How NVO (Novo Nordisk A/S) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a pharmaceutical giant like Novo Nordisk makes money is essential for investors and anyone interested in the business of healthcare. In this post, we break down Novo Nordisk's quarterly income statement (Q4 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick Novo Nordisk Overview

Novo Nordisk operates as a global healthcare company focused on diabetes care, obesity treatments, and rare diseases, with flagship products like Ozempic, Wegovy, and NovoLog. Revenue comes primarily from its Diabetes & Obesity Care segment, supplemented by rare disease therapies and other product sales. The company leverages a portfolio of innovative biologics and GLP-1 agonists, with significant emphasis on high-margin chronic disease treatments.

Revenue Breakdown

• Total Revenue (Q4 2025): $10.5B (-21.5% YoY)
  • Diabetes & Obesity Care Revenue: $11.5B (109.7% of total, -7.7% YoY)
  • Rare Disease Revenue: $0.83B (8.0% of total, -6.2% YoY)
  • Other Revenue by Product: -$1.85B (17.6% of total)
  • Growth is powered by strong demand for GLP-1 drugs in diabetes and obesity, despite YoY declines amid market adjustments and segment offsets.

Gross Profit and Margins

• Gross Profit: $8.47B (80.8% gross margin)
  • Cost of Revenue: $2.01B (-1.0% YoY)
  • Novo Nordisk maintains robust margins due to its scalable biologics manufacturing, high pricing power in patented therapies, and efficient supply chain for injectables.
• Most costs come from manufacturing raw materials, production overhead, and distribution for biologic drugs.

Operating Income and Expenses

• Operating Income: $4.22B (-26.2% YoY, 40.3% margin)
• Operating Expenses: $4.25B (-24.1% YoY)
  • R&D: $2.28B (+6.1% YoY, 21.8% of revenue) — focused on expanding GLP-1 pipeline, next-gen obesity drugs, and rare disease gene therapies
  • SG&A: $2.43B (-23.1% YoY, 23.2% of revenue) — covers global sales force, marketing for blockbuster drugs like Wegovy, and administrative overhead
  • Novo Nordisk continues to prioritize innovation while maintaining efficiency through cost controls in mature markets and digital sales channels.

Net Income

• Pre-Tax Income: $4.54B (-18.0% YoY, 43.4% margin)
• Income Tax: $0.97B (21.3% effective tax rate)
• Net Income: $3.57B (-18.7% YoY, 34.1% net margin)
• Novo Nordisk converts a high portion of sales into profit due to scalability of its biologic platform, pricing power, and non-dilutive other income streams.

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What Drives Novo Nordisk's Money Machine?

• Diabetes & Obesity Care: 109.7% of revenue / Dominates with GLP-1 drugs like Ozempic and Wegovy, driving volume growth despite YoY dip
• GLP-1 Market Penetration: Over 100% segment share reflects core strength; Q4 revenue hit $11.5B amid high demand for weight-loss therapies
• R&D Investments: Heavy spending on pipeline expansion, including oral semaglutide variants and cardiovascular outcomes trials
• Future growth areas: Rare diseases and cardiovascular drugs, though not yet profitable at scale due to early-stage development costs

Visualizing Novo Nordisk'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 SG&A) taking the largest chunk.
• Even after significant R&D investments, 34.1% of revenue drops to the bottom line.

Key Takeaways

• Novo Nordisk's money comes overwhelmingly from Diabetes & Obesity Care
• High gross and net margins illustrate the power of Novo Nordisk's high-margin biologics model
• Heavy investment in R&D, balanced by efficiency in operating costs
• Ongoing growth is driven by GLP-1 demand and pipeline advancements

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FAQ About Novo Nordisk's Income Statement

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

Novo Nordisk generates over 109.7% of its revenue from Diabetes & Obesity Care. Rare Disease adds 8.0%, with other products contributing the balance.

2. How profitable is Novo Nordisk in Q4 2025?

Novo Nordisk reported net income of $3.57B in Q4 2025, with a net margin of approximately 34.1%, reflecting strong profitability driven by high gross margins and other income.

3. What are the largest expense categories for Novo Nordisk?

The biggest expenses on Novo Nordisk's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $2.28B in Q4 2025, as Novo Nordisk prioritizes pipeline expansion in GLP-1 and rare diseases.

4. Why does Other Revenue by Product operate at a loss?

Other Revenue by Product, despite generating -$1.85B in revenue, reflects segment adjustments and offsets in Q4 2025. This is because Novo Nordisk aggressively invests in portfolio optimization, believing these will drive long-term growth—even if the division shows negative contributions today.

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

Novo Nordisk's effective tax rate in Q4 2025 was 21.3%, consistent with previous years. This moderate rate is primarily due to international operations, tax benefits from R&D credits, and efficient global structuring.