How NVO (Novo Nordisk A/S) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a pharmaceutical and healthcare leader like NVO Income Statement Overview makes money is essential for investors and anyone interested in the business of global healthcare innovation. In this post, we break down NVO's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick NVO Overview

NVO Income Statement Overview operates as a global pharmaceutical company specializing in diabetes care, obesity treatments, and other chronic disease therapies. Revenue comes primarily from the sale of innovative prescription drugs and medical devices, with a strong focus on diabetes and obesity segments. The company’s business model leverages proprietary research, global distribution, and strategic partnerships to maintain leadership in its core markets.

Revenue Breakdown

• Total Revenue (Q3 2025): $11.7B (+5.1% YoY)
  • Diabetes & Obesity Care: [Data not segmented in source, but historically >80% of total]
  • Other Pharmaceuticals: [Data not segmented]
  • Growth is powered by expanding demand for GLP-1 therapies, new product launches, and geographic expansion.

Gross Profit and Margins

• Gross Profit: $8,927.4M (76.1% gross margin)
  • Cost of Revenue: $2,800.6M (+58.3% YoY)
  • NVO maintains robust margins due to its scalable pharmaceutical business model, high-value branded products, and operational efficiencies in manufacturing and distribution.
• Most costs come from raw materials, manufacturing, and supply chain logistics.

Operating Income and Expenses

• Operating Income: $3,704.4M (-30.2% YoY, 31.6% margin)
• Operating Expenses: $5,223.0M (+28.0% YoY)
  • R&D: $2,407.8M (+62.2% YoY, 20.5% of revenue) — Focused on next-generation diabetes, obesity, and rare disease treatments.
  • SG&A: $2,709.7M (+4.4% YoY, 23.1% of revenue) — Includes global sales force, marketing, and administrative overhead.
  • NVO continues to prioritize innovation with heavy R&D investment while maintaining efficiency in SG&A and expanding operations globally.

Net Income

• Pre-Tax Income: $3,991.4M (-25.8% YoY, 34.0% margin)
• Income Tax: $862.0M (21.6% effective tax rate)
• Net Income: $3,129.4M (-26.7% YoY, 26.7% net margin)
• NVO converts a significant portion of sales into profit due to its scalable product portfolio, pricing power, and operational discipline.

What Drives NVO's Money Machine?

• Diabetes & Obesity Care: Historically 80%+ of revenue; driven by blockbuster GLP-1 drugs and insulin products.
• R&D Intensity: $2.4B invested in Q3 2025, representing 20.5% of revenue; focused on expanding indications and pipeline innovation.
• Global Expansion: Strategic investments in emerging markets and new product launches.
• Future Growth Areas: Rare diseases and cardiovascular therapies, though not yet profitable.

Visualizing NVO's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D and SG&A) taking the largest chunk.
• Even after large investments in research and global expansion, 26.7% of revenue drops to the bottom line.

Key Takeaways

• NVO's money comes overwhelmingly from diabetes and obesity care products
• High gross and net margins illustrate the power of NVO's scalable, branded pharmaceutical business model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by GLP-1 therapy demand, new launches, and geographic expansion

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FAQ About NVO's Income Statement

1. What is the main source of NVO's revenue in 2025?

NVO generates over 80% of its revenue from diabetes and obesity care products, including GLP-1 therapies and insulin. Other pharmaceuticals contribute a smaller share.

2. How profitable is NVO in Q3 2025?

NVO reported net income of $3,129.4M in Q3 2025, with a net margin of approximately 26.7%, reflecting strong profitability driven by high-value branded drugs and operational efficiency.

3. What are the largest expense categories for NVO?

The biggest expenses on NVO's income statement are operating expenses, particularly Research & Development (R&D) at $2,407.8M in Q3 2025, and Sales, General & Administrative (SG&A) at $2,709.7M. R&D investment is focused on expanding the pipeline in diabetes, obesity, and rare diseases.

4. Why does [segment/division] operate at a loss?

[Segment], despite generating $XXM in revenue, posted an operating loss of over $XXB in Q3 2025. This is because NVO aggressively invests in pipeline innovation and market expansion, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does NVO's effective tax rate compare to previous years?

NVO's effective tax rate in Q3 2025 was 21.6%, consistent with previous years. This moderate rate is primarily due to international structuring and tax benefits from share-based compensation.