The guidance raise on both sales and non-GAAP EPS, combined with strong Winrevair and Gardasil growth, signals underlying momentum. However, GAAP EPS missed consensus and GAAP net income declined 12% YoY. Watch for Keytruda Qlex adoption trajectory and Bridion/JANUVIA erosion pace in coming quarters.
Price Chart
Executive Summary
Merck reported Q3 2026 sales of $18.1B (+5% YoY), slightly above the $17.33B consensus, but GAAP EPS of $2.04 missed the $2.09 consensus. The company narrowed and raised its full-year 2026 sales guidance to $66.8B-$67.3B and non-GAAP EPS guidance to $2.77-$2.82, though the EPS outlook includes $0.12/share in one-time charges. Keytruda/Keytruda Qlex combined sales grew 6% to $8.6B, while Winrevair surged 93% to $694M, offsetting declines in Bridion, Januvia/Janumet and Lagevrio.
Key Financial Metrics
Key Facts
- Q3 2026 total sales $18.1B, up 5% YoY (4% ex-FX), vs consensus $17.33B
- GAAP EPS $2.04 vs consensus $2.09; non-GAAP EPS $2.49 vs prior-year $2.58
- Full-year 2026 sales guidance narrowed and raised to $66.8B-$67.3B (prior $66.3B-$67.3B)
- Full-year 2026 non-GAAP EPS guidance raised to $2.77-$2.82 (prior $2.66-$2.76), including a $0.12/share SciBrunch charge
- Keytruda/Keytruda Qlex combined sales $8.6B, up 6% YoY; Winrevair $694M, up 93%
- Gardasil/Gardasil 9 sales $1.995B, up 14% YoY; Bridion fell 67% to $144M on generic competition
- GAAP gross margin 72.9% vs 77.7% a year ago; non-GAAP gross margin 81.4% vs 81.9%
- R&D expenses $4.5B, up 7%, including a $400M SciBrunch license charge
- GAAP net income $5.1B, down 12% YoY; non-GAAP net income $6.2B, down 4%
Financial Impact
Sales beat consensus by ~$750M; GAAP EPS missed by $0.05; guidance raised modestly
Segment Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| Pharmaceutical | $16.3B | +4.2% |
| Animal Health | $1.7B | +3.8% |
Risk Factors
- Keytruda Q3 sales declined 5% YoY (excluding Qlex), signaling potential peak sales pressure
- Bridion sales collapsed 67% on U.S. generic competition; Januvia/Janumet down 39%
- GAAP gross margin contracted 480bps YoY due to amortization and restructuring costs
- Full-year non-GAAP EPS guidance of $2.77-$2.82 implies a weak Q4 relative to Q3's $2.49
- One-time charges from Cidara ($3.62/share) and Terns ($2.31/share) acquisitions weigh on reported EPS
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-119825 |
| Document: tm2628203d1_ex99-1.htm | 0001104659-26-119825 |
| Document: tm2628203d1_8k.htm | 0001104659-26-119825 |
| Document: 0001104659-26-119825-index-headers.html | 0001104659-26-119825 |
| Document: 0001104659-26-119825-index.html | 0001104659-26-119825 |
| Document: 0001104659-26-119825.txt | 0001104659-26-119825 |
| 8-K Data (Synthetic) | 0001104659-26-119825 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 29, 2026 1d ago | 8-K | $144.49 | awaiting T+20 | awaiting T+20 | $149.63 (+3.56%) |
Oct 22, 2026 7d ago | 3/A | $145.27 | awaiting T+20 | awaiting T+20 | $149.63 (+3.00%) |
Oct 21, 2026 9d ago | PTAB Trial | $147.24 | awaiting T+20 | awaiting T+20 | $149.63 (+1.62%) |
Oct 15, 2026 15d ago | PTAB Trial | $145.95 | awaiting T+20 | awaiting T+20 | $149.63 (+2.52%) |
Oct 15, 2026 15d ago | PTAB Trial | $145.95 | awaiting T+20 | awaiting T+20 | $149.63 (+2.52%) |
Oct 13, 2026 17d ago | 8-K | $141.98 | awaiting T+20 | awaiting T+20 | $149.63 (+5.39%) |
Sep 29, 2026 4w ago | Court Ruling | $145.31 $141.82 | ▼ −2.40% | ▼ −3.32% | $149.63 (+2.97%) |
Sep 28, 2026 4w ago | Court Ruling | $149.28 $141.82 | ▼ −5.00% | ▼ −5.71% | $149.63 (+0.23%) |
Sep 22, 2026 5w ago | Court Ruling | $148.08 $149.88 | ▲ +1.22% | ▲ +0.53% | $149.63 (+1.05%) |
Sep 11, 2026 7w ago | Court Ruling | $144.85 $145.45 | ▲ +0.41% | ▼ −1.85% | $149.63 (+3.30%) |
US Market Status
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