Novartis reported net sales of $13.34 billion for the fourth quarter of 2025, representing a 1% year-on-year increase but falling short of consensus estimates of $13.78 billion. On a constant-currency basis, sales declined by 1%. Core operating income rose by 1% to $4.93 billion (1% in constant currency), driven by higher government grant income and reduced SG&A expenses, though partially offset by increased R&D spending. The core operating income margin edged up 0.1 percentage point to 37.0% (0.7 points in constant currency). Adjusted earnings per share were $2.03, surpassing the consensus of $1.99.

Growth was underpinned by strong demand for key oncology and immunology therapies. Kisqali sales climbed 44% in constant currency to $1.32 billion, Kesimpta rose 27% to $1.23 billion, and Cosentyx contributed $1.81 billion, up 11%. Scemblix and Pluvicto delivered double-digit growth, with revenues of $391 million (up 87% cc) and $605 million (up 70% cc), respectively. These gains were partly offset by a 15-point negative impact from generic competition, including a 3-point hit from U.S. revenue deductions on Entresto and Promacta, and a 4-point drag from pricing, which were offset only in part by a 2-point currency tailwind.

For fiscal 2026, Novartis expects net sales to grow in the low single digits, while core operating income is projected to decline in the low single digits. Incoming CFO Mukul Mehta indicated that adjusted operating income growth is anticipated to accelerate in the second half of the year, supporting momentum into 2027. The company faces its largest patent expiry cycle to date but maintains confidence in its mid-term guidance based on its diversified portfolio. Institutional ownership stands at 13.12%, with recent notable changes including a 48.4% reduction in shares held by Federated Hermes to 51,422 shares and incremental stakes added by Fisher Asset Management (7.12 million shares), Loomis Sayles (5.58 million), Envestnet (1.74 million) and State Street (1.60 million).