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MRK · Q2 2026
Archived report (Q2 2026). Latest deep dive →
The quarter in brief
A GAAP loss quarter manufactured almost entirely by one deal — the $5.7B Terns acquisition charge sits in R&D with no tax benefit; the underlying business grew 5% with the KEYTRUDA franchise at $8.4B and guidance narrowed upward, so the loss is an accounting event, not an operating one.
All figures in $M.
| Line item | Amount and change |
|---|---|
| Pharmaceutical | $14,760 · +5.1% |
| Animal Health | $1,775 · +7.8% |
| Other Revenues | $72 · -34.5% |
| Total Revenue | $16,607 · +5.1% |
| Net Loss (GAAP) | $1,335 · vs +$4,427 |
| Cost of Sales | $4,395 · +23.6% |
| SG&A | $2,904 · +9.6% |
| R&D (incl. $5.7B Terns charge) | $9,741 · +140.6% |
| Restructuring ≈ | $151 |
| Other Expense, net | $99 · vs $7 income |
| Income Tax | $654 · ETR −95.9% |
Verdict: a GAAP loss quarter manufactured almost entirely by one deal — the $5.7B Terns acquisition charge sits in R&D with no tax benefit; the underlying business grew 5% with the KEYTRUDA franchise at $8.4B and guidance narrowed upward, so the loss is an accounting event, not an operating one.
Loss quarter (mirror layout): left side shows where the money came from — revenue plus the net loss itself; right side shows what it covered. FY2026 outlook: sales $66.3-67.3B, non-GAAP EPS $2.66-2.76 (includes $2.31/sh Terns and $3.62/sh Cidara one-offs).
Source and notation
* marks non-cash / ≈ estimated. Restructuring line estimated as the residual to the stated pretax loss. Source: Merck & Co. press release 8-K EX-99.1 (SEC EDGAR).
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Chart: “MRK Q2 2026: where the revenue went” by Who Reports Today, https://whoreportstoday.com/t/mrk/q2-2026. Licensed under CC BY 4.0.
<figure> <a href="https://whoreportstoday.com/t/mrk/q2-2026"><img src="https://whoreportstoday.com/t/mrk/q2-2026/sankey.png" alt="MRK Q2 2026: where the revenue went" loading="lazy" style="max-width:100%;height:auto"></a> <figcaption>Source: <a href="https://whoreportstoday.com/t/mrk/q2-2026">Who Reports Today</a>, licensed under <a href="https://creativecommons.org/licenses/by/4.0/">CC BY 4.0</a></figcaption> </figure>
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<a href="https://whoreportstoday.com/t/mrk/q2-2026">MRK Q2 2026 earnings chart (Who Reports Today)</a>
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- The whole loss is one line: R&D of $9,741M includes a $5,700M one-time charge for the Terns acquisition (no tax benefit recorded); ex-charge R&D grew modestly vs $4,048M a year ago.
- Tax paradox of a non-deductible charge: a $654M income tax PROVISION on a $683M pretax LOSS — effective tax rate of −95.9%, of which 108.9 points come from Terns.
- KEYTRUDA franchise sales were $8,366M (+5.2%), now including KEYTRUDA QLEX at $463M; WINREVAIR nearly doubled to $588M (+75%).
- Gross margin fell to 73.5% from 77.5% — mostly higher amortization of intangibles flowing through cost of sales (+23.6% y/y).
- Restructuring costs (≈$151M) are shown as the residual between disclosed expense lines and the stated $683M pretax loss.
- More GAAP pain is already scheduled: the FY outlook carries a further $9.0B one-time R&D charge for the Cidara acquisition in H2 2026.
- Net loss attributable to Merck is $1,335M; flows sum to $1,337M — the $2M gap is noncontrolling interests.
What distorts the picture in this report and what to watch beyond the headlines.
MRK — Merck & Co. is a global pharmaceutical company developing prescription medicines and vaccines.
It focuses on areas such as oncology, infectious diseases, and animal health, headquartered in Rahway, New Jersey.
Heads-up
- a net loss in Q2 2026 ($1,335 · vs +$4,427)
Net loss for Q2 2026: $1,335M. In the report's figures: costs grew faster than revenue: r&d (incl. $5.7b terns charge) +141% y/y, cost of sales +24% y/y. Based on the Q2 2026 report.
Company filings on SEC EDGAR ↗More reports: MRNA · Q2 2026 · MTD · Q2 2026 · PFE · Q2 2026 · PODD · Q2 2026 · REGN · Q3 2026 · RMD · Q1 FY2027 · RVTY · Q2 2026 · SOLV · Q2 2026 · STE · Q1 FY2027 · SYK · Q3 2026 · all reports