Johnson & Johnson raises 2025 sales guidance by $2B and targets $50B oncology sales by 2030 amid robust Q2 performance

Earnings Call Insights: Johnson & Johnson (JNJ) Q2 2025

Management View

• Joaquin Duato, CEO, highlighted a “very strong second quarter” with operational sales growth of 4.6% and lifted full-year sales guidance by $2 billion and EPS guidance by $0.25 to a new range of $10.60 to $10.85. He emphasized, “In Innovative Medicine, we reported 3.8% operational sales growth, delivering more than $15 billion in quarterly sales for the first time. No other health care company has grown through the loss of exclusivity of a multibillion-dollar product in the first year. In our case, STELARA and yet that is exactly what we are doing and for the second quarter in a row.”
• Duato noted double-digit growth across 13 brands, including DARZALEX, CARVYKTI, TECVAYLI, TALVEY, RYBREVANT plus LAZCLUZE, TREMFYA, CAPLYTA, and SPRAVATO, and strong MedTech momentum with 6.1% sales growth, especially in Cardiovascular, Surgery, and Vision.
• He outlined a strategic focus on six areas: Oncology, Immunology, Neuroscience, Cardiovascular, Surgery, and Vision, and projected, “We expect to become the #1 oncology company by 2030 with sales of more than $50 billion.”
• In MedTech, Duato cited “over 22% operational sales growth over the quarter” in Cardiovascular, driven by new product performance in Abiomed and Shockwave, and strong mapping in electrophysiology.
• CFO Joseph J. Wolk stated, “Worldwide sales were $23.7 billion for the quarter. Sales increased 4.6% despite an approximate 710 basis point headwind from STELARA. Growth in the U.S. was 7.8% and 0.6% outside of the U.S.”
• Wolk added, “Net earnings were $5.5 billion with diluted earnings per share of $2.29 versus diluted earnings per share of $1.93 a year ago. Adjusted net earnings for the quarter were $6.7 billion, with adjusted diluted earnings per share of $2.77, representing a decrease of 2.1% and 1.8%, respectively, compared to the second quarter of 2024.”
• EVP John C. Reed emphasized the “very strong second quarter, exceeding expectations on both the top and bottom line,” and reinforced conviction to “achieve, and I’d be willing to bet likely beat the upper end of the growth targets we conveyed at our 2023 enterprise business review.”

Outlook

• The company raised its full-year operational sales guidance by approximately $900 million, now expecting operational sales growth for 2025 in the range of 4.5% to 5%, with a midpoint of $92.9 billion or 4.8%.
• Reported sales growth is expected between 5.1% to 5.6%, with a midpoint of $93.4 billion or 5.4%.
• Adjusted operational sales growth is projected in the range of 3.2% to 3.7% compared to 2024.
• Adjusted earnings per share guidance increased by $0.25 to $10.85, for a range of $10.80 to $10.90.
• The company reiterated its operating margin guide and now anticipates MedTech tariff impact for 2025 to be approximately $200 million, down from $400 million previously.

Financial Results

• Worldwide sales for Q2 2025 were $23.7 billion. U.S. sales grew by 7.8% and international sales by 0.6%. Growth was positively impacted by acquisitions, primarily Intra-Cellular and Shockwave.
• Net earnings for the quarter were $5.5 billion, with adjusted net earnings of $6.7 billion and adjusted diluted EPS of $2.77.
• Innovative Medicine worldwide sales were $15.2 billion, with 3.8% growth despite a 1,170 basis point headwind from STELARA. MedTech sales were $8.5 billion, up 6.1%.
• Oncology operational sales grew 22.3%. Key brands like DARZALEX, CARVYKTI, TECVAYLI, and TALVEY showed robust growth. TREMFYA grew 30.1%; STELARA declined 43.2% due to biosimilar competition.
• Cardiovascular MedTech saw over 22% growth, driven by new product launches. Electrophysiology grew 9.8%, Abiomed 16.9%, and Shockwave delivered double-digit growth.
• Cost of products sold deleveraged by 150 basis points due to product mix and amortization from the Intra-Cellular acquisition. Selling, marketing, and administrative expenses improved by 50 basis points, and R&D expenses leveraged by 50 basis points.

Q&A

• Christopher Thomas Schott, JPMorgan: Asked about drivers of upside to guidance and franchise contributions. CFO Wolk responded that both Innovative Medicine and MedTech contributed, with Jennifer L. Taubert and Timothy Schmid highlighting strong double-digit growth across 13 brands, exceptional Cardiovascular and Vision performance, and confidence in continued acceleration due to “significant new products.”
• Terence C. Flynn, Morgan Stanley: Inquired about Oncology’s $50 billion target by 2030 and TAR-200 launch. Taubert detailed multiple myeloma, prostate, and lung cancer growth drivers, emphasized “the biggest disconnect” with Street expectations for TAR-200, and confirmed FDA priority review and anticipated launch in the second half of 2025.
• Lawrence H. Biegelsen, Wells Fargo: Probed on sales growth acceleration and margin improvement. Wolk withheld specific margin guidance but noted “we certainly see ’26 being better than ’25 in terms of the growth rate based on what we know today.”
• Asad Haider, Goldman Sachs: Asked about pharma tariffs and supply chain flexibility. CEO Duato stated, “Our goal is to be able to manufacture in the U.S., all the medicines that are consumed in the U.S. at the completion of that plan.”
• Shagun Singh Chadha, RBC: Sought clarity on OTTAVA timeline and EP adoption. Schmid said, “We haven’t pushed out our time lines at all… we feel very confident about the progress that we’re making on OTTAVA,” and detailed “continued adoption of VARIPULSE” with “phenomenal” physician feedback.
• Alexandria Janet Hammond, Wolfe Research: Asked about TAR-200 launch strategy. Taubert highlighted preparations for a “very successful launch,” leveraging J&J’s combined Innovative Medicine and MedTech strengths.
• Danielle Joy Antalffy, UBS: Questioned MedTech growth potential. Schmid projected Cardiovascular and Surgery as “the two biggest growth drivers for MedTech going forward.”
• Vamil Kishore Divan, Guggenheim: Sought updates on co-antibody therapy 4804. Reed said Phase IIb readouts in Crohn’s and colitis are expected “middle of this year” and highlighted excitement for icotrokinra oral peptide.

Sentiment Analysis

• Analysts focused on drivers of guidance raises, product launches, and pipeline milestones, posing probing but generally constructive questions about growth sustainability and new product launches. The tone was slightly positive, with analysts congratulating management and seeking more color on product and margin outlooks.
• Management demonstrated high confidence, frequently citing robust performance, pipeline depth, and strong guidance. Duato and Wolk expressed assurance in their outlook, using language such as “we are confident” and “we have strong reasons to believe in continued acceleration.”
• Compared to the previous quarter, management’s tone was more assertive in highlighting outperformance and future growth, especially around Oncology and MedTech. Analyst sentiment remained positive but was more focused on the sustainability of growth acceleration.

Quarter-over-Quarter Comparison

• Guidance was raised more sharply in Q2, with sales and EPS outlook both increased. Management language shifted to greater confidence, now projecting operational sales growth up to 5% and highlighting a $2 billion guidance raise vs. a $700 million raise in Q1.
• Strategic focus expanded around Oncology ($50 billion by 2030), TAR-200, and MedTech’s Cardiovascular growth. The number of double-digit growth brands increased from 11 in Q1 to 13 in Q2.
• Margin commentary evolved, with ongoing attention to cost controls and efficiency programs, but now including lower anticipated tariff impact for 2025.
• Analysts in both quarters focused on product innovation, margin expansion, and tariff impacts, but Q2 saw more emphasis on how the company will accelerate growth into 2026 and beyond.
• Management’s confidence level was notably higher in Q2, repeatedly emphasizing “strong momentum,” “robust growth,” and “unique portfolio strength.”

Risks and Concerns

• Management cited continued headwinds from STELARA biosimilar erosion and Part D redesign, impacting margins and sales in Innovative Medicine.
• Tariffs remain a risk, with anticipated impact now estimated at $200 million for 2025, but company plans to reinvest the differential into pipeline acceleration.
• Litigation risk around talc remains, with the company preparing for the Daubert hearing in the fall.
• Competitive pressures in MedTech and Orthopedics persist, though management expects new launches and innovations to offset these challenges.

Final Takeaway

Johnson & Johnson delivered robust Q2 results, raising both sales and EPS guidance for the full year while reinforcing confidence in its diversified portfolio and pipeline. The company reported industry-leading growth in Oncology, Immunology, and MedTech, and provided a clear strategic roadmap to drive sustained expansion through 2030, targeting $50 billion in Oncology sales. Management remains focused on navigating headwinds from product exclusivity losses, tariffs, and litigation, while accelerating new product launches and operational efficiency to extend its market leadership and deliver value to shareholders.

Read the full Earnings Call Transcript