Novartis (NOVN) Q4 2025 earnings summary

Executive summary

• Achieved 8% year-over-year net sales growth to $54.5B and a 14% increase in core operating income to $21.9B, with a record 40.1% core margin, two years ahead of plan.

• Priority brands Kisqali, Kesimpta, Pluvicto, Leqvio, Scemblix, and Cosentyx delivered robust double-digit growth, offsetting generic erosion.

• Advanced pipeline with multiple regulatory submissions, approvals, and positive Phase III data, including new launches and label expansions.

• Record free cash flow of $17.6B (+8%), supporting reinvestment, acquisitions, and shareholder returns.

• Strategic acquisition of Avidity Biosciences announced, expanding RNA-targeting capabilities.

Financial highlights

• Full-year net sales: $54.5B (+8%); core operating income: $21.9B (+14%); core margin: 40.1% (+2.1 pts); free cash flow: $17.6B (+8%).

• Core EPS: $8.98 (+17%); reported EPS: $7.21 (+22%).

• Q4 net sales: $13.3B (+1%); Q4 core operating income: $4.9B (+1%), margin 37.0%.

• Dividend proposed at CHF 3.70/share, a 5.7% increase, marking the 29th consecutive annual increase.

• Net debt at year-end: $21.9B, up from $16.1B prior year.

Outlook and guidance

• 2026 net sales expected to grow low single digit; core operating income to decline low single digit due to US generics and Avidity deal dilution.

• H1 2026 to be most impacted by US generics; recovery expected in H2.

• Mid-term sales CAGR of 5-6% (2025-2030) reaffirmed; core margin expected to return to 40%+ by 2029.

• FX expected to have a positive 2-3 percentage point impact on 2026 sales if current rates persist.