Johnson & Johnson Q4 Earnings Call Highlights

Johnson & Johnson (NYSE:JNJ) executives highlighted what they described as a “catapult year” in 2025, pointing to strong operational sales growth, accelerating momentum in key therapeutic and device categories, and a 2026 outlook that calls for faster growth and improving margins despite continued headwinds from biosimilar competition and tariffs.

Management frames 2025 as a launch point for faster growth

CEO Joaquin Duato said 2025 “launched us into a new era of accelerated growth,” supported by what he called the strongest portfolio and pipeline in the company’s history. He emphasized Johnson & Johnson’s focus on six core areas—oncology, immunology, neuroscience, cardiovascular, surgery, and vision—and noted the company has “28 platforms or products that generate at least $1 billion of revenue annually.”

Duato also reiterated a strategic pivot toward higher-growth markets, including a planned separation of the Orthopaedics business, which CFO Joe Wolk said is targeted for mid-2027. Duato said the company invested over $32 billion in R&D and M&A in 2025, including the acquisitions of Intra-Cellular Therapies and Halda Therapeutics, and initiated “billions of dollars” in new U.S. manufacturing facilities.

Q4 and full-year results: growth despite Stelara headwind

Investor Relations Vice President Darren Snellgrove reported fourth-quarter 2025 worldwide sales of $24.6 billion, up 7.1% operationally despite an approximate 650 basis point headwind from Stelara. U.S. sales grew 7.5% and sales outside the U.S. grew 6.6%. Acquisitions and divestitures added 100 basis points to worldwide growth, primarily driven by the Intra-Cellular acquisition.

For the quarter, net earnings were $5.1 billion and diluted EPS was $2.10 versus $1.41 a year earlier. Adjusted net earnings were $6.0 billion and adjusted diluted EPS was $2.46, representing increases of 21.5% and 20.6%, respectively, compared with Q4 2024. Snellgrove cited items affecting comparability, including a $0.22 IPR&D charge related to the V-Wave acquisition in 2024 and $0.10 of dilution due to the Halda Therapeutics acquisition in 2025.

Full-year 2025 worldwide sales were $94.2 billion, up 5.3% operationally despite an approximate 620 basis point headwind from Stelara. U.S. growth was 6.9% and growth outside the U.S. was 3.4%. Acquisitions and divestitures contributed 110 basis points, driven primarily by the Intra-Cellular and Shockwave acquisitions.

Full-year net earnings were $26.8 billion and diluted EPS was $11.03, which included a $7 billion talc reserve reversal in Q1. Adjusted net earnings were $26.2 billion and adjusted diluted EPS was $10.79, both up 8.1% from 2024.

Key business highlights: oncology, immunology, and MedTech momentum

In Innovative Medicine, Q4 worldwide sales were $15.8 billion, up 7.9% operationally despite an approximate 1,110 basis point Stelara headwind. Snellgrove said both U.S. and ex-U.S. growth were 7.9%, and acquisitions added 170 basis points, primarily from Intra-Cellular.

• Oncology: Darzalex grew 24.1% in Q4, driven by share gains and market growth; full-year Darzalex sales were described by Duato as over $14 billion with 22% growth. Carvykti generated $555 million in Q4 sales, up 63.2%. Tecvayli and Talvey grew 18.9% and 73.1%, respectively. Rybrevant plus Lazcluze delivered $216 million in Q4 sales, up 76.5%.
• Immunology: Tremfya grew 65.4% in Q4; Duato said global full-year Tremfya sales accelerated to more than $5 billion for the first time and reiterated confidence in over $10 billion peak-year sales. Stelara declined 48.6% in Q4 amid biosimilar competition and the Part D redesign.
• Neuroscience: Spravato grew 67.8% in Q4, and Duato said more than 200,000 patients have been treated worldwide. Caplyta contributed $249 million in Q4 sales following the Intra-Cellular acquisition, with management noting record new patient starts since U.S. approval for adjunctive major depressive disorder.

MedTech Q4 sales were $8.8 billion, up 5.8% operationally, with 6.6% growth in the U.S. and 4.9% outside the U.S. Cardiovascular was a key driver, including Abiomed growth of 18.3% and Shockwave growth of 22.9% in Q4. Snellgrove said electrophysiology grew 6.5% in Q4, aided by procedure growth and VARIPULSE, partially offset by competitive pressures in pulsed field ablation.

In surgery, sales grew 3.7% despite divestiture impacts, while vision contact lenses grew 5.3% and Surgical Vision grew 10.8%, driven by premium intraocular lenses and new product innovation.

Margins, litigation items, and 2026 guidance

Snellgrove said adjusted income before tax as a percentage of sales rose to 28.7% in Q4 from 24.1% a year earlier, with Innovative Medicine margin improving to 36.3% and MedTech margin improving to 17.4%.

He also cited cost pressures, including MedTech tariffs affecting cost of goods sold. Other income and expense in Q4 was a net expense of $483 million versus $161 million of income a year ago, driven by $0.9 billion of higher litigation costs primarily related to the Auris shareholder resolution and a $0.2 billion non-recurring charge related to Halda employee equity awards, partially offset by a $0.3 billion contingent value right reduction associated with the Abiomed acquisition.

Wolk said the company ended 2025 with approximately $20 billion of cash and marketable securities and $48 billion of debt, for net debt of approximately $28 billion. Johnson & Johnson generated $19.7 billion of free cash flow in 2025 and expects to increase free cash flow to approximately $21 billion in 2026.

For 2026, Wolk guided to operational sales growth of 5.7% to 6.7%, with a midpoint of $100 billion (6.2%). Including a 53rd week worth approximately 100 basis points and using the euro spot rate assumptions discussed on the call, the company expects reported sales growth of 6.2% to 7.2%, with a midpoint of $100.5 billion (6.7%).

Adjusted EPS guidance was $11.28 to $11.48, implying 5.5% growth at the midpoint; reported adjusted EPS is expected to be $11.53 at the midpoint including an estimated $0.15 benefit from currency. Wolk also said the company expects full-year MedTech tariffs of approximately $500 million and plans for adjusted pre-tax operating margin to improve by at least 50 basis points despite increased investment, the 53rd week, tariffs, and the impact of a voluntary U.S. government agreement “to improve access to medicines and lower costs to U.S. patients.”

Pipeline and product milestones discussed for 2026 and beyond

Management highlighted anticipated 2026 regulatory events, including expected approvals for Icotide (icotrokinra) in psoriasis, Tecvayli in combination with Darzalex in relapsed/refractory multiple myeloma as early as second line, and Tremfya for inhibition of structural joint damage in psoriatic arthritis. In MedTech, Wolk pointed to anticipated approvals and submissions including the Ottava robotic surgical system, ETHIZIA in Biosurgery, and submission of a dual-energy ThermoCool SmartTouch SF catheter in the U.S.

During Q&A, executives also addressed multiple myeloma portfolio positioning, with leadership describing Tecvayli plus Darzalex as “community-ready” therapy and Carvykti as a single-dose CAR-T option with strong uptake. On Inlexo for bladder cancer, executives said early launch feedback has been positive and that a permanent J-code is anticipated around the beginning of the second quarter (April timeframe), which they called a catalyst for utilization.

Wolk also discussed a recent Daubert report and recommendation in the talc MDL, saying the company will appeal portions it believes did not apply Rule 702 appropriately and that the recommendation has no legal effect until accepted by the judge. Duato said the company will continue to defend against what management called “meritless claims” and urged investors to focus on business performance and guidance.

About Johnson & Johnson (NYSE:JNJ)

Johnson & Johnson is a multinational healthcare company headquartered in New Brunswick, New Jersey, that develops, manufactures and markets a broad range of products across pharmaceuticals, medical devices and previously consumer health. Founded in 1886 by the Johnson family, the company has grown into a global healthcare organization with operations and sales in many countries around the world.

The company’s pharmaceuticals business, organized largely under its Janssen research and development organization, focuses on prescription medicines across therapeutic areas such as immunology, infectious disease, oncology and neuroscience.