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    JNJ
    Earnings call· Dec 2025(Q4 FY25)

    JOHNSON & JOHNSON JNJ

    Jan 21, 2026 Source

    Executive summary

    Johnson & Johnson Q4 FY25 — Strong Growth Across Innovative Medicine and MedTech, Elevated 2026 Guidance

    Johnson & Johnson concluded a strong FY25, exceeding financial expectations and setting the stage for accelerated growth in 2026, with a clear path to double-digit growth by the decade's end. Fueled by a robust pipeline and strategic portfolio shifts, the company is leveraging its depth in Innovative Medicine and MedTech to drive sustainable growth, despite ongoing STELARA erosion and increased tariff impacts. Management remains confident in its ability to deliver value through innovation and disciplined capital allocation.

    Highlights

    5

    • Full year 2025 operational sales grew 5.3%, exceeding expectations and firmly placing STELARA LOE in the rearview mirror.

    • Innovative Medicine operational sales increased 7.9% in Q4, despite a significant 1,110 basis point headwind from STELARA.

    • MedTech operational sales grew 5.8% in Q4, with Cardiovascular achieving 15% operational sales growth for the full year 2025.

    • Adjusted diluted EPS for Q4 increased 20.6% to $2.46, demonstrating strong bottom-line performance.

    • The company provided strong 2026 guidance, anticipating operational sales growth of 5.7% to 6.7% (midpoint $100 billion) and adjusted operational EPS growth of 5.5% at the midpoint ($11.28 to $11.48).

    Concerns

    5

    • STELARA sales declined 48.6% in Q4, driven by biosimilar competition and Part D redesign, creating a 1,110 basis point headwind for Innovative Medicine.

    • MedTech tariffs are projected to be approximately $500 million in 2026, a significant increase from 2025, impacting operating margin.

    • Higher litigation costs of $0.9 billion in Q4 were primarily related to the Auris shareholder resolution.

    • The diluted share count is increasing to approximately 2.44 billion shares, resulting in a slight headwind of over $0.05 to EPS in 2026 versus 2025.

    • Generic impact for SIMPONI and OPSUMIT is expected to begin in 2026, which is contemplated in the full year guidance.

    Guidance & targets

    17
    CategoryTargetConfidence
    Growth in 2026
    faster than in 2025
    high materiality
    High
    Revenue growth
    double-digit growth
    high materiality
    High
    Free cash flow generation
    approximately $21 billion
    high materiality
    High
    Operational sales growth
    5.7% to 6.7%
    high materiality
    High
    Adjusted operational sales growth midpoint
    5.9%
    high materiality
    High
    Reported sales growth
    6.2% to 7.2%
    high materiality
    High
    Adjusted pretax operating margin improvement
    at least 50 basis points
    medium materiality
    High
    Full year MedTech tariffs
    approximately $500 million
    medium materiality
    High
    Net interest expense
    $300 million and $400 million
    low materiality
    High
    Net other income
    $1 billion to $1.2 billion
    low materiality
    High
    Effective tax rate
    17.5% to 18.5%
    medium materiality
    High
    Adjusted operational earnings per share growth
    5.5% at the midpoint
    high materiality
    High
    Reported adjusted earnings per share
    $11.53 at the midpoint
    high materiality
    High
    EPS growth phasing
    higher in the second half of the year versus the first half
    medium materiality
    High
    STELARA erosion curve
    continue to follow the HUMIRA erosion curve
    high materiality
    High
    Generic impact for SIMPONI and OPSUMIT
    to begin in 2026
    medium materiality
    High
    Orthopaedics business separation
    mid-2027 separation
    high materiality
    High

    Segment performance

    9
    SegmentRevenueYoYQoQMargin
    Innovative Medicine
    Strong growth despite significant STELARA headwind, driven by key brands and new launches. Margin improvement primarily driven by administrative expense leveraging and phasing of R&D expense.
    Growth in the U.S.: 7.9%Growth outside of the U.S.: 7.9%Acquisition and divestitures net positive impact on worldwide growth: 170 basis pointsSTELARA headwind: 1,110 basis pointsMargin improved from: 32.5%
    		$15.8 billion7.9%—36.3%
    Oncology
    Strong operational sales growth for the full year, with significant contributions from multiple myeloma and solid tumor portfolios. Expects to exceed $50 billion in annual sales by 2030.
    DARZALEX growth: 24.1%DARZALEX share gains across all lines of therapy: 6.5 pointsDARZALEX share gains in frontline setting: nearly 12 pointsCARVYKTI sales: $555 millionCARVYKTI growth: 63.2%TECVAYLI growth: 18.9%TALVEY growth: 73.1%ERLEADA growth: 18%RYBREVANT plus LAZCLUZE sales: $216 millionRYBREVANT plus LAZCLUZE growth: 76.5%
    		—21%——
    Immunology
    TREMFYA showed remarkable growth driven by share gains across all indications, particularly strong momentum from IBD launch. STELARA declined due to biosimilar competition and Part D redesign.
    TREMFYA growth: 65.4%STELARA decline: 48.6%
    		————
    Neuroscience
    Operational sales grew 10% for the full year. SPRAVATO continues strong trajectory, and CAPLYTA showed highest ever new patient start volumes since aMDD approval.
    SPRAVATO growth: 67.8%CAPLYTA sales: $249 million
    		—10%——
    MedTech
    Strong performance across Cardiovascular, Surgery, and Vision. Margin improvement primarily driven by prior year acquired IPR&D expense from V-Wave acquisition, partially offset by tariffs and COGS impact.
    Growth in the U.S.: 6.6%Growth outside of the U.S.: 4.9%Acquisitions and divestitures net negative impact on worldwide growth: 10 basis pointsMargin improved from: 10.8%
    		$8.8 billion5.8%—17.4%
    Cardiovascular (MedTech)
    Strong operational sales growth for the full year, with Abiomed and Shockwave performing particularly well. Electrophysiology growth driven by procedure growth and new products like VARIPULSE.
    Electrophysiology growth: 6.5%Abiomed growth: 18.3%Shockwave growth: 22.9%
    		—15%——
    Surgery (MedTech)
    Growth despite negative impact from divestitures, driven by new product launches in biosurgery and technology penetration in wound closure, partially offset by competitive pressures and VBP in China.
    		—3.7%——
    Vision (MedTech)
    Robust annual operational sales growth, with particularly strong momentum in surgical vision driven by new product innovations and demand for premium IOLs.
    Contact lenses and other products growth: 5.3%Surgical Vision growth: 10.8%
    		—5.3%——
    Orthopaedics
    Growth continued to gain momentum, driven by new product launches and strong commercial execution, partially offset by Orthopaedics transformation and VBP in China.
    		—3.5%——

    Operational metrics

    62
    Adjusted net earnings
    $6 billion
    Q4 FY25

    For the fourth quarter.

    Adjusted diluted earnings per share
    $2.46increase of 20.6%
    Q4 FY25

    For the fourth quarter, compared to Q4 2024.

    IPR&D charge from V-Wave acquisition
    $0.22
    Q4 FY25

    Per share impact associated with the V-Wave acquisition in 2024.

    Dilution from Halda Therapeutics acquisition
    $0.10
    Q4 FY25

    Per share impact due to the acquisition of Halda Therapeutics in 2025.

    Adjusted net earnings
    $26.2 billion
    FY25

    For the full year.

    Adjusted diluted earnings per share
    $10.79increase of 8.1%
    FY25

    For the full year, compared to FY24.

    Talc reserve reversal
    $7 billion
    Q1 FY25

    Included in full year 2025 net earnings.

    Acquired IPR&D charges
    $0.67
    FY24

    Per share dilution in FY24 due to various transactions.

    Cost of goods sold deleverage
    80YoY
    Q4 FY25

    Compared to the same quarter of last year.

    Selling, marketing and administrative expense leverage
    110YoY
    Q4 FY25

    Compared to the same quarter of last year.

    Research and development leverage
    620YoY
    Q4 FY25

    Compared to the same quarter of last year.

    Net interest income
    $23 milliondecrease from $144 million
    Q4 FY25

    Compared to Q4 2024.

    Other income and expense
    $483 millionnet expense vs $161 million income
    Q4 FY25

    Net expense compared to net income in Q4 2024.

    GAAP tax rate
    3%benefit vs 11.7% cost
    Q4 FY25

    Compared to Q4 2024.

    Adjusted income before tax as percentage of sales
    28.7%increased from 24.1%
    Q4 FY25

    For the enterprise.

    Cash and marketable securities
    $20 billion
    FY25 end

    Balance at the end of 2025.

    Debt
    $48 billion
    FY25 end

    Balance at the end of 2025.

    Net debt position
    $28 billion
    FY25 end

    Calculated as debt minus cash and marketable securities.

    Diluted share count
    2.44 billion
    FY26

    Based on U.S. GAAP accounting rules, increasing due to rapid share price appreciation.

    Incremental dilutive shares headwind
    $0.05vs 2025
    FY26

    Slightly more than $0.05 headwind to EPS.

    Operational sales growth
    5.3%
    FY25

    For the full year.

    STELARA headwind to sales
    620
    FY25

    Approximate headwind for full year worldwide sales.

    Worldwide sales growth excluding STELARA
    double digits
    FY25

    Johnson & Johnson grew double digits for the full year, excluding STELARA.

    Acquisitions and divestitures impact on worldwide growth
    110
    FY25

    For full year worldwide growth.

    DARZALEX operational growth
    22%
    FY25

    Across the full year.

    SPRAVATO growth
    57%
    FY25

    For the full year.

    Platforms/products with over $1 billion annual revenue
    28
    Annual

    Number of platforms or products that generate at least $1 billion of revenue annually.

    DARZALEX annual sales
    $14 billion
    Annual

    Annual sales over $14 billion.

    CARVYKTI patients treated
    10,000
    Cumulative

    More than 10,000 patients now treated across 14 markets.

    SPRAVATO patients treated
    200,000
    Cumulative

    More than 200,000 patients now treated worldwide.

    MedTech major launches
    15
    FY25

    Number of major launches in MedTech.

    MedTech regulatory approvals
    40
    FY25

    Number of regulatory approvals in MedTech.

    MedTech active clinical trials
    60
    Current

    Number of active clinical trials in MedTech.

    VARIPULSE atrial fibrillation patients treated
    40,000
    Cumulative

    Nearly 40,000 atrial fibrillation patients treated globally.

    CARTO 3 System AFib readmissions reduction
    61%
    Recent study

    Patients treated with PFA devices using CARTO were 61% less likely to experience AFib-related readmissions.

    MedTech assets in high-growth markets
    roughly halfvs 20% in 2018
    Current

    Assets participating in higher-growth markets (growing north of 5%).

    MedTech assets in high-growth markets post Ortho separation
    north of 70%
    Post Ortho separation

    Expected percentage of assets participating in higher-growth markets following the Ortho separation.

    INLEXZO permanent J-code expectation
    beginning of the second quarter
    Q2 FY26

    Anticipated timing for the permanent J-code, expected to be a catalyst for utilization.

    Localized bladder cancer new cases
    600,000
    Annual

    New cases per year.

    Localized bladder cancer relapsed cases
    400,000
    Annual

    Annual cases of patients who have relapsed and are looking for a solution.

    TAR-210 complete responses success rate
    north of 90%
    Current

    Success rate seen with complete responses for the erdafitinib carrying device.

    R&D and M&A investment
    $32 billion
    2025

    Total investment in R&D and M&A.

    Manufacturing facilities investment
    billions of dollars
    2025

    Initiated new state-of-the-art manufacturing facilities.

    DARZALEX operational growth
    24.1%
    Q4 FY25

    Primarily driven by strong share gains and market growth.

    CARVYKTI sales
    $555 million
    Q4 FY25

    Achieved sales in the quarter.

    CARVYKTI growth
    63.2%
    Q4 FY25

    Driven by share gains and site expansion.

    TECVAYLI growth
    18.9%
    Q4 FY25

    Driven by continued expansion in the community setting.

    TALVEY growth
    73.1%
    Q4 FY25

    Driven by continued expansion in the community setting.

    ERLEADA growth
    18%
    Q4 FY25

    Due to market growth and continued share gains, partially offset by Part D redesign.

    RYBREVANT plus LAZCLUZE sales
    $216 million
    Q4 FY25

    Sales in the quarter.

    RYBREVANT plus LAZCLUZE growth
    76.5%
    Q4 FY25

    Driven by continued launch uptake in all regions.

    TREMFYA operational growth
    65.4%
    Q4 FY25

    Remarkable growth, with strong momentum from IBD launch.

    TREMFYA full year sales
    more than $5 billion
    FY25

    Accelerating for the first time.

    STELARA decline
    48.6%
    Q4 FY25

    Driven by share loss due to biosimilar competition and Part D redesign.

    SPRAVATO growth
    67.8%
    Q4 FY25

    Driven by continued strong demand from physicians and patients.

    CAPLYTA sales
    $249 million
    Q4 FY25

    For the quarter, acquired as part of Intra-Cellular acquisition.

    Abiomed growth
    18.3%
    Q4 FY25

    With continued strong adoption of Impella technology.

    Shockwave growth
    22.9%
    Q4 FY25

    Driven by continued adoption of coronary and peripheral products.

    Electrophysiology growth
    6.5%
    Q4 FY25

    Driven by procedure growth and new products, partially offset by competitive pressures.

    Contact lenses and other products growth
    5.3%
    Q4 FY25

    Driven by category growth, ACUVUE OASYS 1-Day Family products, and strategic price actions.

    Surgical Vision growth
    10.8%
    Q4 FY25

    Driven by new product innovations, demand for premium IOLs, and strong commercial execution.

    Orthopaedics growth
    3.5%
    Q4 FY25

    Primarily driven by new product launches and strong commercial execution, partially offset by transformation and VBP in China.

    Industry KPIs

    12
    MetricValueDetails
    Peak sales guidance$10 billionUSD
    Prescription volume—
    EPS revenue guidance5.7% to 6.7%%
    Pricing policy impact—
    Product franchise net salesOver $14 billionUSD
    Pipeline clinical milestones11programs
    Regulatory approvals filings51 approvals, 32 submissions
    Therapeutic drug market share6.5 pointspoints
    Price volume mix decomposition—
    Geographic regional revenue growth7.5% (U.S.), 6.6% (OUS)%
    Clinical trial efficacy safety data83%%
    Business development capacity deal appetite$32 billionUSD

    Product announcements

    8
    ProductTypeDetails
    RYBREVANT FASPROlaunch
    INLEXZOlaunch
    CAPLYTAlaunch
    ACUVUE OASYS MAX disposable lenseslaunch
    TECNIS Odyssey IOLlaunch
    TECNIS PureSeelaunch
    MONARCH robotics platformlaunch
    ETHICON 4000 staplerlaunch

    Deals & partnerships

    5
    Intra-Cellular TherapiesAcquisition of a company

    Acquisition primarily drove net positive impact on worldwide growth.

    Halda TherapeuticsAcquisition of a company

    Q4 acquisition added a promising clinical stage treatment for prostate cancer.

    V-WaveAcquisition of a company

    Acquisition in 2024, associated with an IPR&D charge.

    ShockwaveAcquisition of a company

    Acquisition in 2025, primarily drove net positive impact on worldwide growth.

    Bristol-Myers SquibbDevelopment partnership for milvexian

    Developing milvexian in partnership for secondary stroke and atrial fibrillation.

    Risks & headwinds

    8
    STELARA biosimilar competition and Part D redesignQ4 FY25, FY25, FY26

    650 basis point headwind to worldwide sales in Q4; 620 basis point headwind to worldwide sales in FY25; 1,110 basis point headwind to Innovative Medicine sales in Q4; 48.6% decline in STELARA sales in Q4.

    Mitigation: Strong pipeline and new launches are offsetting the impact; STELARA erosion expected to continue following HUMIRA curve, incorporated into 2026 guidance.

    MedTech tariffsFY26

    Approximately $500 million for FY26

    Mitigation: Incorporated into 2026 guidance; P&L cost was largely recorded in Q4 2025 for prior year.

    Higher litigation costsQ4 FY25

    $0.9 billion in Q4 FY25

    Mitigation: Aggressively fighting meritless claims in the court system, appealing erroneous parts of the Daubert ruling.

    Diluted share count increaseFY26

    Approximately 2.44 billion shares for FY26, resulting in slightly more than $0.05 headwind versus 2025.

    Mitigation: Incorporated into 2026 EPS guidance.

    Generic impact for SIMPONI and OPSUMIT2026

    Generic impact to begin

    Mitigation: Contemplated in full year 2026 guidance.

    Competitive pressures in MedTechQ4 FY25

    Partially offset growth in electrophysiology, energy, and endocutters.

    Mitigation: Continued innovation, new product launches (e.g., VARIPULSE, new catheters), and strong commercial execution.

    Volume-based procurement (VBP) in ChinaQ4 FY25, FY26

    Impacted Surgery portfolio and Orthopaedics.

    Mitigation: Anticipate some additional rounds of VBP in China, all incorporated into 2026 guidance.

    Non-recurring charge for Halda employee equity awardsQ4 FY25

    $0.2 billion

    What to watch in Q1 FY26

    5

    ICOTYDE US Approval

    Coming months
    CurrentAnticipated
    TargetApproval decision

    Why it matters

    ICOTYDE is expected to be a new blockbuster, expanding immunology innovation and leading the next wave of treatment for psoriasis and IBD.

    In the coming months⏳, we look forward to the anticipated U.S. approval of icotrokinra, to be marketed as ICOTYDE, which will expand our immunology innovation beyond injectable medicines.

    Q&A highlights

    5

    How will J&J achieve double-digit revenue growth by the end of the decade, given its size and the Ortho spin? What is the mix of organic pipeline, M&A, and portfolio pruning, and what stage is the strategic repositioning in?

    Joaquin Duato outlined the growth drivers across Oncology (targeting $50B by 2030), Immunology (TREMFYA >$10B peak sales, ICOTYDE as a new blockbuster, co-antibody therapeutic), and Neuroscience (SPRAVATO, CAPLYTA >$5B). In MedTech, he highlighted Cardiovascular (electrophysiology, Abiomed, Shockwave), Surgery (OTTAVA, MONARCH), and Vision. He emphasized the derisked nature of the pipeline with many products already approved or submitted, and that the company's growth story is one of the 'cleanest' in healthcare.

    “So we feel very confident about our outlook. It's reflected in our guidance for 2026. And I can assure you that everybody here at Johnson & Johnson is focused on doing exactly what we do best, which is looking for innovation in medicines and medical technologies to improve the standard of care of the millions of patients that we serve, and we are convinced that, that will translate in strong business results.”

    asked by Asad Haider · answered by Joaquin Duato

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Repositioning and Future Growth

    Johnson & Johnson is actively transforming its portfolio, increasing focus on high-growth, high-unmet-need areas. This includes significant R&D and M&A investments totaling over $32 billion in 2025, alongside the planned separation of the Orthopaedics business by mid-2027. The company aims for double-digit revenue growth by the end of the decade, supported by a robust portfolio of 28 platforms generating over $1 billion annually, which provides sustainable growth and resilience.

    02

    Innovative Medicine Momentum

    The Innovative Medicine segment achieved 5.3% operational sales growth in FY25, with pharmaceutical sales exceeding $60 billion for the first time. Key growth drivers include Oncology, which saw 21% operational growth in 2025 and is targeting over $50 billion in annual sales by 2030, and Immunology, highlighted by TREMFYA's 65% Q4 operational growth. Neuroscience also contributed significantly with SPRAVATO growing 57% in 2025. The segment secured 51 approvals and filed 32 submissions across major markets in 2025.

    03

    MedTech Innovation and Expansion

    MedTech delivered 5.4% operational sales growth in FY25, reaching nearly $34 billion, with strong performance across its three focus areas. Cardiovascular grew 15% operationally in 2025, driven by Abiomed and Shockwave's double-digit growth. Surgery is being reinvented through robotics with the upcoming launch of MONARCH for Urology and the recent FDA de novo submission of the OTTAVA robotic surgery system. Vision saw robust 5.3% annual operational sales growth, fueled by new product launches like ACUVUE OASYS MAX and TECNIS Odyssey IOL.

    04

    Pipeline and Regulatory Milestones

    J&J's pipeline is robust, with several anticipated regulatory approvals in 2026. These include ICOTYDE for psoriasis, TECVAYLI in combination with DARZALEX for relapsed/refractory multiple myeloma, and TREMFYA for the inhibition of structural joint damage in psoriatic arthritis. In MedTech, the company expects approvals and regulatory submissions for the OTTAVA Robotic Surgical System, ETHIZIA in Biosurgery, and the Dual Energy THERMOCOOL SMARTTOUCH SF Catheter in the U.S.

    05

    Capital Allocation and Financial Strength

    The company ended 2025 with approximately $20 billion in cash and marketable securities and generated $19.7 billion in free cash flow. Management expects to elevate free cash flow generation to approximately $21 billion in 2026. The planned mid-2027 separation of the Orthopaedics business is progressing well and is expected to further shift the portfolio towards higher-growth markets, enabling greater capital allocation to strategic areas.

    06

    Talc Litigation Update

    Management addressed the recent Daubert rulings in the talc MDL, stating that while some aspects were favorable, they would appeal parts where the court did not uphold its gatekeeping duty. The company reiterated its strategy to aggressively fight meritless claims through trials and appeals, emphasizing that the litigation does not distract from J&J's core mission of delivering innovative medicines and medical technologies.

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