GILD Q2 Earnings Beat on HIV and Trodelvy Growth, Product Sales Outlook Raised

Revenues increased 10% year over year to $7.80 billion, which beat the Zacks Consensus Estimate of $7.37 billion. Growth was driven by the HIV portfolio, along with Trodelvy and Livdelzi. Product sales excluding Veklury rose 10% to $7.60 billion.

Shares of GILD have gained 10.2% year to date compared with the industry’s growth of 0.8%.

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GILD's HIV Franchise Drives Growth

HIV product sales increased 12% year over year to $5.69 billion, reflecting higher average realized prices and demand. The figure beat the Zacks Consensus Estimate of $5.4 billion and our model estimate of $5.35 billion.

Flagship HIV therapy Biktarvy sales rose 7% to $3.80 billion, driven by pricing, favorable inventory dynamics and higher demand. Sales surpassed the Zacks Consensus Estimate of $3.65 billion and our model estimate of $3.72 billion.

Biktarvy continues to lead as the regimen of choice for both naive and switch patients across major markets.

Descovy sales jumped 48% to $967 million, comfortably exceeding the Zacks Consensus Estimate of $750 million and our model estimate of $701 million. The increase reflected higher demand and realized prices, particularly in HIV prevention.

Incremental sales of newly approved Yeztugo (lenacapavir) for pre-exposure prophylaxis (PrEP) also boosted HIV product sales. Yeztugo raked in sales of $232 million in the second quarter.

Driven by a $4 billion annualized PrEP business and the continued strong performance of Biktarvy, Gilead raised its full-year HIV sales growth guidance to 9-10% from the previous 8% forecast. GILD continues to expect Yeztugo sales of approximately $1 billion in 2026.

Gilead's Liver Disease Portfolio Sales Advance

Liver Disease portfolio sales increased 10% to $877 million. The figure topped the Zacks Consensus Estimate of $800 million and our model estimate of $787 million. Higher demand for Livdelzi, hepatitis B treatments and Hepcludex more than offset lower hepatitis C product sales.

GILD's Cell Therapy Sales Face Pressure

Cell Therapy sales declined 14% year over year to $417 million amid continued competitive headwinds. The figure matched the Zacks Consensus Estimate but came below our model estimate of $418.8 million.

Yescarta sales decreased 12% to $346 million due to competition. Tecartus sales fell 24% to $70 million because of in-class competition.

Gilead now expects full-year Cell Therapy sales to decline by a mid-teens percentage.

Trodelvy Boosts GILD’s Q2 Revenues

Trodelvy sales increased 26% year over year to $457 million, beating the Zacks Consensus Estimate of $448 million and our model estimate of $427 million. Growth reflected stronger demand across triple-negative and previously treated HR-positive/HER2-negative metastatic breast cancer.

The recent first-line metastatic triple-negative breast cancer approvals expand Trodelvy's addressable population. Management said adoption has broadened following regulatory approvals and treatment guideline updates.

Gilead's Costs Reflect Acquisition Charges

Adjusted product gross margin remained unchanged year over year at 86.9%. Adjusted research and development expenses declined 1% to $1.43 billion, as lower oncology clinical study activity offset costs associated with newly acquired businesses.

Adjusted selling, general and administrative expenses increased 12% to $1.52 billion, mainly due to higher HIV promotional spending. Acquired in-process research and development expenses totaled $11.2 billion, primarily related to the Arcellx, Tubulis and Ouro Medicines acquisitions.

As of June 30, 2026, Gilead's cash, cash equivalents and marketable debt securities totaled $3.2 billion, down from $10.6 billion as of Dec. 31, 2025. The decline was primarily due to $11.3 billion in acquisition-related cash outflows, $2.8 billion in debt repayments, $2.1 billion in dividend payments and $774 million in share repurchases.

These acquisition-related charges were the main reason for the adjusted quarterly loss. Excluding the acquisitions and nonrecurring other revenues, management indicated that adjusted earnings would have been $2.27 per share.

GILD Raises 2026 Base Business Outlook

Gilead now expects product sales of $30.10-$30.40 billion in 2026, up from the earlier expectation of $30.00-$30.40 billion. Product sales excluding Veklury are projected to be in the band of $29.80-$30.10 billion, up from the previous guidance of $29.40-$29.80 billion.

Veklury sales are now expected to be approximately $300 million, down from the earlier forecast of around $600 million, reflecting fewer COVID-19-related hospitalizations. Adjusted loss per share is projected between 30 cents and 65 cents compared with the previous loss guidance of 65 cents-$1.05.

The improved adjusted earnings outlook reflects stronger base-business sales.

Key Pipeline and Regulatory Updates From GILD

The FDA accepted Gilead's supplemental new drug application for Yeztugo (lenacapavir) 300 mg tablets as a potential once-weekly oral HIV PrEP regimen, with a target date of Feb. 2, 2027.

Gilead and partner Merck MRK reported positive phase III results from the ISLEND-1 and ISLEND-2 studies, demonstrating the potential of the investigational once-weekly oral combination of islatravir and lenacapavir in virologically suppressed adults with HIV.

The FDA also granted accelerated approval to Hepcludex for the treatment of chronic hepatitis D virus (HDV) infection in adults without cirrhosis or with compensated cirrhosis, making it the first and only FDA-approved therapy for HDV in the United States.

Trodelvy received FDA approval for first-line metastatic triple-negative breast cancer (mTNBC), as a monotherapy for patients who are not candidates for PD-1/PD-L1 inhibitor-based therapy or in combination with Merck’s Keytruda combination with Keytruda (pembrolizumab) or Keytruda Qlex (pembrolizumab and berahyaluronidase alfa-pmph) for patients whose tumors express PD-L1 (CPS ≥10).

The European Commission approved Trodelvy monotherapy for first-line unresectable locally advanced or metastatic TNBC in patients ineligible for PD-1/PD-L1 therapy.

The EMA's CHMP issued a positive opinion for Trodelvy plus Keytruda as a first-line treatment for PD-L1-positive unresectable locally advanced or metastatic TNBC.

However, Gilead and partner Merck announced that the phase III EVOKE-03 study was discontinued. The study was evaluating Trodelvy plus Keytruda in first-line PD-L1-high metastatic non-small cell lung cancer after an independent review found the study was unlikely to meet its efficacy goals.

Our Take on GILD’s Q2 Performance

Gilead delivered a strong second quarter, with both earnings and revenues exceeding expectations. The HIV franchise remains the principal growth engine, supported by Biktarvy's durability and rapid expansion of the prevention business.

Descovy and Yeztugo’s strong performance is boosting the top-line growth. Per GILD, Yeztugo has quickly become the leading long-acting PrEP option for new patient starts.

Management's higher HIV outlook reinforces the franchise's near-term momentum.

The FDA had earlier accepted Gilead’s new drug application for bictegravir/lenacapavir (BIC/LEN) for virologically suppressed people living with HIV under priority review, setting a target action date of Aug. 27, 2026.  A potential approval of BIC/LEN will further bolster its HIV portfolio.

Approval of additional better treatments should bolster GILD’s HIV franchise in the wake of increasing competition from the likes of GSK plc GSK.

HIV sales account for a major chunk of GSK’s Specialty Medicines portfolio. GSK continues to grow its HIV business, driven by strong patient demand for long-acting injectable medicines (Cabenuva and Apretude) and Dovato. The solid growth from these drugs has helped GSK combat the decline in Triumeq sales.

Trodelvy and Livdelzi are adding meaningful diversification, while additional approvals could expand their growth runway.

Gilead’s recent aggressive dealmaking strategy, including the acquisitions of Arcellx and Tubulis, underscores its commitment to diversifying beyond its core HIV franchise and expanding into higher-growth oncology and immunology markets.

Launch preparations are underway for anito-cel (added from Arcellx acquisition), which has a Dec. 23 regulatory action date for heavily pretreated relapsed or refractory multiple myeloma.

The Tubulis acquisition added next-generation antibody-drug conjugate (“ADC”) assets, including GS-8824, a NaPi2b-directed topoisomerase-I inhibitor ADC, and a platform to develop novel ADCs, to GILD’s pipeline.

However, competitive pressure in Cell Therapy remains a notable weakness, and recent acquisitions have created substantial near-term earnings volatility.

GILD’s Zacks Rank

Gilead currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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