Johnson & Johnson (JNJ) Financials

Johnson & Johnson (NYSE: JNJ) has demonstrated steady financial performance over the last four years, with notable trends and key developments across income statements, balance sheets, and cash flow statements.

Positive Financial Highlights:

• Revenue growth: Quarterly operating revenue increased from approximately $9.77 billion in Q4 2021 to $23.74 billion in Q2 2025, reflecting consistent top-line growth.
• Profitability improvement: Consolidated net income rose from roughly $4.74 billion in Q4 2021 to $5.54 billion in Q2 2025. Notably, net income recovered from a loss of $68 million in Q1 2023 to positive territory in subsequent quarters.
• Gross profit expansion: Total gross profit consistently increased, reaching approximately $16.1 billion by Q2 2025, supporting solid operating margins.
• Strong cash flows from operations: Net cash from continuing operating activities remained robust over the quarters, with $3.88 billion generated in Q2 2025, underpinning financial flexibility.
• Consistent dividend payments: Dividends per common share steadily grew from $1.06 in early 2021 to $1.30 in Q2 2025, reflecting Johnson & Johnson’s commitment to returning capital to shareholders.
• Substantial asset base: Total assets expanded to about $193.4 billion in Q2 2025, driven by growth in goodwill, intangible assets, and property plant & equipment, supporting long-term growth capacity.
• Managing debt: While long-term debt increased to $39.2 billion in Q2 2025, the company actively repaid short-term debt and managed financing activities to balance capital structure.
• Investment in R&D: Johnson & Johnson consistently invested in research and development, spending around $3.5 billion in Q2 2025, fueling innovation and future product pipelines.

Neutral Financial Aspects:

• Fluctuating operating expenses: Selling, General & Administrative expenses and restructuring charges showed some variability but generally scaled with revenue.
• Non-cash adjustments and depreciation: Non-cash adjustments to reconcile net income and depreciation expenses remained steady, aligned with asset levels.
• Working capital changes: Changes in operating assets and liabilities sometimes negatively impacted operating cash flow, notably large outflows in recent quarters, indicating investment in receivables and inventories.

Negative Financial Considerations:

• Significant acquisitions spending: Johnson & Johnson’s investing activities included heavy acquisitions outflows, peaking at $14.5 billion in Q2 2025, indicating heavy cash use which may pressure liquidity.
• Large investing cash outflows: Net cash used in investing activities reached $18.26 billion in Q2 2025, driven primarily by acquisitions and investments, which reduce free cash flow.
• Decline in cash & equivalents: Cash balance fell from over $60 billion in early 2021 to approximately $18.6 billion by Q2 2025, reflecting the cash used for investments and debt repayment.
• Increased accumulated other comprehensive loss: The negative balance in accumulated other comprehensive income increased to around $14.3 billion in Q2 2025, which could signal currency or other valuation exposures impacting equity.
• Interest expense rising: Interest expense increased to $308 million in Q2 2025, consistent with higher debt levels, which may pressure net income in the future.

Summary:

Johnson & Johnson has exhibited resilient growth in revenue and net income over the past four years, supported by strong margins and ongoing investments in R&D. The balance sheet remains robust with large asset holdings, though growth in debt and heavy acquisition spending have reduced cash reserves. The company continues to generate strong operating cash flow, but investing activities and debt repayments are sizable cash uses. Dividend increases attest to confidence in sustained cash generation. Investors should monitor acquisition spending and debt levels as potential risk factors amid the company’s growth trajectory.