Segment and other information
We operate our business in one operating segment, which also represents one reportable segment: human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting.
The human therapeutics segment is engaged in the discovery, development, manufacturing and delivery of innovative medicines to fight some of the world’s toughest diseases. The Company’s Chief Executive Officer has been identified as the chief operating decision maker (CODM). The CODM manages and allocates resources on a consolidated basis. The determination of a single segment is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating performance and allocating resources, which is reviewed on a consolidated basis.
As the Company’s CODM evaluates the financial performance of the Company’s human therapeutics segment on a consolidated basis, the measure of segment performance is net income, as reflected in the Consolidated Statements of Income. The CODM uses net income to allocate resources on a consolidated basis, which enables the CODM to assess both the overall level of resources available and optimize distribution of resources across functions, therapeutic areas, regions and R&D programs in line with our long-term corporate-wide strategic goals. In addition, the CODM may also evaluate financial performance based on net income adjusted for certain items that are unusual and non-recurring. As the Company manages its assets on a consolidated basis, the measure of segment assets is total assets, as reflected in the Consolidated Balance Sheets. See Note 10, Investments, for further information regarding equity method investments, and Net cash used in investing activities in the Consolidated Statements of Cash Flows for further information regarding capital expenditures.
The following table provides segment revenues, significant segment expenses, other segment items and reported segment net income for the Company’s one reportable segment, as well as a reconciliation of segment net income to the Company’s total consolidated net income for the years ended December 31, 2025, 2024 and 2023 (in millions):
| | | | | | | | | | | | | | | | | | | | |
| | Years ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Revenues: | | | | | | |
| Product sales | | $ | 35,148 | | | $ | 32,026 | | | $ | 26,910 | |
| Other revenues | | 1,603 | | | 1,398 | | | 1,280 | |
| Total revenues | | 36,751 | | | 33,424 | | | 28,190 | |
| | | | | | |
| Less: | | | | | | |
Manufacturing cost of sales(1)(2) | | 9,845 | | | 11,118 | | | 7,347 | |
Profit share and royalties in cost of sales(1) | | 2,192 | | | 1,740 | | | 1,104 | |
Research and development(1) | | 7,272 | | | 5,964 | | | 4,784 | |
Sales and marketing(1) | | 4,590 | | | 4,713 | | | 3,784 | |
General and administrative(1) | | 2,460 | | | 2,383 | | | 2,395 | |
Other segment items(3) | | (931) | | | 252 | | | (729) | |
| | | | | | |
Interest income | | (408) | | | (510) | | | (1,225) | |
| Interest expense, net | | 2,755 | | | 3,155 | | | 2,875 | |
Provision for income taxes | | 1,265 | | | 519 | | | 1,138 | |
| Segment net income | | 7,711 | | | 4,090 | | | 6,717 | |
Reconciliation of profit or loss: | | | | | | |
| Adjustments and reconciling items | | — | | | — | | | — | |
| Consolidated net income | | $ | 7,711 | | | $ | 4,090 | | | $ | 6,717 | |
____________
(1) During the years ended December 31, 2025, 2024 and 2023, we recognized amortization expense on our intangible assets of $4.3 billion, $4.8 billion and $3.2 billion, respectively. Amortization of intangible assets is primarily included in Cost of sales in the Consolidated Statements of Income. In addition, during the years ended December 31, 2025, 2024 and 2023, we recognized depreciation and ROU asset amortization expense of $887 million, $805 million and $824 million, respectively.
(2) During the years ended December 31, 2025, 2024 and 2023, manufacturing cost of sales included amortization of step-up to fair value of inventory acquired in business combinations of $1.3 billion, $2.4 billion and $656 million, respectively.
(3) Other segment items included in Segment net income primarily consists of: (i) fair value adjustments on equity securities (see Note 10, Investments); (ii) net impairment charges on intangible assets (see Note 13, Goodwill and other intangible assets); and (iii) expenses related to restructuring and cost-savings initiatives.