Novartis (NOVN) Q3 2026 earnings summary

Executive summary

• Q3 net sales were $14.522B, up 4% in constant currencies; core operating income rose 10% cc to $6.036B and core margin expanded 2.0 points cc to 41.6%.

• FY2026 core operating income guidance rose from a low-single-digit decline to in line to low-single-digit growth; net sales guidance remains low-single-digit growth.

• Growth in Kisqali, Kesimpta, Scemblix, Leqvio and other newer medicines faced generic pressure, while the del-desiran impairment sharply reduced reported earnings.

Financial highlights

• Q3 reported operating income fell 59% to $1.843B and net income fell 70% to $1.196B; the declines primarily reflected a $1.94B del-desiran impairment.

• Q3 core net income rose 8% to $4.7B; core EPS increased 9% to $2.46, including a benefit from fewer weighted-average shares.

• 9M sales rose 2% to $42.043B in USD and were flat cc; core operating income declined 1% to $16.873B in USD and 2% cc.

• 9M net income fell 34% to $7.6B and reported operating income fell 23% to $10.8B; core net income declined 4% to $13.0B and core EPS fell 1% to $6.85.

• Free cash flow was $5.111B in Q3, down 18%, and $14.002B for 9M, down 12%.

Outlook and guidance

• FY2026 net sales are expected to grow low single-digit cc; core operating income is expected in line to grow low single-digit, upgraded from a low-single-digit decline.

• FY2026 core net financial expense is expected at ~$1.7B and the core tax rate at ~16.5%; late-October exchange rates imply a +1-point FX impact on both net sales and core operating income.

• Mid-term sales CAGR outlook remains 5%-6% for 2025-2030; the 40%+ core margin target by 2029 was reaffirmed.

• Q4 core margin is expected below Q3 due to year-end spending, higher royalties and lower other income.