NOVARTIS AG (NVS): Financial results for Q3 2026
NOVARTIS AG (NVS) furnished an SEC Form 6-K — earnings release. Novartis International AG CH-4002 Basel Switzerland https://www.novartis.com https://x.com/novartisnews FINANCIAL RESULTS | FINANZERGEBNISSE Novartis delivered sales growth and core margin expansion in Q3; raised FY core operating income guidance Ad hoc announcement pursuant to A
How this was made
The 30-second read
Why it matters
The raised guidance provides a fresh catalyst that could drive short‑term buying interest, while the earnings miss may create volatility.
Market read
First‑report earnings with raised guidance for a large‑cap pharma, likely to affect NVS and sector peers.
What to watch
Partial impairment charge and declining net income could weigh on price despite guidance.
Novartis delivered sales growth and core margin expansion in Q3; raised FY core operating income guidance
Q3 net sales grew +4% and core operating income grew +10% at constant currencies, with core operating income margin expanding 2.0 percentage points at constant currencies. Reported operating income, net income and EPS declined sharply following a USD 1.9 billion partial impairment charge of the del-desiran IPR&D asset, while nine-month core operating income declined -2% at constant currencies.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 net salesother | USD 14 522 million | – | +4% USD, +4% cc |
| Q3 2026 operating incomeother | USD 1 843 million | – | -59% USD, -61% cc |
| Q3 2026 operating income as a % of salesother | 12.7% | – | – |
| Q3 2026 net incomeother | USD 1 196 million | – | -70% USD, -71% cc |
| Q3 2026 EPSother | USD 0.63 | – | -69% USD, -70% cc |
| Q3 2026 net cash flows from operating activitiesother | USD 5 503 million | – | -16% |
| Q3 2026 free cash flownon-GAAP | USD 5 111 million | – | -18% |
| Q3 2026 core operating incomenon-GAAP | USD 6 036 million | – | +11% USD, +10% cc |
| Q3 2026 core operating income marginnon-GAAP | 41.6% of net sales | – | +2.3 percentage points, +2.0 percentage points in cc |
| Q3 2026 core net incomenon-GAAP | USD 4 655 million | – | +8% USD, +6% cc |
| Q3 2026 core EPSnon-GAAP | USD 2.46 | – | +9% USD, +8% cc |
| 9M 2026 net salesother | USD 42 043 million | – | +2% USD, 0% cc |
| 9M 2026 operating incomeother | USD 10 828 million | – | -23% USD, -24% cc |
| 9M 2026 operating income as a % of salesother | 25.8% | – | – |
| 9M 2026 net incomeother | USD 7 609 million | – | -34% USD, -35% cc |
| 9M 2026 EPSother | USD 4.01 | – | -32% USD, -33% cc |
| 9M 2026 net cash flows from operating activitiesother | USD 15 061 million | – | -11% |
| 9M 2026 free cash flownon-GAAP | USD 14 002 million | – | -12% |
| 9M 2026 core operating incomenon-GAAP | USD 16 873 million | – | -1% USD, -2% cc |
| 9M 2026 core operating income marginnon-GAAP | 40.1% of net sales | – | -1.1 percentage points, -0.8 percentage points in cc |
| 9M 2026 core net incomenon-GAAP | USD 13 027 million | – | -4% USD, -5% cc |
| 9M 2026 core EPSnon-GAAP | USD 6.85 | – | -1% USD, -3% cc |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CosentyxSales grew in most markets, driven by the HS and SpA indications. US growth benefited from prior-year revenue deduction adjustments. | USD 1 857 million | – | +9% USD, +9% cc |
| KisqaliContinued to grow strongly across all regions, with market share growth in early breast cancer and leadership in metastatic breast cancer. | USD 1 821 million | – | +37% USD, +37% cc |
| KesimptaContinued strong momentum globally, driven by increased demand and broad access. | USD 1 484 million | – | +21% USD, +22% cc |
| EntrestoNot specified. | USD 1 165 million | – | -38% USD, -38% cc |
| PluvictoContinued strong demand driven by the mAPMR setting, with US and China approvals in mAPMN/S in Q3 and ongoing access expansion ex-US. | $674M | – | +20% USD, +20% cc |
| JakaviNot specified. | $564M | – | +5% USD, +5% cc |
| Tafinlar + MekinistNot specified. | $570M | – | +4% USD, +4% cc |
| IlarisNot specified. | $591M | – | +25% USD, +26% cc |
| ScemblixSales grew across all regions, with continued strong momentum in the early-line setting in the US, Japan and Germany. | $593M | – | +66% USD, +67% cc |
| LeqvioSales grew across all regions, with continued uptake in China following NRDL inclusion. | $506M | – | +64% USD, +63% cc |
| Zolgensma GroupSales grew strongly, reflecting continued launch momentum from Itvisma in the US, Japan and other ex-US countries. | $404M | – | +34% USD, +35% cc |
| XolairNot specified. | $331M | – | -25% USD, -25% cc |
| Sandostatin GroupNot specified. | $311M | – | +3% USD, +3% cc |
| LutatheraNot specified. | $219M | – | +3% USD, +3% cc |
| FabhaltaSales grew, with expansion in PNH and renal indications. | $237M | – | +59% USD, +60% cc |
| Exforge GroupNot specified. | $183M | – | +4% USD, +1% cc |
| Promacta/RevoladeNot specified. | $142M | – | -61% USD, -61% cc |
| Diovan GroupNot specified. | $137M | – | -4% USD, -6% cc |
| TasignaNot specified. | $141M | – | -36% USD, -37% cc |
| Piqray/VijoiceNot specified. | $122M | – | +36% USD, +37% cc |
| Top 20 brands totalNot specified. | USD 12 052 million | – | +7% USD, +7% cc |
| RhapsidoContinued to show strong launch uptake in the US, supported by sustained prescription growth and a free drug program facilitating patient access. Ex-US, sales were mainly driven by early launch uptake in Germany and China. | $101M | – | – |
Full-year 2026, growth vs. prior year in cc outlook
- RevenueExpected to grow low single-digit
- NoteCore operating income: Expected to be in line to grow low single-digit (from decline low single-digit)
- NoteIf late-October exchange rates prevail for the remainder of 2026, the foreign exchange impact for the year would be positive 1 percentage point on net sales and positive 1 percentage point on core operating income.
Capital returns
- During the first nine months of 2026, Novartis repurchased 30.9 million shares for USD 4.7 billion on the SIX Swiss Exchange second trading line.
- Repurchases included 18.8 million shares (USD 2.8 billion) under the up-to USD 10 billion share buyback announced in July 2025, with up to USD 4.9 billion still to be executed.
- 12.1 million shares (USD 1.8 billion) were repurchased to mitigate the anticipated full-year dilution related to participation plans of employees.
- 2.0 million shares (USD 0.3 billion) were repurchased from employees.
- USD 0.9 billion of equity-based compensation plan expenses were recognized to equity and 13.3 million shares were delivered to employees related to equity-based compensation plans from prior years.
- The total number of shares outstanding decreased by 19.6 million compared with December 31, 2025.
- Treasury share transactions resulted in an equity decrease of USD 4.1 billion and a cash outflow of USD 4.8 billion.
- The USD 9.1 billion annual dividend payment was a cash outflow during the first nine months of 2026.
What drove it
- Q3 net sales growth reflected volume growth contributing 14 percentage points, partly offset by 9 percentage points from generic competition. Pricing had a negative impact of 1 percentage point, and currency had no impact.
- Priority-brand growth included Kisqali, Kesimpta, Scemblix, Leqvio, Cosentyx, Pluvicto, Zolgensma Group and Fabhalta.
- Q3 core operating income increased mainly due to higher net sales.
- Core EPS benefited from the lower weighted average number of shares outstanding.
- Q3 core operating income margin increased 2.0 percentage points in constant currencies.
- FDA approved Rhapsido for adults with symptomatic dermographism inadequately controlled by H1 antihistamines, expanding its use beyond CSU into CIndU.
- FDA and China’s NMPA approved Pluvicto in combination with an ARPI for patients with PSMA+ mAPMN/S prostate cancer.
- Positive Phase III REMODEL-1 and -2 results showed remibrutinib met its primary endpoint in RMS.
Concerns
- Q3 operating income declined mainly due to higher R&D expenses, including a USD 1.9 billion partial impairment charge of the del-desiran IPR&D asset, and higher other expense.
- Q3 net income declined mainly due to lower operating income and higher interest expense.
- Generic competition reduced Q3 net sales growth by 9 percentage points and 9M net sales growth by 12 percentage points.
- Entresto sales declined -38% USD and -38% cc, while Promacta/Revolade sales declined -61% USD and -61% cc.
- In the Phase III HARBOR study, del-desiran did not meet its primary endpoint versus placebo in DM1.
- In the Phase III HORIZON trial, pelacarsen did not meet its primary endpoint of reducing the risk of cardiovascular events versus placebo.
- Novartis discontinued the Phase III study of remibrutinib in generalized myasthenia gravis following a futility analysis.
What to watch
- Execution against full-year 2026 net sales guidance of low single-digit growth at constant currencies.
- Delivery of full-year 2026 core operating income expected to be in line to grow low single-digit at constant currencies.
- Further commercial progress for Kisqali, Kesimpta, Scemblix, Leqvio, Pluvicto, Zolgensma Group, Rhapsido and Fabhalta.
- The development path for del-desiran following evaluation of the full HARBOR dataset and engagement with health authorities.
- Regulatory outcomes for pelabresib in myelofibrosis, del-zota in DMD44, Vanrafia in IgAN and KLU156 in uncomplicated malaria.
- Foreign exchange effects, estimated at positive 1 percentage point on both full-year net sales and core operating income if late-October exchange rates prevail for the remainder of 2026.
Balance sheet and cash flow
- Q3 2026 net cash flows from operating activities were USD 5 503 million, compared with USD 6 571 million in Q3 2025.
- Q3 2026 free cash flow was USD 5 111 million, compared with USD 6 217 million in Q3 2025.
- 9M 2026 net cash flows from operating activities were USD 15 061 million, compared with USD 16 880 million in 9M 2025.
- 9M 2026 free cash flow was USD 14 002 million, compared with USD 15 941 million in 9M 2025.
- Net debt increased to USD 37.4 billion at September 30, 2026, compared with USD 21.9 billion at December 31, 2025.
- The increase in net debt was mainly due to free cash flow of USD 14.0 billion being more than offset by net cash outflow for M&A, intangible assets transactions and other acquisitions of USD 16.7 billion, the USD 9.1 billion annual dividend payment and cash outflows for treasury share transactions of USD 4.8 billion.
- As of Q3 2026, the long-term credit rating was Aa3 with Moody’s Ratings and AA- with S&P Global Ratings.
Analysis
Novartis reported Q3 net sales of USD 14 522 million, up +4% in both USD and constant currencies. Volume contributed 14 percentage points to growth, while generic competition reduced growth by 9 percentage points and pricing had a negative impact of 1 percentage point. The priority brands were the key commercial support: Kisqali grew +37% cc, Kesimpta +22% cc, Scemblix +67% cc, Leqvio +63% cc and Cosentyx +9% cc. The release also identifies strong demand for Pluvicto and continued launch momentum for Zolgensma Group and Rhapsido.
Core profitability improved in the quarter. Core operating income rose to USD 6 036 million, up +10% cc, and core operating income margin reached 41.6% of net sales, an increase of 2.0 percentage points in constant currencies. Core net income increased +6% cc to USD 4 655 million, and core EPS increased +8% cc to USD 2.46, benefiting from a lower weighted average number of shares outstanding. These results contrast with the nine-month trend, where core operating income was down -2% cc and core operating income margin was 40.1%, down 0.8 percentage points in constant currencies.
Reported earnings were materially affected by a USD 1.9 billion partial impairment charge of the del-desiran IPR&D asset, recorded in higher R&D expenses. Q3 operating income fell -61% cc to USD 1 843 million, net income fell -71% cc to USD 1 196 million and EPS fell -70% cc to USD 0.63. Higher other expense and higher interest expense were additional pressures. The impairment followed the Phase III HARBOR study, in which del-desiran did not meet its primary endpoint in DM1.
Cash generation declined. Q3 free cash flow was USD 5 111 million, down -18%, while nine-month free cash flow was USD 14 002 million, down -12%. Net debt rose to USD 37.4 billion at September 30, 2026 from USD 21.9 billion at December 31, 2025, as free cash flow was more than offset by M&A, intangible assets transactions and other acquisitions, the annual dividend payment and treasury share transactions. Novartis repurchased 30.9 million shares for USD 4.7 billion during the first nine months of 2026.
The company maintained its full-year net-sales outlook for low single-digit constant-currency growth and raised core operating income guidance to be in line to grow low single-digit, from a prior expectation of a low-single-digit decline. The guide reflects Q3 core-margin expansion and continued priority-brand growth, while generic erosion, the del-desiran impairment, nine-month core-profit pressure and the outcome of several development programs remain important factors for the remainder of the year.
Management, verbatim
Novartis delivered solid sales growth in Q3, as priority brands and launches more than offset generic erosion, demonstrating the replacement power of the business. Combined with productivity efforts, this drove strong bottom-line performance and allowed us to upgrade our full-year guidance. At the same time, we continued to advance our pipeline, with positive Phase III results for remibrutinib in RMS, label expansions for Rhapsido and Pluvicto in the US, and the first submission for pelabresib in the EU. While the del-desiran readout in DM1 was not what we had hoped, we saw evidence of clinical activity in the data and are working through the development path for this medicine. Importantly, our programs in FSHD and DMD continue to progress well. With continued momentum across the business and pipeline, we remain well on track to deliver our mid- and long-term outlook.
Vas Narasimhan, CEO of Novartis
Not in the filing
stated, not guessed- Gross profit and gross margin were not reported.
- Operating expenses were not reported as a total line item.
- Income tax rate was not reported.
- Cash and cash equivalents balance was not reported.
- Gross debt was not reported.
- Prior-quarter figures were not reported for the financial metrics.
- A previous outlook section was not provided, so no actual-versus-prior-guidance comparison is included.
- Dividend per share was not reported.
- Product-level prior-year revenue figures were not reported.
- Product-level prior-quarter revenue figures were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Novartis filed a Form 6‑K earnings release for Q3 2026, detailing sales growth, margin expansion, and a raised FY core operating income outlook.
Ticker impact
Novartis reported Q3 2026 results, raised full-year core operating income guidance.
potential upside as raised guidance supports valuation
The earnings release is the first disclosure of the numbers and includes a raised FY guidance, a material new fact for a large‑cap pharma.
Market effects
May boost broader pharma sector as guidance upgrades signal demand strength.
Positive for European and Swiss markets where Novartis is a key component.
Limited to healthcare investors; no broad macro effect.
Counterpoint
Operating income fell sharply; some investors may view the guidance raise as insufficient.
Key entities
- companyNovartis AG
Swiss pharmaceutical giant reporting Q3 2026 results.
