Financial Data and Key Metrics Changes - The company reported revenue of $3.6 million for Q1 2025, representing a 91.7% sequential increase compared to Q4 2024, exceeding the previously guided growth of 50% [14] - Gross margins improved to 14.9%, an increase of 961 basis points year-over-year, primarily due to better manufacturing efficiency [15] - Operating expenses decreased by 21% year-over-year, reflecting reductions in selling, general and administrative expenses, including salaries and professional fees [15] - The adjusted net loss averaged $333,000 per month in Q1 2025, a 17% improvement over the previously guided adjusted net loss expectations of $400,000 [16] Business Line Data and Key Metrics Changes - The company shipped 24 units in Q1 2025, a sequential increase of 118% compared to Q4 2024 [14] - The average sale price per unit decreased to $151,000 in Q1 2025 from $171,000 in Q4 2024 due to a higher mix of smaller boats [15] - Field inventory decreased significantly from approximately 180 boats to under 60 boats, indicating improved sales and inventory management [7][9] Market Data and Key Metrics Changes - The company noted that the recreational sector faced challenges in 2024, but this provided an opportunity to reset and refocus for future growth [5] - The dealer network expanded with the addition of six new dealer locations, enhancing market presence [6] Company Strategy and Development Direction - The company is focused on operational efficiency, margin expansion, and developing high-impact digital platforms to complement its core business [19] - A new 22-foot twin D Bay Cat model was introduced, targeting the growing inshore market, which is expected to generate strong interest [10] - The company completed a facility expansion of 30,000 square feet to enhance operational efficiency [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued sequential revenue growth in Q2 2025 as the market recovers and the dealer base expands [19] - The company is actively monitoring the impact of tariffs on its supply chain but believes its proactive strategy will help navigate potential challenges [18] Other Important Information - The company reclassified $4.3 million of land and buildings as held for sale, which is expected to strengthen its cash position within the next twelve months [17] - A new interactive website is set to launch, enhancing customer engagement and allowing for real-time customization of products [12] Q&A Session Summary Question: What is the outlook for revenue growth in the upcoming quarters? - Management anticipates continued sequential revenue growth in Q2 2025 as the market slowly recovers and the dealer base expands [19] Question: How is the company addressing the impact of tariffs? - The company is actively monitoring the evolving tariff landscape and believes its strong relationships with US suppliers will help mitigate risks [18]

Financial Data and Key Metrics Changes - The company reported total revenues of $15.5 billion, reflecting a decrease of 2% year-over-year, or an increase of 1% when excluding foreign exchange impacts [23][12] - Earnings per share (EPS) were reported at $2.22, with a gross margin of 82.2%, an increase of one percentage point due to a favorable product mix [35][34] - The company maintained its full-year revenue guidance of between $64.1 billion and $65.6 billion, representing growth of 1% to 3% excluding foreign exchange impacts [35][36] Business Line Data and Key Metrics Changes - In oncology, sales of Keytruda grew 6% to $7.2 billion, driven by increased uptake in earlier-stage cancers and robust demand for metastatic indications [25] - GARDASIL sales decreased by 40% to $1.3 billion, primarily due to reduced demand in China, while global growth excluding China was strong at 16% [27] - The animal health business saw sales increase by 10%, reflecting higher demand across all species and contributions from the Aqua portfolio acquired from Elanco [32] Market Data and Key Metrics Changes - The decline in GARDASIL sales in China was approximately $1.1 billion, which reduced growth excluding foreign exchange by seven percentage points [24] - Outside of the US and China, GARDASIL experienced strong demand, particularly from a catch-up cohort in Japan [27] - The company noted that the ongoing launch of WinRevair generated global sales of $280 million, with significant uptake in both the US and international markets [30] Company Strategy and Development Direction - The company is focused on balancing its manufacturing footprint and has invested $12 billion in US manufacturing since 2018, with an additional commitment of over $9 billion through 2028 [11][10] - The strategic direction emphasizes the advancement of a robust pipeline, with over 20 promising new products expected to launch in the coming years, potentially generating over $50 billion in commercial opportunities by the mid-2030s [16][19] - The company is committed to maintaining its dividend and prioritizing investments in business development to drive growth and returns for shareholders [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current dynamic global environment and emphasized the importance of innovation in addressing health challenges [10][20] - The management team highlighted the ongoing efforts to mitigate potential impacts from tariffs and emphasized a strong inventory position to manage short-term challenges [13][75] - The company remains optimistic about its long-term growth prospects, particularly in light of its expanding late-phase pipeline and the potential for new product launches [18][19] Other Important Information - The company is actively evaluating opportunities for science-driven business development transactions, despite the complexities introduced by the current macroeconomic environment [92][94] - Management acknowledged the disconnect between market realities and seller expectations in the current business development landscape [94] - The company is open to working with the administration on pricing reforms to address the price differentials between the US and international markets [96][100] Q&A Session Summary Question: Can you discuss Merck's mitigating strategies regarding tariffs? - Management highlighted ongoing changes to the supply chain strategy and investments in US manufacturing to mitigate tariff impacts, with a focus on optimizing supply chain operations [70][72] Question: What is the long-term guidance for KEYTRUDA given patent expiry concerns? - Management emphasized confidence in the long-term pipeline, with over 20 new products expected to launch, which could offset concerns related to KEYTRUDA's patent expiry [78][80] Question: Can you comment on the FDA's recent changes and their impact on vaccines? - Management noted that while there are active dialogues with the FDA regarding imminent PDUFA dates, the long-term impact of personnel transitions remains uncertain [85][86] Question: What is the environment for business development given macro volatility? - Management confirmed that the focus on business development remains unchanged, although the current environment presents complexities in executing deals [92][94] Question: What are the prospects for GARDASIL growth and pricing adjustments? - Management indicated that while GARDASIL growth is expected to slow, particularly in China, they remain committed to ensuring the vaccine's value is understood in pricing discussions [132][130]

Financial Data and Key Metrics Changes - The company reported total revenues of $15.5 billion, reflecting a decrease of 2% year-over-year, or an increase of 1% when excluding foreign exchange impacts [23][12] - Earnings per share (EPS) were reported at $2.22, with a gross margin of 82.2%, an increase of one percentage point due to a favorable product mix [35][34] - The company maintained its full-year revenue guidance of between $64.1 billion and $65.6 billion, representing growth of 1% to 3% excluding foreign exchange impacts [36][35] Business Line Data and Key Metrics Changes - In oncology, sales of Keytruda grew 6% to $7.2 billion, driven by increased uptake in earlier-stage cancers and robust demand for metastatic indications [25] - GARDASIL sales decreased by 40% to $1.3 billion, primarily due to reduced demand in China, while global growth excluding China was strong at 16% [27][24] - The animal health business saw sales increase by 10%, reflecting higher demand across all species and contributions from the Aqua portfolio acquired from Elanco [32] Market Data and Key Metrics Changes - The decline in GARDASIL sales in China was approximately $1.1 billion, which reduced growth excluding foreign exchange by seven percentage points [24] - Outside of the US and China, GARDASIL experienced strong demand, particularly from a catch-up cohort in Japan [27] - The company noted that the ongoing launch of WinRevair generated global sales of $280 million, with significant uptake in both the US and international markets [30] Company Strategy and Development Direction - The company is focused on balancing its manufacturing footprint and has invested $12 billion in US manufacturing since 2018, with an additional commitment of over $9 billion through 2028 [11][10] - The strategic direction emphasizes the advancement of a robust pipeline, with over 20 promising new products expected to launch in the coming years, potentially generating over $50 billion in commercial opportunities by the mid-2030s [16][19] - The company is committed to maintaining its dividend and prioritizing investments in business development to drive growth and returns for shareholders [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for improved growth in the second half of the year, despite challenges from tariffs and foreign exchange impacts [12][13] - The company is well-positioned to navigate the potential impacts of tariffs due to its global supply chain and inventory management strategies [13][70] - Management highlighted the importance of scientific leadership and innovation as key drivers for long-term value creation [20][19] Other Important Information - The company has nearly tripled its late-phase pipeline since 2021, with significant advancements in oncology, cardiometabolic diseases, and HIV treatments [16][14] - The FDA has set PDUFA dates for several key products, including subcutaneous pembrolizumab and doravirine-based regimens, indicating a strong pipeline of upcoming approvals [60][56] Q&A Session Summary Question: Can you discuss Merck's strategies to mitigate tariffs? - Management highlighted ongoing efforts to rebalance the supply chain and invest in US manufacturing to mitigate the impact of existing tariffs, with a focus on optimizing supply chain strategies [70][72] Question: What is the long-term guidance for KEYTRUDA? - Management emphasized confidence in the long-term potential of the pipeline, with over 20 new products expected to drive significant revenue growth, but did not provide specific line-by-line guidance [78][79] Question: Can you comment on the FDA's recent changes and their impact on vaccines? - Management noted that while there are active dialogues with the FDA regarding imminent PDUFA dates, the long-term impact of personnel transitions remains uncertain [85][86] Question: What is the environment for business development given current macroeconomic conditions? - Management acknowledged the complexities in the current environment but reaffirmed their commitment to pursuing science-driven business development opportunities [92][94] Question: What are the expectations for GARDASIL growth moving forward? - Management indicated that while GARDASIL growth is expected to slow, strong growth is anticipated outside of China, and they are focused on maximizing opportunities in the market [132][131]