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JOHNSON & JOHNSON (JNJ)

Business Summary

Johnson & Johnson operates in the healthcare field, focusing on products related to human health and well-being, and conducts business in virtually all countries of the world. The Company is organized into two business segments: Innovative Medicine and MedTech. The Innovative Medicine segment focuses on therapeutic areas including Oncology, Immunology, Neuroscience, Pulmonary Hypertension, Infectious Diseases, and Cardiovascular and Metabolism. The MedTech segment includes a broad portfolio of products used in Cardiovascular, Orthopaedics, Surgery, and Vision fields. The Company faces substantial competition in its two operating segments and in all geographic markets, competing on the basis of cost-effectiveness, technological innovations, intellectual property rights, product performance, pricing, and availability. Competition in research, involving the development and improvement of new and existing products and processes, is particularly significant.

The Company competes with companies both locally and globally in all product lines. The competitive environment requires substantial investments in continuing research. The Company's subsidiaries face patent challenges from third parties seeking to manufacture and market generic and biosimilar versions of key pharmaceutical products prior to expiration of applicable patents. Sales of the Company's largest product, collectively DARZALEX and DARZALEX FASPRO, accounted for approximately 15.0% of total revenues for fiscal 2025. Sales of STELARA accounted for approximately 6.5% of total revenues, and sales of TREMFYA accounted for approximately 5.5% of total revenues for fiscal 2025. The Company expects continued launches of biosimilar versions of STELARA globally which will continue to negatively impact sales of STELARA.

The Company generates revenue through the research, development, manufacture, and sale of a broad range of products in the healthcare field. Innovative Medicine products are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use. MedTech products are distributed to wholesalers, hospitals and retailers, and are used principally in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics. The Company also earns profit-share payments through collaborative arrangements of certain products, which are included in sales to customers. Profit-share payments were less than 2.0% of total revenues in fiscal years 2025, 2024 and 2023.

The Innovative Medicine segment reported sales of $60.4 billion in 2025, an increase of 6.0% from 2024. Key products include DARZALEX, which generated $14.351 billion in 2025, STELARA at $6.078 billion , TREMFYA at $5.155 billion , and CARVYKTI at $1.887 billion . The Oncology therapeutic area achieved sales of $25.380 billion in 2025, representing an increase of 22.1% . Immunology products sales were $15.728 billion in 2025, a decline of 11.8% primarily due to the decline of STELARA sales driven by biosimilar competition and Medicare Part D redesign. Neuroscience products achieved sales of $7.837 billion in 2025, an increase of 10.1% . Pulmonary Hypertension products achieved sales of $4.437 billion , an increase of 3.6% . Infectious disease products sales were $3.241 billion in 2025, a decline of 4.6% . Cardiovascular/Metabolism/Other products achieved sales of $3.778 billion , an increase of 6.1% .

The MedTech segment reported sales of $33.8 billion in 2025, an increase of 6.1% from 2024. The Surgery franchise achieved sales of $10.137 billion in 2025, an increase of 3.0% . The Orthopaedics franchise achieved sales of $9.258 billion in 2025, an increase of 1.1% . The Cardiovascular franchise achieved sales of $8.928 billion in 2025, an increase of 15.8% . The Vision franchise achieved sales of $5.468 billion in 2025, an increase of 6.3% .

In fiscal 2025, the Company initiated a restructuring program of its Surgery franchise within the MedTech segment with a pre-tax restructuring expense of $205 million . The estimated costs of the total program are between $0.9 billion - $1.0 billion . In October 2025, the Company announced its intention to separate its Orthopaedics business with a targeted completion within 18 to 24 months after the initial announcement. On April 2, 2025, the Company acquired Intra-Cellular Therapies for approximately $14.5 billion . In the fiscal first quarter of 2025, the Company issued senior unsecured notes for a total of $9.2 billion . Cash dividends paid were $5.14 per share in 2025. The Company repurchased $5.953 billion of common stock in 2025.

In 2025, worldwide sales increased 6.0% to $94.2 billion as compared to an increase of 4.3% in 2024. Net earnings from continuing operations were $26.804 billion in 2025 compared to $14.066 billion in 2024. Diluted earnings per share from continuing operations were $11.03 in 2025 versus $5.79 in 2024. Cash flow from operations was $24.5 billion in 2025. Cash and cash equivalents were $19.7 billion at the end of 2025 as compared to $24.1 billion at the end of 2024.

Business Outlook & Financial Sufficiency

A major growth vector is the Innovative Medicine pipeline, with several regulatory submissions and approvals for new drugs and additional indications in 2025. The Company advanced its pipeline with approvals including DARZALEX for frontline multiple myeloma transplant ineligible (CEPHEUS) and as subcutaneous monotherapy for high-risk smoldering multiple myeloma (AQUILA), ICOTYDE for Psoriasis, IMAAVY for Generalized Myasthenia Gravis, and TREMFYA for Ulcerative Colitis and Crohn's Disease. New products introduced within the past five years accounted for approximately 25% of 2025 sales. The Company invested $14.7 billion in research and development in 2025, reflecting management's commitment to create life-enhancing innovations.

Another growth vector is the MedTech segment, particularly the Cardiovascular franchise which achieved sales of $8.928 billion in 2025, an increase of 15.8% . Growth was driven by Electrophysiology, Abiomed, and Shockwave. Electrophysiology growth was driven by procedure growth, new product performance and commercial execution. Abiomed sales reflect the continued strong adoption of Impella 5.5 and Impella CP. Shockwave sales growth was driven by Coronary and Peripheral portfolios and new product launches. The Vision franchise also grew 6.3% driven by market growth and strong performance in the ACUVUE OASYS 1-Day family of products.

The Company's cost of products sold increased as a percent to sales driven by unfavorable product mix from the decline of STELARA sales and unfavorable transactional currency in the Innovative Medicine business, and tariffs, unfavorable transactional currency and macroeconomic factors in the MedTech business. Selling, Marketing and Administrative Expenses decreased as a percent to sales driven by corporate administrative expense rationalization and planned leverage in the Innovative Medicine business, partially offset by increased investment related to the acquisition of Intra-Cellular (CAPLYTA). Research and Development expense decreased as a percent to sales primarily driven by acquired in-process research and development expense of $1.25 billion to secure the global rights to the NM26 bispecific antibody (Yellow Jersey acquisition) in 2024, and leverage resulting from investment prioritization in the Innovative Medicine business.

The Company operates 63 manufacturing facilities as well as sourcing from thousands of suppliers around the world. The Company relies on third parties to manufacture and supply certain raw materials, component parts and products. The Company has a policy of only entering into contracts with parties that have at least an investment grade credit rating. The Company maintains credit support agreements with certain derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. As of December 28, 2025, the Company had approximately 138,200 employees worldwide.

In 2025, $14.7 billion was invested in research and development. Additions to property, plant and equipment were $4.832 billion in 2025. Cash dividends paid were $5.14 per share in 2025, and the Company increased its dividend in 2025 for the 63rd consecutive year. On January 2, 2026, the Board of Directors declared a regular cash dividend of $1.30 per share , payable on March 10, 2026. The Company repurchased $5.953 billion of common stock in 2025. In June 2025, the Company secured a new 364-day Credit Facility of $10 billion , which expires on June 24, 2026.

The Company faces pricing pressures from trends toward healthcare cost containment, including consolidation among healthcare providers and government pressure to reduce costs. The Inflation Reduction Act of 2022 (IRA) has changed Medicare Part D benefit design and has subjected certain of the Company's products to government-established pricing beginning in 2026. In 2023, CMS published the first Selected Drug list, which includes XARELTO and STELARA as well as IMBRUVICA. The Company expects generic competition for OPSUMIT in 2026, which would likely result in a significant reduction in future sales. The Company also expects continued launches of biosimilar versions of STELARA globally which will continue to negatively impact sales of STELARA.

The Company faces significant challenges from patent expirations and competition. Third parties have filed biologics license applications seeking approval to market biosimilar versions of STELARA around the globe. At least two biosimilars are pursuing regulatory approval for a SIMPONI biosimilar in the United States. The Company is also subject to risks from global operations, including foreign currency exchange rate fluctuations, as approximately 43% of the Company's sales occurred outside of the U.S. in fiscal 2025. The Company has accounted for operations in Argentina, Turkey, Venezuela and Egypt as highly inflationary. The Company is also exposed to risks from the planned separation of its Orthopaedics business, which may not be completed on the terms or timeline currently contemplated.

Management Sentiments & Priorities

Management's message emphasizes that with Our Credo as the foundation, the Company believes health is everything. The Company's strength in healthcare innovation empowers it to build a world where complex diseases are prevented, treated, and cured, where treatments are smarter and less invasive, and solutions are personal. Management states that new products introduced within the past five years accounted for approximately 25% of 2025 sales. In 2025, $14.7 billion was invested in research and development reflecting management's commitment to create life-enhancing innovations and to create value through partnerships. The Company's approximately 138,200 employees are critical drivers of the Company's success. Management's strategic priorities include leveraging extensive resources across the enterprise to innovate and execute with excellence, ensuring the Company can remain focused on addressing the unmet needs of society every day and invest for an enduring impact, ultimately delivering value to its patients, consumers and healthcare professionals, employees, communities and shareholders.

Financial Details

Total sales to customers were $94.193 billion in 2025, compared to $88.821 billion in 2024 and $85.159 billion in 2023. Net earnings from continuing operations were $26.804 billion in 2025, compared to $14.066 billion in 2024 and $13.326 billion in 2023. Diluted earnings per share from continuing operations were $11.03 in 2025, $5.79 in 2024, and $5.20 in 2023. Earnings before provision for taxes on income were $32.581 billion in 2025, compared to $16.687 billion in 2024. The worldwide effective income tax rate from continuing operations was 17.7% in 2025 and 15.7% in 2024. Cash flow from operations was $24.530 billion in 2025. Cash and cash equivalents were $19.709 billion at the end of 2025, compared to $24.105 billion at the end of 2024. Total debt was $47.9 billion at the end of 2025, compared to $36.6 billion at the end of 2024. The net debt position was $27.8 billion as of December 28, 2025. Shareholders' equity per share was $33.86 at the end of 2025 compared to $29.70 at year-end 2024. The Innovative Medicine segment income before tax as a percent to sales was 36.9% in 2025 versus 33.2% in 2024. The MedTech segment income before tax as a percent to sales was 12.2% in 2025 versus 11.7% in 2024. Other (income) expense, net reflected an increase in income of $11.9 billion as compared to the prior year, primarily due to the reversal of approximately $7.0 billion of the previously accrued talc reserve and an expense of $0.8 billion for the Auris shareholder litigation in 2025, compared to charges of approximately $5.1 billion for talc matters in 2024.

Risk Factors

The Company faces substantial competition and loss of patent exclusivity, which for key pharmaceutical products often leads to a substantial reduction in sales as competitors gain regulatory approval for generic and biosimilar products. Sales of STELARA, which accounted for approximately 6.5% of total revenues in fiscal 2025, are expected to continue to be negatively impacted by biosimilar competition. The Company is subject to significant legal proceedings, including numerous lawsuits arising out of the use of body powders containing talc, and has accrued approximately $3.4 billion related to talc matters as of December 28, 2025. The Company is also subject to pricing pressures from healthcare reforms, including the Inflation Reduction Act of 2022, which has subjected certain products like XARELTO and STELARA to government-established pricing beginning in 2026. The Company operates globally and faces foreign currency exchange risk, with approximately 43% of sales occurring outside the U.S. in fiscal 2025, and a 1% change in the value of the U.S. Dollar would impact translation of foreign sales by approximately $0.4 billion and net income by approximately $0.2 billion .

References

  1. [1] Item 1, Business — Patents
  2. [2] Item 1, Business — Patents
  3. [3] Item 1, Business — Patents
  4. [4] Item 8, Note 1 — Summary of significant accounting policies, Revenue recognition
  5. [5] Item 7, MD&A — Analysis of sales by business segments, Innovative Medicine segment
  6. [6] Item 7, MD&A — Analysis of sales by business segments, Innovative Medicine segment
  7. [7] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  8. [8] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  9. [9] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  10. [10] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  11. [11] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  12. [12] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  13. [13] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  14. [14] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  15. [15] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  16. [16] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  17. [17] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  18. [18] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  19. [19] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  20. [20] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  21. [21] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  22. [22] Item 7, MD&A — Major Innovative Medicine therapeutic area sales
  23. [23] Item 7, MD&A — Analysis of sales by business segments, MedTech segment
  24. [24] Item 7, MD&A — Analysis of sales by business segments, MedTech segment
  25. [25] Item 7, MD&A — Major MedTech franchise sales
  26. [26] Item 7, MD&A — Major MedTech franchise sales
  27. [27] Item 7, MD&A — Major MedTech franchise sales
  28. [28] Item 7, MD&A — Major MedTech franchise sales
  29. [29] Item 7, MD&A — Major MedTech franchise sales
  30. [30] Item 7, MD&A — Major MedTech franchise sales
  31. [31] Item 7, MD&A — Major MedTech franchise sales
  32. [32] Item 7, MD&A — Major MedTech franchise sales
  33. [33] Item 7, MD&A — Restructuring
  34. [34] Item 7, MD&A — Restructuring
  35. [35] Item 1, Business — Segments of business, MedTech
  36. [36] Item 7, MD&A — Liquidity and capital resources
  37. [37] Item 7, MD&A — Liquidity and capital resources
  38. [38] Item 7, MD&A — Dividends
  39. [39] Item 8, Consolidated Statements of Cash Flows
  40. [40] Item 7, MD&A — Results of operations, Analysis of consolidated sales
  41. [41] Item 7, MD&A — Results of operations, Analysis of consolidated sales
  42. [42] Item 7, MD&A — Results of operations, Analysis of consolidated sales
  43. [43] Item 8, Consolidated Statements of Earnings
  44. [44] Item 8, Consolidated Statements of Earnings
  45. [45] Item 8, Consolidated Statements of Earnings
  46. [46] Item 8, Consolidated Statements of Earnings
  47. [47] Item 8, Consolidated Statements of Cash Flows
  48. [48] Item 8, Consolidated Balance Sheets
  49. [49] Item 8, Consolidated Balance Sheets
  50. [50] Item 7, MD&A — Management's objectives
  51. [51] Item 7, MD&A — Management's objectives
  52. [52] Item 7, MD&A — Major MedTech franchise sales
  53. [53] Item 7, MD&A — Major MedTech franchise sales
  54. [54] Item 7, MD&A — Major MedTech franchise sales
  55. [55] Item 7, MD&A — Research and development expense
  56. [56] Item 2, Properties
  57. [57] Item 1, Business — Employees and human capital management
  58. [58] Item 7, MD&A — Management's objectives
  59. [59] Item 8, Consolidated Statements of Cash Flows
  60. [60] Item 7, MD&A — Dividends
  61. [61] Item 7, MD&A — Dividends
  62. [62] Item 7, MD&A — Dividends
  63. [63] Item 8, Consolidated Statements of Cash Flows
  64. [64] Item 7, MD&A — Financing and market risk
  65. [65] Item 1A, Risk factors — Risks related to financial and economic market conditions
  66. [66] Item 1, Business — Patents
  67. [67] Item 7, MD&A — Liquidity and capital resources
  68. [68] Item 1A, Risk factors — Risks related to financial and economic market conditions
  69. [69] Item 7, MD&A — Economic and market factors
  70. [70] Item 7, MD&A — Economic and market factors
  71. [71] Item 7, MD&A — Management's objectives
  72. [72] Item 7, MD&A — Management's objectives
  73. [73] Item 7, MD&A — Management's objectives
  74. [74] Item 8, Consolidated Statements of Earnings
  75. [75] Item 8, Consolidated Statements of Earnings
  76. [76] Item 8, Consolidated Statements of Earnings
  77. [77] Item 8, Consolidated Statements of Earnings
  78. [78] Item 8, Consolidated Statements of Earnings
  79. [79] Item 8, Consolidated Statements of Earnings
  80. [80] Item 8, Consolidated Statements of Earnings
  81. [81] Item 8, Consolidated Statements of Earnings
  82. [82] Item 8, Consolidated Statements of Earnings
  83. [83] Item 8, Consolidated Statements of Earnings
  84. [84] Item 8, Consolidated Statements of Earnings
  85. [85] Item 7, MD&A — Provision for Taxes on Income
  86. [86] Item 7, MD&A — Provision for Taxes on Income
  87. [87] Item 8, Consolidated Statements of Cash Flows
  88. [88] Item 8, Consolidated Balance Sheets
  89. [89] Item 8, Consolidated Balance Sheets
  90. [90] Item 7, MD&A — Liquidity and capital resources
  91. [91] Item 7, MD&A — Liquidity and capital resources
  92. [92] Item 7, MD&A — Liquidity and capital resources
  93. [93] Item 7, MD&A — Liquidity and capital resources
  94. [94] Item 7, MD&A — Liquidity and capital resources
  95. [95] Item 7, MD&A — Income before tax by segment
  96. [96] Item 7, MD&A — Income before tax by segment
  97. [97] Item 7, MD&A — Income before tax by segment
  98. [98] Item 7, MD&A — Income before tax by segment
  99. [99] Item 7, MD&A — Other (Income) Expense, Net
  100. [100] Item 7, MD&A — Other (Income) Expense, Net
  101. [101] Item 7, MD&A — Other (Income) Expense, Net
  102. [102] Item 7, MD&A — Other (Income) Expense, Net

Analysis on 6/8/2026