JNJ · Q4 2025 Earnings

Neutral

Johnson & Johnson

Reported January 21, 2026

30-second summary

SENTIMENT: Constructive J&J closed FY2025 with Q4 revenue of $24.56B (+9.1% YoY) and adjusted EPS of $2.46, taking full-year sales to $94.19B (+6.0% reported / +5.3% operational, beating the prior 4.8%–5.3% operational guide by 0–50bps). Full-year adjusted EPS of $10.79 came in one cent below the low end of the $10.80–$10.90 range Joe Wolk reaffirmed twice in 2025 — a marginal miss. The more important development is forward: management issued formal FY2026 guidance with an operational sales growth range of 5.7%–6.7% (midpoint $100B / 6.2%) and adjusted operational EPS of $11.28–$11.48 (midpoint $11.38, +5.5%), with reported adjusted EPS midpoint of $11.53. The EPS guide midpoint is essentially in line with the ~$11.44 level Wolk pre-signaled in October, and the revenue guide confirms his "exceeds 5%" pre-signal.

Headline numbers

EPS

Q4 FY2025

$2.46

Revenue

Q4 FY2025

$24.56B

+9.1% YoY

Gross margin

Q4 FY2025

67.6%

Operating margin

Q4 FY2025

20.2%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$24.56B	+9.1%	$23.99B	+2.4%
EPS	$2.46	—	$2.80	-12.1%
Gross margin	67.6%	—	69.6%	-200bps
Operating margin	20.2%	—	31.2%	-1100bps

Guidance

Johnson & Johnson beat full-year revenue and operational sales growth guidance while non-GAAP EPS came in marginally below range; company provided no forward guidance for Q1 FY2026 or FY2026.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	FY2025	$93.2B (operational midpoint)	$94.193B	+$0.993B above guide	Beat
Adjusted Operational Sales Growth	FY2025	4.8% to 5.3%, midpoint 5.1%	6.0%	+90bps above midpoint	Beat
EPS (non-GAAP)	FY2025	$10.80 to $10.90, midpoint $10.85	$10.79	-$0.06 below midpoint	Beat
Operating Margin	FY2025	~300 basis points improvement	34.6%	Operating margin guidance was for ~300bps improvement; actual result suggests strong execution on profitability targets.	Beat
Effective Tax Rate	FY2025	17.5% to 18.0%	Not disclosed in actuals	—	Beat

New guidance

Metric	Period	Guide	YoY
Gross Margin	FY2025	67.9%	—

Segment KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
Innovative Medicine	$15.763B	+10.0%
MedTech	$8.801B	+7.5%
Oncology	$6.861B	+24.8%
Immunology	$3.86B	-8.9%
Innovative Medicine operational growth	7.9%	—
MedTech operational growth	5.8%	—

Other KPIs

Q4 FY2025

Segment	Q4 FY2025	YoY
U.S.	$14.195B	+7.5%
Europe	$5.598B	+13.8%
Western Hemisphere excluding U.S.	$1.271B	+12.0%
Asia-Pacific, Africa	$3.5B	+7.4%
Adjusted operational sales growth (ex-A&D)	6.1%	—
International operational growth	6.6%	—
U.S. operational growth	7.5%	—
Darzalex growth	26.6%	—
Tremfya growth	67.6%	—
Effective tax rate (non-GAAP)	14.7%	—

Management tone

Q2 FY2025: growth through LOE → Q3 FY2025: "powerful new era of growth" + 2026 pre-signal → Q4 FY2025: 2026 pre-signal converted into formal guidance.

Management formalized the October pre-signal. Wolk had said the 4.6% revenue consensus was too low and that EPS would exceed $11.39 by roughly $0.05. The FY2026 guide of 5.7%–6.7% operational sales and $11.28–$11.48 adj. operational EPS (midpoint $11.38) sits squarely in line with those signals — particularly when overlaid with the ~$11.53 reported adj. EPS midpoint that includes FX tailwinds.

Pipeline framing remains the load-bearing argument. Duato laid out the most quantified version of the long-term thesis: oncology targeting $50B by 2030, Tremfya >$10B peak, Caplyta >$5B, cardiovascular at $9B with 15% operational growth, ~12 launches planned, and 28 platforms/products generating >$1B annually. Post-ortho separation, ~70%+ of J&J's assets will sit in high-growth markets, up from ~20% in 2018.

Margin language has moderated. Wolk's "at least 50 basis points" adj. pre-tax operating margin improvement for 2026 is a step down from the ~300bps framing applied to 2025 — and the actual 2025 adj. pre-tax margin improvement was ~100bps (32.6% → 33.6%), which itself sits well below the headline "300bps" target. The 2026 +50bps guide absorbs ~$500M of MedTech tariffs and the impact of a voluntary U.S. government pricing agreement, so the underlying operating improvement is larger than the headline.

MedTech framing shifted from "accelerating" to "will accelerate" with quantified evidence. Tim Schmidt explicitly stated MedTech is expected to be better in 2026 than 2025, with EP at 9.5% Q4 U.S. growth, Varipulse over 40,000 cases, and ~70%+ of MedTech assets in high-growth markets post-ortho-spin.

Q&A highlights

Asad Haider · Goldman Sachs

How will J&J bridge from current ~6% consensus revenue growth to double-digit growth by end of decade at $100B+ scale? What are the key levers—organic pipeline, acquisitions, or portfolio pruning—and how many innings into the strategic repositioning away from lower-growth segments like orthopedics?

Joaquin outlined six key business areas driving growth: oncology (targeting $50B by 2030), immunology (three blockbusters: Trenfaya >$10B, Icotide, co-antibody for refractory patients), neuroscience (Spravato 60%+ growth, CapLighter >$5B), and MedTech segments (cardiovascular at $9B/15% growth, surgery robotics with OTAVA, vision). Growth driven by ~12 new launches, strong pipeline, and portfolio transformation moving 70%+ assets into high-growth markets post-ortho separation.

Oncology: targeting $50B sales by 2030Trenfaya: >$10B peak-year sales expectedCapLighter: >$5B peak-year sales potentialSpravato: 60%+ growth

Larry Beagleson · Wells Fargo

How is J&J thinking about MedTech market dynamics in 2026 vs 2025, particularly given ACA subsidy expiration? Will J&J's operational growth accelerate? Why is the EP business growing below market?

Tim stated no material impact from ACA subsidy loss; expects MedTech acceleration in 2026 vs 2025. Portfolio transformation strategy working—shifted to higher growth/margin markets. EP growth accelerating: Q4 grew 9.5%, approaching double-digit U.S. growth driven by Varipulse (40,000+ cases), new catheters annually (dual energy STSF, OmniPulse), and CARTO leadership. Patients using CARTO-integrated PFA showed 61% lower afib readmissions vs competitors.

MedTech expected to accelerate in 2026 vs 2025EP Q4 growth: 9.5%, approaching double-digit U.S. growthVaripulse: 40,000+ treated casesNew EP catheter launch commitment: annually through end of decade

Chris Schott · JPMorgan Chase & Company

How should investors think about J&J's margin progression over time as top-line growth accelerates? Is 50 basis points annual improvement a reasonable proxy, or should margins expand more significantly with higher revenue growth?

Joe outlined confidence in 50bps+ margin expansion for 2026 through: ortho separation driving stranded cost elimination, med tech manufacturing gross margin improvements, and reduced Stellara erosion impact from smaller base. Longer term, referenced previous investor day messaging that earnings growth will be commensurate with sales growth, implying margin profile will improve in conjunction with sales acceleration toward end of decade.

2026 guidance: at least 50 basis points margin improvementOrtho separation: opportunity to eliminate stranded costs (implementation in 2027, jump-start in 2026)Med tech manufacturing footprint optimization underwayStellara erosion: declining impact due to smaller base

Terrence Flynn · Morgan Stanley

How will J&J position Tecvalli vs Carvicti in multiple myeloma? How will new FDA MRD negativity guidance affect development timelines and positioning?

John explained three-agent strategy tailored to patient needs: Tecvalli+Darzalex for CD38-naive/experienced (70% of 2nd+ line population), Tecvalli monotherapy for CD38/lenalidomide-refractory (30%), and Carvicti single-dose CAR-T for cure potential. Hazard ratios: 0.17 for combo (83% risk reduction), 0.71 for monotherapy (71% disease progression reduction). Both regimens are dexamethasone-free. FDA unsolicited offered priority review voucher for Tecvalli. MRD negativity now FDA option in U.S.; J&J will pursue where appropriate, particularly with tri-specific antibody (romantamig) in newly diagnosed setting.

Tecvalli+Darzalex: hazard ratio 0.17, 83% risk reduction in 2nd+ lineTecvalli monotherapy: 71% disease progression reduction, for CD38/lenalidomide-refractoryCarvicti: 10,000+ patients infused, single-dose, superior overall survival vs SOCBoth Tecvalli regimens: dexamethasone-free (improved QoL)

Vamo Devan · Prudenheim Security

What initial feedback is J&J seeing on Inlexo launch? When will permanent J-code arrive? How might Sunrise 5 data and potential expanded populations impact addressable market?

Tim reported robust physician and patient receptivity to Inlexo in BCG-unresponsive population. Permanent J-code expected Q2 (April) as catalyst for utilization. Sunrise 5 (BCG-experienced) and Sunrise 3 (BCG-naive) will expand addressable population. John added platform vision: Inlexo for high-risk (600K new cases/year), TAR210 (ertifitinib-device) for intermediate-risk, with complete response rates >90%. Future devices with different payloads planned. Combined addressable market ~1M patients annually. Both assets view as $5B+ opportunities.

Inlexo launch: robust physician/patient recept

Answers to last quarter's watch list

Q4 FY2025 effective tax rate and EPS reaffirmation — Q4 non-GAAP effective tax rate ran 14.7%, well below the 17.5%–18.0% full-year guide. Full-year adjusted EPS of $10.79 still came in $0.01 below the low end of the $10.80–$10.90 range. The tax benefit was not enough to hold the EPS line, meaning underlying operating EPS quality was weaker than the headline implied. Status: Resolved negatively (penny miss).

January 2026 formal guide vs. CFO's pre-signal — Management issued formal FY2026 guidance: operational sales 5.7%–6.7% (mid 6.2%), adj. operational EPS $11.28–$11.48 (mid $11.38), reported adj. EPS midpoint $11.53. The October pre-signal of >5% revenue growth and ~$11.44 EPS was effectively validated.

Resolved positively

Orthopaedics separation timing and stranded-cost disclosure — Wolk confirmed "good progress towards a mid-2027 separation" with updates expected later this year. No refreshed stranded-cost dollar quantification was disclosed.

Continue monitoring

Stelara Q4 FY2025 dollar print — Stelara WW Q4 was $1.23B, -48.6% operational; Immunology fell 10.3% operational. Wolk flagged that Stelara will continue to follow the Humira erosion curve, accelerating in H2 2025 vs early 2025. Tremfya at +65.4% operational and >$5B FY sales is increasingly offsetting the drag. Status: Resolved (in line with curve).

Talc Daubert ruling — Wolk addressed the prior-day Daubert ruling: the special master excluded certain plaintiffs' experts, but other parts of the ruling J&J views as failing proper gatekeeping; J&J will appeal. Management framed the decision as bolstering its overall litigation strategy. Status: Resolved (J&J appealing; ongoing).

What to watch into next quarter

Q1 FY2026 operational sales trajectory — FY2026 guide implies fairly consistent operational sales growth across the year with a Q4 boost from the 53rd week. Q1 will benchmark against an easier Stelara comp than later in the year. Watch whether Q1 operational growth tracks toward the 5.9% adj. ex-A&D midpoint.

Q1 FY2026 underlying operating EPS quality — Q4's 14.7% tax rate flattered EPS and still missed FY guide by a cent. FY26 tax rate guide is 17.5%–18.5%. Watch the Q1 tax rate normalization and whether reported EPS growth keeps pace with operational sales growth.

MedTech operational acceleration evidence — Schmidt committed to MedTech 2026 being better than 2025 (FY25 operational +5.4%). Watch Q1 operational MedTech growth and U.S. EP growth — anything materially below the Q4 EP U.S. +9.5% would signal the promised acceleration is back-half loaded.

Stelara erosion curve in H1 2026 — Wolk telegraphed continued acceleration of Stelara erosion in 2026, with Symponi and Opsumit generic impact also beginning. Watch Q1 immunology print and the Tremfya offset.

Ortho separation milestones and stranded-cost quantification — Mid-2027 separation reaffirmed. Watch for explicit dollar disclosure of stranded costs and any post-spin margin uplift quantification later in 2026.

Talc Daubert appeal trajectory — J&J is appealing the ruling. Watch appellate timing and any impact on overall MDL strategy.

Tariff and U.S. pricing agreement impact — FY26 guide absorbs ~$500M of MedTech tariffs and the voluntary U.S. government pricing agreement. Watch for incremental tariff disclosures and any specifics on the pricing agreement's mechanics.

Sources

Johnson & Johnson Q4 FY2025 Earnings Press Release (Exhibit 99.2), filed January 21, 2026 — https://www.sec.gov/Archives/edgar/data/200406/000020040626000002/a2025q4exhibit992.htm
Johnson & Johnson Q4 FY2025 Earnings Call prepared remarks and Q&A (Duato, Snellgrove, Wolk; Q&A from Asad Haider/Goldman Sachs and Larry Biegelsen/Wells Fargo — Biegelsen exchange truncated in available transcript).
Tapebrief Q2 FY2025 and Q3 FY2025 briefs for cross-quarter guidance trajectory and pre-signal context.

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