Novartis Q2 Profit Rises, Initiates $10 Bln Share Buyback, Raises FY Core Operating Profit Growth View

Novartis Q2 net income rose to $4.041bln from $3.246bln YoY, driven by higher operating income and partially offset by higher net financial expense. The company initiated a $10bln share buyback program and revised its FY core operating profit growth view to low teens growth, while maintaining its high single-digit annual sales growth outlook.

Swiss pharmaceutical giant Novartis AG (NVS) has reported a robust second quarter (Q2) 2025, with net income rising to $4.041 billion from $3.246 billion in the same period last year. The company's core operating income grew by 21%, driven by higher operating income, while net financial expense partially offset the gains. Novartis also initiated a share buyback program worth up to $10 billion, to be completed by the end of 2027.

The company's Q2 net sales increased to $14.054 billion from $12.512 billion, a 12% growth year-over-year (YoY). The growth was primarily driven by strong performance from key therapies such as Kisqali, Entresto, Kesimpta, Scemblix, Leqvio, and Pluvicto. Sales in the U.S. contributed significantly to the growth, with a 21% increase to $6.2 billion. Sales outside the U.S. also grew by 6%, or 4% at constant currency.

Operating income rose to $4.9 billion from $4.014 billion, a 21% increase. Net income increased to $4.024 billion from $3.246 billion, a 24% growth. Earnings per share (EPS) increased to $2.07 from $1.60, a 29% increase. The company's core operating income margin reached 42.2% of sales, up by 2.6 percentage points from the previous year.

Novartis also revised its fiscal year (FY) 2025 core operating income growth outlook to the low teens from the earlier low double-digit growth estimate. The company expects annual sales to grow at a high single-digit rate from the prior year. The outlook reflects growth compared to the prior year on a constant currency basis.

The company's free cash flow increased by 37% to $6.3 billion, driven by higher net cash flows from operating activities. Total financial debt stood at $30.8 billion at the end of June, compared with $29.6 billion at the end of 2024. Net debt rose to $23.8 billion from $16.1 billion, while cash and equivalents declined to $6.7 billion from $11.5 billion, following dividend payments and share buybacks.

Vas Narasimhan, CEO of Novartis, commented on the Q2 results, stating, "Novartis delivered another strong quarter, with double-digit sales and core operating income growth. We continue to drive strong performance on our ongoing launches for Kisqali, Pluvicto, and Scemblix, demonstrating the replacement power in our portfolio. Our robust balance sheet and confidence in our mid and long-term growth enable us to initiate an up-to $10 billion share buyback as part of our commitment to balanced capital allocation."

References:

[1] https://www.nasdaq.com/articles/novartis-q2-profit-riseslifts-fy-core-operating-profit-growth-view-initiates-10-bln-share
[2] https://www.investing.com/news/earnings/novartis-q2-profit-rises-24-on-strong-us-sales-of-kisqali-and-entresto-4138701
[3] https://www.novartis.com/news/media-releases/novartis-reports-strong-q2-double-digit-sales-growth-and-core-margin-expansion-raises-fy-2025-core-operating-income-guidance