Gilead Sciences 2025 Q1 Earnings Significant Turnaround with Net Income Surging 131.5%

Gilead Sciences (GILD), ranking 103rd by market capitalization, reported its fiscal 2025 Q1 earnings on May 07th, 2025. Gilead's Q1 earnings showcased a remarkable turnaround with net income surging 131.5% from a net loss of $4.17 billion to a profit of $1.31 billion. However, Gilead's total revenue slightly decreased by 0.3% year-over-year. The company adjusted its full-year diluted EPS guidance downward, reflecting a more conservative outlook. This was primarily attributed to the challenges in maintaining Veklury sales and other operational adjustments. Gilead's focus on its diverse pipeline and disciplined expense management remains unchanged, reflecting confidence in its long-term strategy.

Revenue
Gilead Sciences experienced a slight decline in total revenue for Q1 2025, reaching $6.67 billion compared to $6.69 billion in the same period last year. This includes product sales amounting to $6.61 billion, while revenues from royalties, contracts, and other sources contributed $54 million.

Earnings/Net Income
Gilead Sciences returned to profitability with an EPS of $1.06 in Q1 2025, recovering from a loss of $3.34 per share in Q1 2024. This marked a substantial 131.7% positive change. The company's net income also saw a significant positive swing, reaching $1.31 billion compared to a net loss of $4.17 billion in the previous year. The EPS improvement reflects a strong recovery from prior-year losses.

Price Action
The stock price of Gilead Sciences has edged up 1.05% during the latest trading day, has dropped 7.17% during the most recent full trading week, and has dropped 7.79% month-to-date.

Post Earnings Price Action Review
The strategy of buying GILD shares post-revenue raise and holding for 30 days has underperformed over the past five years, delivering a -7.14% return. This performance significantly lagged behind the benchmark, accompanied by a Sharpe Ratio of -0.29 and a maximum drawdown of -9.76%. The strategy's compound annual growth rate (CAGR) stood at -1.48%, with a volatility of 5.10%. These figures indicate that the strategy has not been favorable for investors seeking to capitalize on revenue increases, emphasizing the need for a reevaluation of investment approaches concerning GILD shares post-earnings.

CEO Commentary
Daniel O'Day, CEO of Gilead Sciences, emphasized that "Gilead had a strong start to the year driven by excellent commercial and clinical execution along with disciplined expense management." He noted a 4% year-over-year growth in the base business, primarily led by the sustained strength of Biktarvy. O'Day highlighted recent positive Phase 3 results for Trodelvy combined with pembrolizumab in treating triple-negative breast cancer. He expressed optimism regarding the upcoming PDUFA date for lenacapavir for HIV prevention and the company's diverse pipeline, stating that Gilead looks forward to building on this positive momentum throughout the year.

Guidance
For the full year 2025, Gilead expects product sales to be between $28.2 billion and $28.6 billion, with sales excluding Veklury projected between $26.8 billion and $27.2 billion. The company has lowered its diluted EPS guidance to a range of $5.65 to $6.05, down from the previous estimate of $5.95 to $6.35. Non-GAAP diluted EPS guidance remains unchanged at $7.70 to $8.10. Gilead anticipates continued focus on its pipeline and disciplined expense management as key components of its strategy moving forward.

Additional News
Gilead Sciences announced $11 billion in new planned investments in the U.S. to enhance its domestic manufacturing and research capabilities. These investments, unveiled on May 8, 2025, are a response to President Donald Trump's tariff policy and will supplement an already planned spending of $21 billion through 2030. The funds will be directed towards new technologies, building three new facilities, and upgrading three existing sites. This strategic move is expected to create at least 800 new direct jobs and support over 2,200 indirect jobs by 2028, contributing an estimated $43 billion in value to the U.S. economy over the next five years.