepatitis B virus and chronic hepatitis D virus, partially offset by lower average realized price across all Liver Disease products, most notably for chronic hepatitis C virus, inclusive of the U.S. Medicare Part D program redesign impact.
Veklury
Veklury product sales decreased 49% to $911 million in 2025, compared to 2024, primarily due to lower COVID-19-related hospitalizations.
Oncology
Cell Therapy
Cell Therapy product sales decreased 7% to $1.8 billion in 2025, compared to 2024, primarily due to lower demand reflecting ongoing competitive headwinds.
Trodelvy
Trodelvy product sales increased 6% to $1.4 billion in 2025, compared to 2024, primarily due to higher demand in breast cancer treatment, partially offset by the indication withdrawal in bladder cancer treatment.
Gross-to-Net Deductions
Product sales are recorded n et of estimated gross-to-net deductions, including rebates and chargebacks, patient co-pay assistance, prompt pay discounts, distributor fees, sales return provisions and other related deductions.
The following table summarizes our gross-to-net deductions and period-over-period changes:

Year Ended December 31,
(in millions, except percentages) 2025 2024 Change
Gross-to-net deductions (1)
$ 19,953  $ 17,776  12  %
% of gross product sales 41  % 38  % 250 bps

_______________________________
(1)     Includes rebates and chargebacks of $17.5 billion and $15.5 billion for the years ended December 31, 2025 and 2024, respectively. F or further information, see “Critical Accounting Estimates” section below.
Gross-to-net deductions as a percentage of gross product sales increased in 2025, compared to 2024, primarily due to U.S. Medicare Part D program redesign impact.
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 26% and 27% of our product sales were denominated in foreign currencies during 2025 and 2024, respectively. Foreign currency exchange, net of hedges, had a favorable impact on our total product sales of $56 million in 2025, based on a comparison using foreign currency exchange rates from 2024.
Royalty, Contract and Other Revenues
Royalty, contract and other revenues increased to $527 million in 2025, compared to 2024, primarily due to recognition of $400 million of previously constrained revenues from the sale of certain intellectual property.
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Costs and Expenses
The following table summarizes our costs and expenses and period-over-period changes:

Year Ended December 31,
(in millions, except percentages) 2025 2024 Change
Cost of goods sold $ 6,234  $ 6,251  —  %
Product gross margin 78.4  % 78.2  % 29 bps
Research and development expenses $ 5,799  $ 5,907  (2) %
Acquired in-process research and development expenses $ 1,024  $ 4,663  (78) %
In-process research and development impairments $ 590  $ 4,180  (86) %
Selling, general and administrative expenses $ 5,774  $ 6,091  (5) %

Product Gross Margin
Product gross margin was 78.4% in 2025 and remained relatively flat compared to 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 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 summarizes our Research and development expenses and period-over-period changes:

Year Ended December 31,
(in millions, except percentages) 2025 2024 Change
Personnel, infrastructure and other support costs $ 3,427  $ 3,555  (4) %
Clinical studies and other costs 2,372  2,352  1  %
Research and development expenses $ 5,799  $ 5,907  (2) %

Research and development expenses decreased 2% to $5.8 billion in 2025, compared to 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 in 2024, which did not repeat in 2025, as well as lower restructuring costs. Clinical studies and other costs remained relatively flat, with higher expenses driven by fair value adjustments to the MYR-related contingent consideration largely offset by lower study-related and clinical manufacturing expenses.
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 $1.0 billion in 2025, primarily related to the following transactions:
• $311 million Interius acquisition;
• $250 million LEO Pharma collaboration upfront payment; and
• $200 million Pregene collaboration upfront and milestone payments.
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Acquired in-process research and development expenses were $4.7 billion in 2024, primarily related to the following transactions:
• $3.8 billion CymaBay acquisition;
• $320 million Janssen Pharmaceutica NV future royalty obligation extinguishment related to seladelpar;
• $100 million Arcus collaboration continuation fee;
• $68 million Arcellx collaboration milestones met; and
• $47 million Tmunity Therapeutics, Inc. acquisition milestones met.
See Note 6. Acquisitions and Note 7. Collaborations and Other Arrangements of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.
In-Process Research and Development Impairments
2025 Impairments
In the second quarter of 2025 and again in the fourth quarter of 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 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 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 and December 31, 2025 fair value estimations primarily reflected the updated expectations for bulevirtide’s potential market share outside of the EU.
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 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 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 during 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 during the third quarter of 2024, bringing the full-year 2024 total to $4.2 billion.
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To arrive at the revised estimated fair value, 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, include 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. Our revised discounted cash flows for the September 30, 2024 fair value estimation primarily reflected the removal of cash flows associated with second-line plus patients, and the remaining carrying value as of that date reflects Trodelvy’s opportunity as a combination therapy in first-line metastatic NSCLC patients supported by its ongoing Phase 3 clinical trial in this patient population.
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:

Year Ended December 31,
(in millions, except percentages) 2025 2024 Change
Selling and marketing expenses $ 3,522  $ 3,453  2  %
General and administrative expenses 2,252  2,638  (15) %
Selling, general and administrative expenses $ 5,774  $ 6,091  (5) %

Selling, general and administrative expenses decreased 5% to $5.8 billion in 2025, compared to 2024. Selling and marketing expenses increased primarily due to higher HIV promotional expenses. General and administrative expenses decreased primarily due to lower expenses related to corporate initiatives and legal matters, as well as the impact of stock-based compensation expenses and other integration costs related to the acquisition of CymaBay in 2024, which did not repeat in 2025, partially offset by donations of equity securities made to the Gilead Foundation.
Interest Expense and Other (Income) Expense, Net
The following table summarizes our Interest expense and Other (income) expense, net and period-over-period changes:

Year Ended December 31,
(in millions, except percentages) 2025 2024 Change
Interest expense $ 1,024  $ 977  5  %
Other (income) expense, net $ (798) $ (6) NM
(Gain) loss from equity securities, net $ (451) $ 274  NM
Interest income $ (349) $ (281) 24  %
Other, net $ 1  $ 2  (41) %
_______________________________
NM - Not Meaningful
Interest expense increased 5% to $1.0 billion in 2025, compared to 2024, primarily due to higher debt balances and a higher weighted-average interest rate on the debt. See Note 10. Debt and Credit Facilities of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information on our long-term debt and related interest rates.
Favorable movements in Other (income) expense, net in 2025, compared to 2024, primarily related to net unrealized gains from equity securities compared to net unrealized losses in 2024, as well as higher interest income.
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Income Taxes
The following table summarizes our Income tax (benefit) expense and period-over-period changes:

Year Ended December 31,
(in millions, except percentages) 2025 2024 Change
Income before income taxes $ 9,796  $ 690  $ 9,106 
Income tax expense $ 1,286  $ 211  $ 1,075 
Effective tax rate 13.1  % 30.5  % NM
_______________________________
NM - Not Meaningful
Our effective tax rate decreased in 2025, compared to 2024, primarily due to:
• The non-deductible acquired IPR&D expense recorded in connection with our acquisition of CymaBay in 2024, which did not repeat in 2025;
• A settlement with a tax authority related to a prior year legal entity restructuring; and
• Favorable changes in the fair value of our equity securities that are non-taxable for income tax purposes; partially offset by
• A tax benefit associated with a legal entity restructuring in 2024; and
• A decrease in state deferred tax liabilities associated with the $4.2 billion NSCLC IPR&D intangible asset impairment charge in 2024.
The Organisation for Economic Co-operation and Development (“OECD”) has developed a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as “Pillar Two”), with certain aspects effective January 1, 2024 and other aspects effective January 1, 2025. Certain countries in which we operate have enacted Pillar Two legislation, and other countries are in the process of introducing legislation to implement Pillar Two. In January 2026, the OECD announced additional administrative guidance, including a “side-by-side” framework intended to coordinate the application of Pillar Two with existing minimum tax regimes in certain jurisdictions. We do not expect Pillar Two, including the side-by-side framework, to have a material impact on our results of operations, liquidity or capital resources.

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 $7.6 billion and marketable debt securities were $3.0 billion as of December 31, 2025. The table below summarizes our cash flow activities, followed by our analysis of changes and trends:

Year Ended December 31,
(in millions, except percentages) 2025 2024 Change
Net cash provided by (used in):    
Operating activities $ 10,019  $ 10,828  (7) %
Investing activities (4,793) (3,449) 39  %
Financing activities (7,745) (3,433) NM
Effect of exchange rate changes on cash and cash equivalents 92  (40) NM
Net change in cash and cash equivalents $ (2,428) $ 3,906  NM

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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 in 2025, compared to 2024, primarily due to higher inventory build-up and higher income tax payments, as well as unfavorable timing of accounts receivable collections. In 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, compared to $1.2 billion paid in 2024.
Investing Activities
Net cash used in investing activities increased in 2025, compared to 2024. In 2025, we utilized cash primarily for purchases of marketable debt securities and payments related to the Interius acquisition and various collaborations. In 2024, we utilized cash primarily for the $3.9 billion CymaBay acquisition and purchases of equity securities, partially offset by cash received 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 in 2025, compared to 2024, was primarily due to cash provided by a new debt offering in 2024, which did not repeat in 2025, as well as higher common stock repurchases. In 2025, we utilized cash of $4.0 billion for dividend payments, $1.9 billion for common stock repurchases and $1.8 billion for repayment of debt. In 2024, we utilized cash of $3.9 billion for dividend payments, $2.0 billion for repayment of debt and other obligations, and $1.2 billion for common stock repurchases, partially offset by $3.5 billion in net proceeds from the issuance of senior unsecured notes in November 2024. 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.
On February 10, 2026, we announced that our Board of Directors declared a quarterly dividend of $0.82 per share of our common stock, with a payment date of March 30, 2026 to all stockholders of record as of the close of business on March 13, 2026. Future dividends are subject to declaration by our Board of Directors.
Capital Resources
As of December 31, 2025, our material cash requirements for the operations of our business consisted primarily of the current and long-term liabilities noted on our Consolidated Balance Sheets as well as other commitments, including the following notable items:
• payments of outstanding borrowings, including interest on long-term debt (see Note 10. Debt and Credit Facilities);
• income tax payments, including potential payments related to uncertain tax positions (see Note 15. Income Taxes);
• payments of operating lease obligations (see Note 11. Leases);
• payments related to certain unconditional inventory purchase obligations and capital expenditures. There were no changes to such commitments in the current year that would have a material impact on our ability to meet short- or long-term cash requirements;
• payments related to our acquisitions, including contingent consideration (see Notes 3. Fair Value Measurements and 6. Acquisitions); and
• milestone and other payments related to collaboration agreements (see Note 7. Collaborations and Other Arrangements). We are contractually obligated to make payments to our collaboration partners upon the achievement of various development, regulatory and commercial milestones as well as royalty payments. These payments are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring. If milestones for multiple products covered by these arrangements happen to be reached in the same reporting period, the aggregate cash requirement could be material. It is not possible to predict with reasonable certainty whether these milestones will be achieved or the timing for achievement. As such, these obligations are not recorded on our Consolidated Balance Sheets until the events triggering milestone payments occur.
Our anticipated sources of funds to satisfy the above material cash requirements for the short- and long-term include our current balances of cash and cash equivalents as well as future cash flows from operations. If needed, we also have the ability to utilize our $2.5 billion revolving credit facility (see Note 10. Debt and Credit Facilities) and access other external capital through future debt or equity offerings.
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While we are not aware of any trends at this time that are reasonably likely to materially impact our future cash requirements and sources of funds, such requirements and funds will depend on many factors, including but not limited to the following:
• the commercial performance of our current and future products;
• the progress and scope of our R&D efforts and those of our collaboration partners, including preclinical studies and clinical trials;
• the cost, timing and outcome of regulatory reviews;
• the expansion of our sales and marketing capabilities;
• the acquisition of additional manufacturing capabilities or office facilities on acceptable terms;
• the acquisition of other companies or new products on acceptable terms;
• the issuance of new debt or equity in the market on acceptable terms;
• the favorability of repaying certain long-term debt obligations prior to maturity dates;
• future dividends subject to declaration by our Board of Directors (see “Dividends” in Part II, Item 5 of this 10-K);
• the favorability of repurchasing shares (see “Issuer Purchases of Equity Securities” in Part II, Item 5 of this 10-K);
• the establishment of additional collaborative relationships with other companies on acceptable terms; and
• costs associated with the defense, settlement and adverse results of government investigations and litigation (see Note 12. Commitments and Contingencies).

Critical Accounting Estimates
See Note 1. Summary of Business and Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for information about our significant accounting policies and how estimates are involved in the preparation of our financial statements. We believe the following reflect the critical accounting estimates used in the preparation of our Consolidated Financial Statements.
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 and may not be known at the time of sale. As a result, our recorded amounts for rebates and chargebacks are determined using a complex estimation process that requires significant management judgment. In developing our estimates of rebates and chargebacks, we consider the following:
• product sales, including product mix and pricing;
• historical and estimated payer mix;
• statutory discount requirements and contractual terms;
• historical claims experience and processing time lags;
• estimated patient population;
• known market events or trends;
• market research;
• channel inventory data obtained from our major U.S. wholesalers; and
• other pertinent internal or external information.
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The following table summarizes the consolidated activities and ending balances in our rebates and chargebacks accounts, including adjustments made relating to previous years’ sales as a result of changes in estimates:

(in millions) Balance at Beginning of Year Decrease/(Increase) to Product Sales Payments Balance at End of Year
Year ended December 31, 2025:        
Activity related to 2025 sales $ —  $ 17,880  $ (13,064) $ 4,816 
Activity related to sales prior to 2025 4,646  (378) (3,903) 365 
Total $ 4,646  $ 17,503  $ (16,967) $ 5,181 
Year ended December 31, 2024:        
Activity related to 2024 sales $ —  $ 15,808  $ (11,508) $ 4,300 
Activity related to sales prior to 2024 4,493  (350) (3,797) 345 
Total $ 4,493  $ 15,458  $ (15,305) $ 4,646 

We assess and update our estimates each reporting period to reflect actual claims and other current information. Historically, our actual rebates and chargebacks claimed for prior years have varied by less than 5% from our estimates.
Valuation of Intangible Assets
Determining the fair values of intangible assets, whether as part of a business combination or impairment assessment, involves the use of a probability-weighted income approach that discounts expected future cash flows to present value and requires the use of critical estimated inputs, including:
• identification of product candidates with sufficient substance requiring separate recognition;
• estimates of projected future cash flows, including revenues and operating profits related to the products or product candidates, which, for example, include significant inputs such as addressable patient population, treatment duration and projected market share;
• the probability of technical and regulatory success for unapproved product candidates considering their stages of development;
• the time and resources needed to complete the development and approval of product candidates;
• an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile, representing the rate that market participants would use to value the intangible assets;
• the life of the potential commercialized products and associated risks, including the inherent difficulties and uncertainties in developing a product candidate such as obtaining FDA and other regulatory approvals; and
• risks related to the viability of and potential alternative treatments in any future target markets.
These estimates are subject to uncertainty due to the high rate of failure inherent in the discovery and development of new products; delays that can occur in development, approval and product launch processes; unanticipated decisions made by regulatory agencies; advent of competing products; unexpected changes in U.S. and global financial markets and other unanticipated events and circumstances. If future events result in adverse changes in the critical assumptions used in determining fair value, impairment charges on our intangible assets may be recorded and could be material to our financial statements. For example, in 2024, upon receiving data from our Phase 3 EVOKE-01 study of Trodelvy, which indicated the study did not meet its primary endpoint, and further discussions with regulators and external opinion leaders and completion of the evaluation of the trial data which led to the strategic decision to end the second-line indication program, we recognized in aggregate $4.2 billion in impairment charges related to our NSCLC IPR&D intangible asset, reflecting, amongst other changes, the removal of expected future cash flows associated with second-line plus patients from our valuation model.
Legal Contingencies
We are a party to various legal actions. Certain significant matters are described in Note 12. Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.
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Critical inputs to the accruals recorded and disclosures provided in relation to these matters include the probability of a certain outcome of the case, the determination as to whether an exposure is reasonably estimable and the amount of potential exposure. These inputs are subject to uncertainty due to changes in the legal facts and circumstances of the case, status of the proceedings, applicable law, the views of legal counsel and the views of any judges or jury involved in the case. Upon the final resolution of such matters, it is possible that there may be a loss in excess of the amount recorded, and such amounts could have a material adverse effect on our results of operations, cash flows or financial position. We periodically reassess these matters when additional information becomes available and adjust our estimates and assumptions when facts and circumstances indicate the need for any changes. For example, in the second quarter of 2023, we recorded an accrual of $525 million in Other current liabilities on our Consolidated Balance Sheets for settlements with certain plaintiffs in the HIV antitrust litigation, which we paid in the second half of 2023. Also, as of December 31, 2024, we accrued approximately $200 million on our Consolidated Balance Sheets 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.
Income Taxes
We are subject to income taxes in the U.S. and various foreign jurisdictions, including Ireland. See Note 15. Income Taxes of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information. Critical inputs in determining our provision for income taxes and related tax balances include forecasts of our future income and expenses, potential tax planning strategies and determination of the probability of certain tax positions being sustained upon examination by tax authorities. These inputs are subject to uncertainty due to potential changes in facts and circumstances, economic and political conditions, changes to existing tax laws and new regulations or interpretations by tax authorities. Changes in these conditions could have a material adverse impact on our results of operations and financial position. For example, in October 2025, we reached a settlement with a tax authority related to a prior year legal entity restructuring. As a result, we recognized approximately $450 million of income tax benefit and a corresponding $530 million reduction in our unrecognized tax benefits in the quarter ending December 31, 2025.
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ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks that may result from changes in foreign currency exchange rates, interest rates and equity prices. To reduce certain of these risks, we enter into various types of foreign currency derivative transactions, follow our investment policy guidelines and monitor outstanding receivables as part of our risk management program.
Foreign Currency Exchange Rate Risk
We have operations in more than 35 countries worldwide. As such, certain of our monetary assets and liabilities and approximately 26% of our 2025 product sales are denominated in foreign currencies. 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. When the U.S. dollar strengthens against these currencies, the relative value of sales made in the respective foreign currency decreases. Conversely, when the U.S. dollar weakens against these currencies, the relative value of such sales increases. Overall, we are a net receiver of foreign currencies and, therefore, we benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar. Additionally, our monetary assets and liabilities denominated in foreign currencies expose us to currency fluctuations between the date a transaction is recorded and the date that cash is collected or paid.
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. As of December 31, 2025 and 2024, we had open foreign currency forward contracts with notional amounts of $3.9 billion and $2.9 billion, respectively. A hypothetical 10% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2025 and 2024 would have resulted in a reduction in fair value of these contracts of approximately $439 million and $364 million, respectively, and if realized, would have negatively affected earnings over the remaining life of the contracts. The analysis does not consider the impact that hypothetical changes in foreign currency exchange rates would have on anticipated transactions that these foreign currency sensitive instruments were designed to offset.
Interest Rate Risk
We invest in available-for-sale debt securities, adhering to a policy that requires us to limit invested amounts based on credit rating, maturity, industry group and investment type and issuer, except for securities issued by the U.S. government. The goals of our investment policy, in order of priority, are (1) safety and preservation of principal and diversification of risk, (2) liquidity of investments sufficient to meet cash flow requirements and (3) a competitive after-tax rate of return. The fair value of any available-for-sale debt securities is subject to change as a result of potential changes in market interest rates. However, primarily due to the contractual maturity typically being less than five years, we do not believe that future market risks, including a hypothetical 10% increase or decrease in interest rates related to any securities, would have a material adverse impact on our financial position, results of operations, or liquidity.
Our senior unsecured notes have fixed interest rates. As such, there is no financial interest rate exposure. The fair values of both our senior unsecured notes as well as our liability related to future royalties as part of our 2020 acquisition of Immunomedics, Inc. are exposed to fluctuations in interest rates. The current fair value of our debt portfolio and liability related to future royalties are $22.3 billion and $0.8 billion, respectively. The fair value will decrease as interest rates increase and will increase as interest rates decrease. Additionally, we have a $2.5 billion five-year revolving credit facility that matures in June 2029. Loans under our revolving credit facility bear interest at either (i) Term Secured Overnight Financing Rate 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 revolving credit facility agreement. There were no amounts outstanding under the revolving credit facility as of December 31, 2025. As such, there is currently no financial interest rate exposure.
Equity Price Risk
We hold shares of common stock of certain publicly traded biotechnology companies primarily in connection with license and collaboration agreements. These equity securities are measured at fair value with any changes in fair value recognized in earnings. The fair value of these equity securities was approximately $2.0 billion and $1.6 billion as of December 31, 2025 and 2024, respectively. Changes in fair value of these equity securities are impacted by the volatility of the stock market and changes in general economic conditions, among other factors. A hypothetical 20% increase or decrease in the stock prices of these equity securities would have increased or decreased their fair value as of December 31, 2025 and 2024 by approximately $392 million and $312 million, respectively.
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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 )
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Audited Consolidated Financial Statements:

Consolidated Balance Sheets
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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

`
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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.

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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

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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; no ne 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.
53

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.
54

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.
55

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.
56

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.
57

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.
58

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.
59

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.
60

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.
61

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.
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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.
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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.

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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   %

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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  

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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.
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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  

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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.
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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  

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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.