Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Vertex Pharmaceuticals Inc., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Federal	704,900)	900,400)	779,000)	374,900)	71,377)
State	118,200)	46,200)	34,900)	26,500)	18,851)
Foreign	309,800)	350,100)	372,400)	141,500)	37,582)
Current taxes	1,132,900)	1,296,700)	1,186,300)	542,900)	127,810)
Federal	(438,700)	(569,900)	(404,000)	(36,900)	510,220)
State	(48,700)	(21,900)	(11,000)	(19,300)	6,700)
Foreign	138,600)	55,300)	139,100)	(98,400)	(239,579)
Deferred taxes	(348,800)	(536,500)	(275,900)	(154,600)	277,341)
Provision for income taxes	784,100)	760,200)	910,400)	388,300)	405,151)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Current taxes	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Vertex Pharmaceuticals Inc. current taxes increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.
Deferred taxes	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Vertex Pharmaceuticals Inc. deferred taxes decreased from 2022 to 2023 but then increased from 2023 to 2024 not reaching 2022 level.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Vertex Pharmaceuticals Inc. provision for income taxes decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.

Vertex Pharmaceuticals Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
U.S. federal statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
State taxes, net of federal benefit	29.50%	0.30%	0.60%	0.80%	0.60%
Foreign income tax rate differential	21.30%	-0.60%	-0.30%	-0.30%	0.20%
U.S. tax on foreign earnings, net of credits	-12.60%	0.70%	1.90%	0.70%	2.70%
Foreign derived intangible income deduction	-28.30%	-1.70%	-1.40%	-0.80%	-0.20%
Tax credits	-102.90%	-6.00%	-2.20%	-6.40%	-1.80%
Tax rate change	0.00%	0.00%	0.00%	-3.50%	-1.20%
Stock compensation (benefit), shortfalls and cancellations	-25.50%	-0.80%	-0.80%	0.00%	-2.30%
Long-term intercompany receivable write-off	0.00%	0.00%	0.00%	0.00%	-1.70%
Uncertain tax positions	11.30%	3.40%	2.70%	2.00%	1.30%
Non-deductible AIPR&D	373.80%	0.00%	0.00%	0.00%	0.00%
Intra-entity transfer of intellectual property rights	0.00%	0.00%	0.00%	0.00%	-6.70%
Other	27.90%	1.10%	0.00%	0.70%	1.10%
Effective tax rate	315.50%	17.40%	21.50%	14.20%	13.00%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Vertex Pharmaceuticals Inc. effective tax rate decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Vertex Pharmaceuticals Inc., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Tax credit carryforwards	298,300)	261,000)	223,000)	202,400)	406,120)
Intangible assets	769,300)	799,200)	738,500)	802,800)	507,484)
Stock-based compensation	164,200)	144,100)	124,400)	94,600)	89,203)
Finance lease liabilities	25,900)	92,100)	94,900)	103,400)	118,749)
Operating lease assets	333,500)	72,500)	79,600)	81,100)	65,046)
R&D capitalization	1,404,100)	919,300)	438,300)	—)	—)
Other	166,100)	146,600)	146,600)	196,900)	209,838)
Gross deferred tax assets	3,161,400)	2,434,800)	1,845,300)	1,481,200)	1,396,440)
Valuation allowance	(272,900)	(266,600)	(237,800)	(220,400)	(213,750)
Deferred tax assets	2,888,500)	2,168,200)	1,607,500)	1,260,800)	1,182,690)
Property and equipment	(110,800)	(145,100)	(139,800)	(118,200)	(116,955)
Acquired intangibles	(132,700)	(130,200)	(130,500)	(87,000)	(87,025)
Operating lease liabilities	(271,900)	(55,600)	(63,100)	(64,800)	(63,310)
Other	(42,000)	(25,200)	(27,200)	(56,300)	(32,621)
Deferred tax liabilities	(557,400)	(356,100)	(360,600)	(326,300)	(299,911)
Net deferred tax assets (liabilities)	2,331,100)	1,812,100)	1,246,900)	934,500)	882,779)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Vertex Pharmaceuticals Inc. gross deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Vertex Pharmaceuticals Inc. deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Vertex Pharmaceuticals Inc. net deferred tax assets (liabilities) increased from 2022 to 2023 and from 2023 to 2024.

Vertex Pharmaceuticals Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
	Deferred tax assets	2,331,100)	1,812,100)	1,246,900)	934,500)	882,779)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Deferred tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Vertex Pharmaceuticals Inc. deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.

Vertex Pharmaceuticals Inc., adjustments to financial statements

US$ in thousands

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported)	22,533,200)	22,730,200)	18,150,900)	13,432,500)	11,751,808)
Less: Noncurrent deferred tax assets, net	2,331,100)	1,812,100)	1,246,900)	934,500)	882,779)
Total assets (adjusted)	20,202,100)	20,918,100)	16,904,000)	12,498,000)	10,869,029)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)	16,409,600)	17,580,400)	13,912,700)	10,100,000)	8,686,815)
Less: Net deferred tax assets (liabilities)	2,331,100)	1,812,100)	1,246,900)	934,500)	882,779)
Shareholders’ equity (adjusted)	14,078,500)	15,768,300)	12,665,800)	9,165,500)	7,804,036)
Adjustment to Net Income (loss)
Net income (loss) (as reported)	(535,600)	3,619,600)	3,322,000)	2,342,100)	2,711,647)
Add: Deferred income tax expense (benefit)	(348,800)	(536,500)	(275,900)	(154,600)	277,341)
Net income (loss) (adjusted)	(884,400)	3,083,100)	3,046,100)	2,187,500)	2,988,988)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Vertex Pharmaceuticals Inc., Financial Data: Reported vs. Adjusted

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Vertex Pharmaceuticals Inc., adjusted financial ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net Profit Margin
Reported net profit margin	-4.86%	36.68%	37.20%	30.92%	43.70%
Adjusted net profit margin	-8.03%	31.24%	34.11%	28.88%	48.17%
Total Asset Turnover
Reported total asset turnover	0.49	0.43	0.49	0.56	0.53
Adjusted total asset turnover	0.55	0.47	0.53	0.61	0.57
Financial Leverage
Reported financial leverage	1.37	1.29	1.30	1.33	1.35
Adjusted financial leverage	1.43	1.33	1.33	1.36	1.39
Return on Equity (ROE)
Reported ROE	-3.26%	20.59%	23.88%	23.19%	31.22%
Adjusted ROE	-6.28%	19.55%	24.05%	23.87%	38.30%
Return on Assets (ROA)
Reported ROA	-2.38%	15.92%	18.30%	17.44%	23.07%
Adjusted ROA	-4.38%	14.74%	18.02%	17.50%	27.50%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Vertex Pharmaceuticals Inc. adjusted net profit margin ratio deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Vertex Pharmaceuticals Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Vertex Pharmaceuticals Inc. adjusted financial leverage ratio decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Vertex Pharmaceuticals Inc. adjusted ROE deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Vertex Pharmaceuticals Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Vertex Pharmaceuticals Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income (loss)	(535,600)	3,619,600)	3,322,000)	2,342,100)	2,711,647)
Revenues	11,020,100)	9,869,200)	8,930,700)	7,574,400)	6,205,683)
Profitability Ratio
Net profit margin¹	-4.86%	36.68%	37.20%	30.92%	43.70%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)	(884,400)	3,083,100)	3,046,100)	2,187,500)	2,988,988)
Revenues	11,020,100)	9,869,200)	8,930,700)	7,574,400)	6,205,683)
Profitability Ratio
Adjusted net profit margin²	-8.03%	31.24%	34.11%	28.88%	48.17%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Net profit margin = 100 × Net income (loss) ÷ Revenues
= 100 × -535,600 ÷ 11,020,100 = -4.86%

² Adjusted net profit margin = 100 × Adjusted net income (loss) ÷ Revenues
= 100 × -884,400 ÷ 11,020,100 = -8.03%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Vertex Pharmaceuticals Inc. adjusted net profit margin ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Revenues	11,020,100)	9,869,200)	8,930,700)	7,574,400)	6,205,683)
Total assets	22,533,200)	22,730,200)	18,150,900)	13,432,500)	11,751,808)
Activity Ratio
Total asset turnover¹	0.49	0.43	0.49	0.56	0.53
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenues	11,020,100)	9,869,200)	8,930,700)	7,574,400)	6,205,683)
Adjusted total assets	20,202,100)	20,918,100)	16,904,000)	12,498,000)	10,869,029)
Activity Ratio
Adjusted total asset turnover²	0.55	0.47	0.53	0.61	0.57

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 11,020,100 ÷ 22,533,200 = 0.49

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 11,020,100 ÷ 20,202,100 = 0.55

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Vertex Pharmaceuticals Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Total assets	22,533,200)	22,730,200)	18,150,900)	13,432,500)	11,751,808)
Shareholders’ equity	16,409,600)	17,580,400)	13,912,700)	10,100,000)	8,686,815)
Solvency Ratio
Financial leverage¹	1.37	1.29	1.30	1.33	1.35
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	20,202,100)	20,918,100)	16,904,000)	12,498,000)	10,869,029)
Adjusted shareholders’ equity	14,078,500)	15,768,300)	12,665,800)	9,165,500)	7,804,036)
Solvency Ratio
Adjusted financial leverage²	1.43	1.33	1.33	1.36	1.39

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ Financial leverage = Total assets ÷ Shareholders’ equity
= 22,533,200 ÷ 16,409,600 = 1.37

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 20,202,100 ÷ 14,078,500 = 1.43

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Vertex Pharmaceuticals Inc. adjusted financial leverage ratio decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income (loss)	(535,600)	3,619,600)	3,322,000)	2,342,100)	2,711,647)
Shareholders’ equity	16,409,600)	17,580,400)	13,912,700)	10,100,000)	8,686,815)
Profitability Ratio
ROE¹	-3.26%	20.59%	23.88%	23.19%	31.22%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)	(884,400)	3,083,100)	3,046,100)	2,187,500)	2,988,988)
Adjusted shareholders’ equity	14,078,500)	15,768,300)	12,665,800)	9,165,500)	7,804,036)
Profitability Ratio
Adjusted ROE²	-6.28%	19.55%	24.05%	23.87%	38.30%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ ROE = 100 × Net income (loss) ÷ Shareholders’ equity
= 100 × -535,600 ÷ 16,409,600 = -3.26%

² Adjusted ROE = 100 × Adjusted net income (loss) ÷ Adjusted shareholders’ equity
= 100 × -884,400 ÷ 14,078,500 = -6.28%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Vertex Pharmaceuticals Inc. adjusted ROE deteriorated from 2022 to 2023 and from 2023 to 2024.

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
As Reported
Selected Financial Data (US$ in thousands)
Net income (loss)	(535,600)	3,619,600)	3,322,000)	2,342,100)	2,711,647)
Total assets	22,533,200)	22,730,200)	18,150,900)	13,432,500)	11,751,808)
Profitability Ratio
ROA¹	-2.38%	15.92%	18.30%	17.44%	23.07%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income (loss)	(884,400)	3,083,100)	3,046,100)	2,187,500)	2,988,988)
Adjusted total assets	20,202,100)	20,918,100)	16,904,000)	12,498,000)	10,869,029)
Profitability Ratio
Adjusted ROA²	-4.38%	14.74%	18.02%	17.50%	27.50%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

¹ ROA = 100 × Net income (loss) ÷ Total assets
= 100 × -535,600 ÷ 22,533,200 = -2.38%

² Adjusted ROA = 100 × Adjusted net income (loss) ÷ Adjusted total assets
= 100 × -884,400 ÷ 20,202,100 = -4.38%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Vertex Pharmaceuticals Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Vertex Pharmaceuticals Inc. (NASDAQ:VRTX)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Vertex Pharmaceuticals Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Vertex Pharmaceuticals Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)