Key Takeaways
- Q1 revenue reached $6.96 billion, surpassing Wall Street’s $6.91 billion estimate.
- Adjusted earnings per share of $2.03 exceeded analyst expectations of $1.91.
- Annual EPS outlook reversed from a profit of $8.45–$8.85 to a loss of $0.65–$1.05.
- A massive $11.5 billion charge for in-process R&D from recent acquisitions triggered the guidance reversal.
- Shares declined approximately 2% after-hours Wednesday and traded down 1% at $132.60 in Friday’s premarket session.
Gilead Sciences delivered better-than-expected first-quarter results, yet investors sent shares lower. The reason? A stunning reversal in annual earnings guidance that overshadowed the quarterly beat.
Shares retreated nearly 2% in Wednesday’s extended trading session and continued their decline, falling 1% to $132.60 during Friday’s premarket hours.
The biopharmaceutical company reported first-quarter revenue of $6.96 billion, narrowly exceeding the Street’s $6.91 billion projection. Adjusted earnings per share landed at $2.03, topping the FactSet consensus estimate of $1.91.
Building on these solid quarterly results, Gilead lifted its full-year revenue outlook to a range of $30 billion–$30.4 billion, an increase from its previous forecast of $29.6 billion–$30 billion.
However, the profit outlook painted a starkly different picture.
Management now anticipates a full-year adjusted loss ranging from $0.65 to $1.05 per share—a dramatic shift from its earlier projection of $8.45 to $8.85 in profit. The consensus estimate had stood at $8.65.
The company attributed this guidance cut to approximately $11.5 billion in charges related to in-process research and development (IPR&D), along with increased financing expenses stemming from multiple recent acquisitions.
HIV Franchise Powers Revenue Growth
Biktarvy, Gilead’s leading HIV treatment, continued to anchor the company’s performance. Revenue from the drug climbed 8% to $3.4 billion, representing roughly half of total quarterly sales. The complete HIV franchise delivered 10% growth compared to the prior-year period.
The company also significantly increased its sales projection for Yeztugo, its twice-daily injectable HIV prevention therapy, to $1 billion—a substantial jump from the previous $200 million estimate.
Some products underperformed expectations. Veklury, the company’s COVID-19 treatment, experienced a 52% decline to $144 million in sales, which management linked to declining COVID-19 hospitalization trends.
Epclusa, a hepatitis C medication, generated $283 million compared to $346 million in the year-ago quarter. The cell therapy segment also weakened, declining roughly 12% to $407 million from $464 million previously.
When excluding Veklury from the calculation, overall product sales increased 8% to $6.8 billion.
Aggressive M&A Strategy Behind Guidance Reversal
Gilead has pursued an aggressive acquisition strategy throughout 2026. In February, the company announced plans to acquire Arcellx for $7.8 billion. The two companies already had an established partnership to jointly develop anitocabtagene autoleucel.
Toward the end of March, Gilead revealed an agreement to purchase privately held Ouro Medicine, aiming to bolster its autoimmune disease pipeline. The following month brought another deal to acquire Tubulis GmbH, enhancing the company’s antibody-drug conjugate platform.
The $11.5 billion IPR&D expense associated with these transactions is the primary factor behind the dramatic EPS guidance shift.
Gilead currently maintains a market capitalization of roughly $164.57 billion. The stock trades at a price-to-earnings ratio of 19.8x. Company insiders have sold $10.6 million worth of shares over the previous three months, with no insider purchases reported during the same timeframe.
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