Risk Factors Update Summary
- Keytruda and Gardasil/Gardasil 9 represented 56% of total sales in 2023.
- Sales of Bravecto decreased from $1.0 billion to $1.1 billion in 2023.
- Market exclusivity for Bridion lost in Japan in 2024 and U.S. in 2026.
- The Company faces risks from climate change, including extreme weather conditions and rising sea levels.
- The Company faces risks from cyber-attacks, AI system flaws, and unauthorized technology usage.
- Changes in government laws and regulations could impact FDA approval processes and foreign regulatory authorities.
- The Company's success is impacted by ESG reporting requirements and shareholder reactions.
Full Text Changes in Most Recent 10-K
Intended use: review the highlighted statements. These are additions to the risk factors disclosure in the most recent 10-K filing compared to the previous 10-K filing. Deleted and moved text is less important and is shown for context.
To view the full company filings, click on the following link to be taken to the SEC EDGAR database landing page for the company: https://www.sec.gov/edgar/browse/?CIK=310158&owner=exclude
Days Sales Outstanding (DSO) (hover/click for more information)
**Click to collapse**
Days Sales Outstanding, commonly known as DSO, is a measure of the average number of days that a company takes to collect payment after a sale has been made. It's a financial indicator that illustrates how well a company manages its accounts receivables and how efficiently it collects cash from customers.
DSO is calculated by dividing the total accounts receivable during a certain period by the total net credit sales for the same period, and then multiplying the result by the number of days in the period. A low DSO value means that it takes a company fewer days to collect its accounts receivable, which is generally positive as it could mean a healthier cash flow. A high DSO number shows that a company is selling its product to customers on credit and taking longer to collect payment, which could be a sign of cash flow problems. An increasing DSO could indicate several issues requiring further investigation.
However, DSO can be influenced by a company's industry and business practices. For instance, if a company operates in an industry where long payment terms are the norm, it may have a high DSO. In some cases, companies may have a high DSO because they are extending more credit to their customers to boost sales. Therefore, it's crucial to compare DSO with competitors in the same industry.
Selling accounts receivable will artificially lower DSO. We provide the DSO and Adjusted DSO data below to give a clearer picture of the company's financial health. Keep in mind that this is only one aspect of an entire financial analysis and should not be used in isolation when making investment decisions.
- Red: The most recent DSO has been adjusted for selling accounts receivable and is more than 10% higher than the previous DSO.
- Light Red: The most recent DSO is adjusted for selling accounts receivable, or more than 10% higher than the previous 3-period average DSO.
- Yellow: The most recent DSO is more than 5% higher than the previous DSO.
- Green: No alarms were triggered for the company.
DSO Data
***This tool is in beta mode and data validation is still in progress.***
| Item (Click to expand row) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|
| Revenues ($ millions) | 42,294 | 39,121 | 41,518 | 48,704 | 59,283 | 60,115 |
| Accounts Receivable ($ millions) | 7,071 | 6,778 | 6,803 | 9,230 | 9,450 | 10,349 |
| DSO | 61.0 | 63.2 | 60.0 | 69.2 | 58.2 | 62.8 |
| Accounts Receivable Sold ($ millions) | 1,100 | 2,700 | 2,300 | 2,800 | 2,500 | 3,000 |
| Adjusted Accounts Receivable ($ millions) | 8,171 | 9,478 | 9,103 | 12,030 | 11,950 | 13,349 |
| Adjusted DSO | 70.7 | 88.7 | 80.2 | 90.4 | 73.8 | 81.3 |
Text from Filings Related to Selling Accounts Receivable
2024-02-26
The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable. The Company factored $ 3.0 billion and $ 2.5 billion of accounts receivable as of December 31, 2023 and 2022, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions, generally within thirty days after receipt. At December 31, 2023 and 2022, the Company had collected $ 44 million and $ 67 million, respectively, on behalf of the financial institutions, which is reflected as restricted cash in Other current assets and the related obligation to remit the cash within Accrued and other current liabilities . The net cash flows related to these collections are reported as financing activities in the Consolidated Statement of Cash Flows. The cost of factoring such accounts receivable was
2023-02-24
The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable. The Company factored $ 2.5 billion and $ 2.8 billion of accounts receivable as of December 31, 2022 and 2021, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions. At December 31, 2022 and 2021, the Company had collected $ 67 million and $ 62 million, respectively, on behalf of the financial institutions, which is reflected as restricted cash in Other current assets and the related obligation to remit the cash within Accrued and other current liabilities . The Company remitted the cash to the financial institutions in January 2023 and 2022, respectively. The net cash flows related to these collections are reported as financing activities in
2022-02-25
The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable. The Company factored $ 2.8 billion and $ 2.1 billion of accounts receivable as of December 31, 2021 and 2020, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions. At December 31, 2021 and 2020, the Company had collected $ 62 million and $ 102 million,
2021-02-25
The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable (see Note 6 to the consolidated financial statements). The Company factored $2.3 billion and $2.7 billion of accounts receivable in the fourth quarter of 2020 and 2019, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions. At December 31, 2020 and 2019 the Company had collected $102 million and $256 million, respectively, on behalf of the financial institutions, which was remitted to them in January 2021 and 2020, respectively. The net cash flows from these collections are reported as financing activities in the Consolidated Statement of Cash Flows.
The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable. The Company factored $ 2.3 billion and $ 2.7 billion of accounts receivable in the fourth quarter of 2020 and 2019, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the
Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions. At December 31, 2020 and 2019, the Company had collected $ 102 million and $ 256 million, respectively, on behalf of the financial institutions, which is reflected as restricted cash in Other current assets and the related obligation to remit the cash within Accrued and other current liabilities . The Company remitted the cash to the financial institutions in January 2021 and 2020, respectively. The net cash flows relating to these collections are reported as financing activities in
2020-02-26
The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable (see Note 6 to the consolidated financial statements). The Company factored $2.7 billion and $1.1 billion of accounts receivable in the fourth quarter of 2019 and 2018 , respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Consolidated Statement of Cash Flows.
, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions. At December 31, 2019 , the Company had collected $256 million on behalf of the financial institutions, which was remitted to them in January 2020. The net cash flows from these collections are reported
, respectively, under these factoring arrangements, which reduced outstanding accounts receivable. The cash received from the financial institutions is reported within operating activities in the Consolidated Statement of Cash Flows. In certain of these factoring arrangements, for ease of administration, the Company will collect customer payments related to the factored receivables, which it then remits to the financial institutions. At December 31, 2019 , the Company had collected $ 256 million on behalf of the financial institutions, which is reflected as restricted cash in
Free Cash Flow (FCF, gray bars), Net Income (blue line) and Adjusted Free Cash Flow are used to validate reported financial performance. Adjusted Free Cash Flow provides a more accurate measure of cash generated from normal operating activities.
- Dotted line indicates the beginning of sales of Accounts Receivable included in FCF adjustment. Selling Receivables data is only pulled for the past 6 years. If the red dotted line appears on todays date (right end of the graph) that indicates that we did not find sales of accounts receivable for the company.
- Cash generated from selling accounts receivable is subtracted from Free Cash Flow. See "DSO" tab for data.
- Stock-Based Compensation, if paired with Share Buybacks, is removed from Free Cash Flow. GAAP treats such transactions as financing expenses. Adjusted Free Cash Flow effectively treats this as a normal operating use of cash for employee compensation. The adjustment is the minimum of Stock-Based Compensation and Share Buybacks
- Gross capex (rather than net capex) is used to exclude one time items that would reduce capex and increase fcf. For companies with regular asset sales, net capex should be evaluated.
Click any value in the table below to view the endpoint the company used to report each data point. We aim to flag year-to-year changes that could indicate more or less aggressive accounting practices. Clicking the row label in the "Item" column will expand the entire row.
Net Income and Adjusted Free Cash Flow Data
| Item (Click to expand row) | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Income ($ millions) | 3,275 | 7,808 | 12,899 | 861 | 6,272 | 6,168 | 4,404 | 11,920 | 4,442 | 3,920 | 2,394 | 6,220 | 9,843 | 7,067 | 13,049 | 14,519 | 365 |
| Cash Flow from Operations ($ millions) | 6,999 | 6,572 | 3,392 | 10,822 | 12,383 | 10,022 | 11,654 | 7,989 | 12,538 | 10,376 | 6,451 | 10,922 | 13,440 | 10,253 | 13,122 | 19,095 | 13,006 |
| Capital Expenditures ($ millions) | 1,011 | 1,298 | 1,461 | 1,678 | 1,723 | 1,954 | 1,548 | 1,317 | 1,283 | 1,614 | 1,888 | 2,615 | 3,369 | 4,429 | 4,448 | 4,388 | 3,863 |
| Free Cash Flow ($ millions) | 5,988 | 5,274 | 1,931 | 9,144 | 10,660 | 8,068 | 10,106 | 6,672 | 11,255 | 8,762 | 4,563 | 8,307 | 10,071 | 5,824 | 8,674 | 14,707 | 9,143 |
| Stock-Based Compensation ($ millions) | 330 | 348 | 415 | 509 | 369 | 335 | 276 | 278 | 299 | 300 | 312 | 348 | 388 | 441 | 479 | 541 | 645 |
| Total Buybacks ($ millions) | 1,430 | 2,725 | N/A | 1,665 | 1,921 | 2,591 | 6,516 | 7,703 | 4,186 | 3,434 | 4,014 | 9,091 | 4,780 | 1,281 | 840 | N/A | 1,346 |
| Accounts Receivable Sold ($millions) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 1,100 | 2,700 | 2,300 | 2,800 | 2,500 | 3,000 |
| Adjusted Free Cash Flow ($ millions) | 5,658 | 4,926 | 1,931 | 8,635 | 10,291 | 7,733 | 9,830 | 6,394 | 10,956 | 8,462 | 4,251 | 6,859 | 8,083 | 5,783 | 7,695 | 15,007 | 7,998 |