Biopharmaceutical company Gilead Sciences (NASDAQ: GILD) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 1.8% year on year to $7.08 billion. On the other hand, the company’s full-year revenue guidance of $28.5 billion at the midpoint came in 0.8% below analysts’ estimates. Its non-GAAP profit of $2.01 per share was 2.7% above analysts’ consensus estimates.
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Gilead Sciences (GILD) Q2 CY2025 Highlights:
- Revenue: $7.08 billion vs analyst estimates of $7.00 billion (1.8% year-on-year growth, 1.1% beat)
- Adjusted EPS: $2.01 vs analyst estimates of $1.96 (2.7% beat)
- Adjusted Operating Income: $3.29 billion vs analyst estimates of $3.24 billion (46.5% margin, 1.6% beat)
- The company slightly lifted its revenue guidance for the full year to $28.5 billion at the midpoint from $28.4 billion
- Management raised its full-year Adjusted EPS guidance to $8.10 at the midpoint, a 2.5% increase
- Operating Margin: 34.9%, down from 38% in the same quarter last year
- Free Cash Flow Margin: 10.2%, down from 17.2% in the same quarter last year
- Market Capitalization: $137.2 billion
Company Overview
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ: GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Gilead Sciences grew its sales at a mediocre 5.4% compounded annual growth rate. This wasn’t a great result compared to the rest of the healthcare sector, but there are still things to like about Gilead Sciences.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Gilead Sciences’s recent performance shows its demand has slowed as its annualized revenue growth of 2.7% over the last two years was below its five-year trend. 
Gilead Sciences also breaks out the revenue for its most important segment, HIV. Over the last two years, Gilead Sciences’s HIV revenue averaged 1.9% year-on-year growth. This segment has lagged the company’s overall sales. 
This quarter, Gilead Sciences reported modest year-on-year revenue growth of 1.8% but beat Wall Street’s estimates by 1.1%.
Looking ahead, sell-side analysts expect revenue to grow 2.3% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and implies its newer products and services will not lead to better top-line performance yet. At least the company is tracking well in other measures of financial health.
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Adjusted Operating Margin
Gilead Sciences has been a well-oiled machine over the last five years. It demonstrated elite profitability for a healthcare business, boasting an average adjusted operating margin of 40.1%.
Looking at the trend in its profitability, Gilead Sciences’s adjusted operating margin decreased by 2.3 percentage points over the last five years, but it rose by 5.1 percentage points on a two-year basis. Still, shareholders will want to see Gilead Sciences become more profitable in the future.
In Q2, Gilead Sciences generated an adjusted operating margin profit margin of 46.5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Gilead Sciences’s solid 7.1% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
In Q2, Gilead Sciences reported adjusted EPS at $2.01, in line with the same quarter last year. This print beat analysts’ estimates by 2.7%. Over the next 12 months, Wall Street expects Gilead Sciences’s full-year EPS of $7.74 to grow 7.2%.
Key Takeaways from Gilead Sciences’s Q2 Results
It was good to see Gilead Sciences narrowly top analysts’ full-year EPS guidance expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance slightly missed. Zooming out, we think this was a mixed quarter. The stock traded up 1.7% to $112.22 immediately following the results.
Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
