Johnson & Johnson (JNJ) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary shows strong financial performance, with impressive growth in key products like CARVYKTI and TECVAYLI, and positive MedTech developments. The guidance is optimistic, with increased operational sales and EPS projections. The Q&A reveals confidence in growth strategies and market positioning, despite some uncertainties around litigation and ACA impact. Overall, the positive growth outlook and strategic focus on high-growth areas support a positive sentiment, likely leading to a stock price increase.
Key Financial Performance
R&D and M&A Investment $32 billion invested in 2025, including acquisitions of Intra-Cellular Therapies and Halda Therapeutics. This investment supports innovation and growth.
Operational Sales Growth 5.3% growth for the full year 2025, despite a 620 basis point headwind from STELARA. Growth driven by commercial execution and innovation.
Pharmaceutical Business Sales Exceeded $60 billion for the first time in 2025, with 13 brands growing double digits. Growth attributed to a strong portfolio and pipeline.
Oncology Sales Growth 21% operational sales growth in 2025, driven by multiple myeloma treatments like DARZALEX, which grew 22% to over $14 billion in annual sales.
TREMFYA Sales Growth 75% operational sales growth in Q4 2025 and 65% worldwide for the year, reaching over $5 billion in annual sales. Growth driven by share gains and market expansion.
Neuroscience Sales Growth 10% operational sales growth in 2025, with SPRAVATO growing 57% and CAPLYTA contributing $249 million in Q4 sales.
MedTech Sales Growth 5.4% operational sales growth in 2025, reaching nearly $34 billion. Growth supported by launches and regulatory approvals in Cardiovascular, Surgery, and Vision.
Q4 2025 Worldwide Sales $24.6 billion, a 7.1% increase despite a 650 basis point headwind from STELARA. Growth driven by acquisitions and divestitures.
Q4 2025 Net Earnings $5.1 billion, with diluted earnings per share of $2.10, up from $1.41 a year ago. Adjusted net earnings were $6 billion, a 21.5% increase year-over-year.
Full Year 2025 Worldwide Sales $94.2 billion, a 5.3% increase despite a 620 basis point headwind from STELARA. U.S. sales grew 6.9%, and international sales grew 3.4%.
Full Year 2025 Net Earnings $26.8 billion, with diluted earnings per share of $11.03, up from $5.79 in 2024. Adjusted net earnings were $26.2 billion, an 8.1% increase year-over-year.
Innovative Medicine Sales $15.8 billion in Q4 2025, a 7.9% increase despite a 1,110 basis point headwind from STELARA. Growth driven by acquisitions and new launches.
DARZALEX Sales Growth 24.1% growth in Q4 2025, driven by share gains and market growth in multiple myeloma treatments.
CARVYKTI Sales Growth 63.2% growth in Q4 2025, driven by share gains and site expansion.
TECVAYLI and TALVEY Sales Growth 18.9% and 73.1% growth respectively in Q4 2025, driven by expansion in the community setting.
TREMFYA Q4 2025 Growth 65.4% growth, driven by share gains across all indications and market growth.
SPRAVATO Q4 2025 Growth 67.8% growth, driven by strong demand from physicians and patients.
MedTech Cardiovascular Growth 15% operational sales growth in 2025, with Abiomed and Shockwave delivering 18% and 23% growth respectively in Q4.
MedTech Surgery Growth 3.7% growth in Q4 2025, driven by new product launches and commercial execution.
MedTech Vision Growth 5.3% growth in Q4 2025, driven by new product innovations and strategic pricing actions.
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Operating Highlights
Oncology: Delivered 21% operational sales growth in 2025, with DARZALEX achieving $14 billion in sales and CARVYKTI treating over 10,000 patients. TECVAYLI plus DARZALEX showed an 83% reduction in disease progression risk in multiple myeloma.
Immunology: TREMFYA became the first IL-23 inhibitor for ulcerative colitis and Crohn's disease, achieving $5 billion in sales. ICOTYDE is expected to expand innovation in psoriasis and inflammatory bowel disease.
Neuroscience: SPRAVATO grew 57% in 2025, treating over 200,000 patients. CAPLYTA was launched for adjunctive major depressive disorder, with $5 billion peak sales potential.
MedTech: Operational sales grew 5.4% in 2025, driven by cardiovascular, surgery, and vision segments. Key launches included MONARCH robotics for urology and TECNIS Odyssey IOL for vision.
Oncology Market Expansion: Johnson & Johnson is the #1 company in multiple myeloma and expects to exceed $50 billion in annual oncology sales by 2030.
MedTech Market Expansion: Abiomed and Shockwave achieved 18% and 23% growth, respectively, with plans to expand in pulsed-field ablation and robotics.
R&D Investment: Invested over $32 billion in R&D and M&A in 2025, including acquisitions of Intra-Cellular Therapies and Halda Therapeutics.
Manufacturing Expansion: Initiated billions in new U.S. manufacturing facilities to accelerate innovation delivery.
Orthopaedics Business Separation: Planned separation of Orthopaedics business by mid-2027 to focus on high-growth areas.
Litigation Strategy: Continued defense against talc-related claims, with plans to appeal recent rulings.
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Risk or Challenges
Litigation Costs: Higher litigation costs of $0.9 billion, primarily related to the Auris shareholder resolution, pose a financial risk to the company.
Talc MDL Rulings: The court's mixed rulings on the Talc MDL litigation could lead to prolonged legal battles and financial liabilities.
STELARA Biosimilar Competition: STELARA sales declined 48.6% due to biosimilar competition, significantly impacting revenue.
Tariffs in MedTech: MedTech tariffs, which are expected to cost approximately $500 million in 2026, represent a financial burden.
Generic Impact on SIMPONI and OPSUMIT: Generic competition for SIMPONI and OPSUMIT is expected to begin in 2026, potentially reducing revenue.
Volume-Based Procurement (VBP) in China: VBP in China negatively impacted the Surgery portfolio and is expected to continue affecting MedTech in 2026.
Higher Debt Balance: A higher average debt balance has reduced interest income, impacting financial performance.
Orthopaedics Transformation: The ongoing transformation of the Orthopaedics business may lead to operational disruptions and financial uncertainties.
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Guidance & Outlook
Revenue Growth: Johnson & Johnson anticipates operational sales growth in the range of 5.7% to 6.7% for 2026, with a midpoint of $100 billion or 6.2%. Including currency impacts, reported sales growth is expected to be between 6.2% to 7.2%, with a midpoint of $100.5 billion or 6.7%.
Innovative Medicine Growth: Sales growth in 2026 will be driven by key products such as TREMFYA, DARZALEX, CARVYKTI, ERLEADA, and SPRAVATO, as well as new launches like RYBREVANT plus LAZCLUZE in lung cancer and CAPLYTA for major depressive disorder.
MedTech Growth: Growth in MedTech is expected to be driven by new product launches across Cardiovascular, Surgery, and Vision portfolios, including VARIPULSE in Electrophysiology, ETHICON 4000 in Surgery, and the OASYS MAX Family in Vision.
Pipeline and Regulatory Approvals: In 2026, Johnson & Johnson expects regulatory approvals for ICOTYDE in psoriasis, TECVAYLI in combination with DARZALEX for multiple myeloma, and TREMFYA for psoriatic arthritis. Submissions and data presentations are also planned across Oncology, Immunology, and Neuroscience.
Orthopaedics Business Separation: The company is progressing towards a mid-2027 separation of its Orthopaedics business.
Financial Metrics: Adjusted operational earnings per share growth is projected at 5.5% at the midpoint, with a range of $11.28 to $11.48. Adjusted pretax operating margin is expected to improve by at least 50 basis points in 2026.
Capital Allocation and Free Cash Flow: Free cash flow generation is expected to increase to approximately $21 billion in 2026, up from $19.7 billion in 2025.
Strategic Investments: The company plans to continue investing in new product launches, pipeline advancements, and U.S. manufacturing facilities to support innovation and growth.
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Shareholder Return Plan
Dividend Program: The transcript does not explicitly mention any specific dividend program or details about dividends.
Share Buyback Program: The transcript does not explicitly mention any specific share buyback program or details about share repurchase.
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Key Q&A
Q:What are the key levers to achieve double-digit revenue growth by the latter part of the decade?
A:Joaquin Duato highlighted six areas of focus: Oncology (aiming to become the #1 oncology company with $50 billion by the end of the decade), Innovative Medicine (three major blockbusters: TREMFYA, ICOTYDE, and a co-antibody therapeutic), MedTech (strong growth in Cardiovascular, Surgery, and Vision), and a dozen new product launches. He emphasized the strength of the portfolio and pipeline, with many products already approved or submitted.
Q:How is J&J addressing the MedTech market dynamics and growth in 2026?
A:Tim Schmid stated that J&J does not expect the loss of ACA subsidies to materially impact MedTech performance. He emphasized robust procedure demand and highlighted growth in Cardiovascular (15.2% operational growth in 2025), Vision, and Surgery. He also mentioned the portfolio transformation, with 70% of assets in higher-growth markets post-Ortho separation.
Q:What is the outlook for J&J's margin progression over time?
A:Joseph Wolk explained that J&J aims to improve infrastructure, eliminate stranded costs post-Ortho separation, and enhance gross margins in MedTech. He noted that STELARA erosion will have less impact going forward and reiterated that earnings growth will align with sales growth.
Q:What are the growth prospects for J&J's Vision Care business?
A:Tim Schmid reported strong growth in Vision Care, with contact lenses growing 5.3% and Surgical Vision close to 11%. He highlighted the success of ACUVUE OASYS 1-Day Family and premium intraocular lenses like TECNIS Odyssey and PureSee. He also emphasized global market share expansion and capital allocation to Vision post-Ortho separation.
Q:How is J&J positioning TECVAYLI and CARVYKTI in the multiple myeloma market?
A:Jennifer Taubert and John Reed discussed TECVAYLI's strong data in combination with DARZALEX and its potential in second-line and third-line settings. CARVYKTI, a single-dose CAR-T therapy, has shown superior overall survival. They emphasized tailored treatment options based on patient needs and practice settings.
Q:What is J&J's strategy for expanding into new growth markets?
A:Tim Schmid and Jennifer Taubert highlighted opportunities in Cardiovascular, Surgery, and Vision, with a focus on OTTAVA in surgical robotics. In Innovative Medicine, they mentioned areas like head and neck cancer, Sjogren's disease, atopic dermatitis, B-cell malignancies, and atrial fibrillation.
Q:What is the progress and outlook for INLEXZO?
A:Jennifer Taubert reported strong interest in INLEXZO for BCG unresponsive bladder cancer. A permanent J-code is expected in Q2 2026, which will boost utilization. John Reed highlighted the broader platform potential with devices delivering different payloads, addressing a large unmet need in bladder cancer.
Q:What is J&J's response to the Talc litigation and its impact on the business?
A:Joseph Wolk and Joaquin Duato stated that J&J will continue to fight meritless claims and appeal erroneous recommendations. They emphasized that the litigation does not distract from the company's focus on innovation and delivering strong business results.
Q:What is the confidence level in milvexian and its potential in the market?
A:John Reed and Jennifer Taubert expressed confidence in milvexian, citing its superior safety and bleeding risk profile compared to competitors. They highlighted its potential in atrial fibrillation and secondary stroke prevention, aiming to address undertreated patients due to safety concerns.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the timeline for achieving double-digit growth, the exact impact of ACA subsidy loss, and the precise financial implications of the Talc litigation. Responses to these questions were broad and lacked numerical specificity.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ACUVUE OASYS
CAPLYTA
Cardiovascular Vision
Catheter
Halda Therapeutics
ICOTYDE
Immunology
Instructions
Intra acquisition
Johnson today
Neuroscience
Oncology
Orthopaedics
RYBREVANT
STELARA Acquisitions
TECVAYLI
VBP China
Wave acquisition
acquisition Halda
acquisition share
charge
decrease
end decade
enterprise
expense Wave
experience
field ablation
focus area
headwind STELARA
margin expense
point Intra
progression death
robotics
sale momentum
strength depth
success launch
wave
JNJ Transcript
Johnson & Johnson (JNJ) Q4 2025 Earnings Call Transcript
Positive1-21
The earnings call summary shows strong financial performance, with impressive growth in key products like CARVYKTI and TECVAYLI, and positive MedTech developments. The guidance is optimistic, with increased operational sales and EPS projections. The Q&A reveals confidence in growth strategies and market positioning, despite some uncertainties around litigation and ACA impact. Overall, the positive growth outlook and strategic focus on high-growth areas support a positive sentiment, likely leading to a stock price increase.
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