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GILEAD SCIENCES, INC. (GILD)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered solid top-line and margin performance: total revenues $7.57B (+6% YoY), product sales $7.54B (+7% YoY), GAAP diluted EPS $1.42 and non-GAAP EPS $1.90, with GAAP product gross margin expanding to 79.0% and non-GAAP to 86.7% .
  • Base business (ex-Veklury) accelerated: product sales ex-Veklury +13% YoY to $7.20B, led by HIV (+16% YoY; Biktarvy +21%, Descovy +21%) and oncology (Trodelvy +19%) .
  • 2025 guidance introduced: product sales $28.2–$28.6B, ex-Veklury $26.8–$27.2B, Veklury $1.4B, GAAP EPS $5.95–$6.35, non-GAAP EPS $7.70–$8.10; underlying growth masked by IRA ($1.1B), lower Veklury ($0.4B) and FX (~$250MM) headwinds; excluding these, implied 5–6% revenue growth .
  • Near-term catalysts: potential mid-2025 U.S. launch of twice-yearly lenacapavir for PrEP (Breakthrough Therapy; FDA filing accepted), continued Livdelzi launch momentum, and Trodelvy Phase 3 readouts (ASCENT-03/04) .

What Went Well and What Went Wrong

  • What Went Well
    • HIV strength with pricing and demand plus favorable inventory: HIV sales $5.5B (+16% YoY); Biktarvy $3.8B (+21% YoY) and Descovy $616MM (+21% YoY) .
    • Oncology momentum: Trodelvy $355MM (+19% YoY) driven by broad regional demand; cell therapy up 5% YoY with Yescarta +6% .
    • Margin expansion: GAAP product GM 79.0% (vs 70.4% LY), non-GAAP GM 86.7% (vs 86.1% LY); GAAP operating margin 32.4% (vs 22.7% LY) .
    • Management tone: “exceptionally strong full year and fourth quarter” and pipeline progress supporting multi-year growth, per CEO Daniel O’Day .
  • What Went Wrong
    • Veklury headwind: sales down 53% YoY to $337MM on lower COVID hospitalizations; sequential decline also pronounced .
    • SG&A uptick: $1.9B vs $1.6B LY, driven by a litigation accrual and launch prep for lenacapavir and Livdelzi; non-GAAP SG&A also up 16% YoY .
    • Cell therapy competitive dynamics: persistent U.S./EU headwinds and slower-than-targeted class uptake; management expects continued competition in 2025 .
    • Estimates context: S&P Global consensus data unavailable this period due to request limits, constraining explicit beat/miss analysis.*

Financial Results

  • Quarter-over-quarter and year-over-year (GAAP and non-GAAP KPIs)
MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($MM)$6,954 $7,545 $7,569
Product Sales ($MM)$6,912 $7,515 $7,536
Product Sales ex-Veklury ($MM)$6,698 $6,823 $7,198
GAAP Diluted EPS ($)$1.29 $1.00 $1.42
Non-GAAP Diluted EPS ($)$2.01 $2.02 $1.90
GAAP Product GM (%)77.7% 79.1% 79.0%
Non-GAAP Product GM (%)86.0% 86.8% 86.7%
GAAP Operating Margin (%)38.0% 11.8% 32.4%
GAAP Effective Tax Rate (%)21.4% (31.1%) 17.8%
  • Q4 YoY comparables (GAAP):
MetricQ4 2023Q4 2024
Total Revenues ($MM)$7,115 $7,569
Product Sales ($MM)$7,070 $7,536
GAAP Diluted EPS ($)$1.14 $1.42
Non-GAAP Diluted EPS ($)$1.72 $1.90
GAAP Product GM (%)70.4% 79.0%
GAAP Operating Margin (%)22.7% 32.4%
GAAP Effective Tax Rate (%)14.3% 17.8%
  • Segment breakdown
Segment ($MM)Q2 2024Q3 2024Q4 2024
HIV$4,745 $5,073 $5,452
Liver Disease$832 $733 $719
Oncology$841 $816 $843
Other$280 $201 $184
Veklury$214 $692 $337
Total Product Sales$6,912 $7,515 $7,536
  • Product KPIs
Product ($MM)Q2 2024Q3 2024Q4 2024
Biktarvy$3,232 $3,472 $3,774
Descovy$485 $586 $616
Trodelvy$320 $332 $355
Yescarta$414 $387 $390
Tecartus$107 $98 $98
Veklury$214 $692 $337

Guidance Changes

  • 2025 guidance introduced; prior 2025 guidance not provided, so marked as “New”.
MetricPeriodPrevious GuidanceCurrent GuidanceChange
Product Sales ($B)FY 2025N/A28.2 – 28.6New
Product Sales ex-Veklury ($B)FY 2025N/A26.8 – 27.2New
Veklury ($B)FY 2025N/A1.4New
GAAP Diluted EPS ($)FY 2025N/A5.95 – 6.35New
Non-GAAP Diluted EPS ($)FY 2025N/A7.70 – 8.10New
Non-GAAP Product GM (%)FY 2025N/A85 – 86New
Non-GAAP Operating Income ($B)FY 2025N/A12.7 – 13.2New
Non-GAAP ETR (%)FY 2025N/A~19New
Quarterly Dividend ($/shr)Q1 2025$0.77 (Q4’24) $0.79Raised
  • CFO quantified 2025 topline headwinds:
HeadwindFY 2025 ImpactNote
IRA (Medicare Part D)~$1.1B~$900MM in HIV; masks underlying demand-led growth
Veklury~$0.4BLower vs 2024; variability acknowledged
FX~$250MMStronger USD offset

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
HIV/PrEP product performancePURPOSE-1: 100% efficacy interim for lenacapavir in cisgender women; pipeline updates (weekly orals) PURPOSE-2: 96% risk reduction; superiority vs Truvada; filings planned NDA filings completed; FDA Breakthrough; EU filings; planning mid-2025 U.S. launch Strengthening; regulatory momentum
Medicare Part D (IRA)Discussed policy impacts; set expectations N/A~$1.1B revenue impact; HIV ~flat 2025; underlying growth masked Headwind peaks in 2025
Oncology—TrodelvyMixed data (urothelial EVOKE/TROPiCS context); ongoing Phase 3 plans ASH/World Lung updates; ES-SCLC Breakthrough 6 Phase 3s ongoing; ASCENT-03/04 readouts in 2025; ES-SCLC Phase 3 initiation Expanding indications
Cell therapy (Kite)Program expansions; outpatient feasibility (ZUMA-24) Competitive headwinds vs in-/out-of-class in U.S.; EU Continued competitive headwinds; reimbursement/accreditation efforts (FACT) Challenged near term
Liver—Livdelzi (seladelpar)FDA accelerated approval anticipated; royalty buy-out U.S. launch in H2; demand building Strong early uptake ($30MM Q4); UK authorization; positive CHMP opinion; EU decision expected Positive launch trajectory
Regulatory/legalTDF litigation settlement in principle RMAT designation (Yescarta) DOJ/HHS PrEP patent settlement; litigation accrual for promotional programs Cleaning up legacy issues
R&D executionMultiple platform updates across HIV/oncologyPURPOSE-2; pipeline breadth54 clinical programs; weekly and combination regimens; autoimmune CAR-T IND Robust pipeline breadth
Macro/FX/supply chainN/AN/AFX headwind; supply chain risks noted in FLS FX headwind into 2025

Management Commentary

  • CEO Daniel O’Day: “Gilead delivered another exceptionally strong full year and fourth quarter… we are planning for the potential launch of lenacapavir for HIV PrEP in Summer 2025…” .
  • CCO Johanna Mercier on HIV: “Our HIV business again delivered very strong results for the fourth quarter with sales of $5.5 billion, up 16% year-over-year…” .
  • CFO Andrew Dickinson on 2025 drivers: “Excluding the IRA FX and Veklury headwinds, our guidance today would have been for total product revenue growth of approximately 5% to 6%.” .
  • CMO Dietmar Berger on pipeline: “Lenacapavir… recognized by Science as 2024’s Breakthrough of the Year… transformative potential… help end the HIV epidemic…” .

Q&A Highlights

  • Lenacapavir launch ramp: Management targets ~75% U.S. payer access at 6 months and ~90% at 12 months; specialty pharmacy/buy-and-bill logistics expected to temper early months .
  • HIV inventory dynamics: Seasonal inventory builds concentrated in Q4 2024 (vs spread over Q3–Q4 in 2023); demand remains primary driver (Biktarvy, Descovy) .
  • Livdelzi uptake: Strong week-over-week growth, favorable payer dynamics, and potential label-expansion cohort (IDEAL); partial responders ~20–25k U.S./similar in EU .
  • Cell therapy safety/competition: No tremor-related cases in the cited anito-cel ICANS; competitive landscape remains intense in U.S./EU .
  • Europe PrEP strategy: Tiered approach targeting stakeholders; EU-M4all could accelerate access across up to 138 countries .

Estimates Context

  • Consensus EPS and revenue estimates (S&P Global Capital IQ) were not retrievable due to API request limits during this session; therefore, explicit beat/miss versus Street is unavailable.*
  • Given Q4 base business acceleration (+13% ex-Veklury YoY) and margin expansion, Street models may need to reflect: (a) stronger HIV demand/pricing and inventory dynamics in Q4; (b) 2025 masking effects (IRA ~$1.1B, lower Veklury ~$0.4B, FX ~$250MM), implying underlying 5–6% growth ex-headwinds; and (c) potential mid-2025 lenacapavir launch contribution dependent on access/logistics ramp .

Key Takeaways for Investors

  • HIV remains a growth engine; strong Biktarvy/Descovy performance and PrEP market growth (+16% in Q4) set favorable setup ahead of lenacapavir; watch payer access ramp and early launch logistics in 2H 2025 .
  • 2025 guide is conservative on reported growth due to IRA/Veklury/FX; underlying ex-headwind growth of ~5–6% suggests resiliency—use adjusted lenses when calibrating models .
  • Livdelzi launch is exceeding expectations and expanding the liver franchise; EU decision pending adds optionality; IDEAL study could broaden addressable PBC population by ~20–25k in U.S. .
  • Oncology catalysts in 2025 (ASCENT-03/04, ES-SCLC Phase 3 initiation) can reshape Trodelvy’s trajectory; track first-line TNBC readouts and lung programs .
  • Cell therapy remains strategically important but faces competitive/reimbursement hurdles; policy/accreditation workstreams (FACT) could improve access—monitor updates .
  • Margin discipline intact; non-GAAP product GM 86.7% and SG&A slated to decline high single digits in 2025 (ex-litigation accrual) bolster EPS leverage .
  • Narrative that moves the stock near term: lenacapavir regulatory milestones/launch readiness, Livdelzi EU decision/uptake trajectory, clarity on IRA impact cadence in Q1/Q2, and Trodelvy Phase 3 outcomes .

Footnote: *S&P Global consensus values were unavailable due to API limit errors during retrieval; values would normally be sourced from S&P Global.