Johnson & Johnson Q2 Earnings Call Highlights

Key Points

• Johnson & Johnson raised its full-year 2026 outlook after reporting a Q2 beat on both revenue and earnings, with worldwide sales of $25.3 billion and adjusted EPS of $2.90. Management said growth was driven by Innovative Medicine and new product launches, helping offset continued STELARA biosimilar pressure.
• Innovative Medicine was the main growth engine, with strong performances from oncology drugs like DARZALEX, CARVYKTI, TECVAYLI and TALVEY, plus major momentum from TREMFYA and newer launches such as ICOTYDE and INLEXZO. TREMFYA hit its first $2 billion quarter, while STELARA sales fell sharply.
• MedTech grew more slowly, particularly in cardiovascular, where electrophysiology and Abiomed weighed on results, though surgery, vision and orthopedics all accelerated. Despite that mixed performance, J&J said it remains on track for roughly $21 billion in full-year free cash flow and continues to see pipeline and launch catalysts ahead.

Johnson & Johnson NYSE: JNJ raised its full-year 2026 outlook after reporting second-quarter sales growth that management said was supported by strength in Innovative Medicine, new product launches and a broad portfolio that helped offset continued pressure from STELARA biosimilar competition.

Chairman and Chief Executive Officer Joaquin Duato said the company delivered a “Q2 beat on the top and bottom line and raised guidance,” describing 2026 as a year of accelerated growth for Johnson & Johnson. The company reported worldwide quarterly sales of $25.3 billion, up 5.6% operationally. Excluding STELARA, Duato said Johnson & Johnson grew double digits in the quarter.

Ryan Kurz, Vice President of Investor Relations, said U.S. sales rose 7.3%, while sales outside the U.S. increased 3.4%. Net earnings were $5.5 billion, and diluted earnings per share were $2.27, compared with $2.29 a year earlier. Adjusted net earnings were $7.1 billion, with adjusted diluted EPS of $2.90, up 4.7% from the second quarter of 2025.

Innovative Medicine Leads Growth

Innovative Medicine sales totaled $16.4 billion, up 6.8% operationally, despite what Kurz described as an approximately 760-basis-point headwind from STELARA. The division posted 8.9% growth in the U.S. and 3.6% growth outside the U.S.

Duato said the Innovative Medicine business had eight brands growing double digits. In oncology, DARZALEX remained the company’s largest product, with quarterly sales of more than $4 billion and growth of 17.6%, driven by share gains and market growth in multiple myeloma. CARVYKTI grew 47.7%, TECVAYLI grew 56.1% and TALVEY grew 62.6%.

In lung cancer, RYBREVANT plus LAZCLUZE grew 61.6%, supported by launch uptake across regions and share gains in first- and second-line settings. ERLEADA grew 7.6% in prostate cancer, with share gains and market growth partly offset by unfavorable patient mix and inventory dynamics.

In immunology, TREMFYA delivered 71% growth. Duato said it remains the fastest-growing advanced therapy in both Crohn’s disease and ulcerative colitis. STELARA declined 55.7%, reflecting biosimilar competition, adoption of newer treatment classes and unfavorable patient mix.

Jennifer Taubert, Executive Vice President and Worldwide Chairman, Innovative Medicine, said during the question-and-answer session that TREMFYA reached its first $2 billion quarter. She said the product is leading new patient starts, or induction share, among IL-23 therapies in both ulcerative colitis and Crohn’s disease.

Launches Gain Traction

Management highlighted early momentum for ICOTYDE, INLEXZO and other newer products. Duato said more than 10,000 patients had initiated therapy on ICOTYDE since launch, citing demand for a once-daily oral psoriasis treatment. In the Q&A, Taubert updated that figure to 11,000 patients, with more than 18,000 prescriptions written and 6,000 unique prescribers. She said commercial coverage had surpassed 50% within 90 days, ahead of company projections.

Taubert said ICOTYDE is being positioned as a first-choice systemic treatment for psoriasis patients moving beyond topical therapy, while TREMFYA is being positioned as a first-choice biologic, particularly for patients with or at risk of psoriatic arthritis. John Reed, Executive Vice President, Innovative Medicine Research and Development, said pivotal data for ICOTYDE in psoriatic arthritis are expected later this year, with phase 3 studies in ulcerative colitis and Crohn’s disease underway.

For INLEXZO in bladder cancer, Duato said nearly one in three eligible patients started on an INLEXZO regimen during the second quarter, and new patient insertions grew about 75% from the prior quarter. Taubert said the product is outperforming recent competitive launches in the U.S. and more than doubled sales from the first quarter, though the company is not yet reporting quarterly sales for the product.

MedTech Growth Slows in Cardiovascular

MedTech sales were $8.9 billion, up 3.6% operationally, with growth across cardiovascular, surgery and vision. Kurz said cardiovascular grew 3.1%, below recent trends, due mainly to headwinds in electrophysiology and Abiomed.

Electrophysiology grew 3.1%, supported by procedure growth, commercial execution and new products, but partially offset by competitive pressure in pulsed field ablation and an estimated 400-basis-point negative impact from China inventory. Duato said VARIPULSE, the company’s pulsed field ablation platform for atrial fibrillation, has treated more than 85,000 patients worldwide.

Abiomed declined 2% as U.S. procedure pressures weighed on heart recovery. Tim Schmid, Executive Vice President and Worldwide Chairman, MedTech, said in the Q&A that the slowdown followed a neutral clinical trial in the U.K. focused on high-risk PCI, which led physicians to become more selective. Schmid characterized the issue as behavioral rather than structural and said the company is engaging with physicians while awaiting PROTECT IV data expected in 2027.

Surgery grew 2.3%, vision grew 5.6% and orthopedics grew 4.2%. Schmid said three of the four MedTech businesses — surgery, vision and orthopedics — accelerated in the quarter and performed above expectations. He also said the company is not seeing evidence of a broad-based slowdown in procedure volumes across its portfolio.

Guidance Raised for 2026

Chief Financial Officer Joe Wolk said Johnson & Johnson ended the quarter with about $21 billion in cash and marketable securities and about $49 billion of debt, resulting in a net debt position of about $28 billion. Year-to-date free cash flow totaled approximately $8.7 billion, and Wolk said the company remains on track for full-year free cash flow approaching $21 billion.

Wolk raised full-year operational sales growth guidance by $400 million, now expecting growth of 6.5% to 7.1%, with a midpoint of $100.6 billion. Including currency, reported sales growth is expected to be 7.0% to 7.6%, with a midpoint of $101.1 billion. The company’s 2026 calendar includes a 53rd week, which Wolk said provides an approximately 100-basis-point benefit.

Adjusted operational EPS is now expected to range from $11.50 to $11.65, an $0.18 increase at the midpoint. Reported EPS is projected at $11.60 to $11.75. Wolk said the updated outlook reflects second-quarter performance, uptake of new launches, operating efficiencies and anticipated reduction and recoupment of certain tariff-related costs.

Wolk also said the company’s outlook does not include the impact of pending acquisitions such as Firefly Bio, which Johnson & Johnson expects to close in the third quarter. Duato said the planned acquisition would add another antibody platform and strengthen the company’s next-generation oncology pipeline.

Pipeline and Portfolio Updates

Management pointed to several second-half catalysts, including potential FDA approval of IMAAVY for warm autoimmune hemolytic anemia and data readouts for TECVAYLI with TALVEY, pasritamig, J&J 6143, INLEXZO, ICOTYDE and CAPLYTA. In MedTech, expected catalysts include launches tied to electrophysiology, Shockwave catheters, the OTTAVA robotic surgical system, ETHICON 4000 and vision products.

Wolk said the company continues to evaluate separation options for DePuy Synthes and remains on track for a mid-2027 separation. Duato closed the call by saying Johnson & Johnson’s growth momentum is expected to carry into the second half of 2026 and 2027, with the company maintaining its ambition for double-digit growth by the end of the decade.

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.

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