Third disappointing quarter in a row from Novo Nordisk. However, I am not surprised. Rebuilding a company takes more than a quarter or two, and patience is needed.

Some examples from my portfolio that have shown me that are Alphabet, the company needed close to three years to show the market they are leading the AI revolution and not falling behind; or Eurofins Scientific, which required a similar amount of time to remind the market that their testing business expands further than Covid-19 testing.

Without further ado, let’s review Novo Nordisk Q3 2025 earnings.

DISCLAIMER: This article is not a recommendation to buy or sell any financial instrument; the content is educational and my personal opinion. Each person has to make their own analysis. Any action or decision you take as a result of viewing this article is your sole responsibility.

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Executive Summary

• Revenue Growth. Revenue increased +5.0% YoY (11.0% at CER), in Q3 2025.

• Operating income decreased by -30% YoY (-21% at CER) due to the one-off restructuring costs.

• Diluted EPS reached 4.5 DKK per share, down -26% vs Q3 2025.

• Guidance narrowed to the low to mid-range of the latest update from the quarter. 

Income Statement

Revenue

Novo Nordisk reported its Q3 2025 results, with revenue of DKK 74.98 billion, up 5.0% YoY (11.0% at CER).

Gross margin during Q2 decreased to 76.1%, down -800 bps vs Q3 2024. DKK 3.0 billion in restructuring costs were related to COGS. Adding them back, we get a normalized gross margin of 80.1%, down -400 bps vs Q3 2024. This gross margin drag is mainly due to D&A expenses from Catalent acquired sites.

Product Revenue Distribution

The figures reveal a clear pattern: while Wegovy sales are growing across all geographies, the performance of other GLP-1 drugs has been stagnant or flat over the past two years. Similarly, the Rare Diseases segment and insulin portfolio have also demonstrated flat sales performance during this period.

It is remarkable to see how during the last 2 years Rybelsus sales have been stagnant. This trend confirms my initial theory (suggested back in Q1 2025) that Novo Nordisk is strategically constraining Rybelsus volumes to free up semaglutide API for its injectable products. In my opinion, this constraint is escalating due to the upcoming 2026 launch of oral Wegovy, which requires the company to build inventory. Given that oral Wegovy necessitates a significantly higher dose of 25 mg to 50 mg of semaglutide, compared to the 3 mg to 14 mg used in Rybelsus, the pressure on API supply will only intensify.

Geographical Revenue Distribution

During Q3, USO sales growth further slowed down showing a lower growth at CER than IO sales, 10% vs 12% respectively. All regions were able to maintain double digit growth apart from Emerging Markets, which decreased -15% at CER YoY due to supply chain constraints in the filling of Wegovy.

US Operations (USO)

USO experienced a further slowdown in GLP-1 sales growth this quarter. Injectables performance was weak this quarter: Ozempic sales grew but slowed down considerably to +7% at CER. Same for Wegovy, which sales increased +6% during the quarter vs 136% of the branded obesity market. First generation GLP-1, Victoza and Saxenda can be now considered discontinued from the USO region as their sales in the quarter kept decreasing to the point that they only reached around $20 million.

Rybelsus sales decreased for another quarter (-13% YoY growth at CER). Injectables are still being prioritized in the USA.

US insulin sales showed strong growth for another quarter, +20% at CER year-over-year. Insulins were favored by gross-to-net adjustments related to prior years and channel and payer mix although realized volumes kept decreasing.

Finally, the rare diseases segment showed a slight decrease in sales of -2% at CER after posting an impressive +52% sales growth in the previous quarter.

FX impact in US Operations dragged sales growth by 7% meaning double digit growth has been achieved at CER.

International Operations (IO)

IO experienced significant growth, primarily fueled by the continued launch of its weight-management medication, Wegovy. Wegovy sales surged by an impressive +67% at CER year-over-year, rising from DKK 1,675 million in Q3 2024 to DKK 7,822 million in Q3 2025. Moreover, the quarter-over-quarter (QoQ) growth was also remarkable, with sales growing +17.3% at CER from the DKK 6,666 million registered in Q2 2025

It should be noted how Wegovy sales in the EUCAN region doubled vs Q3 2024 while Emerging Markets sales decreased due to Wegovy filling bottlenecks.

The Rare Diseases segment accelerated its double-digit growth in IO from the previous quarter, posting a +21% YoY thanks to the segment’s stellar performance in Asia, especially China.

Note: Remember that back in January 2025 Novo Nordisk removed Canada from North America Operations, moving it into International Operations geography so Canada is now reported within the EUCAN region.

Operating Income

Reported operating income reached DKK 23,682 million, equaling an operating margin of 31.6%, -15.8 bps vs Q3 2024. Diving into the operating expenses we can see:

1. R&D expenses: were DKK 15,393 million (+62% vs Q2 2024) a tremendous increase compared to the year before despite the cancellation of several non-core research programmes. DKK 4,000 million one-off restructuring costs. Normalized, R&D costs would have increased by +20% vs the same quarter the prior year.

2. Sales & Distribution costs rose by 5% in Danish kroner and by 14% at CER, reaching DKK 15,996 million. However, they include DKK 2,000 million one-off restructuring costs. Normalized, S&D costs would have decreased by -8% YoY.

3. Administration costs rose by 36% to DKK 1,884 million. DKK 500 million one-off restructuring costs impacted this category. Normalized, administrative costs would have been flat vs Q3 2024.

In summary, the quarter's results were impacted by DKK 6.5 billion in restructuring costs charged to operating expenses. Normalizing for these expenses brings the operating income to DKK 30,182 million. When factoring in the additional DKK 2.5 billion in one-off restructuring costs booked in COGS, the impact on normalized operating profit is minimal: it would have decreased by only 2%, leading to an underlying growth of +7% for the quarter at CER.

After some positive quarters, Rare Diseases segment fell back during Q3 2025, posting a negative operating margin again. See picture below.

Cash Flow Statement

Capital Allocation

The company made the following investments:

1. Property, Plant & Equipment: DKK 13.6 billion, up +12.4% vs Q3 2024. After ramping CapEx constantly during the last decade, in 2025 CapEx has been contained and hasn’t surpassed the historical peak registered in Q4 2024.

2. M&A

   During the quarter the company acquired the research biotech company Akero Therapeutics for $4.7 billion in cash due to its asset factor 21 (FGF21) strategic fit into Novo Nordisk MASH portfolio.

   Additionally, Novo Nordisk has also reached an agreement for the purchase of all rights drug candidate zaltenibart from Omeros to complement its OCVD and Rare Diseases portfolio. The price paid is $340 million plus up to additional 1,760 million for the completion of milestones and net sales royalties.

   Finally, yesterday the company announced they are exiting the “bidding war” against Pfizer for Metsera so the American pharma giant will acquire it for $10 billion at what I consider an exorbitant price.

3. The company paid an interim dividend of 3.75€ per share back in August. It is frustrating to these capital allocation choices considering the stock valuation and the existing approval at the 2025 Annual General Meeting to repurchase up to 10% of the company's equity.

FCF Generation

Operating Cash Flow (OCF) grew +5% YoY reaching DKK 46,107 million in Q3 2025 vs 43,850 million in H1 2024.

Reported Q3 2025 FCF was DKK 30.3 billion compared to DKK 30.4 billion from Q3 2024, almost flat.

2025 Guidance Update

Novo Nordisk narrowed its already twice lowered FY 2025 guidance to the announced low to mid range back in August 2025 reflecting updated expectations for the business development during Q4 2024.

These updated expectations translate into Q4 2025 posting declining sales. However, Q4 comps. are the hardest until this day as it has been the best quarter in sales in the history of the company. For context, in 2024, QoQ sales growth into the last quarter of the year was +20.2%!

Achieving a revenue growth of +6% or more (or +10% or more at CER) would mark the return to sequential sales growth, ending a streak of three consecutive quarters of declining sales since Q4 2024.

Management Call

The management call was quite disappointing: not much interesting information, plain questions and most analysts interested in knowing more about the potential acquisition of Metsera and the ongoing bidding battle with Pfizer.