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 a margin of 41.2%, driven by strong growth in priority brands and new launches, 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, Kesimpta, Rhapsido) delivered double-digit growth, providing momentum for H2 and supporting midterm growth guidance.

• Pipeline advanced with key regulatory milestones, approvals, and submissions, including Rhapsido, Itvisma, and del-zota, with multiple pivotal readouts expected in H2.

Financial highlights

• Q2 net sales: $14.4B (+1% cc, +3% USD); H1 net sales: $27.5B (+1% USD, -2% cc).

• Q2 core operating income: $5.9B (flat); Q2 core EPS: $2.41 (flat); Q2 net income: $3.3B (-19%).

• Q2 free cash flow: $5.6B (-12%); H1 free cash flow: $8.9B (-9%).

• Interest expense increased to $462M in Q2 and $805M in H1 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; core operating income projected to grow mid to high single digits.

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