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    JNJ
    Earnings call· Jun 2026(Q2 FY26)

    JOHNSON & JOHNSON Q2 FY26 earnings call JNJ

    Jul 15, 2026 Source

    Executive summary

    Johnson & Johnson Q2 FY26 — Strong Growth Driven by New Launches and Raised Full-Year Guidance

    Johnson & Johnson delivered a strong Q2 FY26, exceeding expectations with robust performance in Innovative Medicine driven by new launches like ICOTYDE and TREMFYA's IBD expansion. Despite headwinds from STELARA biosimilar competition and Abiomed's temporary slowdown, the company raised its full-year operational sales and EPS guidance, underscoring confidence in its broad portfolio and pipeline for sustained long-term growth and its ambition for double-digit growth by the end of the decade.

    Highlights

    5

    • Worldwide operational sales grew 5.6% to $25.3 billion, achieving double-digit growth excluding STELARA.

    • Innovative Medicine operational sales increased 6.8% to $16.4 billion, with 8 brands growing double digits.

    • ICOTYDE, a new psoriasis treatment, demonstrated significant early launch momentum with over 11,000 patients initiated and 6,000 unique prescribers.

    • TREMFYA sales reached $2 billion, growing over 70%, driven by market leadership in ulcerative colitis (58% induction share) and Crohn's disease (over 50% induction share).

    • Full-year 2026 operational sales guidance was raised by $400 million, with the midpoint now at $100.6 billion, and adjusted operational EPS guidance increased by $0.18 at the midpoint.

    Concerns

    5

    • STELARA sales declined 55.7% due to biosimilar competition and share loss.

    • Abiomed sales declined 2% due to increased decision selectivity by physicians following a recent external clinical trial.

    • Cardiovascular segment growth was muted at 3.1%, impacted by headwinds in electrophysiology (400 bps negative from China inventory) and Abiomed.

    • Selling, marketing, and administrative expenses deleveraged by 60 basis points due to increased investments in new product launches.

    • Innovative Medicine margin declined from 42.7% to 42.5% due to unfavorable mix and heavier investments in new product launches.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year 2026 operational sales growth
    6.5% to 7.1%
    high materiality
    High
    Full-year 2026 reported sales growth
    7.0% to 7.6%
    high materiality
    High
    Full-year 2026 free cash flow
    approaching $21 billion
    medium materiality
    High
    Full-year 2026 adjusted pretax operating margin improvement
    approximately 75 basis point improvement
    medium materiality
    High
    Full-year 2026 net interest expense
    $250 million to $300 million
    low materiality
    High
    Full-year 2026 effective tax rate
    17.0% to 18.0%
    low materiality
    High
    Full-year 2026 adjusted operational earnings per share
    $11.50 to $11.65
    high materiality
    High
    Full-year 2026 reported earnings per share
    $11.60 to $11.75
    high materiality
    High
    Double-digit growth
    double-digit growth
    high materiality
    High
    Oncology company ranking
    #1 oncology company
    high materiality
    High
    DePuy Synthes business separation
    mid-2027 separation
    medium materiality
    High

    Segment performance

    12
    SegmentRevenueYoYQoQMargin
    Worldwide Sales
    Sales increased despite an approximate 460 basis point headwind from STELARA.
    Operational growth excluding STELARA: double-digits
    		$25.3 billion5.6%——
    U.S. Sales
    		—7.3%——
    Outside U.S. Sales
    		—3.4%——
    Innovative Medicine
    Financial results reflect depth of expertise and innovation. Margin declined from 42.7% primarily due to unfavorable mix and heavier investments in new product launches.
    Operational growth excluding STELARA: 14%+U.S. growth: 8.9%Outside U.S. growth: 3.6%STELARA headwind: 760 basis pointsSTELARA as % of Innovative Medicine business: 4%
    		$16.4 billion6.8%—42.5%
    MedTech
    Growth across each key focus area. Margin declined from 22.2% primarily due to commercial investments, increased R&D, and increased impact of tariffs.
    U.S. growth: 3.9%Outside U.S. growth: 3.2%
    		$8.9 billion3.6%—22%
    Oncology
    Strong performance across multiple myeloma, solid tumors, and lung cancer. DARZALEX is the largest product, exceeding $4 billion in sales.
    DARZALEX growth: 17.6%CARVYKTI growth: 47.7%TECVAYLI growth: 56.1%TALVEY growth: 62.6%RYBREVANT plus LAZCLUZE growth: 61.6%ERLEADA growth: 7.6%
    		————
    Immunology
    TREMFYA's IBD launch is driving significant momentum. STELARA declined due to biosimilar competition and novel classes.
    TREMFYA growth: 71%STELARA decline: 55.7%
    		————
    Neuroscience
    SPRAVATO and CAPLYTA performed strongly, with CAPLYTA new patient starts up 122% versus prior year.
    SPRAVATO growth: 40%CAPLYTA growth: 70.9%
    		————
    Cardiovascular
    Growth lower than recent trend due to headwinds in electrophysiology and Abiomed. Abiomed decline due to pressures on U.S. procedures driven by usage patterns.
    Electrophysiology growth: 3.1%Electrophysiology China inventory impact: -400 basis pointsAbiomed decline: 2%Shockwave growth: 14.7%
    		—3.1%——
    Surgery
    Growth driven by strength in biosurgery and enclosure, partially offset by VBP in China and competitive pressures.
    Divestitures impact: -40 basis points
    		—2.3%——
    Vision
    Growth driven by premium innovation, strong execution, and global reach. ACUVUE portfolio delivered strong growth.
    Contact lenses growth: 6%Surgical vision growth: 4.7%
    		—5.6%——
    Orthopaedics
    Primarily driven by new product launches such as Volt and Trauma and strong commercial execution.
    		—4.2%——

    Operational metrics

    52
    Worldwide sales operational growth
    5.6%
    Q2 FY26

    Despite an approximate 460 basis point headwind from STELARA.

    Worldwide sales operational growth excluding STELARA
    double-digits
    Q2 FY26

    Johnson & Johnson grew double digits for the quarter.

    U.S. sales growth
    7.3%
    Q2 FY26
    Outside U.S. sales growth
    3.4%
    Q2 FY26
    Acquisitions and divestitures impact on worldwide growth
    -10
    Q2 FY26

    Net negative impact.

    Adjusted net earnings
    $7.1 billion5.7% increase
    Q2 FY26

    Compared to Q2 2025.

    Adjusted diluted EPS
    $2.904.7% increase
    Q2 FY26

    Compared to Q2 2025.

    Innovative Medicine operational sales growth
    6.8%
    Q2 FY26

    Despite an approximate 760 basis point headwind from STELARA.

    Innovative Medicine operational sales growth excluding STELARA
    14%+
    Q2 FY26

    96% of business grew over 14%.

    STELARA as % of Innovative Medicine business
    4%
    Q2 FY26
    Innovative Medicine U.S. sales growth
    8.9%
    Q2 FY26
    Innovative Medicine Outside U.S. sales growth
    3.6%
    Q2 FY26
    Innovative Medicine divestitures impact on worldwide growth
    -10
    Q2 FY26

    Negative impact.

    TECVAYLI worldwide sequential growth
    29.2%sequential
    Q2 FY26

    Driven by launch uptake and share gains.

    TECVAYLI U.S. sequential growth
    46.2%sequential
    Q2 FY26

    Driven by launch uptake and share gains across earlier lines of therapy and expansion in community setting.

    TECVAYLI community site expansion
    25%QoQ increase
    Q2 FY26

    In the U.S.

    CAPLYTA new patient starts growth
    122%YoY
    Q2 FY26

    Significantly outpacing the market leader.

    MedTech U.S. sales growth
    3.9%
    Q2 FY26
    MedTech Outside U.S. sales growth
    3.2%
    Q2 FY26
    MedTech acquisitions and divestitures impact on worldwide growth
    -10
    Q2 FY26

    Net negative impact.

    Electrophysiology China inventory impact
    -400
    Q2 FY26

    Negative impact on growth, would have taken global growth up to north of 7%.

    Surgery divestitures impact
    -40
    Q2 FY26

    Negative impact.

    Cost of goods sold leverage
    30
    Q2 FY26
    Selling, marketing and administrative expenses deleverage
    60
    Q2 FY26
    Research and development leverage
    40
    Q2 FY26
    Net interest expense
    $62 millionvs $48 million expense in Q2 2025
    Q2 FY26
    Other income and expense
    $331 millionvs $107 million expense in Q2 2025
    Q2 FY26
    GAAP effective tax rate
    18%vs 14.7% in Q2 2025
    Q2 FY26
    Innovative Medicine adjusted income before tax margin
    42.5%vs 42.7% in Q2 2025
    Q2 FY26
    MedTech adjusted income before tax margin
    22%vs 22.2% in Q2 2025
    Q2 FY26
    Enterprise adjusted income before tax as % of sales
    34.2%vs 34.5% in Q2 2025
    Q2 FY26
    Cash and marketable securities
    $21 billion
    end of Q2 FY26
    Debt
    $49 billion
    end of Q2 FY26
    Net debt
    $28 billion
    end of Q2 FY26
    53rd week benefit
    100
    FY26

    Benefit to financial calendar in 2026.

    Foreign currency impact on reported sales
    -$100 millionvs prior guidance
    FY26

    Negative total impact based on major currency movements.

    Updated EPS guidance currency impact
    -$0.05reduction
    FY26

    Reduction of favorable currency when compared to prior guidance.

    ICOTYDE patients initiated
    11,000
    since launch

    Underscoring unmet need for first-line systemic treatment.

    ICOTYDE prescriptions written
    18,000
    since launch
    ICOTYDE unique prescribers
    6,000
    since launch
    ICOTYDE commercial coverage
    >50%
    within 90 days of launch

    Ahead of projections.

    INLEXZO eligible patients starting regimen
    1 in 3vs 1 in 4 in Q1
    Q2 FY26

    Outperforming all recent competitive launches.

    INLEXZO new patient insertions growth
    75%QoQ
    Q2 FY26

    Post permanent J-code.

    INLEXZO sales growth
    more than doubledQoQ
    Q2 FY26

    Beat consensus for the quarter.

    VARIPULSE Afib patients treated
    >85,000
    worldwide

    Post-field ablation platform for atrial fibrillation.

    Investment in U.S. vision manufacturing
    >$1 billion
    not stated

    To scale manufacturing, packaging, and distribution capabilities.

    Milvexian eligible AFib patients not receiving oral anticoagulants
    40%
    current

    Due to concerns about potential bleeding.

    Milvexian people taking oral anticoagulants
    8 million
    current

    In the U.S. alone.

    Milvexian people who should be taking oral anticoagulants
    18 million
    current

    In the U.S. alone, but are not due to bleeding risk.

    Impella patients supported
    >400,000
    cumulative
    Impella peer review publications
    ~2,600
    cumulative
    Impella high-risk PCI patients studied
    >40,000
    cumulative

    Evidence base with 2 decades of clinical experience.

    Industry KPIs

    9
    MetricValueDetails
    Prescription volume18,000prescriptions
    EPS revenue guidance—
    Product franchise net sales—
    Pipeline clinical milestones—
    Regulatory approvals filings—
    Therapeutic drug market share5 pointspoints
    Geographic regional revenue growth—
    Clinical trial efficacy safety data—
    Patent expiry loe biosimilar erosion55.7%%

    Product announcements

    5
    ProductTypeDetails
    CARTO Sound Sonatalaunch
    THERMALCOOL SMARTTOUCH SF platformlaunch
    Shockwave C2 AEROlaunch
    Ethicon 4000 Staplerlaunch
    TECNIS PureSeeexpansion

    Deals & partnerships

    2
    FireFly Bioacquisition

    Planned acquisition to strengthen leadership in next-generation oncology innovation.

    Halda Therapeuticsacquisition

    Recent acquisition, contributing to oncology pipeline with J&J-6143.

    Risks & headwinds

    9
    STELARA biosimilar competition and share lossQ2 FY26

    Sales declined 55.7%

    Mitigation: Focus on new launches and strong performance of other key brands in Innovative Medicine.

    Abiomed procedure volume decline due to external clinical trialQ2 FY26

    Sales declined 2%

    Mitigation: Actively engaging physicians and their teams to reinforce appropriate patient selection, leveraging significant depth of clinical evidence base; expecting gradual improvements and return to double-digit growth over coming quarters.

    Electrophysiology China inventory impactQ2 FY26

    Negative impact of approximately 400 basis points on growth

    Increased impact of tariffs on MedTech businessQ2 FY26

    Impacted MedTech margin

    Mitigation: Anticipated reduction and recoupment of certain tariff-related costs based on latest rulings.

    Unfavorable product mix in Innovative MedicineQ2 FY26

    Contributed to 30 bps leverage in COGS and 0.2% decline in Innovative Medicine margin

    Increased investments in new product launchesQ2 FY26

    Selling, marketing and administrative expenses deleveraged by 60 basis points

    Value-Based Purchasing (VBP) in ChinaQ2 FY26

    Partially offset Surgery growth

    Competitive pressures in energy and endocutters (Surgery) and U.S. Surgical VisionQ2 FY26

    Partially offset growth in respective segments

    Potential affordability pressures from ACA subsidy removalsnot stated

    Not expected to translate into a material impact on demand for MedTech and procedures

    Q&A highlights

    8

    Is the $400 million increase in operational sales guidance primarily driven by pharma, potentially offset by lower MedTech assumptions?

    Joe Wolk confirmed this characterization, stating that better second-half revenue growth is expected, particularly from new pharma launches. MedTech is also anticipated to improve in H2, but Abiomed's expectations are tempered.

    “I would say that's probably a fair characterization.”

    asked by Chris Schott · answered by Joseph Wolk

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Portfolio Strength and Growth Trajectory

    Johnson & Johnson emphasized its robust portfolio, comprising 28 products and platforms each generating over $1 billion in annual sales, as a key driver of its resilience and growth. The company is on track to surpass $100 billion in annual revenue for the first time in 2026 and maintains a clear line of sight to achieving double-digit growth by the end of the decade. This broad and diversified base allows the company to absorb headwinds from specific products while continuing overall strong performance.

    02

    Oncology Leadership Ambition and Pipeline Expansion

    J&J reiterated its ambitious goal to become the #1 oncology company by 2030, with projected sales exceeding $50 billion. This is supported by strong growth from key multiple myeloma treatments like DARZALEX (up 17.6%), CARVYKTI (up 47.7%), TECVAYLI (up 56.1%), and TALVEY (up 62.6%). The company also highlighted new data for ERLEADA and RYBREVANT, and strengthened its oncology pipeline through the planned acquisition of FireFly Bio, adding a proprietary platform for KRAS-driven solid tumors.

    03

    MedTech Innovation and Targeted Recovery Efforts

    Despite a temporary slowdown in Abiomed due to physician caution following an external clinical trial, J&J's MedTech segment saw acceleration in Surgery, Vision, and Orthopaedics. The company is actively engaging physicians to reinforce appropriate patient selection for Abiomed and expects gradual improvements, returning to double-digit growth in coming quarters. Significant innovations include the anticipated FDA approval for the OTTAVA robotic surgical system and new cardiovascular product launches like VARIPULSE Pro and Shockwave C2 AERO.

    04

    ICOTYDE's Rapid Market Penetration

    The launch of ICOTYDE, a first-in-class oral IL-23 inhibitor for psoriasis, is progressing ahead of expectations. Since launch, over 18,000 prescriptions have been written for 11,000 patients by 6,000 unique prescribers. The product has secured over 50% commercial payer coverage within 90 days, contributing significantly to Innovative Medicine's strong performance. J&J has also initiated direct-to-consumer advertising to further accelerate patient uptake.

    05

    TREMFYA's Dominance in IBD

    TREMFYA achieved its first $2 billion sales quarter, marking over 70% growth, primarily driven by its strong performance in ulcerative colitis and Crohn's disease. The product holds market leadership in induction share for both conditions among IL-23 inhibitors, with 58% in ulcerative colitis and over 50% in Crohn's disease. New data presented at DDW demonstrated TREMFYA's efficacy in perianal fistulizing Crohn's, further differentiating its profile.

    06

    Capital Allocation and Strategic Acquisitions

    J&J's capital allocation priorities remain focused on R&D investments, supporting commercial launches, and returning capital to shareholders through dividends. The company ended Q2 with $21 billion in cash and marketable securities and a net debt position of $28 billion, with YTD free cash flow of $8.7 billion. The planned acquisition of FireFly Bio, expected to close in Q3 2026, exemplifies the strategy of acquiring innovative platforms to diversify and strengthen the pipeline, particularly in oncology.

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