Novo Nordisk (NOVO) Q1 2025 earnings summary

Executive summary

• Sales grew 19% in DKK and 18% at constant exchange rates (CER) in Q1 2025, reaching DKK 78.1bn, with operating profit up 22% in DKK and 20% at CER, driven by strong obesity care and GLP-1 diabetes product growth, serving nearly 46 million patients.

• Obesity care sales surged 67% in DKK (65% at CER), with international operations up 137% and U.S. up 40%, led by Wegovy® growth.

• Diabetes care sales rose 10% in DKK (8% at CER), with GLP-1 products up 13% in DKK (11% at CER); rare disease sales increased 5% in DKK (3% at CER).

• Strategic focus on innovation, sustainability, and expanding leadership in core therapy areas, with significant R&D progress including pivotal CagriSema trial completion and oral semaglutide 25 mg FDA submission.

• Ongoing organizational changes and executive appointments to enhance execution and decision-making.

Financial highlights

• Q1 2025 sales: DKK 78,087 million, up 18% at CER; operating profit: DKK 38,791 million, up 20% at CER; net profit: DKK 29,034 million, up 14%; diluted EPS: DKK 6.53, up 15%.

• Gross margin declined to 83.5% from 84.8% due to Catalent-related costs and capacity expansion.

• Free cash flow rose to DKK 9.5 billion from DKK 5 billion year-over-year; EBITDA up 23% to DKK 42.6bn.

• Capital expenditure increased 58% to DKK 13.4bn, mainly for production capacity expansion.

• Returned DKK 36.7 billion to shareholders, mainly as dividends.

Outlook and guidance

• 2025 sales growth expected at 13–21% at CER; operating profit growth at 16–24% at CER; DKK-reported growth expected to be 3–5 percentage points lower due to FX headwinds.

• Guidance reflects lower-than-expected U.S. branded GLP-1 penetration due to compounded products, but expects patient shift to branded in H2 2025.

• Free cash flow expected at DKK 56–66 billion; CapEx for 2025 expected around DKK 65 billion.

• Effective tax rate for 2025 expected at 21–23%.

• Tariffs currently do not materially impact outlook; potential increases could pose risk.