Earnings drop as Johnson & Johnson (NYSE: JNJ) grows Q1 2026 sales
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Johnson & Johnson reported mixed results for the fiscal first quarter ended March 29, 2026. Sales to customers reached $24,062 million, up from $21,893 million, driven by 11.2% growth in Innovative Medicine and 7.7% in MedTech. Oncology, neuroscience and pulmonary hypertension therapies showed strong increases, while some immunology products such as STELARA and XARELTO in cardiovascular declined.
Profitability was much lower than a year ago. Net earnings were $5,235 million versus $10,999 million, and diluted EPS was $2.14 compared with $4.54. The prior year included a large benefit from reversing approximately $7.0 billion of talc reserve and significant other income; the current quarter includes about $0.3 billion of talc-related charges.
Operating cash flow was $2,514 million, down from $4,174 million, as payables and accrued liabilities decreased. The company returned cash through $3,131 million in dividends and $4,028 million of share repurchases, while cash and cash equivalents rose to $21,688 million. Total assets were $200,894 million and total liabilities $119,708 million, leaving shareholders’ equity at $81,186 million.
Positive
- None.
Negative
- Net earnings more than halved year over year, declining from $10,999 million to $5,235 million, as prior-year results benefited from a roughly $7.0 billion talc reserve reversal and significant other income, while the current quarter includes about $0.3 billion in new talc-related charges.
Insights
Strong top-line growth but earnings compare against an unusually elevated prior-year quarter.
Johnson & Johnson delivered Q1 2026 sales of $24,062 million, up 9.9%, with double-digit growth in Innovative Medicine and solid expansion in MedTech. Oncology brands such as DARZALEX, CARVYKTI and newer multiple myeloma therapies, plus neuroscience products including CAPLYTA and SPRAVATO, were notable contributors.
Net earnings fell to $5,235 million from $10,999 million, largely because Q1 2025 benefited from reversing about $7.0 billion of talc reserve and very large other income, while Q1 2026 includes around $0.3 billion in talc-related charges. Core margins also reflected higher selling, marketing and administrative spending and higher interest expense.
Cash generation remained positive, with operating cash flow of $2,514 million and cash and cash equivalents of $21,688 million as of March 29, 2026. The company continued significant capital returns through dividends and share repurchases while carrying non‑current debt of $37,527 million. Actual long‑term performance will depend on sustaining specialty drug growth, executing the planned Orthopaedics separation, and resolving ongoing talc and other legal matters disclosed in this report.
Key Figures
Q1 2026 Revenue: $24,062 million
Q1 2026 Net Earnings: $5,235 million
Diluted EPS: $2.14 per share
+5 more
8 metrics
Q1 2026 Revenue
$24,062 million
Sales to customers for fiscal first quarter ended March 29, 2026
Q1 2026 Net Earnings
$5,235 million
Net earnings for fiscal first quarter 2026 vs $10,999 million in 2025
Diluted EPS
$2.14 per share
Diluted net earnings per share for fiscal first quarter 2026
Operating Cash Flow
$2,514 million
Net cash flows from operating activities, Q1 2026
Cash & Cash Equivalents
$21,688 million
Balance as of March 29, 2026 on consolidated balance sheet
Total Assets
$200,894 million
Consolidated assets as of March 29, 2026
Share Repurchases
$4,028 million
Repurchase of common stock including excise tax in Q1 2026
Dividends Paid
$3,131 million
Cash dividends paid at $1.30 per share in Q1 2026
Key Terms
forward-looking statements, cash flow hedges, net investment hedges, interim consolidated financial statements, +2 more
6 terms
forward-looking statements regulatory
"This Quarterly Report on and Johnson & Johnson’s other publicly available documents contain “forward-looking statements” within the meaning..."
Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.
cash flow hedges financial
"The Company uses forward foreign exchange contracts and cross currency interest rate swaps designated as cash flow hedges..."
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
net investment hedges financial
"The Company uses cross currency interest rate swaps and Euro denominated notes as net investment hedges of its investments..."
interim consolidated financial statements financial
"The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited..."
Interim consolidated financial statements are financial reports prepared for a partial reporting period (such as a quarter) that combine the results of a parent company and all its subsidiaries into a single picture. They matter to investors because they provide a timely snapshot of group performance between annual reports—like checking a car’s dashboard mid-journey—to spot trends, cash flow issues, or changes in profitability before the year-end statements arrive.
segment income before tax financial
"For the Innovative Medicine and MedTech segments, the CODM uses segment income before tax to allocate resources..."
talc reserve reversal financial
"Ultimately, each of the bankruptcy proceedings was dismissed and the Company reversed approximately $7.0 billion from amounts previously reserved for the bankruptcy resolution..."
Earnings Snapshot
Revenue: $24,062 million
Q1 2026
Revenue
$24,062 million
+9.9% vs Q1 2025
Net earnings
$5,235 million
-52.4% vs $10,999 million in Q1 2025
Diluted EPS
$2.14
down from $4.54 in Q1 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||||||
for the quarterly period ended March 29, 2026
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to | ||||||||
Commission file number 1-3215
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices)
Registrant’s telephone number, including area code (732 ) 524-0400
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☑ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company | ||||||||||||||
If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
On April 17, 2026, 2,407,216,971 shares of Common Stock, $1.00 par value, were outstanding.
JOHNSON & JOHNSON AND SUBSIDIARIES
Table of contents
Item | Page | ||||||||||
Part I | |||||||||||
Financial information | 1 | ||||||||||
Item 1 | Financial statements (unaudited) | 1 | |||||||||
Consolidated balance sheets — March 29, 2026 and December 28, 2025 | 1 | ||||||||||
Consolidated statements of earnings for the fiscal first quarters ended March 29, 2026 and March 30, 2025 | 2 | ||||||||||
Consolidated statements of comprehensive income for the fiscal first quarters ended March 29, 2026 and March 30, 2025 | 3 | ||||||||||
Consolidated statements of equity for the fiscal first quarters ended March 29, 2026 and March 30, 2025 | 4 | ||||||||||
Consolidated statements of cash flows for the fiscal three months ended March 29, 2026 and March 30, 2025 | 5 | ||||||||||
Notes to consolidated financial statements | 6 | ||||||||||
Item 2 | Management’s discussion and analysis of financial condition and results of operations | 27 | |||||||||
Item 3 | Quantitative and qualitative disclosures about market risk | 37 | |||||||||
Item 4 | Controls and procedures | 37 | |||||||||
Part II | |||||||||||
Other information | 38 | ||||||||||
Item 1 | Legal proceedings | 38 | |||||||||
Item 2 | Unregistered sales of equity securities and use of proceeds | 38 | |||||||||
Item 5 | Other information | 39 | |||||||||
Item 6 | Exhibits | 39 | |||||||||
Signatures | 40 | ||||||||||
Cautionary note regarding forward-looking statements
This Quarterly Report on Form 10-Q and Johnson & Johnson’s other publicly available documents contain “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Management and representatives of Johnson & Johnson and its subsidiaries (the Company) also may from time to time make forward-looking statements. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans, objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “estimates,” and other words of similar meaning in conjunction with, among other things: discussions of future operations, expected operating results, financial performance; impact of planned acquisitions and dispositions; impact and timing of restructuring initiatives including associated cost savings and other benefits; the Company’s strategy for growth; product development activities; regulatory approvals; market position and expenditures.
Because forward-looking statements are based on current beliefs, expectations and assumptions regarding future events, they are subject to uncertainties, risks and changes that are difficult to predict and many of which are outside of the Company’s control. Investors should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, the Company’s actual results and financial condition could vary materially from expectations and projections expressed or implied in its forward-looking statements. Investors are therefore cautioned not to rely on these forward-looking statements. Risks and uncertainties include, but are not limited to:
Risks related to product development, market success and competition
•Challenges and uncertainties inherent in innovation and development of new and improved products and technologies on which the Company’s continued growth and success depend, including uncertainty of clinical outcomes, additional analysis of existing clinical data, obtaining regulatory approvals, health plan coverage and customer access, and initial and continued commercial success;
•Challenges to the Company’s ability to secure and maintain adequate patent and other intellectual property rights for new and existing products and technologies in the United States and other important markets;
•The impact of patent expirations, typically followed by the introduction of competing generic, biosimilar or other products and resulting revenue and market share losses;
•Increasingly aggressive and frequent challenges to the Company’s patents by competitors and others seeking to launch competing generic, biosimilar or other products and increased receptivity of courts, the United States Patent and Trademark Office and other decision makers to such challenges, potentially resulting in loss of market exclusivity and rapid decline in sales for the relevant product sooner than expected;
•Competition in research and development of new and improved products, processes and technologies, which can result in product and process obsolescence;
•Competition to reach agreement with third parties for collaboration, licensing, development and marketing agreements for products and technologies;
•Competition based on cost-effectiveness, product performance, technological advances and patents attained by competitors; and
•Allegations that the Company’s products infringe the patents and other intellectual property rights of third parties, which could adversely affect the Company’s ability to sell the products in question and require the payment of money damages and future royalties.
Risks related to product liability, litigation and regulatory activity
•Product efficacy or safety concerns, whether or not based on scientific evidence, potentially resulting in product withdrawals, recalls, regulatory action on the part of the United States Food and Drug Administration (U.S. FDA) (or international counterparts), declining sales, reputational damage, increased litigation expense and share price impact;
•The impact, including declining sales and reputational damage, of significant litigation or government action adverse to the Company, including product liability claims and allegations related to pharmaceutical marketing practices and contracting strategies;
•The impact of an adverse judgment or settlement and the adequacy of reserves related to legal proceedings, including patent litigation, product liability, personal injury claims, securities class actions, government investigations, employment and other legal proceedings;
•Increased scrutiny of the healthcare industry by government agencies and state attorneys general resulting in investigations and prosecutions, which carry the risk of significant civil and criminal penalties, including, but not limited to, debarment from government business;
•Failure to meet compliance obligations in compliance agreements with governments or government agencies, which could result in significant sanctions;
•Potential changes to applicable laws and regulations affecting United States and international operations, including relating to: approval of new products; licensing and patent rights; sales and promotion of healthcare products; access to, and reimbursement and pricing for, healthcare products and services; environmental protection; and sourcing of raw materials;
•Compliance with local regulations and laws that may restrict the Company’s ability to manufacture or sell its products in relevant markets, including requirements to comply with medical device reporting regulations and other requirements such as the European Union’s Medical Devices Regulation;
•Changes in domestic and international tax laws and regulations, increasing audit scrutiny by tax authorities around the world may cause exposures to additional tax liabilities potentially in excess of existing reserves; and
•The issuance of new or revised accounting standards by the Financial Accounting Standards Board and regulations by the Securities and Exchange Commission.
Risks related to the Company’s strategic initiatives, healthcare market trends and the planned separation of the Company's Orthopaedics Business
•Pricing pressures resulting from trends toward healthcare cost containment, including the continued consolidation among healthcare providers and other market participants, trends toward managed care, the shift toward governments increasingly becoming the primary payors of healthcare expenses, significant new entrants to the healthcare markets seeking to reduce costs and government pressure on companies to voluntarily reduce costs and price increases;
•Restricted spending patterns of individual, institutional and governmental purchasers of healthcare products and services due to economic hardship and budgetary constraints;
•Challenges to the Company’s ability to realize its strategy for growth including through externally sourced innovations, such as development collaborations, strategic acquisitions, licensing and marketing agreements, and the potential heightened costs of any such external arrangements due to competitive pressures;
•The potential that the expected strategic benefits and opportunities from any planned or completed acquisition or divestiture by the Company may not be realized or may take longer to realize than expected;
•The potential that the expected benefits and opportunities related to past and ongoing restructuring actions may not be realized or may take longer to realize than expected.
•The Company’s ability to satisfy the necessary conditions to consummate the planned separation of the Company’s Orthopaedics business on a timely basis or at all;
•The Company’s ability to successfully separate the Company’s Orthopaedics business and realize the anticipated benefits from the planned separation; and
•The structure of the separation transaction and the future operating and financial performance, market position and business strategy for each company.
Risks related to economic conditions, financial markets and operating internationally
•The risks associated with global operations on the Company and its customers and suppliers, including foreign governments in countries in which the Company operates;
•The impact of inflation and fluctuations in interest rates and currency exchange rates and the potential effect of such fluctuations on revenues, expenses and resulting margins;
•Potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs and potential drug reimportation legislation, and the impact of such changes on raw material prices, supply chains market volatility and the pace of product development;
•The impact on international operations from financial instability in international economies, sovereign risk, possible imposition of governmental controls and restrictive economic policies, and unstable international governments and legal systems;
•The impact of global public health crises and pandemics;
•Changes to global climate, extreme weather and natural disasters that could affect demand for the Company’s products and services, cause disruptions in manufacturing and distribution networks, alter the availability of goods and services within the supply chain, and affect the overall design and integrity of the Company’s products and operations;
•The impact of global or economic changes or events, including global tensions and war; and
•The impact of armed conflicts and terrorist attacks in the United States and other parts of the world, including social and economic disruptions and instability of financial and other markets.
Risks related to supply chain and operations
•Difficulties and delays in manufacturing, internally, through third-party providers or otherwise within the supply chain, that may lead to voluntary or involuntary business interruptions or shutdowns, product shortages, withdrawals or suspensions of products from the market, and potential regulatory action;
•Interruptions and breaches of the Company’s information technology systems or those of the Company’s vendors, which could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action;
•Reliance on global supply chains and production and distribution processes that are complex and subject to increasing regulatory requirements that may adversely affect supply, sourcing and pricing of materials used in the Company’s products; and
•The potential that the expected benefits and opportunities related to restructuring actions may not be realized or may take longer to realize than expected, including due to any required approvals from applicable regulatory authorities.
Investors also should carefully read the Risk Factors described in Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2025, for a description of certain risks that could, among other things, cause the Company’s actual results to differ materially from those expressed in its forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above to be a complete statement of all potential risks and uncertainties. The Company does not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments.
Table of Contents
Part I — Financial information
Item 1 — Financial statements
Johnson & Johnson and subsidiaries consolidated balance sheets
(Unaudited; Dollars in Millions Except Share and Per Share Data)
| March 29, 2026 | December 28, 2025 | |||||||||||||
Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents (Note 4) | $ | |||||||||||||
| Marketable securities | ||||||||||||||
Accounts receivable, trade, less allowances $ | ||||||||||||||
| Inventories (Note 2) | ||||||||||||||
Prepaid expenses and other | ||||||||||||||
| Total current assets | ||||||||||||||
| Property, plant and equipment at cost | ||||||||||||||
| Less: accumulated depreciation | ( | ( | ||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Intangible assets, net (Note 3) | ||||||||||||||
| Goodwill (Note 3) | ||||||||||||||
| Deferred taxes on income (Note 5) | ||||||||||||||
Other assets | ||||||||||||||
| Total assets | $ | |||||||||||||
Liabilities and shareholders’ equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Loans and notes payable | $ | |||||||||||||
| Accounts payable | ||||||||||||||
| Accrued liabilities | ||||||||||||||
| Accrued rebates, returns and promotions | ||||||||||||||
| Accrued compensation and employee related obligations | ||||||||||||||
Accrued taxes on income (Note 5) | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt (Note 4) | ||||||||||||||
| Deferred taxes on income (Note 5) | ||||||||||||||
| Employee related obligations (Note 6) | ||||||||||||||
| Long-term taxes payable (Note 5) | ||||||||||||||
Other liabilities | ||||||||||||||
| Total liabilities | $ | |||||||||||||
| Commitments and Contingencies (Note 11) | ||||||||||||||
| Shareholders’ equity: | ||||||||||||||
Common stock — par value $ | $ | |||||||||||||
| Accumulated other comprehensive income (loss) (Note 7) | ( | ( | ||||||||||||
| Retained earnings and Additional paid-in capital | ||||||||||||||
Less: common stock held in treasury, at cost ( | ||||||||||||||
| Total shareholders’ equity | $ | |||||||||||||
| Total liabilities and shareholders’ equity | $ | |||||||||||||
See Notes to Consolidated Financial Statements
Form 10-Q | 1 | ||||
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of earnings
(Unaudited; Dollars & Shares in Millions Except Per Share Amounts)
| Fiscal First Quarter Ended | ||||||||||||||||||||||||||
| March 29, 2026 | Percent to Sales | March 30, 2025 | Percent to Sales | |||||||||||||||||||||||
| Sales to customers (Note 9) | $ | % | $ | % | ||||||||||||||||||||||
| Cost of products sold | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Selling, marketing and administrative expenses | ||||||||||||||||||||||||||
| Research and development expense | ||||||||||||||||||||||||||
| In-process research and development impairments | ||||||||||||||||||||||||||
| Interest income | ( | ( | ( | ( | ||||||||||||||||||||||
| Interest expense, net of portion capitalized | ||||||||||||||||||||||||||
| Other (income) expense, net | ( | ( | ||||||||||||||||||||||||
| Restructuring (Note 12) | ||||||||||||||||||||||||||
| Earnings before provision for taxes on income | ||||||||||||||||||||||||||
| Provision for taxes on income (Note 5) | ||||||||||||||||||||||||||
| Net earnings | $ | % | $ | % | ||||||||||||||||||||||
| Net earnings per share (Note 8) | ||||||||||||||||||||||||||
| Basic | $ | $ | ||||||||||||||||||||||||
| Diluted | $ | $ | ||||||||||||||||||||||||
Avg. shares outstanding | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
See Notes to Consolidated Financial Statements
2 |  | ||||
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of comprehensive income
(Unaudited; Dollars in Millions)
| Fiscal First Quarter Ended | ||||||||||||||
| March 29, 2026 | March 30, 2025 | |||||||||||||
| Net earnings | $ | |||||||||||||
| Other comprehensive income (loss), net of tax | ||||||||||||||
| Foreign currency translation | ( | |||||||||||||
| Employee benefit plans: | ||||||||||||||
| Prior service cost amortization during period | ( | ( | ||||||||||||
| Gain (loss) amortization during period | ||||||||||||||
| Net change | ||||||||||||||
| Derivatives & hedges: | ||||||||||||||
| Unrealized gain (loss) arising during period | ( | |||||||||||||
| Reclassifications to earnings | ( | ( | ||||||||||||
| Net change | ( | |||||||||||||
| Other comprehensive income (loss) | ||||||||||||||
| Comprehensive income | $ | |||||||||||||
See Notes to Consolidated Financial Statements
The tax cost/(benefit) effects in other comprehensive income/(loss) for the fiscal first quarter were as follows for 2026 and 2025, respectively: Foreign Currency Translation: $( | ||
Form 10-Q | 3 | ||||
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of equity
(Unaudited; Dollars in Millions)
Fiscal First Quarter Ended March 29, 2026
| Total | Retained Earnings and Additional Paid-in Capital | Accumulated Other Comprehensive Income (AOCI) | Common Stock Issued Amount | Treasury Stock Amount | |||||||||||||||||||||||||||||||
Balance, December 28, 2025 | $ | ( | ( | ||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | ||||||||||||||||||||||||||||||||
Cash dividends paid ($ | ( | ( | — | — | — | ||||||||||||||||||||||||||||||
| Employee compensation and stock option plans | ( | — | — | ||||||||||||||||||||||||||||||||
| Repurchase of common stock (including excise tax) | ( | — | — | — | ( | ||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | ||||||||||||||||||||||||||||||||
Balance, March 29, 2026 | $ | ( | ( | ||||||||||||||||||||||||||||||||
Fiscal First Quarter Ended March 30, 2025
| Total | Retained Earnings and Additional Paid-in Capital | Accumulated Other Comprehensive Income | Common Stock Issued Amount | Treasury Stock Amount | ||||||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | ( | ( | |||||||||||||||||||||||||||||
| Net earnings | — | — | — | |||||||||||||||||||||||||||||
Cash dividends paid ($ | ( | ( | — | — | — | |||||||||||||||||||||||||||
| Employee compensation and stock option plans | ( | — | — | |||||||||||||||||||||||||||||
| Repurchase of common stock (including excise tax) | ( | — | — | — | ( | |||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | — | — | — | |||||||||||||||||||||||||||||
| Balance, March 30, 2025 | $ | ( | ( | |||||||||||||||||||||||||||||
See Notes to Consolidated Financial Statements
4 | | ||||
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of cash flows
(Unaudited; Dollars in Millions)
| Fiscal Three Months Ended | ||||||||||||||
| March 29, 2026 | March 30, 2025 | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Net earnings | $ | |||||||||||||
Adjustments to reconcile net earnings to cash flows from operating activities: | ||||||||||||||
Depreciation and amortization of property and intangibles | ||||||||||||||
Stock based compensation | ||||||||||||||
Asset write-downs | ||||||||||||||
Charges for acquired in-process research and development assets | ||||||||||||||
Net loss/(gain) on sale of assets/businesses | ( | |||||||||||||
Deferred tax provision | ||||||||||||||
Credit losses and accounts receivable allowances | ( | ( | ||||||||||||
Changes in assets and liabilities, net of effects from acquisitions and divestitures: | ||||||||||||||
Increase in accounts receivable | ( | ( | ||||||||||||
Increase in inventories | ( | ( | ||||||||||||
Decrease in accounts payable and accrued liabilities | ( | ( | ||||||||||||
Decrease/(Increase) in other current and non-current assets | ( | |||||||||||||
Decrease in other current and non-current liabilities | ( | ( | ||||||||||||
Net cash flows from operating activities | ||||||||||||||
Cash flows used for investing activities | ||||||||||||||
Additions to property, plant and equipment | ( | ( | ||||||||||||
Proceeds from the disposal of assets/businesses, net (Note 10) | ||||||||||||||
Acquired in-process research and development assets / related milestones (Note 10) | ( | |||||||||||||
Purchases of investments | ( | ( | ||||||||||||
Sales of investments | ||||||||||||||
Credit support agreements activity, net | ( | |||||||||||||
Other (including capitalized licenses and milestones) | ( | ( | ||||||||||||
Net cash used for investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Dividends to shareholders | ( | ( | ||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||
Proceeds from short-term debt, net | ||||||||||||||
Repayment of short-term debt, net | ( | ( | ||||||||||||
Proceeds from long-term debt, net of issuance costs | ||||||||||||||
Repayment of long-term debt | ( | ( | ||||||||||||
Proceeds from the exercise of stock options/employee withholding tax on stock awards, net | ||||||||||||||
Credit support agreements activity, net | ( | ( | ||||||||||||
Other | ( | |||||||||||||
Net cash from financing activities | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | |||||||||||||
Increase in cash and cash equivalents | ||||||||||||||
| Cash and cash equivalents, beginning of period | ||||||||||||||
| Cash and cash equivalents, end of period | ||||||||||||||
See Notes to Consolidated Financial Statements
Form 10-Q | 5 | ||||
Table of Contents
Notes to consolidated financial statements
Note 1 — The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of Johnson & Johnson and its subsidiaries (the Company) and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented.
Columns and rows within tables may not add due to rounding. Percentages have been calculated using actual, non-rounded figures.
Recently Adopted Accounting Standards
ASU 2025-07: Derivates and Hedging (Topic 815) and Revenue from Contracts with Customers (TOPIC 606)
Effective beginning fiscal year 2026, the Company prospectively adopted the amended guidance issued by the FASB that adds a scope exception to exclude from derivative accounting non-exchange-traded contracts with variables (underlyings) that are based on operations or activities specific to one of the parties to the contract. The adoption of this new accounting standard did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Standards Not Yet Adopted
There were no new material accounting standards issued in the fiscal first quarter of 2026.
Supplier finance program obligations
The Company has agreements for supplier finance programs with third-party financial institutions. These programs provide enrolled suppliers the ability to finance payment obligations from the Company with the third-party financial institutions. The Company is not a party to the arrangements between the suppliers and the third-party financial institutions. The Company’s obligations to its suppliers, including amounts due, and scheduled payment dates (which have general payment terms of 90 days), are not affected by a participating supplier’s decision to join in the program.
Note 2 — Inventories
| (Dollars in Millions) | March 29, 2026 | December 28, 2025 | |||||||||
| Raw materials and supplies | $ | ||||||||||
| Goods in process | |||||||||||
| Finished goods | |||||||||||
| Total inventories | $ | ||||||||||
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Note 3 — Intangible assets and goodwill
Intangible assets that have finite useful lives are amortized over their estimated useful lives. The latest annual impairment assessment of goodwill and indefinite lived intangible assets was completed in the fiscal fourth quarter of 2025. Future impairment tests for goodwill and indefinite lived intangible assets will be performed annually in the fiscal fourth quarter, or sooner, if warranted.
| (Dollars in Millions) | March 29, 2026 | December 28, 2025 | |||||||||
| Intangible assets with definite lives: | |||||||||||
| Patents and trademarks — gross | $ | ||||||||||
| Less accumulated amortization | ( | ( | |||||||||
| Patents and trademarks — net | $ | ||||||||||
| Customer relationships and other intangibles — gross | |||||||||||
| Less accumulated amortization | ( | ( | |||||||||
Customer relationships and other intangibles — net(1) | $ | ||||||||||
| Intangible assets with indefinite lives: | |||||||||||
| Trademarks | |||||||||||
| Purchased in-process research and development | |||||||||||
| Total intangible assets — net | $ | ||||||||||
(1)The majority is comprised of customer relationships
Goodwill as of March 29, 2026 was allocated by segment of business as follows:
| (Dollars in Millions) | Innovative Medicine | MedTech | Total | ||||||||||||||
Goodwill at December 28, 2025 | $ | ||||||||||||||||
| Goodwill, related to acquisitions | |||||||||||||||||
| Goodwill, related to divestitures | |||||||||||||||||
| Currency translation/Other | ( | ( | ( | ||||||||||||||
Goodwill at March 29, 2026 | $ | ||||||||||||||||
The weighted average amortization period for patents and trademarks is approximately 12 years. The weighted average amortization period for customer relationships and other intangible assets is approximately 19 years. The amortization expense of amortizable intangible assets included in the cost of products sold was $1.2 billion and $1.1 billion for the fiscal first quarters ended March 29, 2026 and March 30, 2025, respectively.
The estimated amortization expense for approved products, before tax, for the five succeeding years is approximately:
| (Dollars in Millions) | ||||||||||||||||||||||||||
| 2026 | 2027 | 2028 | 2029 | 2030 | ||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||
See Note 10 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.
Form 10-Q | 7 | ||||
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Note 4 — Fair value measurements
The Company uses forward foreign exchange contracts to manage its exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of future intercompany product and third-party purchases of materials denominated in a foreign currency. The Company uses cross currency interest rate swaps to manage currency risk primarily related to borrowings. Both types of derivatives are designated as cash flow hedges.
Additionally, the Company uses interest rate swaps as an instrument to manage interest rate risk related to fixed rate borrowings. These derivatives are designated as fair value hedges. The Company uses cross currency interest rate swaps and forward foreign exchange contracts designated as net investment hedges. Additionally, the Company uses forward foreign exchange contracts to offset its exposure to certain foreign currency assets and liabilities. These forward foreign exchange contracts are not designated as hedges, and therefore, changes in the fair values of these derivatives are recognized in earnings, thereby offsetting the current earnings effect of the related foreign currency assets and liabilities.
The Company does not enter into derivative financial instruments for trading or speculative purposes, or that contain credit risk related contingent features. The Company maintains credit support agreements (CSA) with certain derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. As of March 29, 2026, the cumulative amount of cash collateral paid by the Company under the CSA amounted to $4.7 billion net, related to net investment and cash flow hedges. On an ongoing basis, the Company monitors counter-party credit ratings. The Company considers credit non-performance risk to be low because the Company primarily enters into agreements with commercial institutions that have at least an investment grade credit rating. Refer to the table on significant financial assets and liabilities measured at fair value contained in this footnote for receivables and payables with these commercial institutions. As of March 29, 2026, the Company had notional amounts outstanding for forward foreign exchange contracts, cross currency interest rate swaps and interest rate swaps of $43.9 billion, $37.9 billion and $8.0 billion, respectively. As of December 28, 2025, the Company had notional amounts outstanding for forward foreign exchange contracts, cross currency interest rate swaps and interest rate swaps of $40.6 billion, $38.9 billion and $8.0 billion, respectively.
All derivative instruments are recorded on the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction, and if so, the type of hedge transaction.
The designation as a cash flow hedge is made at the entrance date of the derivative contract. At inception, all derivatives are expected to be highly effective. Foreign exchange contracts designated as cash flow hedges are accounted for under the forward method and all gains/losses associated with these contracts will be recognized in the income statement when the hedged item impacts earnings. Changes in the fair value of these derivatives are recorded in accumulated other comprehensive income until the underlying transaction affects earnings and are then reclassified to earnings in the same account as the hedged transaction.
Gains and losses associated with interest rate swaps and changes in fair value of hedged debt attributable to changes in interest rates are recorded to interest expense in the period in which they occur. Gains and losses on net investment hedges are accounted for through the currency translation account within accumulated other comprehensive income. The portion excluded from effectiveness testing is recorded through interest (income) expense using the spot method. On an ongoing basis, the Company assesses whether each derivative continues to be highly effective in offsetting changes of hedged items. If and when a derivative is no longer expected to be highly effective, hedge accounting is discontinued.
The Company designated its Euro denominated notes with due dates ranging from 2028 to 2055 as a net investment hedge of the Company's investments in certain of its international subsidiaries that use the Euro as their functional currency in order to reduce the volatility caused by changes in exchange rates.
As of March 29, 2026, the balance of deferred net loss on derivatives included in accumulated other comprehensive income was $0.6 billion after-tax. For additional information, see the Consolidated Statements of Comprehensive Income and Note 7. The Company expects that substantially all of the amounts related to forward foreign exchange contracts will be reclassified into earnings over the next 12 months as a result of transactions that are expected to occur over that period. The maximum length of time over which the Company is hedging transaction exposure is 18 months, excluding interest rate contracts and net investment hedge contracts. The amount ultimately realized in earnings may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity of the derivative.
8 | | ||||
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The following table is a summary of the activity related to derivatives and hedges for the fiscal first quarters ended March 29, 2026 and March 30, 2025, net of tax:
| March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||||||||||
| (Dollars in Millions) | Sales | Cost of Products Sold | R&D Expense | Interest (Income) Expense | Other (Income) Expense | Sales | Cost of Products Sold | R&D Expense | Interest (Income) Expense | Other (Income) Expense | |||||||||||||||||||||||||
| The effects of fair value, net investment and cash flow hedging: | |||||||||||||||||||||||||||||||||||
| Gain (Loss) on fair value hedging relationship: | |||||||||||||||||||||||||||||||||||
| Interest rate swaps contracts: | |||||||||||||||||||||||||||||||||||
| Hedged items | $ | ||||||||||||||||||||||||||||||||||
| Derivatives designated as hedging instruments | ( | ( | |||||||||||||||||||||||||||||||||
| Gain (Loss) on net investment hedging relationship: | |||||||||||||||||||||||||||||||||||
| Cross currency interest rate swaps contracts: | |||||||||||||||||||||||||||||||||||
| Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing | |||||||||||||||||||||||||||||||||||
| Amount of gain or (loss) recognized in AOCI | |||||||||||||||||||||||||||||||||||
| Gain (Loss) on cash flow hedging relationship: | |||||||||||||||||||||||||||||||||||
| Forward foreign exchange contracts: | |||||||||||||||||||||||||||||||||||
| Amount of gain or (loss) reclassified from AOCI into income | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Amount of gain or (loss) recognized in AOCI | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Cross currency interest rate swaps contracts: | |||||||||||||||||||||||||||||||||||
| Amount of gain or (loss) reclassified from AOCI into income | |||||||||||||||||||||||||||||||||||
| Amount of gain or (loss) recognized in AOCI | $ | ||||||||||||||||||||||||||||||||||
Form 10-Q | 9 | ||||
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As of March 29, 2026, and December 28, 2025, the following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges:
| Line item in the Consolidated Balance Sheet in which the hedged item is included | Carrying Amount of the Hedged Liability | Cumulative Amount of Fair Value Hedging Gain/ (Loss) Included in the Carrying Amount of the Hedged Liability | ||||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | December 28, 2025 | March 29, 2026 | December 28, 2025 | ||||||||||||||||||||||
| Long-term Debt | $ | ( | ( | |||||||||||||||||||||||
The following table is the effect of derivatives not designated as hedging instruments for the fiscal first quarters ended 2026 and 2025:
| Gain/(Loss) Recognized In Income on Derivative | |||||||||||||||||||||||
| (Dollars in Millions) | Location of Gain /(Loss) Recognized in Income on Derivative | Fiscal First Quarter Ended | |||||||||||||||||||||
| Derivatives Not Designated as Hedging Instruments | March 29, 2026 | March 30, 2025 | |||||||||||||||||||||
| Foreign Exchange Contracts | Other (income) expense | $( | |||||||||||||||||||||
The following table is the effect of net investment hedges for the fiscal first quarters ended in 2026 and 2025:
Gain/(Loss) Recognized In Accumulated OCI | Location of Gain or (Loss) Reclassified from Accumulated OCI Into Income | Gain/(Loss) Reclassified From Accumulated OCI Into Income | ||||||||||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||||
| Debt | $ | ( | Interest (income) expense | |||||||||||||||||||||||||||||
| Cross Currency interest rate swaps | $ | Interest (income) expense | ||||||||||||||||||||||||||||||
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The Company holds equity investments with readily determinable fair values and equity investments without readily determinable fair values. The Company has elected to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
The following table is a summary of the activity related to equity investments:
| December 28, 2025 | March 29, 2026 | |||||||||||||||||||||||||||||||
| (Dollars in Millions) | Carrying Value | Changes in Fair Value Reflected in Net Income (1) | (Sales)/ Purchases/Other (2) | Carrying Value | Non Current Other Assets | |||||||||||||||||||||||||||
| Equity Investments with readily determinable value | $ | ( | ||||||||||||||||||||||||||||||
| Equity Investments without readily determinable value | $ | ( | ||||||||||||||||||||||||||||||
(1)Recorded in Other (income)/expense, net
(2)Other includes impact of currency
Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement determined using assumptions that market participants would use in pricing an asset or liability. In accordance with ASC 820, a three-level hierarchy was established to prioritize the inputs used in measuring fair value. The levels within the hierarchy are described below with Level 1 inputs having the highest priority and Level 3 inputs having the lowest.
The fair value of a derivative financial instrument (i.e., forward foreign exchange contracts, interest rate contracts) is the aggregation by currency of all future cash flows discounted to its present value at the prevailing market interest rates and subsequently converted to the U.S. Dollar at the current spot foreign exchange rate. The Company does not believe that fair values of these derivative instruments materially differ from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a material effect on the Company’s results of operations, cash flows or financial position. The Company also holds equity investments which are classified as Level 1 and debt securities which are classified as Level 2. The Company holds acquisition related contingent liabilities based upon certain regulatory and commercial events, which are classified as Level 3, whose values are determined using discounted cash flow methodologies or similar techniques for which the determination of fair value requires significant judgment or estimations.
The following three levels of inputs are used to measure fair value:
Level 1 — Quoted prices in active markets for identical assets and liabilities.
Level 2 — Significant other observable inputs.
Level 3 — Significant unobservable inputs.
Form 10-Q | 11 | ||||
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The Company’s significant financial assets and liabilities measured at fair value as of March 29, 2026 and December 28, 2025 were as follows:
| March 29, 2026 | December 28, 2025 | |||||||||||||||||||||||||||||||
| (Dollars in Millions) | Level 1 | Level 2 | Level 3 | Total | Total(1) | |||||||||||||||||||||||||||
| Derivatives designated as hedging instruments: | ||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Forward foreign exchange contracts | $ | |||||||||||||||||||||||||||||||
Interest rate contracts(2) | ||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Forward foreign exchange contracts | ||||||||||||||||||||||||||||||||
Interest rate contracts(2) | ||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Forward foreign exchange contracts | ||||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||
| Forward foreign exchange contracts | ||||||||||||||||||||||||||||||||
| Other Investments: | ||||||||||||||||||||||||||||||||
Equity investments(3) | ||||||||||||||||||||||||||||||||
Debt securities(4) | ||||||||||||||||||||||||||||||||
| Other Liabilities: | ||||||||||||||||||||||||||||||||
Contingent consideration(5) | $ | |||||||||||||||||||||||||||||||
| Gross to Net Derivative Reconciliation | March 29, 2026 | December 28, 2025 | ||||||||||||
| (Dollars in Millions) | ||||||||||||||
| Total Gross Assets | $ | |||||||||||||
| Credit Support Agreement (CSA) | ( | ( | ||||||||||||
| Total Net Asset | ||||||||||||||
| Total Gross Liabilities | ||||||||||||||
| Credit Support Agreement (CSA) | ( | ( | ||||||||||||
| Total Net Liabilities | $ | |||||||||||||
Summarized information about changes in liabilities for contingent consideration for the fiscal first quarters ended March 29, 2026 and March 30, 2025 is as follows:
| March 29, 2026 | March 30, 2025 | |||||||||||||
| (Dollars in Millions) | ||||||||||||||
| Beginning Balance | $ | |||||||||||||
Changes in estimated fair value(6) | ||||||||||||||
| Additions | ||||||||||||||
| Payments | ||||||||||||||
| Ending Balance | $ | |||||||||||||
(1)2025 assets and liabilities are all classified as Level 2 with the exception of equity investments of $665 million, which are classified as Level 1 and contingent consideration of $753 million, classified as Level 3.
(2)Includes cross currency interest rate swaps and interest rate swaps.
(3)Classified as non-current other assets.
12 | | ||||
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(4)Classified within cash equivalents and current marketable securities.
(5)Classified as non-current other liabilities.
As of March 29, 2026 and December 28, 2025, cash and cash equivalents includes money market funds of $5,089 million and $5,993 million, respectively, which would be considered level 1 in the fair value hierarchy
The Company's cash, cash equivalents and current marketable securities as of March 29, 2026 comprised:
| (Dollars in Millions) | Carrying Amount | Estimated Fair Value | Cash & Cash Equivalents | Current Marketable Securities | ||||||||||||||||||||||
| Cash | $ | |||||||||||||||||||||||||
| U.S. reverse repurchase agreements | ||||||||||||||||||||||||||
| Money market funds | ||||||||||||||||||||||||||
Time deposits(1) | ||||||||||||||||||||||||||
| Subtotal | ||||||||||||||||||||||||||
| | ||||||||||||||||||||||||||
| U.S. Gov’t securities | ||||||||||||||||||||||||||
| Other sovereign securities | ||||||||||||||||||||||||||
| Corporate and other debt securities | ||||||||||||||||||||||||||
Subtotal available for sale debt(2) | $ | |||||||||||||||||||||||||
| Total cash, cash equivalents and current marketable securities | $ | |||||||||||||||||||||||||
(1)Held to maturity investments are reported at amortized cost and gains or losses are reported in earnings.
(2)Available for sale debt securities are reported at fair value with unrealized gains and losses reported net of taxes in other comprehensive income.
As of the fiscal year ended December 28, 2025, the carrying amount of cash, cash equivalents and current marketable securities was the same as the estimated fair value.
Fair value of government securities and obligations and corporate debt securities was estimated using quoted broker prices and significant other observable inputs.
The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. Available for sale securities with stated maturities of greater than one year from the date of purchase are available to fund current operations and are classified as current marketable securities.
The contractual maturities of the available for sale securities as of March 29, 2026 are as follows:
| (Dollars in Millions) | Cost Basis | Fair Value | ||||||||||||
| Due within one year | $ | |||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Total debt securities | $ | |||||||||||||
Form 10-Q | 13 | ||||
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Financial instruments not measured at fair value
The following financial liabilities are held at carrying amount on the consolidated balance sheet as of March 29, 2026:
| (Dollars in Millions) | Carrying Amount | Estimated Fair Value | ||||||||||||
| Financial Liabilities | ||||||||||||||
| Current Debt | $ | |||||||||||||
| Non-Current Debt | ||||||||||||||
14 | | ||||
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| Other | ||||||||||||||
| Total Non-Current Debt | $ | |||||||||||||
The weighted average effective interest rate on non-current debt is 3.56 %.
The excess of the carrying value over the estimated fair value of debt was $1.7 billion at December 28, 2025.
Fair value of the non-current debt was estimated using market prices, which were corroborated by quoted broker prices and significant other observable inputs.
The current debt balance as of March 29, 2026, includes $15.7 billion of commercial paper which has a weighted average interest rate of 3.67 % and a weighted average maturity of approximately two months . The current debt balance as of December 28, 2025 included $6.5 billion of commercial paper which has a weighted average interest rate of 3.81 % and a weighted average maturity of approximately two months .
Note 5 — Income taxes
The worldwide effective income tax rates for the fiscal first quarter of 2026 and 2025 were 12.6 % and 19.3 %, respectively. The primary drivers for year over year change in the Company’s effective tax were:
•In the fiscal first quarter of 2025, the Company reversed approximately $7.0 billion related to the talc reserve which was recorded at approximately 22 %.
•Additional tax benefits in the fiscal first quarter of 2026 related to the Company’s share-based equity compensation programs that either vested or were exercised during the fiscal first quarters of 2026 and 2025, which reduced the effective tax rate by 5.1 % and 0.4 %, respectively.
Form 10-Q | 15 | ||||
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Note 6 — Pensions and other benefit plans
Components of net periodic benefit cost
Net periodic benefit costs for the Company’s defined benefit retirement plans and other benefit plans include the following components:
| Fiscal First Quarter Ended | |||||||||||||||||||||||||||||
| Retirement Plans | Other Benefit Plans | ||||||||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | |||||||||||||||||||||||||
| Service cost | $ | ||||||||||||||||||||||||||||
| Interest cost | |||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||||||||
Amortization of prior service cost/(credit) | ( | ( | |||||||||||||||||||||||||||
Recognized actuarial (gains)/losses | |||||||||||||||||||||||||||||
| Net periodic benefit cost/(credit) | $( | ||||||||||||||||||||||||||||
The service cost component of net periodic benefit cost is presented in the same line items on the Consolidated Statement of Earnings where other employee compensation costs are reported, including Cost of products sold, Research and development expense, and Selling, marketing and administrative expenses. All other components of net periodic benefit cost are presented as part of Other (income) expense, net on the Consolidated Statement of Earnings.
Company contributions
For the fiscal three months ended March 29, 2026, the Company contributed $35 million and $5 million to its U.S. and international retirement plans, respectively. The Company plans to continue to fund its U.S. defined benefit plans to comply with the Pension Protection Act of 2006. International plans are funded in accordance with local regulations.
16 | | ||||
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Note 7 — Accumulated other comprehensive income
Components of other comprehensive income/(loss) consist of the following:
| (Dollars in Millions) | Foreign Currency Translation | Gain/ (Loss) On Securities | Employee Benefit Plans | Gain/ (Loss) On Derivatives & Hedges | Total Accumulated Other Comprehensive Income/(Loss) | |||||||||||||||||||||||||||
| December 28, 2025 | $( | ( | ( | ( | ||||||||||||||||||||||||||||
| Net change | ( | |||||||||||||||||||||||||||||||
| March 29, 2026 | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Amounts in accumulated other comprehensive income are presented net of the related tax impact. Foreign currency translation is not adjusted for income taxes where it relates to permanent investments in international subsidiaries. For additional details on comprehensive income see the Consolidated Statements of Comprehensive Income.
Details on reclassifications out of Accumulated Other Comprehensive Income:
Gain/(Loss) On Securities - reclassifications released to Other (income) expense, net.
Employee Benefit Plans - reclassifications are included in net periodic benefit cost. See Note 6 for additional details.
Note 8 — Earnings per share
The following is a reconciliation of basic net earnings per share to diluted net earnings per share:
| Fiscal First Quarter Ended | |||||||||||||||||
| (Shares in Millions) | March 29, 2026 | March 30, 2025 | |||||||||||||||
| Basic net earnings per share | $ | ||||||||||||||||
| Average shares outstanding — basic | |||||||||||||||||
| Potential shares exercisable under stock option plans | |||||||||||||||||
| Less: shares which could be repurchased under treasury stock method | ( | ( | |||||||||||||||
| Average shares outstanding — diluted | |||||||||||||||||
| Diluted net earnings per share | $ | ||||||||||||||||
| (Shares in Millions) | |||||||||||||||||
The diluted net earnings per share calculation excluded the following number of shares related to stock options, as the exercise price of these options was greater than the average market value of the Company’s stock. | |||||||||||||||||
Form 10-Q | 17 | ||||
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Note 9 — Segments of business and geographic areas
The Company is organized into two
The Company’s chief operating decision maker (CODM) is the Chief Executive Officer (Principal Executive Officer). For the Innovative Medicine and MedTech segments, the CODM uses segment income before tax to allocate resources (including employees, financial, and capital resources) for each segment predominantly in the annual forecasting process. The CODM considers planning-to-actual variances on a quarterly basis to assess performance and make decisions about allocating resources to the segments.
Sales by segment of business
| Fiscal First Quarter Ended | |||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Percent Change | ||||||||||||||||||||
| INNOVATIVE MEDICINE | |||||||||||||||||||||||
| Oncology | |||||||||||||||||||||||
U.S. | $ | % | |||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
DARZALEX | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
CARVYKTI | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | * | ||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
| TECVAYLI | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
| TALVEY | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | * | ||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
| RYBREVANT/ LAZCLUZE | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | * | ||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
ERLEADA | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
IMBRUVICA | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
18 | | ||||
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| Fiscal First Quarter Ended | |||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Percent Change | ||||||||||||||||||||
OTHER ONCOLOGY(1) | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | ( | ||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
| Immunology | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
| TREMFYA | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
SIMPONI / SIMPONI ARIA | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
REMICADE | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
U.S. Exports | |||||||||||||||||||||||
International | ( | ||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
STELARA | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
International | ( | ||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
OTHER IMMUNOLOGY | |||||||||||||||||||||||
U.S. | * | ||||||||||||||||||||||
International | * | ||||||||||||||||||||||
Worldwide | * | ||||||||||||||||||||||
| Neuroscience | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
SPRAVATO | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
CAPLYTA(2) | |||||||||||||||||||||||
U.S. | * | ||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | * | ||||||||||||||||||||||
Form 10-Q | 19 | ||||
Table of Contents
| Fiscal First Quarter Ended | |||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Percent Change | ||||||||||||||||||||
INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
CONCERTA / methylphenidate | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
| OTHER NEUROSCIENCE | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | ( | ||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
| Pulmonary Hypertension (PH) | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
UPTRAVI | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| OPSUMIT/OPSYNVI | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| OTHER PULMONARY HYPERTENSION | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
| International | ( | ||||||||||||||||||||||
| Worldwide | ( | ||||||||||||||||||||||
| Infectious Diseases (ID) | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
EDURANT / rilpivirine | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
PREZISTA / PREZCOBIX / REZOLSTA / SYMTUZA | |||||||||||||||||||||||
U.S. | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Worldwide | |||||||||||||||||||||||
20 | | ||||
Table of Contents
| Fiscal First Quarter Ended | |||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Percent Change | ||||||||||||||||||||
| OTHER INFECTIOUS DISEASES | |||||||||||||||||||||||
U.S. | ( | ||||||||||||||||||||||
International | ( | ||||||||||||||||||||||
Worldwide | ( | ||||||||||||||||||||||
| Cardiovascular / Metabolism / Other (CVM) | |||||||||||||||||||||||
| U.S. | ( | ||||||||||||||||||||||
| International | ( | ||||||||||||||||||||||
| Worldwide | ( | ||||||||||||||||||||||
XARELTO | |||||||||||||||||||||||
| U.S. | ( | ||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | ( | ||||||||||||||||||||||
OTHER | |||||||||||||||||||||||
| U.S. | ( | ||||||||||||||||||||||
| International | ( | ||||||||||||||||||||||
| Worldwide | ( | ||||||||||||||||||||||
| Total PH, ID, CVM | |||||||||||||||||||||||
| U.S. | ( | ||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| TOTAL INNOVATIVE MEDICINE | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| MEDTECH | |||||||||||||||||||||||
| Cardiovascular | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
ELECTROPHYSIOLOGY | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
ABIOMED | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| SHOCKWAVE | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
Form 10-Q | 21 | ||||
Table of Contents
| Fiscal First Quarter Ended | |||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Percent Change | ||||||||||||||||||||
| OTHER CARDIOVASCULAR | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | ( | ||||||||||||||||||||||
| Worldwide | ( | ||||||||||||||||||||||
| Surgery | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
ADVANCED | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
GENERAL | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| Vision | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
CONTACT LENSES / OTHER | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
SURGICAL | |||||||||||||||||||||||
| U.S. | ( | ||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| Orthopaedics* | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
HIPS | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
KNEES | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
22 | | ||||
Table of Contents
| Fiscal First Quarter Ended | |||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Percent Change | ||||||||||||||||||||
TRAUMA | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
SPINE, SPORTS & OTHER | |||||||||||||||||||||||
| U.S. | ( | ||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| TOTAL MEDTECH | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | |||||||||||||||||||||||
| WORLDWIDE | |||||||||||||||||||||||
| U.S. | |||||||||||||||||||||||
| International | |||||||||||||||||||||||
| Worldwide | $ | % | |||||||||||||||||||||
* Percentage greater than 100% or not meaningful
(1) Includes the sales of ZYTIGA which were previously disclosed separately
Adjustments to revenue recognized as a result of changes in estimates for the Company's most significant U.S. rebates and discounts liability balances for products shipped in previous periods were approximately 4.7 % and 4.6 % of U.S. Innovative Medicine revenue during the fiscal first quarter of 2026 and 2025, respectively.
*In October 2025, the Company announced its intention to separate its Orthopaedics business. The Company continues to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
Form 10-Q | 23 | ||||
Table of Contents
Segment income before tax
| Fiscal First Quarter Ended | |||||||||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | |||||||||||||||||||||||||||
Innovative Medicine(1) | MedTech(2) | Total | Innovative Medicine(1) | MedTech(2) | Total | ||||||||||||||||||||||||
| Sales to customers | $ | ||||||||||||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||||||||
| Selling, marketing and administrative | |||||||||||||||||||||||||||||
| Research and development expense | |||||||||||||||||||||||||||||
Other segment items (3) | ( | ( | ( | ||||||||||||||||||||||||||
| Segment income before tax | $ | ||||||||||||||||||||||||||||
(Income)/Expense not allocated to segments (4) | ( | ||||||||||||||||||||||||||||
| Earnings before provision for taxes on income | $ | $ | |||||||||||||||||||||||||||
(1) Innovative Medicine includes:
•Intangible amortization expense of $0.8 billion and $0.6 billion in the fiscal first quarters of 2026 and 2025, respectively.
(2) MedTech includes:
•Intangible amortization expense of $0.5
•Orthopaedics Separation related charge of $0.1 billion in the fiscal first quarter of 2026.
•Acquisition and integration related expense of $0.1 billion in the fiscal first quarter of 2025, primarily related to Shockwave.
(3) Other segment items for each reportable segment include other income and expense (gains and losses on divestitures and gains and losses on sale of assets), restructuring activities and impairment charges related to in-process research and development
(4) Amounts not allocated to segments include interest (income)/expense and general corporate (income)/expense. The fiscal first quarter of 2026 includes charges for talc matters of $0.3 billion. The fiscal first quarter of 2025 includes approximately $7.0 billion related to the talc reserve reversal.
| Identifiable Assets | ||||||||||||||
| (Dollars in Millions) | March 29, 2026 | December 28, 2025 | ||||||||||||
| Innovative Medicine | $ | |||||||||||||
| MedTech | ||||||||||||||
| Total | ||||||||||||||
General corporate (1) | ||||||||||||||
| Worldwide total | $ | |||||||||||||
| Additions to Property, Plant & Equipment | Depreciation and Amortization | |||||||||||||||||||||||||
| Fiscal Three Months Ended | ||||||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||
| Innovative Medicine | $ | $ | ||||||||||||||||||||||||
| MedTech | ||||||||||||||||||||||||||
| Segments total | ||||||||||||||||||||||||||
| General corporate | ||||||||||||||||||||||||||
| Worldwide total | $ | $ | ||||||||||||||||||||||||
24 | | ||||
Table of Contents
Sales by geographic area
| Fiscal First Quarter Ended | |||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Percent Change | ||||||||||||||||||||
| United States | $ | % | |||||||||||||||||||||
| Europe | |||||||||||||||||||||||
| Western Hemisphere, excluding U.S. | |||||||||||||||||||||||
| Asia-Pacific, Africa | |||||||||||||||||||||||
| Total | $ | % | |||||||||||||||||||||
Note 10 — Acquisitions, divestitures and other arrangements
Business combinations
Acquisitions of a business are accounted for as business combinations applying the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date in the Company’s consolidated financial statements. The excess of the purchase price over the fair value of the acquired net assets, where applicable, is recorded as goodwill. The results of operations of these acquisitions have been included in the Company’s financial statements from their respective dates of acquisition.
In the fiscal first quarter of 2026, there were no material business combinations.
2025 Transactions
During the fiscal year 2025, the Company acquired Halda Therapeutics OpCo, Inc. (Halda Therapeutics) and Intra-Cellular Therapies, Inc. (Intra-Cellular) for a total of $17.5 billion, net of cash acquired.
Halda Therapeutics
On December 26, 2025, the Company completed the acquisition of Halda Therapeutics, a clinical-stage biotechnology company with proprietary Regulated Induced Proximity TArgeting Chimera (RIPTACTM) platform to develop oral, targeting therapies for multiple types of solid tumors, including prostate cancer, in an all-cash merger transaction for total consideration transferred of approximately $3.05 billion, net of cash acquired. The acquisition was accounted for as a business combination and the results of operations and goodwill are included in the Innovative Medicine segment as of the acquisition date. Included in the total consideration transferred was $0.2 billion of acquisition-related costs, primarily related to post-closing compensation expense due to the acceleration of equity awards. This expense was recorded in Other (income) expense, net. Acquisition related costs before tax for the fiscal first quarter of 2026 were not material.
The fair value of the assets acquired is $3.4 billion, which primarily relates to acquired in-process research and development (IPR&D) of $2.8 billion and goodwill of $0.6 billion. The fair value of the liabilities assumed is $0.6 billion, primarily related to deferred taxes. These values are preliminary and based on the best estimate of management, which is subject to change within the measurement period. As of the fiscal first quarter ended March 29, 2026, there have been no material measurement period adjustments.
Intra-Cellular
On April 2, 2025, the Company completed the acquisition of Intra-Cellular, a biopharmaceutical company focused on the development and commercialization of therapeutics for central nervous system disorders. This acquisition advances the Company’s industry-leading portfolio in mental health with the addition of CAPLYTA (lumateperone), the first and only U.S. FDA-approved treatment for bipolar I and II depression as an adjunctive therapy and monotherapy and is also approved for the treatment of schizophrenia in adults. This acquisition also includes a promising clinical-stage pipeline with best-in-class potential in generalized anxiety disorder and Alzheimer’s disease-related psychosis and agitation.
The Company acquired all the outstanding shares of Intra-Cellular’s common stock for $132.00 per share in an all-cash merger transaction for total consideration transferred of $14.5 billion. The acquisition was accounted for as a business combination and the results of operations and goodwill are included in the Innovative Medicine segment as of the acquisition date. In addition, acquisition-related costs before tax incurred during the fiscal year 2025 were $0.4 billion, of which $0.1 billion related to post-closing compensation expense due to the acceleration of equity awards and were recorded to Other (income) expense, net. Acquisition related costs before tax for the fiscal first quarter of 2026 were not material.
Form 10-Q | 25 | ||||
Table of Contents
The fair value of the assets acquired is $17.5 billion, which primarily relates to acquired in-process research and development (IPR&D) of $8.3 billion, an amortizable intangible asset of $5.2 billion, goodwill of $2.9 billion and other current and non-current assets of $1.1 billion. The fair value of the liabilities assumed is $3.0 billion, primarily related to deferred taxes. As of the fiscal first quarter ended March 29, 2026, there have been no material measurement period adjustments. During the fiscal fourth quarter of 2025, the U.S. FDA approved CAPLYTA as an adjunctive therapy with anti-depressants for the treatment of major depressive disorder in adults. This IPR&D asset was reclassified to a definite lived asset and began amortizing in the fiscal fourth quarter of 2025.
Asset acquisitions
If it is determined that the acquired set does not meet the definition of a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition. In this case, no goodwill is recorded, acquired in-process research and development (IPR&D) with no alternative future use is immediately recorded as research and development expense and contingent consideration is recorded when the related event occurs.
In the fiscal first quarters of 2026 and 2025, there were no material asset acquisitions.
Divestitures
In the fiscal first quarters of 2026 and 2025, there were no material divestitures.
Other arrangements
In the fiscal first quarter of 2026, the Company entered into a co-funding agreement with Royalty Pharma plc. (Royalty Pharma) under which the Company will receive up to a total of $0.5 billion during the fiscal years 2026 and 2027 to support the clinical development of JNJ-4804, a co-antibody therapy in development to treat chronic immune-mediated diseases. As there is a substantive and genuine transfer of risk to Royalty Pharma, the development funding will be recognized as an obligation to perform contractual services. Accordingly, the funding the Company receives will be recognized as a reduction to research & development expense as the Company performs its contractual services.
Note 11 — Legal proceedings
Johnson & Johnson and certain of its subsidiaries are involved in various lawsuits and claims regarding product liability; intellectual property; commercial; indemnification and other matters; governmental investigations; and other legal proceedings that arise from time to time in the ordinary course of their business.
The Company records accruals for loss contingencies associated with these legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated. As of March 29, 2026, the Company has determined that the liabilities associated with certain litigation matters are probable and can be reasonably estimated. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with ASC 450-20-25. For these and other litigation and regulatory matters discussed below for which a loss is probable or reasonably possible, the Company is unable to estimate the possible loss or range of loss beyond the amounts accrued. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. The ability to make such estimates and judgments can be affected by various factors including, among other things, whether damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; procedural or jurisdictional issues; the uncertainty and unpredictability of the number of potential claims; ability to achieve comprehensive multi-party settlements; complexity of related cross-claims and counterclaims; and/or there are numerous parties involved. To the extent adverse awards, judgments or verdicts have been rendered against the Company, the Company does not record an accrual until a loss is determined to be probable and can be reasonably estimated.
In the Company’s opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company’s balance sheet, is not expected to have a material adverse effect on the Company’s financial position. However, the resolution of, or increase in accruals for, one or more of these
matters in any reporting period may have a material adverse effect on the Company’s results of operations and cash flows for that period.
Matters concerning talc
As of March 29, 2026, there are approximately 75,000 plaintiffs in the United States with direct claims against the Company and its affiliates in pending lawsuits regarding injuries allegedly due to use of body powders containing talc, primarily JOHNSON’S Baby Powder.
In talc cases that have gone to trial, the Company has obtained a number of defense verdicts, but there also have been verdicts against the Company, many of which have been reversed on appeal. The Company continues to believe that it has strong legal grounds to contest all the talc verdicts that it has appealed. Notwithstanding the Company’s confidence in the safety of its talc products, in certain circumstances the Company has settled cases.
In an effort to expeditiously resolve the litigation for the overwhelming majority of claimants, beginning in October 2021, the Company underwent a series of corporate restructurings which ultimately resulted in two entities, Red River Talc, LLC (Red River) and Pecos River Talc LLC (Pecos River), being assigned all liabilities related in any way to injury or damage, or alleged injury or damage, sustained or incurred in the purchase or use of, or exposure to, talc, including talc contained in any product, or to the risk of, or responsibility for, any such damage or injury, except for any liabilities for which the exclusive remedy is provided under a workers’ compensation statute or act. As a result of the restructurings, all claims in North America related to ovarian and other gynecological cancers were separated and allocated to Red River, and mesothelioma, governmental unit and certain other claims in North America were allocated to Pecos River. In connection with these restructurings, the Company filed a series of three Chapter 11 bankruptcy proceedings. Ultimately, each of the bankruptcy proceedings was dismissed and, as a result, the Company reversed substantially all, or approximately $7.0 billion, from amounts previously reserved for the bankruptcy resolution in the fiscal first quarter of 2025. Litigation in the tort system recommenced.
As of the first quarter of 2026, the total present value of the reserve for talc related matters is approximately $3.4 billion, comprising previously executed settlement agreements, litigation defense and other costs. Approximately one-third of the reserve is recorded as a current liability.
As in years prior, both ovarian cancer and mesothelioma trials are being scheduled in various state courts throughout 2026 and beyond. In the ovarian cancer multi-district litigation in New Jersey, the court is addressing the Company's Daubert motions related to general causation, specific causation, and certain asbestos testing methods. In January 2026, the Special Master issued her Report and Recommendation related to general causation, excluding certain opinions by plaintiff experts, but also allowing other opinions to proceed. The Company has filed an appeal of the Report and Recommendation to the District Court. The remaining Daubert motions are expected to be decided in 2026. The Company also faces litigation in Canada.
In February 2018, a securities class action lawsuit was filed against the Company and certain named officers in the United States District Court for the District of New Jersey, alleging that the Company violated the federal securities laws by failing to disclose alleged asbestos contamination in body powders containing talc, primarily JOHNSON’S Baby Powder, and that purchasers of the Company’s shares suffered losses as a result. In April 2019, the Company moved to dismiss the complaint. In December 2019, the court denied, in part, the motion to dismiss. In December 2023, the court granted plaintiffs’ motion for class certification. In July 2025, the Third Circuit affirmed the court's order granting class certification. In September 2025, the Company petitioned the Third Circuit for rehearing or rehearing en banc, which was denied in October 2025. In February 2026, the Company filed a writ of certiorari with the United States Supreme Court regarding the Third Circuit’s decision, which the Supreme Court denied in April 2026.
In February 2019, the Company’s talc supplier, Imerys Talc America, Inc., and two of its affiliates, Imerys Talc Vermont, Inc. and Imerys Talc Canada, Inc. (collectively, Imerys), filed voluntary petitions for relief under Chapter 11 of the United States Code (the Bankruptcy Code) in the United States Bankruptcy Court for the District of Delaware. In February 2021, Cyprus Mines Corporation (Cyprus), which sold certain talc mines and assets to Imerys, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Delaware Bankruptcy Court. In July 2024, the Company, Imerys, and Cyprus and certain of their affiliates (including their parent entities), and the tort claimants' committees and future claimants' representatives appointed in the Imerys debtors' and Cyprus debtors' respective Chapter 11 cases, entered into a global settlement agreement (the Imerys Settlement Agreement) to resolve the parties' ongoing disputes, including disputes raised in the Imerys and Cyprus bankruptcies regarding (i) the Company's alleged obligations to indemnify Imerys and Cyprus for personal injury claims allegedly caused by exposure to talc contained in the Company's products and (ii) entitlements to proceeds of certain of the Company's insurance policies. In October 2024, the Delaware Bankruptcy Court entered an order approving the Imerys Settlement Agreement (the Settlement Order). Certain insurers have appealed the Settlement Order and sought a stay of the Settlement Order pending appeal, which the Delaware Bankruptcy Court denied in January 2025. In August 2025, the District Court denied the insurers' appeal of the Settlement Order. The insurers have appealed that decision to the Third Circuit.
Intellectual property
Certain subsidiaries of the Company are subject, from time to time, to legal proceedings and claims related to patent, trademark and other intellectual property matters arising out of their businesses. Many of these matters involve challenges to the scope and/or validity of patents that relate to various products and allegations that certain of the Company’s products infringe the intellectual property rights of third parties. Although these subsidiaries believe that they have substantial defenses to these challenges and allegations with respect to all significant patents, there can be no assurance as to the outcome of these matters. A loss in any of these cases could adversely affect the ability of these subsidiaries to sell their products, result in loss of sales due to loss of market exclusivity, require the payment of past damages and future royalties, and may result in a non-cash impairment charge for any associated intangible asset.
The Company’s Innovative Medicine subsidiaries have brought lawsuits against generic companies that have filed ANDAs with the U.S. FDA (or similar lawsuits outside of the United States) seeking to market generic versions of products sold by various subsidiaries of the Company prior to expiration of the applicable patents covering those products. These lawsuits typically include allegations of non-infringement and/or invalidity of patents listed in FDA’s publication “Approved Drug Products with Therapeutic Equivalence Evaluations” (commonly known as the Orange Book). In each of these lawsuits, the Company’s subsidiaries are seeking an order enjoining the defendant from marketing a generic version of a product before the expiration of the relevant patents (Orange Book Listed Patents). In the event the Company’s subsidiaries are not successful in an action, or any automatic statutory stay expires before the court rulings are obtained, the generic companies involved would have the ability, upon regulatory approval, to introduce generic versions of their products to the market resulting in the potential for substantial market share and revenue losses for the applicable products, and which may result in a non-cash impairment charge in any associated intangible asset. In addition, from time to time, the Company’s subsidiaries may settle these types of actions and such settlements can involve the introduction of generic versions of the products at issue to the market prior to the expiration of the relevant patents.
The Inter Partes Review (IPR) process with the United States Patent and Trademark Office (USPTO), created under the 2011 America Invents Act, is also being used at times by generic companies in conjunction with ANDAs and lawsuits to challenge the applicable patents.
Innovative Medicine
XARELTO
Beginning in March 2021, Janssen Pharmaceuticals, Inc., Bayer Pharma AG, Bayer AG, and Bayer Intellectual Property GmbH filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of XARELTO before expiration of certain Orange Book Listed Patents. The following entities are named defendants: Dr. Reddy’s Laboratories, Inc.; Dr. Reddy’s Laboratories, Ltd.; Lupin Limited; Lupin Pharmaceuticals, Inc.; Taro Pharmaceutical Industries Ltd.; Taro Pharmaceuticals U.S.A., Inc.; Teva Pharmaceuticals USA, Inc.; Mylan Pharmaceuticals Inc.; Mylan Inc.; Mankind Pharma Limited; Apotex Inc.; Apotex Corp.; Cipla Ltd.; Cipla USA Inc.; InvaGen Pharmaceuticals, Inc.; and Prinston Pharmaceuticals, Inc. The following U.S. patents are included in one or more cases: 9,539,218 and 10,828,310. In December 2025 and January 2026, the cases against Dr. Reddy's Laboratories, Inc.; Dr. Reddy's Laboratories, Ltd.; Lupin Limited; Lupin Pharmaceuticals, Inc.; Taro Pharmaceutical Industries Ltd.; Taro Pharmaceuticals U.S.A., Inc.; Teva Pharmaceuticals USA, Inc.; Mylan Pharmaceuticals Inc.; Mylan Inc.; Mankind Pharma Limited; Apotex Inc.; Apotex Corp.; Cipla Ltd.; Cipla USA Inc.; InvaGen Pharmaceuticals, Inc.; and Prinston Pharmaceuticals, Inc. were dismissed with prejudice. In January 2026, the Company entered into a confidential settlement agreement with Mankind Pharma Limited.
U.S. Patent No. 10,828,310 was also under consideration by the USPTO in an IPR proceeding. In July 2023, the USPTO issued a final written decision finding the claims of the patent invalid. In September 2023, Bayer Pharma AG filed an appeal to the U.S. Court of Appeals for the Federal Circuit. In September 2025, the Federal Circuit entered a decision affirming-in-part, vacating-in-part, and remanding for further proceedings. In January 2026, the USPTO entered judgment against petitioners upon remand.
INVEGA SUSTENNA
Beginning in January 2018, Janssen Pharmaceutica NV and Janssen Pharmaceuticals, Inc. filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of INVEGA SUSTENNA before expiration of the Orange Book Listed Patent. The following entities are named defendants: Pharmascience Inc.; Mallinckrodt PLC; Specgx LLC; Tolmar, Inc.; Eugia Pharma Specialties Ltd.; Eugia US, LLC; and Aurobindo Pharma USA, Inc. The following U.S. patent is included in one or more cases: 9,439,906. In February 2024, the district court issued a decision in the case against Tolmar Inc. finding that United States Patent No. 9,439,906 is not invalid. Tolmar previously stipulated to infringement of a subset of the claims, and based on a claim construction ruling, the district court entered a non-infringement order with respect to the remaining asserted claims. Tolmar has appealed the validity decision, and Janssen appealed the non-infringement decision. In March 2026, Janssen and Tolmar entered into a confidential settlement agreement.
Beginning in February 2018, Janssen Inc. and Janssen Pharmaceutica NV initiated a Statement of Claim under Section 6 of the Patented Medicines (Notice of Compliance) Regulations against generic manufacturers who have filed ANDSs seeking approval to market generic versions of INVEGA SUSTENNA before expiration of the listed patent. The following entity is a named defendant: Pharmascience Inc. The following Canadian patent is included in one or more cases: 2,655,335. In September 2024, the Supreme Court granted Pharmascience's motion to appeal the Federal Court's decision that the 2,655,335 Patent is not invalid.
ERLEADA
Beginning in January 2025, Aragon Pharmaceuticals, Inc., Janssen Inc. (collectively, Janssen Inc.), and Sloan-Kettering Institute for Cancer Research (SKI) initiated Statements of Claims under Section 6 of the Patented Medicines (Notice of Compliance) Regulations against Sandoz Canada Inc. (Sandoz) in response to Sandoz’s filing of ANDSs seeking approval to market 60 mg and 240 mg generic versions of ERLEADA before the expiration of CA Patent Nos. 3,008,345, 2,875,767, 2,885,415, and 3,128,331. Janssen Inc. and SKI are seeking orders enjoining Sandoz from marketing 60 mg and 240 mg generic versions of ERLEADA before the expiration of the relevant patents.
Beginning in June 2025, Aragon Pharmaceuticals, Inc., Janssen Biotech, Inc., The Regents of the University of California, and Sloan-Kettering Institute for Cancer Research initiated a patent infringement lawsuit in United States District Court for the District of New Jersey against Hetero Labs Limited Unit V and Hetero USA, Inc. who filed an ANDA seeking approval to market a 240 mg generic version of ERLEADA before the expiration of certain Orange Book Listed Patents. The following U.S. patents are included in the case: 8,445,507; 8,802,689; 9,338,159; 9,987,261; 9,481,663; 9,884,054; RE49,353; 10,849,888; 10,702,508; 11,963,952; 12,303,493; and 12,303,497.
SPRAVATO
Beginning in May 2023, Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica NV filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of SPRAVATO before expiration of certain Orange Book Listed Patents. The following entities are named defendants: Sandoz Inc. and Alkem Laboratories Ltd. The following U.S. patents are included in one or more cases: 10,869,844; 11,173,134; 11,311,500; and 11,446,260. A trial against Sandoz took place in February 2026. Post-trial briefing is ongoing.
CAPLYTA
Beginning in March 2024, Intra-Cellular Therapies, Inc. (Intra-Cellular) filed patent infringement lawsuits in the United States District Court for the District of New Jersey against generic manufacturers who have filed ANDAs seeking approval to market generic versions of CAPLYTA before expiration of certain Orange Book Listed Patents. The following entities are named defendants: Aurobindo Pharma Ltd., Aurobindo Pharma USA, Inc., Alkem Laboratories Ltd., MSN Laboratories Private Ltd., Zydus Pharmaceuticals (USA) Inc., and Zydus Lifesciences Ltd. The following U.S. Patents are included in one or more cases: RE 48,825; RE 48,839; 8,648,077; 9,168,258; 9,199,995; 9,616,061; 9,956,227; 10,117,867; 10,464,938; 10,960,009; 11,026,951; 11,753,419; 11,980,617; 12,070,459; 12,090,155; 12,122,792; 12,128,043; 12,409,176; and 12,410,195. In February 2026, Intra-Cellular and MSN Laboratories Private Ltd. entered into a confidential settlement agreement and the case was dismissed. In March 2026, Intra-Cellular and Alkem Laboratories Ltd. entered into a confidential settlement agreement and the case was dismissed.
UPTRAVI
Beginning in September 2025, Actelion Pharmaceuticals Ltd, Actelion Pharmaceuticals US, Inc. (collectively, Actelion), and Nippon Shinyaku Co. Ltd. filed a patent infringement lawsuit in the United States District Court for the District of New Jersey against generic manufacturers who have filed ANDAs seeking approval to market generic versions of UPTRAVI before expiration of certain Orange Book Listed Patents. The following entities are named defendants: Apotex Inc. and Apotex Corp. The following U.S. patents are included in one or more cases: 8,791,122; and 9,284,280. In April 2026, Actelion, Nippon Shinyaku Co. Ltd., Apotex Inc., and Apotex Corp. entered into a confidential settlement agreement resolving the action.
CARVYKTI
In January 2026, 2seventy bio, Inc. filed suit in the Unified Patent Court, Local Division of Brussels, against the Company, Janssen Biotech, Inc., Janssen Pharmaceuticals Inc., Janssen-Cilag International NV, Janssen Pharmaceutica NV, Janssen-Cilag NV, Janssen Biologics B.V., Janssen-Cilag B.V., Janssen-Cilag GmbH, Janssen-Cilag, Janssen-Cilag SpA, Janssen-Cilag A/S, Janssen-Cilag Aktiebolag, Janssen-Cilag Farmaceutica Lda., Legend Biotech Corporation, Legend Biotech USA Inc., Legend Biotech Ireland Limited, and Legend Biotech Belgium BV alleging that the manufacture and sale of CARVYKTI infringes EU Patent No. 3 689 383. In the suit, 2seventy bio, Inc. seeks damages and an injunction.
MedTech
In March 2016, Abiomed, Inc. filed a declaratory judgment action against Maquet Cardiovascular LLC (Maquet) in the United States District Court for the District of Massachusetts seeking a declaration that certain Impella products do not infringe Maquet patents. Maquet counterclaimed for infringement against Abiomed, Inc., Abiomed Europe GmbH, and Abiomed R&D, Inc. The following U.S. patents are at issue: 8,888,728; 9,327,068; 9,545,468; 9,561,314; and 9,597,437. In February 2026, the U.S. Court of Appeals for the Federal Circuit remanded the case after considering the District Court's claim constructions. Discovery will begin based on the altered constructions.
In November 2017, Maquet Cardiovascular LLC filed suit against Abiomed, Inc., Abiomed R&D, Inc., and Abiomed Europe GmbH in the United States District Court for the District of Massachusetts alleging that certain Impella products infringe Maquet patents. U.S. Patent No. 10,238,783 remains in the suit, and trial is scheduled to begin in May 2026.
Government proceedings
Like other companies in the pharmaceutical and medical technologies industries, the Company and certain of its subsidiaries are subject to extensive regulation by national, state, and local government agencies in the United States and other countries in which they operate. Such regulation has been the basis of government investigations and litigations. The most significant litigation brought by, and investigations conducted by, government agencies are listed below. It is possible that criminal charges and substantial fines and/or civil penalties or damages could result from government investigations or litigation.
MedTech
In July 2023, the DOJ issued Civil Investigative Demands to the Company, Johnson & Johnson Surgical Vision, Inc., and Johnson & Johnson Vision Care, Inc. (collectively, J&J Vision) in connection with a civil investigation under the False Claims Act relating to free or discounted intraocular lenses and equipment used in eye surgery, such as phacoemulsification and laser systems. J&J Vision has provided documents and information responsive to the Civil Investigative Demands and is continuing to cooperate with the DOJ regarding its inquiry. In the pending qui tam action, the Government filed a notice of declination, and the court ordered the complaint unsealed in February 2026. In March 2026, relators voluntarily dismissed their complaint without prejudice, and the court entered an order of dismissal.
Innovative Medicine
In July 2016, the Company and Janssen Products, LP were served with a qui tam complaint pursuant to the False Claims Act filed in the United States District Court for the District of New Jersey alleging the off-label promotion of two HIV products, PREZISTA and INTELENCE, and anti-kickback violations in connection with the promotion of these products. The complaint was filed under seal in December 2012. The federal and state governments have declined to intervene, and the lawsuit is being prosecuted by the relators. The Court denied summary judgment on all claims in December 2021. Daubert motions were granted in part and denied in part in January 2022, and trial commenced in May 2024. In June 2024, a jury found no liability regarding the anti-kickback violations but found liability for a portion of the off-label promotion claims. The Company challenged the verdict on the off-label claims in post-trial briefing. In March 2025, the court dismissed the state law portion of the claims but entered judgment on the federal claims. The Company appealed the remainder of the verdict to the Third Circuit. The federal government has intervened for the limited purpose of defending the qui tam provision of the False Claims Act. Briefing is complete and oral argument was held in March 2026. A decision is pending. In April 2026, the Third Circuit ordered the parties to engage in mediation.
In March 2017, Janssen Biotech, Inc. (JBI) received a Civil Investigative Demand from the United States Department of Justice (DOJ) regarding a False Claims Act investigation concerning management and advisory services provided to rheumatology and gastroenterology practices that purchased REMICADE or SIMPONI ARIA. In August 2019, the DOJ notified JBI that it was closing the investigation. Subsequently, the United States District Court for the District of Massachusetts unsealed a qui tam False Claims Act complaint, which was served on the Company. The DOJ had declined to intervene in the qui tam lawsuit in August 2019. The Company filed a motion to dismiss, which was granted in part and denied in part. The Court will hear argument on the parties’ summary judgment motions in May 2026. The Court has scheduled a trial date in November 2026.
General litigation
The Company or its subsidiaries regularly face claims in legal proceedings related to contracts, trade secrets, antitrust, unfair competition, consumer protection, and environmental issues, the most significant of which are listed below. Although the Company and its subsidiaries believe that they have substantial defenses to these cases, there can be no assurance as to the outcome of these matters. A loss in any of these cases could require the payment of damages, injunctions, and/or other relief.
In October 2017, certain United States service members and their families brought a complaint against a number of pharmaceutical and medical devices companies, including the Company and certain of its subsidiaries in the United States District Court for the District of Columbia, alleging that the defendants violated the United States Anti-Terrorism Act. The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health. In July 2020, the District Court dismissed the complaint. In January 2022, the United States Court of Appeals for the District of Columbia Circuit reversed the District Court’s decision. In June 2024, the
Supreme Court vacated the D.C. Circuit's decision and remanded the case to the D.C. Circuit for reconsideration. In January 2026, the D.C. Circuit affirmed its reversal of the District Court's dismissal of the complaint. In February 2026, the defendants sought rehearing en banc with the D.C. Circuit.
In February 2024, a putative class action was filed against the Company and the Pension & Benefits Committee of Johnson & Johnson in the United States District Court for the District of New Jersey. The complaint alleges that defendants breached fiduciary duties under the Employee Retirement Income Security Act (ERISA) by allegedly mismanaging the Company’s prescription-drug benefits program. The complaint seeks damages and other relief. In March 2025, plaintiffs filed a second amended complaint. In November 2025, the court granted defendants' motion to dismiss plaintiffs' fiduciary duty claims. Plaintiffs voluntarily withdrew their remaining claim, and the court entered final judgment in defendants' favor in January 2026. Plaintiffs have appealed to the United States Court of Appeals for the Third Circuit.
MedTech
In October 2020, Fortis Advisors LLC, in its capacity as representative of the former stockholders of Auris Health Inc. (Auris), filed a complaint against the Company, Ethicon Inc., and certain named officers and employees (collectively, Ethicon) in the Court of Chancery of the State of Delaware. The complaint alleges breach of contract, fraud, and other causes of action against Ethicon in connection with Ethicon’s acquisition of Auris in 2019. The complaint seeks damages and other relief. In December 2021, the court granted in part and denied in part defendants’ motion to dismiss certain causes of action. All claims against the individual defendants were dismissed. Trial occurred in January 2024. In September 2024, the court found liability with respect to certain claims and no liability with respect to other claims. In January 2026, the Delaware Supreme Court reversed in part and affirmed in part the Chancery Court's decision, including a $0.8 billion judgment, inclusive of interest, against the Company that was accrued in the fiscal fourth quarter of 2025 and subsequently paid in January 2026.
In October 2019, Innovative Health, LLC filed a complaint against Biosense Webster, Inc. (BWI) in the United States District Court for the Central District of California. The complaint alleges that certain of BWI's business practices and contractual terms violate the antitrust laws of the United States and the State of California by restricting competition in the sale of High Density Mapping Catheters and Ultrasound Catheters. In May 2025, a jury returned its verdict in favor of Innovative Health. In August 2025, the court issued a permanent injunction concerning BWI's business practices. BWI appealed both the jury verdict and the permanent injunction. In February 2026, BWI filed its opening brief.
Innovative Medicine
In October 2018, two separate putative class actions were filed against Actelion Pharmaceuticals Ltd., Actelion Pharmaceuticals US, Inc. and Actelion Clinical Research, Inc. (collectively, Actelion) in the United States District Court for the District of Maryland and the United States District Court for the District of Columbia. The complaints allege that Actelion violated state and federal antitrust and unfair competition laws by allegedly refusing to supply generic pharmaceutical manufacturers with samples of TRACLEER. TRACLEER is subject to a Risk Evaluation and Mitigation Strategy required by the U.S. Food and Drug Administration, which imposes restrictions on distribution of the product. In January 2019, the plaintiffs dismissed the District of Columbia case and filed a consolidated complaint in the United States District Court for the District of Maryland. In September 2024, the district court granted plaintiffs' motion for class certification. In February 2026, the parties agreed to settle the matter, which is pending court approval.
In December 2023, a putative class action lawsuit was filed against the Company and Janssen Biotech Inc. (collectively, Janssen) in the United States District Court for the Eastern District of Virginia. The complaint alleges that Janssen violated federal and state antitrust laws and other state laws by delaying biosimilar competition with STELARA through Janssen's enforcement of patent rights covering STELARA. The complaint seeks damages and other relief. In August 2024, the court granted in part and denied in part Janssen's motion to dismiss plaintiffs' amended complaint. In December 2025, the court granted plaintiffs' motion for class certification. In January 2026, the court granted summary judgment for Janssen on plaintiffs' claim regarding patents obtained through the acquisition of Momenta Pharmaceuticals, Inc. in 2020.
In December 2018, Janssen Biotech, Inc., Janssen Oncology, Inc., Janssen Research & Development, LLC, and the Company (collectively, Janssen) were served with a qui tam complaint on behalf of the United States, certain states, and the District of Columbia. The complaint alleges that Janssen violated the federal False Claims Act and state law when providing pricing information for ZYTIGA to the government in connection with direct sales and reimbursement programs. At this time, the federal and state governments have declined to intervene. In December 2021, the United States District Court for the District of New Jersey denied Janssen's motion to dismiss. Daubert briefing is ongoing.
In August 2025, Xoma Corporation (Xoma) filed a complaint against Janssen Biotech, Inc. (Janssen) in the United States District Court for the Eastern District of Pennsylvania. The complaint alleges breach of contract, unjust enrichment, and declaratory relief claims against Janssen regarding the alleged failure to obtain a license from Xoma in connection with Janssen's commercialization of TREMFYA. In December 2025, the court denied Janssen's motion to dismiss.
Note 12 — Restructuring
In fiscal 2025, the Company initiated a restructuring program of its Surgery franchise within the MedTech segment to simplify and focus operations by exiting certain non-strategic product lines and optimize select sites across the network. The pre-tax restructuring expense in the fiscal first quarter of 2026 primarily included costs related to product exits. Total project costs of approximately $0.3 billion have been recorded since the restructuring was announced. The estimated costs of the total program are between $0.9 billion - $1.0 billion and is expected to be substantially completed by the end of fiscal year 2026.
In fiscal 2023, the Company initiated a restructuring program of its Orthopaedics franchise within its MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pre-tax restructuring expense in the fiscal first quarter of 2026 primarily included costs related to market and product exits. The pre-tax restructuring expense in the fiscal first quarter of 2025 primarily included costs related to asset impairments as well as market and product exits. Total project costs of approximately $0.8 billion have been recorded since the restructuring was announced and the program was substantially completed in the fiscal year 2025.
The following table summarizes the restructuring expenses for 2026 and 2025:
| (Pre-tax Dollars in Millions) | Q1 2026 | Q1 2025 | |||||||||||||||
MedTech Segment Surgery franchise(1) | $ | ||||||||||||||||
MedTech Segment Orthopaedics franchise(2) | |||||||||||||||||
Total Programs | $ | ||||||||||||||||
(1)Included $30 million in Restructuring, $20 million in Cost of products sold and $5 million in Other (Income)/Expense on the Consolidated Statement of Earnings in the fiscal first quarter of 2026.
Restructuring reserves as of March 29, 2026 and December 28, 2025 were insignificant.
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Item 2 — Management’s discussion and analysis of financial condition and results of operations
Results of operations
Sales to customers
Analysis of consolidated sales
For the fiscal first quarter of 2026, worldwide sales were $24.1 billion, a total increase of 9.9%, which included operational* growth of 6.4% and a positive currency impact of 3.5% as compared to 2025 fiscal first quarter sales of $21.9 billion. In the fiscal first quarter of 2026, the net impact of acquisitions and divestitures on worldwide operational sales growth was a positive 1.1%, primarily related to CAPLYTA. In the fiscal first quarter of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, on worldwide operational sales was approximately 5.4%.
Sales by U.S. companies were $13.3 billion in the fiscal first quarter of 2026, which represented an increase of 8.3% as compared to the prior year. In the fiscal first quarter of 2026, the net impact of acquisitions and divestitures on U.S. operational sales growth was a positive 2.1%. In the fiscal first quarter of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition on U.S. operational sales was approximately 7.5%. Sales by international companies were $10.7 billion, a total increase of 11.9%, which included operational growth of 3.9% and a positive currency impact of 8.0%. In the fiscal first quarter of 2026, the net impact of acquisitions and divestitures on international operational sales growth was a negative 0.1%. In the fiscal first quarter of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, on international operational sales was approximately 3.0%.
In the fiscal first quarter of 2026, sales by companies in Europe achieved growth of 14.5%, which included operational growth of 2.7% and a positive currency impact of 11.8%. Sales by companies in the Western Hemisphere, excluding the U.S., achieved growth of 10.8%, which included operational growth of 2.5% and a positive currency impact of 8.3%. Sales by companies in the Asia-Pacific, Africa region achieved growth of 8.5%, which included operational growth of 6.1% and a positive currency impact of 2.4%.
Q1 2026
Sales by Geographic Region (in billions)
Sales by Geographic Region (in billions)
Q1 2026
Sales by Segment (in billions)
Sales by Segment (in billions)
Note: values may have been rounded
*operational excludes the effect of translational currency
Form 10-Q | 27 | ||||
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Analysis of sales by business segments
Innovative Medicine
Innovative Medicine segment sales in the fiscal first quarter of 2026 were $15.4 billion, an increase of 11.2% as compared to the same period a year ago, including an operational increase of 7.4% and a positive currency impact of 3.8%. U.S. Innovative Medicine sales increased 9.6% as compared to the same period a year ago. International Innovative Medicine sales increased by 13.4%, including an operational increase of 4.3% and a positive currency impact of 9.1%. In the fiscal first quarter of 2026, the net impact of acquisitions and divestitures on the worldwide Innovative Medicine segment operational sales growth was a positive 1.8%, primarily related to CAPLYTA. In the fiscal first quarter of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, was an approximate 9.2%, 12.0% and 5.3% on worldwide, U.S. and international Innovative Medicine segment operational sales, respectively.
Major Innovative Medicine therapeutic area sales — Fiscal First Quarter Ended
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Total Change | Operations Change | Currency Change | ||||||||||||||||||
Oncology | $6,973 | $5,678 | 22.8 | % | 17.8 | % | 5.0 | % | |||||||||||||||
DARZALEX | 3,964 | 3,237 | 22.5 | 17.8 | 4.7 | ||||||||||||||||||
CARVYKTI | 597 | 369 | 62.1 | 57.4 | 4.7 | ||||||||||||||||||
TECVAYLI | 202 | 151 | 33.5 | 30.1 | 3.4 | ||||||||||||||||||
TALVEY | 152 | 86 | 76.7 | 72.8 | 3.9 | ||||||||||||||||||
RYBREVANT/ LAZCLUZE | 257 | 141 | 82.7 | 80.5 | 2.2 | ||||||||||||||||||
ERLEADA | 949 | 771 | 23.1 | 16.2 | 6.9 | ||||||||||||||||||
IMBRUVICA | 660 | 709 | (6.9) | (13.9) | 7.0 | ||||||||||||||||||
Other Oncology(1) | 192 | 214 | (10.6) | (12.5) | 1.9 | ||||||||||||||||||
Immunology | 3,380 | 3,707 | (8.8) | (11.8) | 3.0 | ||||||||||||||||||
TREMFYA | 1,608 | 956 | 68.3 | 63.8 | 4.5 | ||||||||||||||||||
SIMPONI/ SIMPONI ARIA | 647 | 659 | (1.7) | (5.7) | 4.0 | ||||||||||||||||||
REMICADE | 422 | 467 | (9.5) | (11.2) | 1.7 | ||||||||||||||||||
STELARA | 656 | 1,625 | (59.7) | (61.7) | 2.0 | ||||||||||||||||||
Other Immunology | 46 | 1 | * | * | * | ||||||||||||||||||
Neuroscience | 2,175 | 1,647 | 32.0 | 29.3 | 2.7 | ||||||||||||||||||
SPRAVATO | 468 | 320 | 46.4 | 44.5 | 1.9 | ||||||||||||||||||
CAPLYTA(2) | 270 | — | * | * | — | ||||||||||||||||||
INVEGA SUSTENNA/ XEPLION/ INVEGA TRINZA/ TREVICTA | 1,038 | 903 | 15.0 | 13.2 | 1.8 | ||||||||||||||||||
CONCERTA/ methylphenidate | 136 | 148 | (8.0) | (11.7) | 3.7 | ||||||||||||||||||
Other Neuroscience | 262 | 277 | (5.4) | (11.3) | 5.9 | ||||||||||||||||||
Pulmonary Hypertension (PH) | 1,135 | 1,025 | 10.7 | 8.7 | 2.0 | ||||||||||||||||||
UPTRAVI | 483 | 451 | 7.1 | 5.4 | 1.7 | ||||||||||||||||||
OPSUMIT/ OPSYNVI | 606 | 522 | 16.1 | 14.0 | 2.1 | ||||||||||||||||||
Other Pulmonary Hypertension | 46 | 52 | (12.1) | (14.5) | 2.4 | ||||||||||||||||||
Infectious Diseases (ID) | 889 | 802 | 10.8 | 4.1 | 6.7 | ||||||||||||||||||
EDURANT/rilpivirine | 409 | 358 | 14.1 | 2.8 | 11.3 | ||||||||||||||||||
PREZISTA/ PREZCOBIX/ REZOLSTA/ SYMTUZA | 443 | 403 | 10.0 | 7.4 | 2.6 | ||||||||||||||||||
Other Infectious Diseases | 37 | 41 | (10.4) | (16.5) | 6.1 | ||||||||||||||||||
Cardiovascular / Metabolism / Other (CVM) | 876 | 1,013 | (13.6) | (14.7) | 1.1 | ||||||||||||||||||
XARELTO | 642 | 690 | (7.0) | (7.0) | — | ||||||||||||||||||
Other | 233 | 323 | (27.8) | (31.2) | 3.4 | ||||||||||||||||||
Total Innovative Medicine Sales | $15,426 | $13,873 | 11.2 | % | 7.4 | % | 3.8 | % | |||||||||||||||
*percentage greater than 100% or not meaningful
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Table of Contents
(1) Includes sales of ZYTIGA which were previously disclosed separately
(2) Acquired with Intra-Cellular Therapies on April 2, 2025
Oncology products achieved operational sales growth of 17.8% as compared to the same period a year ago. Contributors to the growth were: DARZALEX (daratumumab) driven by strong share gains and market growth partially offset by inventory dynamics, CARVYKTI (ciltacabtagene autoleucel) driven by continued share gains and site expansion, TECVAYLI (teclistamab-cqyv) driven by launch uptake and share gains from expansion in the community setting and recent U.S. TECVAYLI + DARZALEX FASPRO approval, TALVEY (talquetamab-tgvs) driven by share gains from expansion in the community setting, RYBREVANT (amivantamab)/LAZCLUZE (lazertinib) driven by launch uptake and share gains and ERLEADA (apalutamide) due to continued share gains and market growth. Growth was partially offset by IMBRUVICA (ibrutinib) share loss due to competitive pressures and unfavorable patient mix.
Immunology products experienced an operational decline of 11.8% as compared to the same period a year ago due to the sales decline of STELARA (ustekinumab) driven by the impact of biosimilar competition, increasing adoption of novel classes and unfavorable patient mix as well as declines of SIMPONI/SIMPONI ARIA and REMICADE (infliximab) driven by share loss, biosimilar competition, and unfavorable patient mix partially offset by market growth. The decline was partially offset by growth of TREMFYA (guselkumab) due to share gains across all indications with significant IBD launch momentum and market growth.
Biosimilars are pursuing regulatory approval for SIMPONI, which would likely result in a reduction in future sales, potentially in the first half of 2026 in Europe and second half of 2026 in the U.S.
Third parties have filed biologics license applications with the U.S. FDA, the European Medicines Agency, and other government authorities seeking approval to market biosimilar versions of STELARA around the globe. The Company expects continued launches of biosimilar versions of STELARA globally which will continue to negatively impact the Company’s sales of STELARA.
Neuroscience products, which include sales of CAPLYTA (lumateperone) acquired with the Intra-Cellular Therapies (Intra-Cellular) acquisition on April 2, 2025, achieved operational growth of 29.3% as compared to the same period a year ago. Growth of SPRAVATO (esketamine) was driven by continued increased physician and patient demand. Growth of INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA was primarily driven by favorable patient mix.
Pulmonary Hypertension products achieved operational sales growth of 8.7% as compared to the same period a year ago. The sales growth of UPTRAVI (selexipag) was driven by market and share growth partially offset by inventory dynamics. The sales growth of OPSUMIT (macitentan)/OPSYNVI (macitentan/tadalafil) was driven by share gains, market growth and favorable patient mix. The Company expects generic competition for OPSUMIT in the U.S. in the second half of 2026, which would likely result in a reduction in future sales.
Infectious disease products achieved operational sales growth of 4.1% as compared to the same period a year ago. The sales growth of PREZISTA/ PREZCOBIX/ REZOLSTA/ SYMTUZA was driven by favorable patient mix.
Cardiovascular / Metabolism / Other products experienced a sales decline of 14.7% as compared to the same period a year ago. The sales decline of XARELTO (rivaroxaban) was primarily driven by continued share erosion.
The Company maintains a policy that no end customer will be permitted direct delivery of product to a location other than the billing location. This policy impacts contract pharmacy transactions involving non-grantee 340B covered entities for most of the Company’s drugs, subject to multiple exceptions. Both grantee and non-grantee covered entities can maintain certain contract pharmacy arrangements under policy exceptions. The Company has been and will continue to offer 340B discounts to covered entities on all of its covered outpatient drugs, and it believes its policy will improve its ability to identify inappropriate duplicate discounts and diversion prohibited by the 340B statute. The 340B Drug Pricing Program is a U.S. federal government program requiring drug manufacturers to provide significant discounts on covered outpatient drugs to covered entities.
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MedTech
Major MedTech franchise sales — Fiscal First Quarter Ended
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | Total Change | Operations Change | Currency Change | ||||||||||||||||||
Cardiovascular | $2,377 | $2,103 | 13.0 | % | 10.5 | % | 2.5 | % | |||||||||||||||
Electrophysiology | 1,489 | 1,323 | 12.6 | 9.5 | 3.1 | ||||||||||||||||||
Abiomed | 488 | 420 | 16.3 | 14.4 | 1.9 | ||||||||||||||||||
Shockwave | 305 | 258 | 18.5 | 18.1 | 0.4 | ||||||||||||||||||
Other Cardiovascular | 94 | 103 | (9.1) | (11.9) | 2.8 | ||||||||||||||||||
Surgery | 2,511 | 2,396 | 4.8 | 1.2 | 3.6 | ||||||||||||||||||
Advanced | 1,123 | 1,073 | 4.6 | 1.2 | 3.4 | ||||||||||||||||||
General | 1,388 | 1,323 | 4.9 | 1.1 | 3.8 | ||||||||||||||||||
Vision | 1,365 | 1,279 | 6.7 | 3.6 | 3.1 | ||||||||||||||||||
Contact Lenses/Other | 969 | 919 | 5.5 | 2.7 | 2.8 | ||||||||||||||||||
Surgical | 396 | 361 | 9.7 | 6.0 | 3.7 | ||||||||||||||||||
Orthopaedics | 2,383 | 2,241 | 6.3 | 3.2 | 3.1 | ||||||||||||||||||
Hips | 436 | 409 | 6.5 | 3.5 | 3.0 | ||||||||||||||||||
Knees | 420 | 389 | 7.9 | 4.6 | 3.3 | ||||||||||||||||||
Trauma | 833 | 772 | 8.0 | 5.0 | 3.0 | ||||||||||||||||||
Spine, Sports & Other | 694 | 671 | 3.5 | 0.2 | 3.3 | ||||||||||||||||||
Total MedTech Sales | $8,636 | $8,020 | 7.7 | % | 4.6 | % | 3.1 | % | |||||||||||||||
The Cardiovascular franchise achieved operational sales growth of 10.5% as compared to the prior year fiscal first quarter. Electrophysiology sales growth was driven by procedure growth, commercial execution, new product performance (VARIPULSE, TRUPULSE, NUVISION and CRYSTAL) and inventory dynamics outside the U.S. partially offset by competitive pressures in Pulsed Field Ablation catheters. Abiomed sales growth was driven by the continued strong adoption of Impella 5.5 and Impella CP. Shockwave sales growth was driven by strong adoption of Coronary and Peripheral portfolios and new product launches.
The Surgery franchise achieved operational sales growth of 1.2% as compared to the prior year fiscal first quarter. The operational growth in Advanced Surgery was primarily due to the strength of the portfolio and commercial execution in Biosurgery and new product launches in Energy. This was partially offset by China volume-based procurement across all platforms and competitive pressures in Endocutters. The operational growth in General Surgery was primarily driven by technology penetration and upgrades within the differentiated Wound Closure portfolio coupled with market expansion partially offset by timing of tenders outside the U.S.
The Vision franchise achieved operational sales growth of 3.6% as compared to the prior year fiscal first quarter. The Contact Lenses/Other operational growth was driven by strong performance in the ACUVUE OASYS 1-Day family of products and strategic price actions partially offset by inventory dynamics outside the U.S. The Surgical operational growth was primarily driven by the strength of recent product innovations, robust demand and strong commercial execution partially offset by competitive pressures in the U.S.
The Orthopaedics franchise achieved operational sales growth of 3.2% as compared to the prior year fiscal first quarter. The operational growth in Hips was due to new product launches. The operational growth in Knees was driven by the strength of the ATTUNE portfolio and pull through related to the VELYS Robotic assisted solutions. The operational growth in Trauma was primarily driven by recently launched products. The operational growth in Spine, Sports & Other was driven by new product innovations and growth in shoulders partially offset by competitive pressures and inventory dynamics.
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In October 2025, the Company announced its intention to separate its Orthopaedics business. The Company continues to explore multiple paths to effect the planned separation with a targeted completion within 18 to 24 months after the initial announcement.
Analysis of consolidated earnings before provision for taxes on income
Consolidated earnings before provision for taxes on income for the fiscal first quarter of 2026 was $6.0 billion representing 24.9% of sales as compared to $13.6 billion in the fiscal first quarter of 2025, representing 62.3% of sales. The fiscal first quarter of 2025 includes approximately $7.0 billion related to the talc reserve reversal.
Cost of products sold
(Dollars in billions. Percentages in chart are as a percent to total sales)
Q1 2026 versus Q1 2025
Cost of products sold increased slightly as a percent to sales primarily driven by:
•Tariffs and other operational drivers in the MedTech business
•Unfavorable product mix primarily driven by the decline of STELARA sales in the Innovative Medicine business
partially offset by
•Favorable translational currency in the Innovative Medicine business
The intangible asset amortization expense included in cost of products sold for the fiscal first quarters of 2026 and 2025 was $1.2 billion and $1.1 billion, respectively.
Selling, marketing and administrative expenses
(Dollars in billions. Percentages in chart are as a percent to total sales)
Q1 2026 versus Q1 2025
Selling, Marketing and Administrative Expenses increased as a percent to sales primarily driven by:
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•Phasing of advertising expense and increased investment related to TREMFYA and the acquisition of Intra-Cellular (CAPLYTA) in the Innovative Medicine business
Research and development expense
Research and development expense by segment of business was as follows:
| Fiscal First Quarter Ended | |||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| (Dollars in Millions) | Amount | % of Sales* | Amount | % of Sales* | |||||||||||||
| Innovative Medicine | $2,813 | 18.2 | % | $2,548 | 18.4 | % | |||||||||||
| MedTech | 714 | 8.3 | 677 | 8.4 | |||||||||||||
| Total research and development expense | $3,527 | 14.7 | % | $3,225 | 14.7 | % | |||||||||||
| Percent increase over the prior year | 9.4 | % | |||||||||||||||
*As a percent to segment sales | |||||||||||||||||
Interest (income) expense
Interest (income) expense in the fiscal first quarter of 2026 was net expense of $43 million as compared to net income of $128 million in the fiscal first quarter of 2025. Interest income in the fiscal first quarter of 2026 decreased as compared to the prior year driven by a lower average cash balance. Interest expense in the fiscal first quarter of 2026 was higher as compared to the prior year due to a higher average debt balance. The balance of cash, cash equivalents and current marketable securities was $22.1 billion at the end of the fiscal first quarter of 2026 as compared to $38.8 billion at the end of the fiscal first quarter of 2025. The Company’s debt position was $55.0 billion as of March 29, 2026, as compared to $52.3 billion the same period a year ago.
Other (income) expense, net*
Q1 2026 versus Q1 2025
Other (income) expense, net for the fiscal first quarter of 2026 reflected a decrease in income of $7.6 billion as compared to the prior year primarily due to the following:
| Fiscal First Quarter | ||||||||||||||||||||
| (Dollars in Billions)(Income)/Expense | March 29, 2026 | March 30, 2025 | Change | |||||||||||||||||
Litigation related(1) | $ | 0.3 | (7.0) | 7.3 | ||||||||||||||||
Acquisition, Integration and Divestiture related | 0.1 | 0.1 | 0.0 | |||||||||||||||||
Orthopaedics separation | 0.1 | 0.0 | 0.1 | |||||||||||||||||
Employee benefit related | (0.2) | (0.1) | (0.1) | |||||||||||||||||
Other | 0.0 | (0.3) | 0.3 | |||||||||||||||||
Total Other (Income) Expense, Net | $ | 0.3 | (7.3) | 7.6 | ||||||||||||||||
(1)The fiscal first quarter of 2026 includes charges for talc matters of $0.3 billion. The fiscal first quarter of 2025 includes approximately $7.0 billion related to the talc reserve reversal. For additional details related to talc refer to Note 11 to the Consolidated Financial Statements.
*Other (income) expense, net is the account where the Company records gains and losses related to the sale and write-down of certain investments in equity securities held by Johnson & Johnson Innovation - JJDC, Inc. (JJDC), changes in the fair value of securities, gains and losses on divestitures, gains and losses on sale of assets, certain transactional currency gains and losses, acquisition-related costs, litigation accruals and settlements, investment (income)/loss related to employee benefit plans, as well as royalty income.
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Segment income before tax
Income before tax by segment of business for the fiscal first quarters were as follows:
| Income Before Tax | Segment Sales | Percent of Segment Sales | ||||||||||||||||||||||||||||||||||||
| (Dollars in Millions) | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||||||||
| Innovative Medicine | $5,317 | $5,210 | $15,426 | $13,873 | 34.5 | % | 37.6 | % | ||||||||||||||||||||||||||||||
| MedTech | 1,239 | 1,421 | 8,636 | 8,020 | 14.3 | 17.7 | ||||||||||||||||||||||||||||||||
| Segment total | 6,556 | 6,631 | 24,062 | 21,893 | 27.2 | 30.3 | ||||||||||||||||||||||||||||||||
(Income)/ Expenses not allocated to segments(1) | 566 | (7,000) | ||||||||||||||||||||||||||||||||||||
| Earnings before provision for taxes on income | $5,990 | $13,631 | $24,062 | $21,893 | 24.9 | % | 62.3 | % | ||||||||||||||||||||||||||||||
(1)Amounts not allocated to segments include interest (income) expense, certain litigation expenses and general corporate (income) expense. The fiscal first quarter of 2026 includes charges of $0.3 billion related to talc matters. The fiscal first quarter of 2025 includes approximately $7.0 billion related to the talc reserve reversal. For additional details related to talc refer to Note 11 to the Consolidated Financial Statements.
Innovative Medicine segment
The Innovative Medicine segment income before tax as a percent of sales in the fiscal first quarter of 2026 was 34.5% versus 37.6% for the same period a year ago. The decrease in the income before tax as a percent of sales for the fiscal first quarter of 2026 as compared to the prior year was primarily driven by the following:
•Unfavorable product mix in Cost of products sold, primarily driven by the decline of STELARA sales
•Phasing of advertising expense and investment related to TREMFYA and to the acquisition of Intra-Cellular (CAPLYTA)
partially offset by
•Favorable translational currency
MedTech segment
The MedTech segment income before tax as a percent of sales in the fiscal first quarter of 2026 was 14.3% versus 17.7% for the same period a year ago. The decrease in the income before tax as a percent of sales for the fiscal first quarter of 2026 as compared to the prior year was primarily driven by the following:
•Tariffs included in Cost of products sold
•Gains on certain divestitures recorded in 2025
•Orthopaedics separation related costs
Restructuring
In fiscal 2025, the company initiated a restructuring program of its Surgery franchise within the MedTech segment to simplify and focus operations by exiting certain non-strategic product lines and optimize select sites across the network. The pre-tax restructuring expense was $55 million in the fiscal first quarter of 2026, of which $30 million was recorded in Restructuring, $20 million in Cost of products sold and $5 million in Other income and expense on the Consolidated Statement of Earnings. The pre-tax restructuring expense in the fiscal first quarter of 2026 primarily included costs related to product exits. Total project costs of approximately $0.3 billion have been recorded since the restructuring was announced. The estimated costs of the total program are between $0.9 billion - $1.0 billion and is expected to be substantially completed by the end of fiscal year 2026.
In fiscal 2023, the Company initiated a restructuring program of its Orthopaedics franchise within its MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pre-tax restructuring expense was $55 million in the fiscal first quarter of 2025, of which $17 million was recorded in Restructuring, $30 million in Other (Income)/Expense and $8 million in Cost of products sold on the Consolidated Statement of Earnings primarily for costs related to asset impairments as well as market and product exits. Total project costs of approximately $0.8 billion have been recorded since the restructuring was announced and the program was substantially completed in the fiscal year 2025.
For further details related to the restructuring refer to Note 12 to the Consolidated Financial Statements.
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Provision for taxes on income
The worldwide effective income tax rate for the fiscal three months was 12.6% in 2026 and 19.3% in 2025.
On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework that was supported by over 130 countries worldwide. Several EU and non-EU countries have enacted Pillar Two legislation with an initial effective date of January 1, 2024, with other aspects of the law effective in 2026 or later. While countries continue to enact new provisions or issue new regulations this could have an impact to the Company’s effective tax rate. The Company will continue to monitor further developments to determine any potential impact in the countries in which we operate, such as the recently issued administrative guidance on the side-by-side system that will fully exclude U.S. parented groups from certain provisions of the Pillar Two Framework.
For further details related to the fiscal 2026 provision for taxes refer to Note 5 to the Consolidated Financial Statements.
Liquidity and capital resources
Proceeds from the disposal of assets/businesses, net
Dividends to shareholders
Cash flows
Cash and cash equivalents were $21.7 billion at the end of the fiscal first quarter of 2026 as compared with $19.7 billion at the end of fiscal year 2025. The primary sources and uses of cash that contributed to the $2.0 billion increase were:
(Dollars In Billions) | ||||||||
19.7 | Q4 2025 Cash and cash equivalents balance | |||||||
2.5 | net cash generated from operating activities | |||||||
(1.0) | net cash used for investing activities | |||||||
0.5 | net cash from financing activities | |||||||
$ | 21.7 | Q1 2026 Cash and cash equivalents | ||||||
In addition, the Company had $0.4 billion in marketable securities at the end of the fiscal first quarter of 2026 and $0.4 billion at the end of fiscal year 2025.
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Cash flow from operations of $2.5 billion was the result of:
(Dollars In Billions) | ||||||||
$ | 5.2 | Net earnings | ||||||
2.5 | non-cash expenses and other adjustments primarily for depreciation and amortization, stock-based compensation, deferred tax provision and asset write-downs | |||||||
(1.0) | an increase in accounts receivable and inventories | |||||||
(3.9) | a decrease in accounts payable and accrued liabilities | |||||||
0.3 | a decrease in other current and non-current assets | |||||||
(0.6) | a decrease in other current and non-current liabilities | |||||||
$ | 2.5 | Net cash flows from operations | ||||||
Cash flow used for investing activities of $1.0 billion was primarily from:
(Dollars In Billions) | ||||||||
$ | (1.0) | additions to property, plant and equipment | ||||||
0.1 | net sales of investments | |||||||
(0.1) | Other and rounding | |||||||
$ | (1.0) | Net cash used for investing activities | ||||||
Cash flow from financing activities of $0.5 billion was primarily from:
(Dollars In Billions) | ||||||||
$ | (3.1) | dividends to shareholders | ||||||
(4.0) | repurchase of common stock | |||||||
7.2 | net proceeds from short and long term debt | |||||||
1.2 | proceeds from stock options exercised/employee withholding tax on stock awards, net | |||||||
(0.8) | Primarily Auris shareholder payment (described in Note 11), other and rounding | |||||||
$ | 0.5 | Net cash from financing activities | ||||||
The Company has access to substantial sources of funds at numerous banks worldwide and has the ability to issue up to $20 billion in Commercial Paper. Furthermore, in June 2025, the Company secured a new 364-day Credit Facility of $10 billion (expiration on June 24, 2026) which may be used for general corporate purposes including to support our commercial paper borrowings. Interest charged on borrowings under the credit line agreement is based on either Secured Overnight Financing Rate (SOFR) Reference Rate or other applicable market rate as allowed plus applicable margins. Commitment fees under the agreement are not material.
As of March 29, 2026, the Company had cash, cash equivalents and marketable securities of approximately $22.1 billion and had approximately $55.0 billion of notes payable and long-term debt for a net debt position of $32.9 billion as compared to the prior year fiscal first quarter net debt position of $13.5 billion. The Company anticipates that operating cash flows, the ability to raise funds from external sources, borrowing capacity from existing committed credit facilities and access to the commercial paper markets will continue to provide sufficient resources to fund operating needs, including the Company’s remaining balance of approximately $3.4 billion related to talc matters, $1.8 billion related to the current portion of Corporate bonds due and the remaining approximately $1.1 billion related to opioid settlements. In addition, the Company monitors the global capital markets on an ongoing basis and from time to time may raise capital when market conditions are favorable.
Dividends
On January 2, 2026, the Board of Directors declared a regular cash dividend of $1.30 per share, payable on March 10, 2026, to shareholders of record as of February 24, 2026.
On April 14, 2026, the Board of Directors declared a regular cash dividend of $1.34 per share, payable on June 9, 2026, to shareholders of record as of May 26, 2026. The Company expects to continue the practice of paying regular quarterly cash dividends.
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Other information
New accounting pronouncements
Refer to Note 1 to the Consolidated Financial Statements for new accounting pronouncements.
Economic and market factors
In July 2023, Janssen Pharmaceuticals, Inc. (Janssen) filed litigation against the U.S. Department of Health and Human Services as well as the Centers for Medicare and Medicaid Services challenging the constitutionality of the IRA's Medicare Drug Price Negotiation Program. The litigation requests a declaration that the IRA violates Janssen’s rights under the First Amendment and the Fifth Amendment to the Constitution and therefore that Janssen is not subject to the IRA’s mandatory pricing scheme. While the impact of the IRA on our business and the broader pharmaceutical industry remains uncertain, as litigation filed by Janssen and other pharmaceutical companies remains ongoing, CMS has publicly announced the maximum fair price for each of the selected drugs and has recently begun implementing the program. In December 2025, Janssen sought review by the U.S. Supreme Court of the Third Circuit's majority affirmance of the district court’s ruling in favor of the government.
The Company operates in certain countries where the economic conditions continue to present significant challenges. The Company continues to monitor these situations and take appropriate actions. Inflation rates and currency exchange rates continue to have an effect on worldwide economies and, consequently, on the way the Company operates. The Company has accounted for operations in Venezuela, Argentina, Turkey and Egypt as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%. In the face of increasing costs, the Company strives to maintain its profit margins through cost reduction programs, productivity improvements and periodic price increases.
The long-term implications of regional conflicts on the Company are difficult to predict. The financial impact of known existing conflicts in the fiscal first quarter of 2026 was not material.
Governments around the world consider various proposals to make changes to tax laws, which may include increasing or decreasing existing statutory tax rates. In connection with various government initiatives, companies are required to disclose more information to tax authorities on operations around the world, which may lead to greater audit scrutiny of profits earned in other countries. A change in statutory tax rate in any country would result in the revaluation of the Company’s deferred tax assets and liabilities related to that particular jurisdiction in the period in which the new tax law is enacted. This change would result in an expense or benefit recorded to the Company’s Consolidated Statement of Earnings. The Company closely monitors these proposals as they arise in the countries where it operates. Changes to the statutory tax rate may occur at any time, and any related expense or benefit recorded may be material to the fiscal quarter and year in which the law change is enacted.
The Company may be further impacted by the imposition of tariffs, trade protection measures or other policies adopted by any jurisdiction that favor domestic companies and technologies over foreign competitors.
The Company faces various worldwide health care changes that may continue to result in pricing pressures that include health care cost containment and government legislation relating to sales, promotions and reimbursement of health care products.
Changes in the behavior and spending patterns of purchasers of healthcare products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and foregoing healthcare insurance coverage, may continue to impact the Company’s businesses.
The Company faces regular intellectual property challenges from third parties, including generic and biosimilar manufacturers, seeking to manufacture and market generic and biosimilar versions of key pharmaceutical products prior to the expiration of the applicable patents. These challengers file Abbreviated New Drug Applications or abbreviated Biologics License Applications with the FDA or otherwise challenged the coverage and/or validity of the Company’s patents. In the event the Company is not successful in defending the patent claims challenged in the resulting lawsuits, generic or biosimilar versions of the products at issue may be introduced to the market, resulting in the potential for substantial market share and revenue losses for those products, and which may result in a non-cash impairment charge in any associated intangible asset. There is also risk that one or more competitors could launch a generic or biosimilar version of the product at issue following regulatory approval even though one or more valid patents are in place.
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Item 3 — Quantitative and qualitative disclosures about market risk
There has been no material change in the Company’s assessment of its sensitivity to market risk since its presentation set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in its Annual Report on Form 10-K for the fiscal year ended December 28, 2025.
Item 4 — Controls and procedures
Disclosure controls and procedures. At the end of the period covered by this report, the Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Joaquin Duato, Chief Executive Officer; Chairman, Executive Committee and Joseph J. Wolk, Executive Vice President, Chief Financial Officer, reviewed and participated in this evaluation. Based on this evaluation, Messrs. Duato and Wolk concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.
Internal control. During the period covered by this report, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company continues to monitor and assess the effectiveness of the design and operation of its disclosure controls and procedures.
The Company is implementing a multi-year, enterprise-wide initiative to integrate, simplify and standardize processes and systems for the human resources, information technology, procurement, supply chain and finance functions. These are enhancements to support the growth of the Company’s financial shared service capabilities and standardize financial systems. This initiative is not in response to any identified deficiency or weakness in the Company’s internal control over financial reporting. In response to this initiative, the Company has and will continue to align and streamline the design and operation of its financial control environment.
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Part II — Other information
Item 1 — Legal proceedings
The information called for by this item is incorporated herein by reference to Note 11 included in Part I, Item 1, Financial Statements (unaudited) — Notes to Consolidated Financial Statements.
Item 2 — Unregistered sales of equity securities and use of proceeds
(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
The following table provides information with respect to Common Stock purchases by the Company during the fiscal first quarter of 2026. Common stock purchases on the open market are made as part of a systematic plan to meet the needs of the Company's compensation programs. The repurchases below also include the stock-for-stock option exercises that settled in the fiscal first quarter.
| Fiscal Month Period | Total Number of Shares Purchased(1) | Avg. Price Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
December 29, 2025 through January 25, 2026 | 649,607 | 219.26 | — | — | ||||||||||||||||||||||
January 26, 2026 through February 22, 2026 | 8,626,168 | 236.70 | — | — | ||||||||||||||||||||||
February 23, 2026 through March 29, 2026 | 7,558,445 | 243.91 | — | — | ||||||||||||||||||||||
Total | 16,834,220 | 239.26 | — | — | ||||||||||||||||||||||
(1)During the fiscal first quarter of 2026, the Company repurchased an aggregate of 16,834,220 shares of Johnson & Johnson Common Stock in open-market transactions, all of which were purchased as part of a systematic plan to meet the needs of the Company’s compensation programs.
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Item 5 — Other information
Securities trading plans of Directors and Executive Officers. During the fiscal first quarter of 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the adoption termination
Item 6 — Exhibits
Exhibit 31.1 Certification of Chief Executive Officer under Rule 13a-14(a) of the Securities Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — Filed with this document.
Exhibit 31.2 Certification of Chief Financial Officer under Rule 13a-14(a) of the Securities Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — Filed with this document.
Exhibit 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — Furnished with this document.
Exhibit 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — Furnished with this document.
Exhibit 101:
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EX-101.SCH | Inline XBRL Taxonomy Extension Schema | |||||||
EX-101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |||||||
EX-101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |||||||
EX-101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |||||||
EX-101.DEF | Inline XBRL Taxonomy Extension Definition Document | |||||||
Exhibit 104: | Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
Form 10-Q | 39 | ||||
Table of Contents
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 22, 2026 | ||
Date: April 22, 2026 | ||
| JOHNSON & JOHNSON | ||
(Registrant) | ||
By | /s/ J. J. Wolk | ||||
J. J. Wolk, Executive Vice President, Chief Financial Officer (Principal Financial Officer) | |||||
By | /s/ R. J. Decker Jr. | ||||
R. J. Decker Jr., Controller (Principal Accounting Officer) | |||||
40 | | ||||
FAQ
How did Johnson & Johnson (JNJ) perform financially in Q1 2026?
Johnson & Johnson generated $24,062 million in Q1 2026 sales, up from $21,893 million. Net earnings were $5,235 million versus $10,999 million a year earlier, with diluted EPS of $2.14 compared with $4.54, reflecting prior-year talc reserve and other income impacts.
Which Johnson & Johnson segments drove Q1 2026 revenue growth?
Q1 2026 growth was led by Innovative Medicine, where sales rose 11.2% to $15,426 million, and MedTech, up 7.7% to $8,636 million. Oncology, neuroscience and pulmonary hypertension therapies, plus cardiovascular and surgery devices, showed strong contributions across U.S. and international markets.
Why did Johnson & Johnson’s Q1 2026 net earnings decline so sharply?
Net earnings dropped to $5,235 million from $10,999 million primarily because Q1 2025 included reversal of about $7.0 billion in talc reserve and substantial other income. Q1 2026 instead recorded roughly $0.3 billion of talc-related charges, alongside higher operating expenses and interest costs.
What were Johnson & Johnson’s cash flow and cash balances in Q1 2026?
Operating activities produced $2,514 million of cash in Q1 2026, down from $4,174 million, mainly due to lower payables and accrued liabilities. Cash and cash equivalents increased to $21,688 million as of March 29, 2026, supported by short‑term debt issuance and disciplined investment spending.
What are key product trends in Johnson & Johnson’s Innovative Medicine business?
In Q1 2026, oncology brands like DARZALEX, CARVYKTI, TECVAYLI and TALVEY posted strong growth, as did neuroscience treatments including CAPLYTA and SPRAVATO. Offsetting this, immunology revenue declined, with STELARA and REMICADE facing lower sales amid patent expirations and competitive pressures.