Business Update & Financial Outlook

Q2 2023 non-GAAP financial results summary 1 $ in billions, except LPS/EPS amounts Change Q2 2023 Q2 2022 Change Ex-FX Sales $15.0 $14.6 +3% +7% Non-GAAP Gross Margin 76.6% 74.7% +1.9pts +2.7pts Non-GAAP Operating Expenses² $15.9 $5.2 N/M N/M Non-GAAP Tax Rate³ -18.4% 13.8% -32.2pts N/A Non-GAAP Earnings / (Loss) Per Share4 ($2.06) $1.87 N/M N/M 1. Merck is providing certain 2023 and 2022 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors' understanding of the company's results because management uses non-GAAP results to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, senior management's annual compensation is derived in part using a non-GAAP pre-tax income metric. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of the non-GAAP adjustments, see Table 2a attached to the earnings release. 2. 2Q23 non-GAAP results include $10.2 billion of R&D expense or $4.02 of negative impact to EPS, related to the acquisition of Prometheus Biosciences. 3. Q2 2023 provision for Taxes on Income was $810 million. A pre-tax loss was recorded this quarter due to the Prometheus one-time charge, which was not tax deductible. As a result, the tax rate was negative in the quarter. 4. Q2 2023 GAAP LPS of ($2.35). MERCK 16

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