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    JNJ
    Earnings call· Mar 2026(Q1 FY26)

    JOHNSON & JOHNSON Q1 FY26 earnings call JNJ

    Apr 14, 2026 Source

    Executive summary

    Johnson & Johnson Q1 FY26 — Strong Start with Raised Guidance and Pipeline Momentum

    Johnson & Johnson reported a strong Q1 FY26, exceeding consensus and raising full-year guidance, driven by robust performance in Innovative Medicine and MedTech. The company is on track for $100 billion in annual revenue and maintains line of sight to double-digit growth by the end of the decade, fueled by its deep portfolio and pipeline. Strategic investments in innovation and new product launches are accelerating momentum, despite headwinds from STELARA biosimilar competition and increased launch-related expenses.

    Highlights

    5

    • Delivered operational sales growth of 6.4% for the quarter, with double-digit growth excluding STELARA's impact.

    • Innovative Medicine operational sales grew 7.4%, with 10 brands growing double digits and 16.6% growth excluding STELARA.

    • DARZALEX sales reached $4 billion with 18% operational sales growth, maintaining its #1 product position.

    • TREMFYA sales increased 64%, making it the fastest-growing IL-23 therapy in the U.S. and share leader in IBD new patient starts.

    • MedTech operational sales grew 4.6%, with strong performance across Cardiovascular (Abiomed +14.4%, Shockwave +18.1%), Vision (+3.6%), and Orthopaedics (+3.2%).

    Concerns

    5

    • STELARA sales declined 61.7% due to biosimilar competition, novel class adoption, and unfavorable patient mix.

    • Cost of goods sold deleveraged by 10 basis points, impacted by tariffs and operational drivers in MedTech and unfavorable mix in Innovative Medicine.

    • Selling, marketing and administrative expense deleveraged by 180 basis points due to heavier investment in new launches and the Intra-Cellular acquisition.

    • Innovative Medicine margin declined from 42.5% to 39.7% due to increased launch investments and unfavorable product mix.

    • MedTech margin declined from 25.9% to 22.3% primarily due to tariff impacts on COGS.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year 2026 Operational Sales Growth
    5.9% to 6.9%
    high materiality
    High
    Full-year 2026 Operational Sales (Midpoint)
    $100.2 billion
    high materiality
    High
    Full-year 2026 Reported Sales Growth
    6.5% to 7.5%
    high materiality
    High
    Full-year 2026 Reported Sales (Midpoint)
    $100.8 billion
    high materiality
    High
    Full-year 2026 Adjusted Operational EPS
    $11.30 to $11.50
    high materiality
    High
    Full-year 2026 Adjusted Reported EPS (Midpoint)
    $11.55
    high materiality
    High
    Full-year 2026 Adjusted Pretax Operating Margin Improvement
    at least 50 basis points
    medium materiality
    High
    Full-year Free Cash Flow
    approximately $21 billion
    high materiality
    High
    Annual Revenue Target
    $100 billion
    high materiality
    High
    Revenue Growth Target
    double-digit growth
    high materiality
    High
    Orthopaedics Separation
    mid-2027
    medium materiality
    High

    Segment performance

    9
    SegmentRevenueYoYQoQMargin
    Innovative Medicine
    Worldwide sales increased 7.4%, despite a significant headwind from STELARA, underscoring the strength of key brands and new launches. Margin declined due to heavier investment in new launches and unfavorable product mix.
    US Growth: 9.6%OUS Growth: 4.3%Acquisitions/Divestitures Impact: +180 bpsSTELARA Headwind: 920 bps
    		$15.4 billion7.4%—39.7%
    MedTech
    Worldwide sales increased 4.6%, with growth across cardiovascular, surgery, and vision. Margin declined primarily due to the impact of tariffs in cost of products sold.
    US Growth: 5.9%OUS Growth: 3.2%Divestitures Impact: -10 bps
    		$8.6 billion4.6%—22.3%
    Oncology
    Strong performance driven by multiple myeloma portfolio (DARZALEX, CARVYKTI, TECVAYLI, TALVEY) and lung cancer (RYBREVANT plus LAZCLUZE). ERLEADA also showed strong growth in prostate cancer.
    DARZALEX Sales: $4 billionDARZALEX Growth: 18%CARVYKTI Sales: ~$600 millionCARVYKTI Growth: 57.4%TECVAYLI Growth: 30.1%TECVAYLI Sequential Growth: 14.2%TALVEY Growth: 72.8%RYBREVANT plus LAZCLUZE Sales: $257 millionRYBREVANT plus LAZCLUZE Growth: 80.5%RYBREVANT plus LAZCLUZE Sequential Growth: 18.8%ERLEADA Growth: 16.2%
    		————
    Immunology
    TREMFYA delivered impressive growth driven by IBD launch and share gains. STELARA declined significantly due to biosimilar competition and market dynamics.
    TREMFYA Growth: 63.8%STELARA Decline: 61.7%
    		————
    Neuroscience
    SPRAVATO continued strong growth. CAPLYTA, acquired in Q2 2025, delivered solid sales with strong momentum in aMDD launch.
    SPRAVATO Growth: 44.5%CAPLYTA Sales: $270 million
    		————
    Cardiovascular (MedTech)
    Growth driven by newly launched products like VARIPULSE, strong adoption of Impella technology, and continued adoption of coronary and peripheral products from Shockwave.
    Electrophysiology Growth: 9.5%Abiomed Growth: 14.4%Shockwave Growth: 18.1%
    		————
    Surgery (MedTech)
    Growth driven by strength in biosurgery and wound closure, partially offset by planned transformation impacts, competitive pressures in energy and endocutters, and VBP in China.
    		—1.2%——
    Vision (MedTech)
    Overall solid performance. Contact lenses driven by ACUVUE OASYS 1-Day family. Surgical Vision driven by new product innovations and robust demand for premium IOLs, partially offset by U.S. competitive pressures.
    Contact Lenses and Other Products Growth: 2.7%Surgical Vision Growth: 6%
    		—3.6%——
    Orthopaedics
    Strong first quarter driven by new product launches and commercial execution, with encouraging momentum across key platforms.
    		—3.2%——

    Operational metrics

    30
    Worldwide Sales
    $24.1 billion6.4% operational growth
    Q1 2026

    Total worldwide sales for the quarter.

    Net Earnings
    $5.2 billion
    Q1 2026

    GAAP net earnings for the quarter.

    Diluted EPS
    $2.14vs $4.54 a year ago
    Q1 2026

    GAAP diluted earnings per share.

    Adjusted Net Earnings
    $6.6 billion-1.4% YoY
    Q1 2026

    Adjusted net earnings for the quarter.

    Adjusted Diluted EPS
    $2.70-2.5% YoY
    Q1 2026

    Adjusted diluted earnings per share for the quarter.

    Cost of Goods Sold Deleveraging
    10 bps
    Q1 2026

    Cost of goods sold deleveraged by 10 basis points compared to the prior year.

    Selling, Marketing and Administrative Expense Deleveraging
    180 bps
    Q1 2026

    Selling, marketing and administrative expense deleveraged by 180 basis points.

    R&D Expense as % of Sales
    14.7%flat
    Q1 2026

    Research and development expense remained flat as a percentage of sales.

    Net Interest Expense
    $43 millionvs $128 million income in Q1 2025
    Q1 2026

    Net interest expense for the quarter, a decrease in income compared to prior year.

    Other Income and Expense
    $294 millionvs $7.3 billion income in Q1 2025
    Q1 2026

    Net expense for other income and expense, significantly lower than prior year due to a non-recurring item.

    GAAP Tax Rate
    12.6%vs 19.3% in Q1 2025
    Q1 2026

    GAAP tax rate for the quarter.

    Adjusted Income Before Tax as % of Sales
    32.5%decreased from 36.6%
    Q1 2026

    Enterprise adjusted income before tax as a percentage of sales.

    Cash and Marketable Securities
    $22 billion
    Q1 2026 end

    Balance of cash and marketable securities at the end of the first quarter.

    Debt
    $55 billion
    Q1 2026 end

    Total debt at the end of the first quarter.

    Net Debt
    $33 billion
    Q1 2026 end

    Net debt position at the end of the first quarter.

    Dividend Increase
    3.1%
    Annual

    Board of Directors authorized a 3.1% increase to the annual dividend rate.

    Investment in US Manufacturing/Technology/R&D
    $55 billion$12 billion invested through end of 2025
    through early 2029

    Total planned investment in U.S.-based manufacturing, technology, and R&D.

    Worldwide Sales Growth (excluding STELARA)
    double digits
    Q1 2026

    Worldwide sales growth excluding the impact of STELARA.

    Innovative Medicine Sales Growth (excluding STELARA)
    16.6%
    Q1 2026

    Innovative Medicine sales growth for the 96% of the business not including STELARA.

    Products with $1B+ Annual Revenue
    28
    Current

    Number of platforms or products generating at least $1 billion in annual revenue.

    53rd Week Benefit
    100 bps
    FY26

    Benefit to sales growth from the 53rd week in the 2026 financial calendar.

    Euro Spot Rate
    $1.17relatively flat as of last week
    Last quarter

    Euro spot rate relative to the U.S. dollar used for guidance.

    INLEXZO Sales
    $30 million
    Q1 2026

    Sales for INLEXZO in the first quarter, slightly above expectations.

    INLEXZO New Patient Insertions Increase (Week 1 post J-code)
    50%
    First week of April

    Increase in new patient insertions for INLEXZO following J-code approval.

    INLEXZO New Patient Insertions Increase (Week 2 post J-code)
    90%
    Second week of April

    Increase in new patient insertions for INLEXZO in the second week following J-code approval.

    VARIPULSE Pro Ablation Time Reduction
    85%
    N/A

    Reduction in ablation time with VARIPULSE Pro's new faster pulse sequence.

    Shockwave IVL Cases
    1 million
    To date

    Number of cases worldwide where Shockwave IVL has been used.

    Shockwave IVL Published Patient Outcomes
    25,000
    To date

    Number of patient outcomes published across journals for Shockwave IVL.

    Shockwave IVL Generators in US Hospitals
    2+
    Current

    Number of U.S. hospitals with more than two Shockwave IVL generators.

    TECNIS PureSee Eyes Treated
    0.5 million
    Worldwide

    Number of eyes worldwide that have experienced TECNIS PureSee.

    Industry KPIs

    13
    MetricValueDetails
    Peak sales guidance—
    Prescription volume1,500patients
    EPS revenue guidance—
    Pricing policy impact—
    Product franchise net sales—
    Pipeline clinical milestones—
    Regulatory approvals filings—
    Therapeutic drug market share—
    Price volume mix decomposition—
    Geographic regional revenue growth—
    Clinical trial efficacy safety data—
    Patent expiry loe biosimilar erosion61.7%%
    Business development capacity deal size appetite—

    Deals & partnerships

    2
    Intra-Cellular TherapiesAcquisition

    Acquisition of Intra-Cellular Therapies, primarily driving positive impact on worldwide and Innovative Medicine growth.

    Halda TherapeuticsLicensing/Partnership

    Early-stage deal bringing a new platform to the oncology business.

    Risks & headwinds

    7
    STELARA Biosimilar CompetitionQ1 2026

    61.7% decline in STELARA sales; approximate 540 basis point headwind to total J&J sales growth; approximate 920 basis point headwind to Innovative Medicine sales growth.

    Mitigation: Focus on key brands and new launches, which are driving double-digit growth excluding STELARA.

    Tariffs and Operational DriversQ1 2026

    Cost of goods sold deleveraged by 10 basis points.

    Mitigation: Partially offset by favorable translational currency in Innovative Medicine.

    Increased Investment in New Launches and AcquisitionsQ1 2026

    Selling, marketing and administrative expense deleveraged by 180 basis points; Innovative Medicine margin declined from 42.5% to 39.7%.

    Mitigation: These are planned investments to support new product launches and strengthen the pipeline, with heavier investment in the first half of the year.

    Unfavorable Product MixQ1 2026

    Contributed to cost of goods sold deleveraging and Innovative Medicine margin decline.

    Competitive Pressures in MedTechQ1 2026

    U.S. Surgical Vision growth offset by competitive pressures; competitive pressures in energy and endocutters within Surgery.

    Mitigation: Focus on new product innovations (TECNIS PureSee), strong commercial execution, and robust pipeline (Shockwave's continuous innovation).

    Volume-Based Procurement (VBP) in ChinaQ1 2026 (Surgery), H2 2026 (electrophysiology)

    Negative impact across the Surgery portfolio; anticipated second half impact for electrophysiology products.

    Mitigation: Factored into full-year guidance.

    Procedural Softness due to WeatherLate January and early February (Q1 2026)

    Localized impact on procedure volumes.

    Mitigation: Teams are experienced in managing short-term disruptions; supply chain, clinical support, and commercial teams work closely with healthcare providers.

    Q&A highlights

    7

    How is ICOTYDE being positioned in the market, considering its label and pricing? What is the expected ramp for reimbursement coverage and sampling plans?

    ICOTYDE is positioned as the preferred first-line systemic therapy for plaque psoriasis, given its differentiated label, efficacy, safety, and once-daily oral administration. The company is pursuing early and broad access with payers and has seen strong early enthusiasm, with 1,500 prescriptions and over 1,000 unique prescribers. TREMFYA remains the first-choice biologic, especially for patients with active or suspected psoriatic arthritis.

    “ICOTYDE is the first and only targeted oral peptide that precisely blocks the IL-23 receptor. ICOTYDE, maybe as a reminder, delivers complete skin clearance, favorable safety and the simplicity of a once-daily pill, and we think it's got the potential to become one of our biggest products.”

    asked by Terence Flynn · answered by Jennifer Taubert

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 Performance and Full-Year Outlook

    Johnson & Johnson delivered a strong Q1 2026, with operational sales growth of 6.4% and adjusted diluted EPS of $2.70. The company raised its full-year operational sales guidance to a range of 5.9% to 6.9% and adjusted operational EPS guidance to $11.30 to $11.50. This performance reinforces confidence in achieving $100 billion in annual revenue for the first time in 2026 and reaching double-digit growth by the end of the decade, driven by a robust portfolio and pipeline.

    02

    Innovative Medicine Growth Drivers

    The Innovative Medicine segment achieved 7.4% operational sales growth, with 10 brands showing double-digit increases. Key oncology products like DARZALEX ($4 billion sales, +18% growth), CARVYKTI (+$600 million sales, +57.4% growth), TECVAYLI (+30.1% growth), and TALVEY (+72.8% growth) demonstrated strong momentum. In immunology, TREMFYA grew 64%, becoming the fastest-growing IL-23 therapy in the U.S. and a share leader in IBD new patient starts. New launches like ICOTYDE and INLEXZO are expected to contribute significantly to future growth.

    03

    MedTech Segment Performance and Innovation

    MedTech reported 4.6% operational sales growth, with contributions from all key focus areas. Cardiovascular saw strong growth from electrophysiology (+9.5%), Abiomed (+14.4%), and Shockwave (+18.1%). The segment is advancing its pipeline with new product launches such as VARIPULSE Pro in Europe, and upcoming U.S. launches for TECNIS PureSee intraocular lens and the Dual Energy THERMOCOOL SMARTTOUCH SF Catheter. The OTTAVA robotic surgical system is progressing with a second IDE trial underway, targeting a launch by year-end.

    04

    Strategic Investments and Capital Allocation

    Johnson & Johnson maintains a consistent approach to capital allocation, prioritizing investment in future innovation. The company has invested approximately $12 billion, or 22% of its $55 billion target, in U.S.-based manufacturing, technology, and R&D through 2025, with significant investments continuing in 2026. The Board authorized a 3.1% increase in the annual dividend to $5.36 per share, marking the 64th consecutive year of dividend growth. Free cash flow for Q1 was $1.5 billion, with a full-year outlook of $21 billion reaffirmed.

    05

    Pipeline Catalysts and Future Growth

    The company highlighted numerous upcoming pipeline catalysts for 2026, including regulatory approval for TREMFYA in psoriatic arthritis, and important data presentations for ERLEADA in prostate cancer, INLEXZO in bladder cancer, JNJ-4804 in ulcerative colitis and Crohn's disease, and CAPLYTA in Bipolar mania. MedTech anticipates regulatory approvals for OTTAVA Robotic Surgical System and VARIPULSE Pro in the U.S. These advancements are expected to drive accelerating growth and fortify future performance.

    06

    ICOTYDE Launch and Market Potential

    ICOTYDE, the first and only IL-23 targeted oral peptide for plaque psoriasis, received FDA approval in March and is off to a fast start. The product is positioned as a preferred first-line systemic therapy, with strong early demand and 1,500 prescriptions written and over 1,000 unique prescribers. Management believes ICOTYDE has the potential to be one of the company's largest products ever, complementing TREMFYA as a first-choice biologic. Studies in psoriatic arthritis and inflammatory bowel diseases are ongoing, with results expected later this year.

    AI-generated summary of the company’s earnings call. Not investment advice.