ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to provide material information around events and uncertainties known to management that are relevant to an assessment of the financial condition and results of operations of Gilead and should therefore be read in conjunction with our audited Consolidated Financial Statements and the related notes thereto and other disclosures included as part of this Annual Report on Form 10-K (including the disclosures under Part I, Item 1A. Risk Factors). Additional information related to the comparison of our results of operations and liquidity and capital resources between the years 2024 and 2023 is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2024 Form 10-K filed with U.S. Securities and Exchange Commission.

Management Overview

Gilead Sciences, Inc. (including its consolidated subsidiaries, referred to as “Gilead,” the “company,” “we,” “our” or “us”) is a biopharmaceutical company that has pursued and achieved breakthroughs in medicine for more than three decades, with the goal of creating a healthier world for all people. We are committed to advancing innovative medicines to prevent and treat life-threatening diseases, including HIV, viral hepatitis, COVID-19 and cancer. We operate in more than 35 countries worldwide, with headquarters in Foster City, California.

Our strategic ambitions are to (i) bring 10+ transformative therapies to patients by 2030 (tracking since 2020); (ii) be a biotech employer and partner of choice; and (iii) deliver shareholder value in a sustainable and responsible manner. Our strategic priorities, as refreshed in late 2025, to deliver on these ambitions include: (i) maximize impact of long-acting HIV therapies; (ii) accelerate our pipeline build in oncology and inflammation; (iii) adopt and scale artificial intelligence to transform how we work; (iv) prioritize investments for highest impact; and (v) strengthen collaboration to accelerate innovation.

Year in Review

During 2025, we delivered growth in our HIV product sales, introduced Yeztugo, the first and only twice-yearly HIV pre-exposure prophylaxis (“PrEP”) option available in the U.S., and expanded Livdelzi’s market share in the treatment of primary biliary cholangitis (“PBC”). As evidenced by various late-stage clinical trial updates in HIV and oncology, we continued to invest in our business and research and development (“R&D”) pipeline through advancement of our portfolio and broadening of available therapies, including through acquisitions and collaborations. Meanwhile, we maintained our financial position by lowering operating expenses, repaying senior notes coming due and providing shareholder returns through dividends and share repurchases. The following represents a summary of notable business updates and events since the filing of our Annual Report on Form 10-K for the year ended December 31, 2024, including certain items from our press releases, which readers are encouraged to review in full as available on our website at www.gilead.com. The content on the referenced website does not constitute a part of and is not incorporated by reference into this Annual Report on Form 10-K.

Virology

•Announced positive topline Phase 3 results from the ARTISTRY-1 and ARTISTRY-2 trial, evaluating our investigational daily oral single-tablet regimen of bictegravir 75mg and lenacapavir 50mg (“BIC/LEN”) for virologically suppressed adults with HIV. BIC/LEN met its primary endpoint, demonstrating non-inferiority to baseline multi-tablet antiviral regimens (ARTISTRY-1) and Biktarvy (ARTISTRY-2).

•Announced settlement agreements to resolve Biktarvy patent litigation with generic manufacturers Lupin Ltd., Cipla Ltd. and Laurus Labs Ltd. Under the agreements, the earliest date the three generic manufacturers can market a generic version of full dose Biktarvy in the U.S. is April 1, 2036, subject to standard acceleration provisions. This is more than two years later than our previous loss of exclusivity projection for Biktarvy (December 2033).

•Received a strong recommendation for the use of twice-yearly injectable Yeztugo (lenacapavir) for HIV PrEP in the new U.S. Centers for Disease Control and Prevention guidelines.

•Announced a partnership with the U.S. State Department and the U.S. President’s Emergency Plan for AIDS Relief (“PEPFAR”) to deliver lenacapavir for HIV PrEP for up to two million people over three years in countries supported by both PEPFAR and the Global Fund.

•Received European Commission (“EC”) marketing authorization for Yeytuo (lenacapavir) for PrEP to reduce the risk of sexually acquired HIV-1 in adults and adolescents with increased HIV-1 acquisition risk.

•Received U.S. Food and Drug Administration (“FDA”) approval for Yeztugo (lenacapavir) for PrEP to reduce the risk of sexually acquired HIV in adults and adolescents weighing at least 35kg.

•Announced that FDA had placed a clinical hold on the HIV treatment trials of GS-1720 and/or GS-4182, including the WONDERS-1 and WONDERS-2 trials. These drug candidates are investigational and not approved anywhere globally.

Oncology

•Announced that we entered into a definitive agreement to acquire all of the outstanding common stock of Arcellx, Inc. (“Arcellx”), providing us with full control of its leading pipeline candidate, anitocabtagene autoleucel, an investigational BCMA-directed CAR-T cell therapy for patients with relapsed and/or refractory multiple myeloma. This transaction is anticipated to close during the second quarter of 2026, subject to the satisfaction or waiver of customary closing conditions.

•Announced the discontinuation of the Phase 3 STAR-221 study, in partnership with Arcus Biosciences, Inc. (“Arcus”), evaluating the anti-TIGIT antibody domvanalimab (“dom”) plus zimberelimab (“zim”) and chemotherapy in first-line HER2- advanced gastric and esophageal cancers. The decision was based on the recommendation of the Independent Data Monitoring Committee, following review of data from a pre-specified interim analysis. Additionally, Gilead and Arcus will discontinue the Phase 2 EDGE-Gastric study evaluating dom and zim regimens in upper gastrointestinal cancers. Dom and zim are investigational products and are not approved anywhere globally.

•Announced that our Phase 3 ASCENT-07 study of Trodelvy evaluating sacituzumab govitecan-hziy (“SG”) as a first-line treatment post-endocrine therapy in hormone receptor-positive, human epidermal growth factor receptor 2-negative (“HR+/HER2-”) metastatic breast cancer patients did not meet the primary endpoint of progression-free survival. Overall survival is a key secondary endpoint and was not mature at the time of the primary analysis; however, an early trend was observed favoring patients treated with Trodelvy compared to chemotherapy.

•Presented Phase 3 ASCENT-03 data for Trodelvy in 1L metastatic triple-negative breast cancer (“mTNBC”) patients who are not candidates for PD-1/PD-L1 checkpoint inhibitors at the 2025 European Society for Medical Oncology Congress. Trodelvy is not approved in this setting.

•Entered into a collaboration with Shenzhen Pregene Biopharma Co., Ltd. (“Pregene”) to develop next-generation in vivo therapies.

•Announced the acquisition of Interius BioTherapeutics, Inc. (“Interius”), a privately held biotechnology company developing in vivo chimeric antigen receptor therapeutics, for approximately $350 million.

•Presented results from the Phase 3 ASCENT-04 trial evaluating Trodelvy plus Keytruda in 1L PD-L1+ mTNBC at the American Society of Clinical Oncology meeting. Trodelvy is not approved in this setting.

•Entered into an exclusive option and license agreement with Kymera Therapeutics, Inc. to develop novel oral molecular glue CDK2 degraders with broad oncology treatment potential.

Inflammation

•Received conditional marketing authorization from the EC for seladelpar for the treatment of PBC in combination with ursodeoxycholic acid (“UDCA”) in adults who have an inadequate response to UDCA alone, or as monotherapy in those unable to tolerate UDCA.

•Entered into a strategic partnership with LEO Pharma A/S (“LEO Pharma”) to develop and commercialize their pre-clinical oral signal transducer and activator of transcription 6 programs for the potential treatment of inflammatory diseases.

Corporate

•Announced an agreement with the U.S. government to lower the cost of medicines for Americans, reinforcing a commitment to U.S.-based innovation, affordability and global health leadership.

•Announced ground-breaking on a new Pharmaceutical Development and Manufacturing Technical Development Center in Foster City, California as part of a planned $32 billion investment in the U.S. through 2030.

The following table summarizes our key financial results for the year and period-over-period changes:

Year Ended December 31,

(in millions, except percentages and per share amounts) 2025 2024 Change

Net income attributable to Gilead $ 8,510 $ 480 NM

Diluted earnings per share attributable to Gilead $ 6.78 $ 0.38 NM

_______________________________

NM - Not Meaningful

Total revenues increased 2% to $29.4 billion in 2025, compared to 2024, primarily due to:

•Higher product sales primarily driven by HIV and Liver Disease products, partially offset by lower sales of Veklury; and

•Higher royalty, contract and other revenues.

Net income attributable to Gilead was $8.5 billion and diluted earnings per share attributable to Gilead was $6.78 in 2025, compared to net income attributable to Gilead of $480 million and $0.38 diluted earnings per share attributable to Gilead in 2024. The increase was primarily due to:

•A $3.8 billion acquired in-process research and development (“IPR&D”) expense related to the acquisition of CymaBay Therapeutics, Inc. (“CymaBay”) in 2024, which did not repeat in 2025;

•Lower pre-tax IPR&D partial impairment charges, with $590 million in 2025 related to assets acquired from MYR GmbH (“MYR”) compared to $4.2 billion in 2024 related to assets acquired from Immunomedics, Inc.;

•Higher net unrealized gains on equity securities;

•Higher revenues; and

•Lower selling, general and administrative expenses; partially offset by

•Higher income tax expense.

Please refer to “Results of Operations” below for further information on 2025 results.

Outlook

As we look to 2026, we expect to see continued growth for our product sales overall, bolstered by increased demand in our HIV business. We anticipate that such growth will be partially offset by the impact of various policy-related developments in the U.S., as well as an expected decrease in our Veklury product sales due to lower rates of COVID-19-related hospitalizations and an expected decrease in our Cell Therapy product sales reflecting ongoing competitive headwinds.

Our R&D portfolio includes over 50 clinical-stage programs across our core therapeutic areas. We expect updates in 2026 on various clinical trials and certain regulatory filing submissions and decisions, including FDA decisions related to two first-line breast cancer therapies and an additional HIV treatment option. We plan to continue investing in our business and R&D pipeline both internally and externally through partnerships and select business development transactions. As part of our overall investment approach to fund the advancement of our pipeline and commercialization of our products, we will continue to focus on disciplined operating expense management.

Results of Operations

Revenues

The following table summarizes our Total revenues and period-over-period changes:

Product sales:

HIV

Liver Disease

Oncology

Cell Therapy

Other

_______________________________

NM - Not Meaningful

(1) Represents our revenue from cobicistat (“C”), emtricitabine (“FTC”) and tenofovir alafenamide (“TAF”) in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland Unlimited Company. See Note 7. Collaborations and Other Arrangements of the Notes to Consolidated Financial StatementsincludedinPart II, Item 8 of this Annual Report on Form 10-K.

(2) Includes Atripla, Complera/Eviplera, Emtriva, Stribild, Sunlenca, Truvada, Tybost and Yeztugo/Yeytuo.

(3) Includes Epclusa and the authorized generic version of Epclusa sold by Gilead’s separate subsidiary, Asegua Therapeutics LLC (“Asegua”).

(4) Includes ledipasvir/sofosbuvir (Harvoni and the authorized generic version of Harvoni sold by Asegua), Hepcludex, Hepsera, Livdelzi/Lyvdelzi, Sovaldi, Viread and Vosevi.

(5) Includes Cayston, Jyseleca, Letairis and Zydelig.

HIV

HIV product sales increased 6% to $20.8 billion in 2025, compared to 2024, primarily due to higher demand for treatment and prevention, with average realized price being relatively flat despite the U.S. Medicare Part D program redesign impact. In particular:

•Biktarvy sales increased 7% primarily due to higher demand, including patients switching from Genvoya and other Gilead HIV products, partially offset by lower average realized price due to the U.S. Medicare Part D program redesign; and

•Descovy sales increased 31% primarily due to higher demand and average realized price.

Liver Disease

Liver Disease product sales increased 6% to $3.2 billion in 2025, compared to 2024, primarily due to higher demand for Livdelzi and products for chronic hepatitis B virus and chronic hepatitis D virus, partially offset by lower average realized price across all Liver Disease products, most notably for chronic hepatitis C virus, inclusive of the U.S. Medicare Part D program redesign impact.

Veklury

Veklury product sales decreased 49% to $911 million in 2025, compared to 2024, primarily due to lower COVID-19-related hospitalizations.

Oncology

Cell Therapy

Cell Therapy product sales decreased 7% to $1.8 billion in 2025, compared to 2024, primarily due to lower demand reflecting ongoing competitive headwinds.

Trodelvy

Trodelvy product sales increased 6% to $1.4 billion in 2025, compared to 2024, primarily due to higher demand in breast cancer treatment, partially offset by the indication withdrawal in bladder cancer treatment.

Gross-to-Net Deductions

Product sales are recorded net of estimated gross-to-net deductions, including rebates and chargebacks, patient co-pay assistance, prompt pay discounts, distributor fees, sales return provisions and other related deductions.

The following table summarizes our gross-to-net deductions and period-over-period changes:

Year Ended December 31,

(in millions, except percentages) 2025 2024 Change

% of gross product sales 41 % 38 % 250 bps

_______________________________

(1) Includes rebates and chargebacks of $17.5 billionand $15.5 billion for the years ended December 31, 2025 and 2024, respectively. For further information, see “Critical Accounting Estimates” section below.

Gross-to-net deductions as a percentage of gross product sales increased in 2025, compared to 2024, primarily due to U.S. Medicare Part D program redesign impact.

Foreign Currency Exchange Impact

We generally face exposure to movements in foreign currency exchange rates, primarily in the Euro. We use foreign currency exchange contracts to hedge a portion of our foreign currency exposures.

Approximately 26% and 27% of our product sales were denominated in foreign currencies during 2025 and 2024, respectively. Foreign currency exchange, net of hedges, had a favorable impact on our total product sales of $56 million in 2025, based on a comparison using foreign currency exchange rates from 2024.

Royalty, Contract and Other Revenues

Royalty, contract and other revenues increased to $527 million in 2025, compared to 2024, primarily due to recognition of $400 million of previously constrained revenues from the sale of certain intellectual property.

Costs and Expenses

The following table summarizes our costs and expenses and period-over-period changes:

Year Ended December 31,

(in millions, except percentages) 2025 2024 Change

Product gross margin 78.4 % 78.2 % 29 bps

Research and development expenses $ 5,799 $ 5,907 (2) %

Acquired in-process research and development expenses $ 1,024 $ 4,663 (78) %

In-process research and development impairments $ 590 $ 4,180 (86) %

Selling, general and administrative expenses $ 5,774 $ 6,091 (5) %

Product Gross Margin

Product gross margin was 78.4% in 2025 and remained relatively flat compared to 2024.

Research and Development Expenses

Research and development expenses consist primarily of personnel costs including salaries, benefits and stock-based compensation expense, infrastructure, materials and supplies and other support costs, research and clinical studies performed by contract research organizations and our collaboration partners and other outside services.

We manage these expenses by identifying the R&D activities we expect to be performed during a given period and then prioritizing efforts based on scientific data, probability of successful technical development and regulatory approval, market potential, available human and capital resources and other considerations. We regularly review our R&D activities based on unmet medical need and, as necessary, reallocate resources among our internal R&D portfolio and external opportunities that we believe will best support the long-term growth of our business. We do not track total R&D expenses by product candidate, therapeutic area or development phase.

The following table summarizes our Research and development expenses and period-over-period changes:

Year Ended December 31,

(in millions, except percentages) 2025 2024 Change

Personnel, infrastructure and other support costs $ 3,427 $ 3,555 (4) %

Clinical studies and other costs 2,372 2,352 1 %

Research and development expenses $ 5,799 $ 5,907 (2) %

Research and development expenses decreased 2% to $5.8 billion in 2025, compared to 2024. Personnel, infrastructure and other support costs decreased primarily due to the impact of stock-based compensation expenses and other integration costs related to the acquisition of CymaBay in 2024, which did not repeat in 2025, as well as lower restructuring costs. Clinical studies and other costs remained relatively flat, with higher expenses driven by fair value adjustments to the MYR-related contingent consideration largely offset by lower study-related and clinical manufacturing expenses.

Acquired In-Process Research and Development Expenses

Acquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed IPR&D projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and pre-commercialization milestone payments related to various collaborations and the costs of rights to IPR&D projects.

Acquired in-process research and development expenses were $1.0 billion in 2025, primarily related to the following transactions:

•$311 million Interius acquisition;

•$250 million LEO Pharma collaboration upfront payment; and

•$200 million Pregene collaboration upfront and milestone payments.

Acquired in-process research and development expenses were $4.7 billion in 2024, primarily related to the following transactions:

•$3.8 billion CymaBay acquisition;

•$320 million Janssen Pharmaceutica NV future royalty obligation extinguishment related to seladelpar;

•$100 million Arcus collaboration continuation fee;

•$68 million Arcellx collaboration milestones met; and

•$47 million Tmunity Therapeutics, Inc. acquisition milestones met.

See Note 6. Acquisitions and Note 7. Collaborations and Other Arrangements of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.

In-Process Research and Development Impairments

2025 Impairments

In the second quarter of 2025 and again in the fourth quarter of 2025, additional competitive clinical data became available indicating a potentially more competitive market for bulevirtide where it is not yet approved. Based on our evaluation of the data, and in connection with the preparation of the financial statements for the second quarter of 2025 and again for the year ended December 31, 2025, we performed impairment tests and determined that the revised estimated fair value of the bulevirtide IPR&D intangible asset was below its carrying value in both periods. As a result, we recognized partial impairment charges of $190 million and $400 million in In-process research and development impairments on our Consolidated Statements of Operations for the second and fourth quarters of 2025, respectively, for a total of $590 million for the year ended December 31, 2025.

To arrive at the revised estimated fair values as of June 30, 2025 and December 31, 2025, we used a probability-weighted income approach that discounts expected future cash flows to present value, which requires the use of Level 3 fair value measurements and inputs, including critical estimated inputs, such as: revenues and operating profits related to the planned utilization of bulevirtide outside of the European Union (“EU”), which includes inputs such as addressable patient population, projected market share, treatment duration, and the life of the potential commercialized product; the probability of technical and regulatory success; the time and resources needed to complete the development and approval of bulevirtide outside of the EU; an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile; and risks related to the viability of and potential alternative treatments in any future target markets. Our revised discounted cash flows for the June 30, 2025 and December 31, 2025 fair value estimations primarily reflected the updated expectations for bulevirtide’s potential market share outside of the EU.

2024 Impairments

In January 2024, we received data from our Phase 3 EVOKE-01 study of Trodelvy evaluating SG indicating that the study did not meet its primary endpoint of overall survival in previously treated metastatic non-small cell lung cancer (“NSCLC”), thus triggering a review for potential impairment of the NSCLC IPR&D intangible asset. Based on our evaluation of the study results and all other data available at the time, and in connection with the preparation of the financial statements for the first quarter of 2024, we performed an interim impairment test and determined that the revised estimated fair value of the NSCLC IPR&D intangible asset was below its carrying value. As a result, we recognized a partial impairment charge of $2.4 billion in In-process research and development impairments on our Consolidated Statements of Operations during the first quarter of 2024.

In September 2024, based on discussions with regulators and external opinion leaders and the completed evaluation of the Phase 3 EVOKE-01 study data, we made a strategic decision to discontinue our clinical development program in metastatic NSCLC for Trodelvy in the second-line indication. This decision triggered a review for potential impairment of the NSCLC IPR&D intangible asset. Based on our evaluation, and in connection with the preparation of the financial statements for the third quarter of 2024, we performed an interim impairment test and determined that the revised estimated fair value of the NSCLC IPR&D intangible asset was below its carrying value. As a result, we recognized a partial impairment charge of $1.8 billion in In-process research and development impairments on our Consolidated Statements of Operations during the third quarter of 2024, bringing the full-year 2024 total to $4.2 billion.

To arrive at the revised estimated fair value, we used a probability-weighted income approach that discounts expected future cash flows to present value, which requires the use of Level 3 fair value measurements and inputs, including critical estimated inputs, such as: revenues and operating profits related to the planned utilization of SG in NSCLC, which, include inputs such as addressable patient population, projected market share, treatment duration, and the life of the potential commercialized product; the probability of technical and regulatory success; the time and resources needed to complete the development and approval of SG in NSCLC; an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile; and risks related to the viability of and potential alternative treatments in any future target markets. Our revised discounted cash flows for the March 31, 2024 fair value estimation primarily reflected the smaller addressable market that Trodelvy could serve among metastatic NSCLC patients and a delay in expected launch timing for second-line plus patients. Our revised discounted cash flows for the September 30, 2024 fair value estimation primarily reflected the removal of cash flows associated with second-line plus patients, and the remaining carrying value as of that date reflects Trodelvy’s opportunity as a combination therapy in first-line metastatic NSCLC patients supported by its ongoing Phase 3 clinical trial in this patient population.

If future events result in adverse changes in the key assumptions used in determining fair value, including the timing of product launches, information on the competitive landscape of treatments in this indication, changes to the probability of technical or regulatory success, failure to obtain anticipated regulatory approval or discount rate, among others, additional impairments may be recorded and could be material to our financial statements.

Selling, General and Administrative Expenses

Selling, general and administrative expenses are recorded when incurred and consist primarily of personnel costs, facilities and overhead costs, and selling, marketing and advertising expenses, as well as other general and administrative costs related to finance, human resources, legal and other administrative activities.

The following table summarizes our Selling, general and administrative expenses and period-over-period changes:

Year Ended December 31,

(in millions, except percentages) 2025 2024 Change

Selling and marketing expenses $ 3,522 $ 3,453 2 %

General and administrative expenses 2,252 2,638 (15) %

Selling, general and administrative expenses $ 5,774 $ 6,091 (5) %

Selling, general and administrative expenses decreased 5% to $5.8 billion in 2025, compared to 2024. Selling and marketing expenses increased primarily due to higher HIV promotional expenses. General and administrative expenses decreased primarily due to lower expenses related to corporate initiatives and legal matters, as well as the impact of stock-based compensation expenses and other integration costs related to the acquisition of CymaBay in 2024, which did not repeat in 2025, partially offset by donations of equity securities made to the Gilead Foundation.

Interest Expense and Other (Income) Expense, Net

The following table summarizes our Interest expense and Other (income) expense, net and period-over-period changes:

Year Ended December 31,

(in millions, except percentages) 2025 2024 Change

Other (income) expense, net $ (798) $ (6) NM

(Gain) loss from equity securities, net $ (451) $ 274 NM

Other, net $ 1 $ 2 (41) %

_______________________________

NM - Not Meaningful

Interest expense increased 5% to $1.0 billion in 2025, compared to 2024, primarily due to higher debt balances and a higher weighted-average interest rate on the debt. See Note 10. Debt and Credit Facilities of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information on our long-term debt and related interest rates.

Favorable movements in Other (income) expense, net in 2025, compared to 2024, primarily related to net unrealized gains from equity securities compared to net unrealized losses in 2024, as well as higher interest income.

Income Taxes

The following table summarizes our Income tax (benefit) expense and period-over-period changes:

Year Ended December 31,

(in millions, except percentages) 2025 2024 Change

Effective tax rate 13.1 % 30.5 % NM

_______________________________

NM - Not Meaningful

Our effective tax rate decreased in 2025, compared to 2024, primarily due to:

•The non-deductible acquired IPR&D expense recorded in connection with our acquisition of CymaBay in 2024, which did not repeat in 2025;

•A settlement with a tax authority related to a prior year legal entity restructuring; and

•Favorable changes in the fair value of our equity securities that are non-taxable for income tax purposes; partially offset by

•A tax benefit associated with a legal entity restructuring in 2024; and

•A decrease in state deferred tax liabilities associated with the $4.2 billion NSCLC IPR&D intangible asset impairment charge in 2024.

The Organisation for Economic Co-operation and Development (“OECD”) has developed a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as “Pillar Two”), with certain aspects effective January 1, 2024 and other aspects effective January 1, 2025. Certain countries in which we operate have enacted Pillar Two legislation, and other countries are in the process of introducing legislation to implement Pillar Two. In January 2026, the OECD announced additional administrative guidance, including a “side-by-side” framework intended to coordinate the application of Pillar Two with existing minimum tax regimes in certain jurisdictions. We do not expect Pillar Two, including the side-by-side framework, to have a material impact on our results of operations, liquidity or capital resources.

Liquidity and Capital Resources

We regularly analyze our ability to generate and obtain adequate amounts of cash to meet our short-term and long-term requirements and plans. Our capital priorities include: (i) investing in our business and R&D pipeline, (ii) continuing select partnerships and business development transactions, (iii) growing our dividend over time, and (iv) repurchasing shares to offset dilution and opportunistically reduce share count. Based on our evaluation of our current position of liquidity, available capital resources and our material cash requirements, we believe that we can satisfy our capital needs for the next 12 months and the foreseeable future.

Liquidity

Cash and cash equivalents were $7.6 billion and marketable debt securities were $3.0 billionas of December 31, 2025. The table below summarizes our cash flow activities, followed by our analysis of changes and trends:

Year Ended December 31,

(in millions, except percentages) 2025 2024 Change

Net cash provided by (used in):

Effect of exchange rate changes on cash and cash equivalents 92 (40) NM

Net change in cash and cash equivalents $ (2,428) $ 3,906 NM

Operating Activities

Net cash provided by operating activities is our primary source of funds, driven mainly by collections on product sales, partially offset by operating spend. Changes in working capital balances, generally associated with the timing of collections and payments, as well as unanticipated payments related to litigation, taxes or other matters, may create some variation in any given year. Net cash provided by operating activities decreased in 2025, compared to 2024, primarily due to higher inventory build-up and higher income tax payments, as well as unfavorable timing of accounts receivable collections. In 2025, we paid the final $1.3 billion federal income tax payment for transition tax on the mandatory deemed repatriation of foreign earnings related to the Tax Cuts and Jobs Act, compared to $1.2 billion paid in 2024.

Investing Activities

Net cash used in investing activities increased in 2025, compared to 2024. In 2025, we utilized cash primarily for purchases of marketable debt securities and payments related to the Interius acquisition and various collaborations. In 2024, we utilized cash primarily for the $3.9 billion CymaBay acquisition and purchases of equity securities, partially offset by cash received from the liquidation of marketable debt securities. Net cash used in investing activities may vary in any given year depending on the favorability of strategic opportunities for the business.

Financing Activities

The change in Net cash used in financing activities in 2025, compared to 2024, was primarily due to cash provided by a new debt offering in 2024, which did not repeat in 2025, as well as higher common stock repurchases. In 2025, we utilized cash of $4.0 billion for dividend payments, $1.9 billion for common stock repurchases and $1.8 billion for repayment of debt. In 2024, we utilized cash of $3.9 billion for dividend payments, $2.0 billion for repayment of debt and other obligations, and $1.2 billion for common stock repurchases, partially offset by $3.5 billion in net proceeds from the issuance of senior unsecured notes in November 2024. Net cash used in financing activities may vary in any given year depending primarily on the timing of debt repayments and proceeds from debt offerings and the amount of common stock repurchases.

On February 10, 2026, we announced that our Board of Directors declared a quarterly dividend of $0.82 per share of our common stock, with a payment date of March 30, 2026 to all stockholders of record as of the close of business on March 13, 2026. Future dividends are subject to declaration by our Board of Directors.

Capital Resources

As of December 31, 2025, our material cash requirements for the operations of our business consisted primarily of the current and long-term liabilities noted on our Consolidated Balance Sheets as well as other commitments, including the following notable items:

•payments of outstanding borrowings, including interest on long-term debt (see Note 10. Debt and Credit Facilities);

•income tax payments, including potential payments related to uncertain tax positions (see Note 15. Income Taxes);

•payments of operating lease obligations (see Note 11. Leases);

•payments related to certain unconditional inventory purchase obligations and capital expenditures. There were no changes to such commitments in the current year that would have a material impact on our ability to meet short- or long-term cash requirements;

•payments related to our acquisitions, including contingent consideration (see Notes 3. Fair Value Measurements and 6. Acquisitions); and

•milestone and other payments related to collaboration agreements (see Note 7. Collaborations and Other Arrangements). We are contractually obligated to make payments to our collaboration partners upon the achievement of various development, regulatory and commercial milestones as well as royalty payments. These payments are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring. If milestones for multiple products covered by these arrangements happen to be reached in the same reporting period, the aggregate cash requirement could be material. It is not possible to predict with reasonable certainty whether these milestones will be achieved or the timing for achievement. As such, these obligations are not recorded on our Consolidated Balance Sheets until the events triggering milestone payments occur.

Our anticipated sources of funds to satisfy the above material cash requirements for the short- and long-term include our current balances of cash and cash equivalents as well as future cash flows from operations. If needed, we also have the ability to utilize our $2.5 billion revolving credit facility (see Note 10. Debt and Credit Facilities) and access other external capital through future debt or equity offerings.

While we are not aware of any trends at this time that are reasonably likely to materially impact our future cash requirements and sources of funds, such requirements and funds will depend on many factors, including but not limited to the following:

•the commercial performance of our current and future products;

•the progress and scope of our R&D efforts and those of our collaboration partners, including preclinical studies and clinical trials;

•the cost, timing and outcome of regulatory reviews;

•the expansion of our sales and marketing capabilities;

•the acquisition of additional manufacturing capabilities or office facilities on acceptable terms;

•the acquisition of other companies or new products on acceptable terms;

•the issuance of new debt or equity in the market on acceptable terms;

•the favorability of repaying certain long-term debt obligations prior to maturity dates;

•future dividends subject to declaration by our Board of Directors (see “Dividends” in Part II, Item 5 of this 10-K);

•the favorability of repurchasing shares (see “Issuer Purchases of Equity Securities” in Part II, Item 5 of this 10-K);

•the establishment of additional collaborative relationships with other companies on acceptable terms; and

•costs associated with the defense, settlement and adverse results of government investigations and litigation (see Note 12. Commitments and Contingencies).

Critical Accounting Estimates

See Note 1. Summary of Business and Significant Accounting Policies of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for information about our significant accounting policies and how estimates are involved in the preparation of our financial statements. We believe the following reflect the critical accounting estimates used in the preparation of our Consolidated Financial Statements.

Rebates and Chargebacks

Rebates and chargebacks include amounts due to payers and healthcare providers under various programs based on contractual arrangements or statutory requirements, which may vary by product, payer and individual plans and may not be known at the time of sale. As a result, our recorded amounts for rebates and chargebacks are determined using a complex estimation process that requires significant management judgment. In developing our estimates of rebates and chargebacks, we consider the following:

•product sales, including product mix and pricing;

•historical and estimated payer mix;

•statutory discount requirements and contractual terms;

•historical claims experience and processing time lags;

•estimated patient population;

•known market events or trends;

•market research;

•channel inventory data obtained from our major U.S. wholesalers; and

•other pertinent internal or external information.

The following table summarizes the consolidated activities and ending balances in our rebates and chargebacks accounts, including adjustments made relating to previous years’ sales as a result of changes in estimates:

We assess and update our estimates each reporting period to reflect actual claims and other current information. Historically, our actual rebates and chargebacks claimed for prior years have varied by less than 5% from our estimates.

Valuation of Intangible Assets

Determining the fair values of intangible assets, whether as part of a business combination or impairment assessment, involves the use of a probability-weighted income approach that discounts expected future cash flows to present value and requires the use of critical estimated inputs, including:

•identification of product candidates with sufficient substance requiring separate recognition;

•estimates of projected future cash flows, including revenues and operating profits related to the products or product candidates, which, for example, include significant inputs such as addressable patient population, treatment duration and projected market share;

•the probability of technical and regulatory success for unapproved product candidates considering their stages of development;

•the time and resources needed to complete the development and approval of product candidates;

•an appropriate discount rate based on the estimated weighted-average cost of capital for companies with profiles similar to our profile, representing the rate that market participants would use to value the intangible assets;

•the life of the potential commercialized products and associated risks, including the inherent difficulties and uncertainties in developing a product candidate such as obtaining FDA and other regulatory approvals; and

•risks related to the viability of and potential alternative treatments in any future target markets.

These estimates are subject to uncertainty due to the high rate of failure inherent in the discovery and development of new products; delays that can occur in development, approval and product launch processes; unanticipated decisions made by regulatory agencies; advent of competing products; unexpected changes in U.S. and global financial markets and other unanticipated events and circumstances. If future events result in adverse changes in the critical assumptions used in determining fair value, impairment charges on our intangible assets may be recorded and could be material to our financial statements. For example, in 2024, upon receiving data from our Phase 3 EVOKE-01 study of Trodelvy, which indicated the study did not meet its primary endpoint, and further discussions with regulators and external opinion leaders and completion of the evaluation of the trial data which led to the strategic decision to end the second-line indication program, we recognized in aggregate $4.2 billion in impairment charges related to our NSCLC IPR&D intangible asset, reflecting, amongst other changes, the removal of expected future cash flows associated with second-line plus patients from our valuation model.

Legal Contingencies

We are a party to various legal actions. Certain significant matters are described in Note 12. Commitments and Contingencies of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

Critical inputs to the accruals recorded and disclosures provided in relation to these matters include the probability of a certain outcome of the case, the determination as to whether an exposure is reasonably estimable and the amount of potential exposure. These inputs are subject to uncertainty due to changes in the legal facts and circumstances of the case, status of the proceedings, applicable law, the views of legal counsel and the views of any judges or jury involved in the case. Upon the final resolution of such matters, it is possible that there may be a loss in excess of the amount recorded, and such amounts could have a material adverse effect on our results of operations, cash flows or financial position. We periodically reassess these matters when additional information becomes available and adjust our estimates and assumptions when facts and circumstances indicate the need for any changes. For example, in the second quarter of 2023, we recorded an accrual of $525 million in Other current liabilities on our Consolidated Balance Sheets for settlements with certain plaintiffs in the HIV antitrust litigation, which we paid in the second half of 2023. Also, as of December 31, 2024, we accrued approximately $200 million on our Consolidated Balance Sheets for a potential settlement with the U.S. Attorney’s Office for the Southern District of New York, which we eventually entered into in April 2025 and subsequently paid.

Income Taxes

We are subject to income taxes in the U.S. and various foreign jurisdictions, including Ireland. See Note 15. Income Taxes of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information. Critical inputs in determining our provision for income taxes and related tax balances include forecasts of our future income and expenses, potential tax planning strategies and determination of the probability of certain tax positions being sustained upon examination by tax authorities. These inputs are subject to uncertainty due to potential changes in facts and circumstances, economic and political conditions, changes to existing tax laws and new regulations or interpretations by tax authorities. Changes in these conditions could have a material adverse impact on our results of operations and financial position. For example, in October 2025, we reached a settlement with a tax authority related to a prior year legal entity restructuring. As a result, we recognized approximately $450 million of income tax benefit and a corresponding $530 million reduction in our unrecognized tax benefits in the quarter ending December 31, 2025.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks that may result from changes in foreign currency exchange rates, interest rates and equity prices. To reduce certain of these risks, we enter into various types of foreign currency derivative transactions, follow our investment policy guidelines and monitor outstanding receivables as part of our risk management program.

Foreign Currency Exchange Rate Risk

We have operations in more than 35 countries worldwide. As such, certain of our monetary assets and liabilities and approximately 26% of our 2025 product sales are denominated in foreign currencies. Our operations in foreign countries expose us to risk associated with foreign currency exchange rate fluctuations between the U.S. dollar and various foreign currencies, primarily the Euro. When the U.S. dollar strengthens against these currencies, the relative value of sales made in the respective foreign currency decreases. Conversely, when the U.S. dollar weakens against these currencies, the relative value of such sales increases. Overall, we are a net receiver of foreign currencies and, therefore, we benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar. Additionally, our monetary assets and liabilities denominated in foreign currencies expose us to currency fluctuations between the date a transaction is recorded and the date that cash is collected or paid.

To partially mitigate the impact of changes in currency exchange rates on net cash flows from our foreign currency denominated sales as well as outstanding monetary assets and liabilities, we enter into foreign currency exchange forward contracts. In general, the risk of foreign currency fluctuations related to our operations is offset by corresponding gains and losses from our derivative instruments. As of December 31, 2025 and 2024, we had open foreign currency forward contracts with notional amounts of $3.9 billion and $2.9 billion, respectively. A hypothetical 10% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates as of December 31, 2025 and 2024 would have resulted in a reduction in fair value of these contracts of approximately $439 million and $364 million, respectively, and if realized, would have negatively affected earnings over the remaining life of the contracts. The analysis does not consider the impact that hypothetical changes in foreign currency exchange rates would have on anticipated transactions that these foreign currency sensitive instruments were designed to offset.

Interest Rate Risk

We invest in available-for-sale debt securities, adhering to a policy that requires us to limit invested amounts based on credit rating, maturity, industry group and investment type and issuer, except for securities issued by the U.S. government. The goals of our investment policy, in order of priority, are (1) safety and preservation of principal and diversification of risk, (2) liquidity of investments sufficient to meet cash flow requirements and (3) a competitive after-tax rate of return. The fair value of any available-for-sale debt securities is subject to change as a result of potential changes in market interest rates. However, primarily due to the contractual maturity typically being less than five years, we do not believe that future market risks, including a hypothetical 10% increase or decrease in interest rates related to any securities, would have a material adverse impact on our financial position, results of operations, or liquidity.

Our senior unsecured notes have fixed interest rates. As such, there is no financial interest rate exposure. The fair values of both our senior unsecured notes as well as our liability related to future royalties as part of our 2020 acquisition of Immunomedics, Inc. are exposed to fluctuations in interest rates. The current fair value of our debt portfolio and liability related to future royalties are $22.3 billion and $0.8 billion, respectively. The fair value will decrease as interest rates increase and will increase as interest rates decrease. Additionally, we have a $2.5 billion five-year revolving credit facility that matures in June 2029. Loans under our revolving credit facility bear interest at either (i) Term Secured Overnight Financing Rate plus the Applicable Percentage, (ii) the Alternative Currency Term Rate plus the Applicable Percentage, or (iii) the Base Rate plus the Applicable Percentage, each as defined in the revolving credit facility agreement. There were no amounts outstanding under the revolving credit facility as of December 31, 2025. As such, there is currently no financial interest rate exposure.

Equity Price Risk

We hold shares of common stock of certain publicly traded biotechnology companies primarily in connection with license and collaboration agreements. These equity securities are measured at fair value with any changes in fair value recognized in earnings. The fair value of these equity securities was approximately $2.0 billion and $1.6 billion as of December 31, 2025 and 2024, respectively. Changes in fair value of these equity securities are impacted by the volatility of the stock market and changes in general economic conditions, among other factors. A hypothetical 20% increase or decrease in the stock prices of these equity securities would have increased or decreased their fair value as of December 31, 2025 and 2024 by approximately $392 million and $312 million, respectively.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GILEAD SCIENCES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Years Ended December 31, 2025, 2024 and 2023

CONTENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 51

Audited Consolidated Financial Statements:

Consolidated Balance Sheets 53

Consolidated Statements of Operations 54

Consolidated Statements of Comprehensive Income 55

Consolidated Statements of Stockholders’ Equity 56

Consolidated Statements of Cash Flows 57

Notes to Consolidated Financial Statements 58

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Gilead Sciences, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Gilead Sciences, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 24, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Government and commercial rebates

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1988.

San Mateo, California

February 24, 2026

GILEAD SCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

December 31,

(in millions, except per share amounts) 2025 2024

Assets

Current assets:

Cash and cash equivalents $ 7,564 $ 9,991

Short-term marketable debt securities 68 —

Prepaid and other current assets 4,024 3,052

Property, plant and equipment, net 5,606 5,414

Long-term marketable debt securities 2,974 —

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of long-term debt, net 2,807 1,815

Long-term income taxes payable 896 830

Deferred tax liabilities 402 724

Commitments and contingencies (Note 12)

Stockholders’ equity:

Accumulated other comprehensive income 39 132

Noncontrolling interest (84) (84)

Total liabilities and stockholders’ equity $ 59,023 $ 58,995

See accompanying notes.

GILEAD SCIENCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31,

Revenues:

Royalty, contract and other revenues 527 144 182

Costs and expenses:

Acquired in-process research and development expenses 1,024 4,663 1,155

In-process research and development impairments 590 4,180 50

Selling, general and administrative expenses 5,774 6,091 6,090

Other (income) expense, net (798) (6) (198)

Net loss attributable to noncontrolling interest — — (52)

Basic earnings per share attributable to Gilead $ 6.84 $ 0.38 $ 4.54

Diluted earnings per share attributable to Gilead $ 6.78 $ 0.38 $ 4.50

See accompanying notes.

GILEAD SCIENCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31,

Other comprehensive (loss) income, net of reclassifications and taxes:

Net gain (loss) on foreign currency translation 38 (26) 60

Net gain on available-for-sale debt securities 8 5 28

Net (loss) gain on cash flow hedges (139) 125 (62)

Other comprehensive (loss) income, net (93) 104 26

Comprehensive loss attributable to noncontrolling interest, net — — (52)

Comprehensive income attributable to Gilead, net $ 8,418 $ 584 $ 5,691

See accompanying notes.

GILEAD SCIENCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Shares Amount

Other comprehensive income, net — — — 26 — — 26

Issuances under employee stock purchase plan 2 — 129 — — — 129

Issuances under equity incentive plans 13 — 99 — — — 99

Stock-based compensation — — 767 — — — 767

Dividends declared ($3.00 per share) — — — — (3,814) — (3,814)

Other comprehensive income, net — — — 104 — — 104

Issuances under employee stock purchase plan 2 — 139 — — — 139

Issuances under equity incentive plans 16 — 282 — — — 282

Stock-based compensation — — 834 — — — 834

Dividends declared ($3.08 per share) — — — — (3,911) — (3,911)

Other comprehensive loss, net — — — (93) — — (93)

Issuances under employee stock purchase plan 2 — 143 — — — 143

Issuances under equity incentive plans 15 — 265 — — — 265

Stock-based compensation — — 899 — — — 899

Dividends declared ($3.16 per share) — — — — (3,989) — (3,989)

See accompanying notes.

GILEAD SCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

Operating Activities:

Net (gain) loss from equity securities (451) 274 167

Acquired in-process research and development expenses 1,024 4,663 1,155

In-process research and development impairments 590 4,180 50

Changes in operating assets and liabilities:

Prepaid expenses and other (311) (259) 39

Income tax assets and liabilities, net (2,108) (732) (1,768)

Accrued and other liabilities 6 108 458

Investing Activities:

Purchases of marketable debt securities (3,939) (244) (1,930)

Proceeds from sales of marketable debt securities 854 2,265 510

Proceeds from maturities of marketable debt securities 55 327 1,334

Purchases of equity securities (133) (492) (442)

Purchases of property, plant and equipment (563) (523) (585)

Other investing activities, net 2 58 (1)

Net cash used in investing activities (4,793) (3,449) (2,265)

Financing Activities:

Proceeds from debt financing, net of issuance costs — 3,464 1,980

Proceeds from issuances of common stock 408 422 232

Repurchases of common stock under repurchase programs (1,922) (1,150) (1,000)

Repayments of debt and other obligations (1,788) (1,970) (2,250)

Other financing activities, net (440) (281) (279)

Net cash used in financing activities (7,745) (3,433) (5,125)

Effect of exchange rate changes on cash and cash equivalents 92 (40) 57

Net change in cash and cash equivalents (2,428) 3,906 673

Cash and cash equivalents at beginning of period 9,991 6,085 5,412

Cash and cash equivalents at end of period $ 7,564 $ 9,991 $ 6,085

See accompanying notes.

GILEAD SCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Business

Our portfolio of marketed products includes AmBisome®, Atripla®, Biktarvy®, Cayston®, Complera®, Descovy®, Descovy for PrEP®, Emtriva®, Epclusa®, Eviplera®, Genvoya®, Harvoni®, Hepcludex®, Hepsera®, Jyseleca®, Letairis®, Livdelzi®/Lyvdelzi®, Odefsey®, Sovaldi®, Stribild®, Sunlenca®, Tecartus®, Trodelvy®, Truvada®, Truvada for PrEP®, Tybost®, Veklury®, Vemlidy®, Viread®, Vosevi®, Yescarta®, Yeztugo®/Yeytuo® and Zydelig®. The approval status of Hepcludex and Jyseleca vary worldwide, and Hepcludex and Jyseleca are not approved in the U.S. We also sell and distribute authorized generic versions of Epclusa and Harvoni in the U.S. through our separate subsidiary, Asegua Therapeutics LLC (“Asegua”). In addition, we sell and distribute certain products through our corporate partners under collaborative agreements. See Note 2. Revenues for a summary of disaggregated revenues by product and geographic region.

We have one operating segment which primarily focuses on the discovery, development and commercialization of innovative medicines in areas of unmet medical need. See Note 16. Segment Information for further details.

Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of Gilead, our wholly-owned subsidiaries and any variable interest entities (“VIEs”) for which we are the primary beneficiary. All intercompany transactions have been eliminated. For any consolidated entities where we own or are exposed to less than 100% of the economics, we record net income or loss attributable to noncontrolling interests in our Consolidated Statements of Operations equal to the attributable economic or ownership interest retained in such entities by the respective noncontrolling parties.

When we obtain a variable interest in another entity, we assess at the inception of the relationship and upon occurrence of certain significant events whether the entity is a VIE and, if so, whether we are the primary beneficiary of the VIE based on our power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The preparation of these Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. On an ongoing basis, we evaluate our significant accounting policies and estimates. We base our estimates on historical experience and on various market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates are assessed each period and updated to reflect current information. Actual results may differ significantly from these estimates.

Beginning with this Annual Report on Form 10-K, in Note 2. Revenues, we have disclosed our revenues related to major customers as a percentage of gross product sales rather than as a percentage of Total revenues. Prior periods have been revised to reflect this change.

We have evaluated subsequent events through the report issuance date and determined that there are no further events or transactions to be disclosed other than those already disclosed elsewhere in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

Certain amounts and percentages herein may not sum or recalculate due to rounding.

Revenue Recognition

Product Sales

We recognize revenue from product sales when control of the product transfers to the customer, which is generally upon shipment or delivery, or in certain cases, upon the corresponding sales by our customer to a third party. Revenues are recognized net of estimated rebates and chargebacks, patient co-pay assistance, prompt pay discounts, distributor fees, sales return provisions and other related deductions. These deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur. Our payment terms to customers generally range from 30 to 90 days; however, payment terms differ by jurisdiction, by customer and, in some instances, by type of product. Revenues from product sales, net of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring when the uncertainty associated with gross-to-net deductions is subsequently resolved. Taxes assessed by governmental authorities and collected from customers are excluded from product sales. If we expect, at contract inception, that the period between the transfer of control and corresponding payment from the customer will be one year or less, we do not adjust the amount of consideration for the effects of a financing component. Shipping and handling activities are considered to be fulfillment activities and not a separate performance obligation.

Gross-to-Net Deductions

Rebates and Chargebacks

Rebates and chargebacks include amounts due to payers and healthcare providers under various programs based on contractual arrangements or statutory requirements, which may vary by product, payer and individual plans. Providers qualified under certain programs can purchase our products through wholesalers or other distributors at a discount. The wholesalers or distributors then charge the discount back to us.

Rebates and chargebacks are estimated primarily based on product sales, including product mix and pricing, historical and estimated payer mix and discount rates, among other inputs, which require significant estimates and judgment. We assess and update our estimates each reporting period to reflect actual claims and other current information.

Chargebacks that are payable to our direct customers are generally classified as reductions of Accounts receivable on our Consolidated Balance Sheets. Rebates that are payable to third party payers and healthcare providers are recorded in Accrued rebates on our Consolidated Balance Sheets.

Patient Co-Pay Assistance

Co-pay assistance represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance. Our accrual for co-pay is based on an estimate of claims and the cost per claim that we expect to receive associated with inventory that exists in the distribution channel at period end.

Cash Discounts

We estimate cash discounts based on contractual terms, historical customer payment patterns and our expectations regarding future customer payment patterns.

Distributor Fees

Under our inventory management agreements with our significant U.S. wholesalers, we pay the wholesalers a fee primarily for compliance with certain contractually-determined covenants such as the maintenance of agreed-upon inventory levels. These distributor fees are based on a contractually-determined fixed percentage of sales.

Allowance for Sales Returns

We typically permit returns if the product is damaged, defective, or otherwise cannot be used by the customer. In the U.S., we typically permit returns six months prior to and up to one year after the product expiration date. Outside the U.S., returns are only allowed in certain countries on a limited basis.

Our estimates of sales returns are based primarily on analysis of our historical product return patterns, industry information reporting the return rates for similar products and contractual agreement terms. We also take into consideration known or expected changes in the marketplace specific to each product.

Royalty, Contract and Other Revenues

Royalty revenue on licensed intellectual property is recognized in the period in which the obligation is satisfied and the corresponding sales by our corporate partners occur, using the sales- and usage-based royalty exception. Contract and other revenues are recognized when the performance obligation is satisfied to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring.

Research and Development Expenses

Research and development expenses are recorded when incurred and consist primarily of personnel costs including salaries, benefits and stock-based compensation expense, infrastructure, materials and supplies and other support costs, research and clinical studies performed by contract research organizations (“CROs”) and our collaboration partners and other outside services. From time to time, we enter into development and collaboration agreements in which we share expenses with a collaboration partner. We record payments received from our collaborative partners for their share of the development costs as a reduction of Research and development expenses.

Clinical study costs are a significant component of Research and development expenses. Most of our clinical studies are performed by third-party CROs. We monitor levels of performance under each significant contract including the extent of patient enrollment and other activities through communications with our CROs. We accrue costs for clinical studies performed by CROs over the service periods specified in the contracts and adjust our estimates, if required, based upon our ongoing review of the level of effort and costs actually incurred by the CROs. All of our material CRO contracts are terminable by us upon written notice and we are generally only liable for actual services completed by the CRO and certain non-cancelable expenses incurred at any point of termination. Payments we make for research and development (“R&D”) services prior to the services being rendered are recorded as prepaid assets within Prepaid and other current assets on our Consolidated Balance Sheets and are expensed as the services are provided.

Acquired In-Process Research and Development Expenses

Acquired in-process research and development expenses are recorded when incurred and reflect costs of externally-developed in-process research and development (“IPR&D”) projects, acquired directly in a transaction other than a business combination, that do not have an alternative future use, including upfront and pre-commercialization milestone payments related to various collaborations and the costs of rights to IPR&D projects.

Selling, General and Administrative Expenses

Advertising expenses within Selling, general and administrative expenses, including promotional expenses, are recorded when incurred and were $1.0 billion, $869 million and $826 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Stock-Based Compensation

We provide stock-based compensation in the form of various types of equity-based awards, including restricted stock units (“RSUs”), performance share units (“PSUs”) and stock options, and through our Employee Stock Purchase Plan and the International Employee Stock Purchase Plan (together, as amended, the “ESPP”). Stock-based compensation expense is based on the estimated fair value of the award on the grant date, or the first date of the ESPP purchase period, and recognized over the requisite service periods on our Consolidated Statements of Operations using the straight-line expense attribution approach, reduced for estimated forfeitures. We estimate forfeitures based on our historical experience. The requisite service period could be shorter than the vesting period if an employee is retirement eligible or if an employee terminates due to death or disability.

The estimated fair value of RSUs is based on the closing price of our common stock on the grant date. For PSUs, depending on the terms of the award, estimated fair value is based on either the Monte Carlo valuation methodology or the closing stock price on the grant date. For stock option and ESPP awards, estimated fair value is based on the Black-Scholes option valuation model. Estimated inputs to that model include (i) expected volatility, based on a blend of historical volatility of our common stock price along with implied volatility for traded options on our common stock, (ii) expected term in years, based on the weighted-average period awards are expected to remain outstanding using historical cancellation and exercise data, contractual terms and vesting terms of the award, (iii) risk-free interest rate, based on observed interest rates appropriate for the term of the stock-based awards, and (iv) expected dividend yield, based on our history and expectation of dividend payments.

Earnings Per Share

Basic earnings per share attributable to Gilead is calculated based on Net income attributable to Gilead on our Consolidated Statements of Operations divided by the weighted-average number of shares of our common stock outstanding during the period. Diluted earnings per share attributable to Gilead is calculated based on Net income attributable to Gilead on our Consolidated Statements of Operations divided by the weighted-average number of shares of our common stock and other dilutive securities outstanding during the period. The potentially dilutive shares of our common stock resulting from the assumed exercise of outstanding stock options and equivalents are determined under the treasury stock method.

Cash and Cash Equivalents

We consider highly liquid investments with insignificant interest rate risk and an original maturity of three months or less on the purchase date to be cash equivalents.

Marketable Debt Securities

All of our marketable debt securities are classified as available-for-sale and recorded at fair value. We determine the appropriate classification of our marketable debt securities at the time of purchase and reevaluate such designation at each balance sheet date. We regularly review our investments for declines in fair value below their amortized cost basis to determine whether the impairment is due to credit-related factors or noncredit-related factors. Our review includes the creditworthiness of the security issuers, the severity of the unrealized losses, whether we have the intent to sell the securities and whether it is more likely than not that we will be required to sell the securities before the recovery of their amortized cost bases. When we determine that a portion of the unrealized loss is due to an expected credit loss, we recognize the loss amount in Other (income) expense, net, with a corresponding allowance against the carrying value of the security we hold. The portion of any unrealized loss related to factors other than credit losses, as well as any unrealized gains, are recognized in Accumulated other comprehensive income on our Consolidated Balance Sheets until realized, at which point they are reclassified into Other (income) expense, net on our Consolidated Statements of Operations. Interest and amortization of purchase premiums and discounts are also recorded in Other (income) expense, net on our Consolidated Statements of Operations. The cost of securities sold and the related tax impact is based on the specific identification method.

Accounts Receivable

Trade accounts receivable are recorded net of allowances for wholesaler chargebacks related to government and other programs, cash discounts for prompt payment and estimated credit losses. Estimates of our allowance for credit losses consider a number of factors, including existing contractual payment terms, individual customer circumstances, historical payment patterns of our customers, a review of the local economic environment and its potential impact on expected future customer payment patterns and government funding and reimbursement practices.

Inventories

Inventories are recorded at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We periodically review our inventories to identify obsolete, slow-moving, excess or otherwise unsaleable items. If obsolete, slow-moving, excess or unsaleable items are observed and there are no alternate uses for the inventory, we record a write-down to net realizable value through a charge to Cost of goods sold on our Consolidated Statements of Operations. The determination of net realizable value requires judgment, including consideration of many factors, such as estimates of future product demand, product net selling prices, current and future market conditions and potential product obsolescence, among others. Inventories that are not expected to be sold within 12 months are classified in Other long-term assets on our Consolidated Balance Sheets.

When future commercialization of a product is considered probable and the future economic benefit is expected to be realized, based on management’s judgment, we capitalize pre-launch inventory costs prior to regulatory approval. A number of factors are considered, including the current status in the regulatory approval process, potential impediments to the approval process such as safety or efficacy, anticipated R&D initiatives that could impact the indication in which the compound will be used, viability of commercialization and marketplace trends.

EquitySecurities

Equity securities with readily determinable fair values, including those for which we have elected the fair value option, are recorded at fair market value, and unrealized and realized gains and losses are included in Other (income) expense, net on our Consolidated Statements of Operations.

Equity securities without readily determinable fair values are recorded using the measurement alternative of cost less impairment, if any, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. Any impairments or adjustments are recorded in Other (income) expense, net on our Consolidated Statements of Operations.

For investments in entities over which we have significant influence but do not meet the requirements for consolidation and have not elected the fair value option, we use the equity method of accounting, with our share of the underlying income or loss of such entities reported in Other (income) expense, net on our Consolidated Statements of Operations.

Our investments in equity securities are classified in Prepaid and other current assets or Other long-term assets on our Consolidated Balance Sheets, generally depending on marketability and whether the securities are subject to lock-up provisions. We regularly review our securities for indicators of impairment.

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized using the straight-line method. Repairs and maintenance costs are expensed as incurred. Estimated useful lives in years are generally as follows:

Description Estimated Useful Life

Buildings and improvements Up to 45

Leasehold improvements Lease term or shorter

Laboratory and manufacturing equipment 4-10

Internal-use software 3-9

See “Impairment of Long-Lived Assets” for additional information.

Leases

We determine if an arrangement contains a lease at inception and classify each lease as operating or financing. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term, which is the non-cancelable period stated in the contract adjusted for any options to extend or terminate when it is reasonably certain that we will exercise that option. Right-of-use assets are adjusted for prepaid lease payments, lease incentives and initial direct costs incurred. Operating lease expense for the minimum lease payments is recognized on a straight-line basis over the lease term.

We account for lease and nonlease components in our lease agreements as a single lease component in determining lease assets and liabilities. In addition, we do not recognize the right-of-use assets and liabilities for leases with lease terms of one year or less.

As most of our operating leases do not provide an implicit interest rate, we generally utilize a collateralized incremental borrowing rate, applied in a portfolio approach when relevant, based on the information available at the commencement date to determine the lease liability.

Acquisitions, including Goodwill, Intangible Assets and Contingent Consideration

We account for business combinations using the acquisition method of accounting, which generally requires that assets acquired, including IPR&D projects, and liabilities assumed be recorded at their fair values as of the acquisition date on our Consolidated Balance Sheets. Any excess of consideration over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires us to make significant estimates and assumptions. As a result, we may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period, which may be up to one year from the acquisition date, with the corresponding offset to goodwill. Transaction costs associated with business combinations are expensed as they are incurred.

Intangible assets related to IPR&D projects are considered to be indefinite-lived until the abandonment or completion of the associated R&D efforts, which generally occurs when regulatory approval is obtained. Goodwill and indefinite-lived intangible assets are not amortized and, instead, are tested for impairment annually or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired.

Intangible assets with finite useful lives are amortized over their estimated useful lives, primarily on a straight-line basis, and are also periodically reviewed for changes in facts or circumstances resulting in a reduction to the estimated useful life of the asset, requiring the acceleration of amortization. See “Impairment of Long-Lived Assets” for additional information.

In determining the initial fair value of an intangible asset, or when quantitative analysis is required to determine any impairment, we use a probability-weighted income approach that discounts expected future cash flows to present value using a discount rate that is based on the estimated weighted-average cost of capital for companies with profiles similar to ours and represents the rate that market participants would use to value the intangible assets. These cash flow models require the use of Level 3 fair value measurements and inputs, including estimated revenues, which, for example, include significant inputs such as addressable patient population, treatment duration, projected market share, assessment of the asset’s life cycle, and competitive trends impacting the asset; costs and probability of technical and regulatory success, among other factors.

In connection with certain acquisitions, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. We record contingent consideration resulting from a business combination at its fair value on the acquisition date. Each reporting period thereafter, we revalue these obligations and record increases or decreases in their fair value on our Consolidated Statements of Operations until such time that the payment is made. Increases or decreases in fair value of the contingent consideration liabilities can result from updates to assumptions such as the expected timing or probability of achieving the specified milestones, changes in projected revenues or changes in discount rates.

When we determine net assets acquired do not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and, therefore, no goodwill is recorded and contingent consideration generally is not recognized at the acquisition date. In an asset acquisition, upfront payments allocated to IPR&D projects at the acquisition date and subsequent pre-commercialization milestone payments are expensed as incurred on our Consolidated Statements of Operations unless there is an alternative future use.

Impairment of Long-Lived Assets

Long-lived assets, including property, plant and equipment and finite-lived intangible assets, are reviewed for impairment whenever facts or circumstances either internally or externally may indicate that the carrying value of an asset may not be recoverable. Should there be an indication of impairment, we test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset over its useful life to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.

Derivatives

We recognize all derivative instruments as either assets or liabilities at fair value on our Consolidated Balance Sheets. Unrealized changes in the fair value of derivatives designated as part of a hedge transaction related to forecasted product sales, net of the related tax impact, are recorded in Accumulated other comprehensive income. The unrealized gains or losses in Accumulated other comprehensive income are reclassified into Product sales, as well as the related tax impact into Income tax (benefit) expense, on our Consolidated Statements of Operations when the respective hedged transactions affect earnings. Changes in the fair value of derivatives that are not part of a hedge transaction are recorded each period in Other (income) expense, net on our Consolidated Statements of Operations.

Using regression analysis, we assess, both at inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are effective in offsetting the changes in cash flows or fair values of the hedged items. If we determine that a forecasted transaction is probable of not occurring, we discontinue hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the contract is recognized in Other (income) expense, net on our Consolidated Statements of Operations.

Contingencies

We recognize accruals for loss contingencies to the extent that we conclude that a loss is both probable and reasonably estimable. We accrue the best estimate of loss within a range; however, if no estimate in the range is better than any other, then we accrue the minimum amount in the range. If we determine that a material loss is reasonably possible, we disclose the possible loss or range of loss, or that the amount of loss cannot be estimated at this time.

Income Taxes

Our income tax provision is computed under the liability method. Significant estimates are required in determining our provision for income taxes. Some of these estimates are based on interpretations of applicable tax laws or regulations.

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance to reduce our deferred tax assets to the amounts that are more likely than not to be realized. We consider future taxable income, ongoing tax planning strategies and our historical financial performance in assessing the need for a valuation allowance. If we expect to realize deferred tax assets for which we have previously recorded a valuation allowance, we will reduce the valuation allowance in the period in which such determination is first made.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by tax authorities based on the technical merits of the position. The tax benefit recognized in the Consolidated Financial Statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. The amount of unrecognized tax benefits is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by tax authorities, new information obtained during a tax examination or resolution of an examination. We recognize both accrued interest and penalties, where appropriate, related to unrecognized tax benefits in Income tax expense on our Consolidated Statements of Operations.

We have elected to account for the tax on Global Intangible Low-Taxed Income as a component of tax expense in the period in which the tax is incurred.

Stock Repurchases

We use the par value method of accounting for our stock repurchases made under repurchase programs. Under the par value method, we record the par value of the shares repurchased to Common stock and the historical issuance cost over par value of the shares repurchased to Additional paid-in capital. The excess of the cost of the shares repurchased over these two amounts is then recorded to Retained earnings.

Foreign Currency Translation and Transactions

Our Consolidated Financial Statements are presented in U.S. dollars. The functional currency for most of our foreign subsidiaries is their local currency. Revenues, expenses, gains and losses for non-U.S. dollar functional currency entities are translated into U.S. dollars using average currency exchange rates for the period. Assets and liabilities for such entities are translated using exchange rates that approximate the rate at the balance sheet date. Foreign currency translation adjustments are recorded as a component of Accumulated other comprehensive income on our Consolidated Balance Sheets. Foreign currency transaction gains and losses on transactions not denominated in functional currency are recorded in Other (income) expense, net, on our Consolidated Statements of Operations.

Fair Value Measurements

We apply fair value accounting for all financial and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risks.

We determine the fair value using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows:

•Level 1 inputs include quoted prices in active markets for identical assets or liabilities;

•Level 2 inputs include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and

•Level 3 inputs include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Our Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques and significant management judgment or estimation.

Recently Adopted Accounting Pronouncements

In December 2023, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires incremental annual disclosures around income tax rate reconciliations, income taxes paid and other related disclosures. Beginning with this Annual Report on Form 10-K, we adopted this standard using a retrospective approach, resulting in increased disclosures in our Notes to Consolidated Financial Statements. See Note 15. Income Taxes for additional information.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, FASB issued ASU No. 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses, and can be applied prospectively or retrospectively. We plan to adopt this guidance beginning with our 2027 annual report to be filed in early 2028 and all quarterly and annual reports thereafter. We expect the adoption of this standard to result in increased disclosures in our Notes to Consolidated Financial Statements.

2. REVENUES

Disaggregation of Revenues

The following table summarizes our Total revenues:

Product sales:

HIV

Liver Disease

Oncology

Cell Therapy

Other

_______________________________

(1) Represents our revenue from cobicistat (“C”), emtricitabine (“FTC”) and tenofovir alafenamide (“TAF”) in Symtuza (darunavir/C/FTC/TAF), a fixed dose combination product commercialized by Janssen Sciences Ireland Unlimited Company (“Janssen”). See Note 7. Collaborations and Other Arrangements for additional information.

(2) Includes Atripla, Complera/Eviplera, Emtriva, Stribild, Sunlenca, Truvada, Tybost and Yeztugo/Yeytuo.

(3) Includes Epclusa and the authorized generic version of Epclusa sold by Gilead’s separate subsidiary, Asegua.

(4) Includes ledipasvir/sofosbuvir (Harvoni and the authorized generic version of Harvoni sold by Asegua), Hepcludex, Hepsera, Livdelzi/Lyvdelzi, Sovaldi, Viread and Vosevi.

(5) Includes Cayston, Jyseleca, Letairis and Zydelig.

(6) All individual international locations accounted for less than 10% of Total revenues.

Revenues from Major Customers

The following table summarizes the revenues from each of our customers who individually accounted for 10% or more of our total gross product sales:

Year Ended December 31,

(as a percentage of total gross product sales) 2025 2024 2023

Cardinal Health, Inc. (“Cardinal Health”) 29 % 29 % 28 %

Cencora, Inc. (“Cencora”) 21 % 21 % 22 %

McKesson Corporation (“McKesson”) 24 % 23 % 24 %

Revenues Recognized from Performance Obligations Satisfied in Prior Years

The following table summarizes revenues recognized from performance obligations satisfied in prior years:

Year Ended December 31,

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(1) See Note 7. Collaborations and Other Arrangements for additional information.

(2) Changes in estimates increased during the year ended December 31, 2025 primarily due to recognition of $400 million in the third quarter of previously constrained revenues from the sale of certain intellectual property.

Contract Balances

The following table summarizes our contract balances:

December 31,

Contract liabilities(2) $ 48 $ 58

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(1) The increase in contract assets during the year ended December 31, 2025 primarily related to recognition of $400 million in the third quarter of previously constrained revenues from the sale of certain intellectual property.

(2) Future revenues recognized from contract liabilities are not expected to be material in any one year.

3.FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following table summarizes the types of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy:

(in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Assets:

Available-for-sale debt securities:

U.S. treasury securities $ 1,224 $ — $ — $ 1,224 $ — $ — $ — $ —

U.S. government agencies securities — 15 — 15 — — — —

Corporate debt securities — 1,398 — 1,398 — — — —

Residential mortgage and asset-backed securities — 407 — 407 — — — —

Equity securities:

Foreign currency derivative contracts — 56 — 56 — 128 — 128

Liabilities:

Contingent consideration liability $ — $ — $ 278 $ 278 $ — $ — $ 206 $ 206

Foreign currency derivative contracts — 72 — 72 — 3 — 3

Level 2 Inputs

Available-for-Sale Debt Securities

For our available-for-sale debt securities, we estimate the fair values by reviewing trading activity and pricing as of the measurement date and by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income-based and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate the fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.

Foreign Currency Derivative Contracts

Our foreign currency derivative contracts have maturities of 18 months or less and all are with counterparties that have a minimum credit rating of A- or equivalent by S&P Global Ratings, Moody’s Investors Service, Inc. or Fitch Ratings, Inc. We estimate the fair values of these contracts by utilizing an income-based industry standard valuation model for which all significant inputs are observable, either directly or indirectly. These inputs include foreign currency exchange rates, Secured Overnight Financing Rate (“SOFR”) and swap rates. These inputs, where applicable, are observable at commonly quoted intervals.

Level 3 Inputs

Contingent Consideration Liability

In connection with our first quarter 2021 acquisition of MYR GmbH, we are subject to a potential contingent consideration payment of up to €300 million, subject to customary adjustments, which is revalued each reporting period using probability-weighted scenarios for U.S. Food and Drug Administration (“FDA”) approval of bulevirtide until the related contingency is resolved.

The following table summarizes the change in fair value of our contingent consideration liability:

Year Ended December 31,

Changes in valuation assumptions(1) 43 (7) (60)

Effect of foreign exchange remeasurement(2) 29 (14) 12

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(1) Included in Research and development expenses on our Consolidated Statements of Operations. The changes in 2025 primarily related to changes in assumptions around probability. The changes in 2023 primarily related to changes in assumptions around probability and timing of regulatory approval.

(2) Included in Other (income) expense, net on our Consolidated Statements of Operations.

(3) Included in Other current liabilities as of December 31, 2025 and in Other long-term liabilities as of December 31, 2024 and 2023on our Consolidated Balance Sheets, respectively.

Fair Value Level Transfers

There were no transfers between Level 1, Level 2 and Level 3 in the periods presented.

Nonrecurring Fair Value Measurements

In 2025, 2024 and 2023, we recorded partial impairment charges of $590 million, $4.2 billion and $50 million, respectively, related to certain acquired IPR&D assets. See Note 8. Goodwill and Intangible Assets for additional information.

In 2023, we recorded a $51 million write-off of our finite-lived intangible asset related to filgotinib as discussed in Note 8. Goodwill and Intangible Assets, as well as a $381 million write-off of manufacturing assets related to changes in our manufacturing strategy as discussed in Note 9. Other Financial Information. Both charges were recorded within Cost of goods sold on our Consolidated Statements of Operations.

Other Fair Value Disclosures

Senior Unsecured Notes

The following table summarizes the total estimated fair value and carrying value of our senior unsecured notes, determined using Level 2 inputs based on their quoted market values:

December 31,

Liability Related to Future Royalties

We recorded a liability related to future royalties as part of our 2020 acquisition of Immunomedics, Inc. (“Immunomedics”), which is subsequently amortized using the effective interest method over the remaining estimated life. The fair value of the liability related to future royalties, determined using Level 3 inputs, was approximately $0.8 billion and $0.9 billion as of December 31, 2025 and 2024, respectively, and the carrying value was $1.1 billion as of December 31, 2025 and 2024. See Note 10. Debt and Credit Facilities for additional information.

4. AVAILABLE-FOR-SALE DEBT SECURITIES AND EQUITY SECURITIES

Available-for-Sale Debt Securities

The following table summarizes our available-for-sale debt securities:

U.S. treasury securities $ 1,222 $ 3 $ — $ 1,224

U.S. government agencies securities 15 — — 15

Residential mortgage and asset-backed securities 405 2 — 407

There were no available-for-sale debt securities balances as of December 31, 2024.

The total gross unrealized losses in the table above relate to available-for-sale debt securities, primarily corporate debt securities and U.S. treasury securities, with an estimated fair value of approximately $724 million that have been in a continuous unrealized loss position for less than 12 months as of December 31, 2025. No allowance for credit losses was recognized for investments with unrealized losses as of December 31, 2025 as the unrealized losses were primarily driven by broader change in interest rates with no adverse conditions identified that would prevent the issuer from making scheduled principal and interest payments. We do not currently intend to sell, and it is not more likely than not that we will be required to sell, such investments before recovery of their amortized cost bases.

The following table summarizes the classification of our available-for-sale debt securities on our Consolidated Balance Sheets:

GILD US Equity

GILD · 10-K · period ended 2025-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GILD US Equity☆

GILD · 10-K · period ended 2025-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GILD US Equity