Earnings Call Insights: Johnson & Johnson (JNJ) Q4 2025
Management View
- Joaquin Duato, CEO & Chairman, opened by emphasizing, “We said 2025 would be a catapult year for Johnson & Johnson, and that’s exactly what it was. It was a year that launched us into a new era of accelerated growth.” He underlined the company’s leading and expanding position across Oncology, Immunology, Neuroscience, Cardiovascular, Surgery, and Vision, highlighting 28 platforms or products generating at least $1 billion in revenue annually.
- The CEO detailed over $32 billion invested in R&D and M&A, including the acquisitions of Intra-Cellular Therapies and Halda Therapeutics, and emphasized ongoing transformation with the planned separation of the Orthopaedics business.
- Duato asserted, “Full year sales for our Pharmaceutical business exceeded $60 billion for the first time with 13 brands growing double digits,” and described a strong portfolio and pipeline, with 51 approvals and 32 submissions across major markets in 2025.
- Oncology operational sales grew 21% in 2025, with DARZALEX sales over $14 billion and growth of 22%, and CARVYKTI established as the leading CAR-T therapy in multiple myeloma.
- In Immunology, TREMFYA saw Q4 operational sales growth of 75% in the U.S. and 65% worldwide, surpassing $5 billion in global annual sales for the first time.
- MedTech delivered nearly $34 billion in sales with operational sales growth of 5.4%, led by strong performance in Cardiovascular and launches such as VARIPULSE and the ETHICON 4000 stapler.
- Joseph Wolk, Executive VP & CFO, stated, “We ended 2025 with approximately $20 billion of cash and marketable securities and $48 billion of debt for a net debt position of approximately $28 billion. The company generated $19.7 billion of free cash flow during 2025, on par with 2024, despite increased capital investment in the U.S. and the impact of tariffs.”
Outlook
- For 2026, Johnson & Johnson anticipates operational sales growth in the range of 5.7% to 6.7% with a midpoint of $100 billion or 6.2%. Reported sales growth is expected between 6.2% to 7.2% with a midpoint of $100.5 billion or 6.7%.
- The company expects adjusted operational earnings per share growth of 5.5% at the midpoint, for a range of $11.28 to $11.48, with reported adjusted earnings per share estimated at $11.53 at the midpoint.
- CFO Joseph Wolk indicated, “Relative to current analyst expectations, our EPS and margin outlooks absorb the previously referenced incremental tariffs, the impact of the voluntary U.S. government agreement and a higher share count.”
- 2026 sales growth is expected to be driven by products including TREMFYA, DARZALEX, CARVYKTI, ERLEADA, SPRAVATO, RYBREVANT plus LAZCLUZE, and CAPLYTA in Innovative Medicine, and new launches in MedTech.
Financial Results
- Worldwide sales for Q4 2025 were $24.6 billion, an increase of 7.1%. Net earnings for the quarter were $5.1 billion, and diluted earnings per share was $2.10. Adjusted net earnings for the quarter were $6 billion, with adjusted diluted earnings per share of $2.46, representing a 21.5% and 20.6% increase, respectively, compared to Q4 2024.
- Full year 2025 worldwide sales were $94.2 billion, up 5.3%. Net earnings for the year were $26.8 billion and diluted earnings per share was $11.03, including a $7 billion Talc reserve reversal from Q1.
- Innovative Medicine reported worldwide sales of $15.8 billion for the quarter, up 7.9%. Notable growth was seen in Oncology, driven by DARZALEX (24.1% growth) and CARVYKTI (63.2% growth). Immunology’s TREMFYA delivered 65.4% growth, while STELARA declined by 48.6% due to biosimilar competition.
- MedTech sales were $8.8 billion, up 5.8%. Cardiovascular, Surgery, and Vision all recorded growth, with Shockwave achieving 22.9% growth, and Surgical Vision growing 10.8%.
Q&A
- Asad Haider, Goldman Sachs: Asked about levers to achieve double-digit growth by the end of the decade and the balance of organic pipeline versus acquisitions. Joaquin Duato responded by detailing the company’s focus on Oncology, Immunology (highlighting TREMFYA, ICOTYDE, and a co-antibody therapeutic), Neuroscience, and MedTech, stating, “We have line of sight to double-digit growth in the later part of the decade, which is especially remarkable for a company that according to our guidance would be $100 billion in sales in 2026.”
- Larry Biegelsen, Wells Fargo: Inquired about MedTech dynamics and market outlook. Tim Schmid, Executive VP & Worldwide Chairman of MedTech, addressed portfolio strategy and growth expectations, noting, “We do expect to see accelerate — we expect the year to be better in 2026 than it was in ’25… our best days are ahead, and we remain very confident in our ability to drive accelerated operational growth.”
- Christopher Schott, JPMorgan: Questioned margin expansion. CFO Joseph Wolk explained ongoing infrastructure improvements and efforts to eliminate stranded costs, “The idea would be to continue to improve our infrastructure… the margin profile will improve in conjunction with the sales growth profile as we move out to the next couple of years.”
- Joanne Wuensch, Citigroup: Asked about Vision Care performance. Tim Schmid emphasized robust growth in contact lenses and surgical vision, highlighting new product launches and portfolio optimization as growth drivers.
- Terence Flynn, Morgan Stanley: Sought clarity on multiple myeloma positioning and FDA guidance. Jennifer Taubert and John Reed detailed the roles of TECVAYLI, DARZALEX, and CARVYKTI, and discussed FDA interactions and MRD endpoint implications.
- Danielle Antalffy, UBS: Probed on high-growth market participation post-Ortho separation. Tim Schmid and Jennifer Taubert both underscored ongoing expansion plans and innovation in MedTech and Innovative Medicine.
- Vamil Divan, Guggenheim: Asked about INLEXZO’s initial launch and expansion opportunities. Jennifer Taubert outlined robust launch momentum and anticipated a permanent J-code in Q2 2026 as a catalyst, while John Reed discussed the broader development program.
- Shagun Singh Chadha, RBC: Requested update on Talc litigation. CFO Joseph Wolk assured, “The bottom line is this is not going to change our strategy. We will continue to aggressively fight in the court system each and every one of these meritless claims.”
- Alexandria Hammond, Wolfe Research: Asked about milvexian’s potential. John Reed and Jennifer Taubert highlighted confidence in the asset and its multibillion-dollar potential, discussing safety and efficacy as key differentiators.
Sentiment Analysis
- Analysts focused on growth levers, margin trajectory, and high-growth market participation, maintaining a positive but probing tone regarding the sustainability of recent momentum and the impact of external factors such as litigation and policy changes.
- Management consistently displayed a highly confident and assertive tone, emphasizing progress, innovation, and resilience to external headwinds. Phrases such as “We feel very confident about our outlook,” and “We remain very confident in our ability to drive accelerated operational growth,” underscored this sentiment.
- Compared to the previous quarter, both management and analyst sentiment remained upbeat, but the current call reflected increased confidence, particularly regarding the company’s double-digit growth prospects and execution of strategic initiatives.
Quarter-over-Quarter Comparison
- Guidance for 2026 was notably more specific, with explicit targets for operational sales and EPS, and a clear path to $100 billion in annual revenue, compared to the broader directional commentary in Q3.
- Strategic focus sharpened further on high-growth markets, with the Orthopaedics separation progressing and more detailed plans for new launches and clinical milestones.
- Analysts’ questions shifted from clarifying the rationale and impact of the Ortho spin to probing execution on growth platforms and litigation risks.
- Management’s confidence and specificity strengthened, supported by stronger growth metrics across key franchises and continued robust pipeline advancement.
Risks and Concerns
- Litigation remained a key concern, particularly the Talc MDL. Management reiterated ongoing appeals and commitment to defending against claims, stating it does not distract from the company’s focus or growth strategy.
- Analysts raised questions about policy changes, MedTech market dynamics, and competitive pressures in biosimilars and new technologies. Management addressed these by pointing to portfolio strength, continuing investment in innovation, and proactive strategic shifts.
Final Takeaway
Johnson & Johnson’s management highlighted a year of accelerated growth, with the company entering 2026 from a position of strength and anticipating operational sales surpassing $100 billion. The strategic focus remains on innovation, high-growth markets, and robust execution across both the Innovative Medicine and MedTech businesses. Management expressed strong confidence in delivering double-digit growth by the end of the decade, supported by a diverse and expanding portfolio, disciplined capital allocation, and resilience against external challenges including litigation and policy developments.