Novartis (NOVN) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales grew 1% in constant currencies and 3% in USD to $14.4B, with flat core operating income at $5.9B and strong growth from priority brands offsetting generic erosion.

• Net income declined 19% to $3.3B, impacted by higher taxes and interest expenses; EPS dropped 17% to $1.71.

• Growth drivers (Kisqali, Cosentyx, Scemblix, Pluvicto, Leqvio) up 36% in constant currencies, providing momentum for H2 and supporting midterm growth guidance.

• Pipeline advanced with key regulatory milestones, updated clinical data, and multiple pivotal readouts and approvals expected in H2.

Financial highlights

• Q2 net sales: $14.4B (+1% cc, +3% USD); H1 net sales: $27.5B (+1% cc, +1% USD).

• Q2 core operating income: $5.9B (flat); Q2 core operating margin: 41.2% (down 0.7 percentage points YoY).

• Q2 net income: $3.3B (-19% YoY); Q2 free cash flow: $5.6B (-12% YoY); H1 free cash flow: $8.9B.

• Interest expense increased to $462M in Q2 due to higher financial debt.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: net sales expected to grow low single digits, core operating income to decline low single digits in constant currencies.

• H2 net sales expected to grow mid-single digits as U.S. generic erosion impact lessens; H2 core operating income to grow mid to high single digits.

• FX expected to have a positive 1 percentage point impact on full-year net sales and core operating income if rates remain stable.