GE HealthCare Technologies Inc. Q4 FY2025 earnings call

• Innovation renaissance progress with double-digit organic revenue growth in pharmaceutical diagnostics and mid-single-digit growth in imaging and advanced visualization solutions in Q4. - Strategic pillars: Precision care with D3 strategy, double-digit vitality rate for new products; accelerated growth with over $7B in enterprise deals globally and planned acquisition of IntelliRed; business optimization with advancement of Heartbeat business system to improve customer experience and drive productivity. - Acquisition of IntelliRed expected to accelerate fully connected cloud-first imaging ecosystem, with IntelliRed revenues expected to be ~$270M in the first full year of ownership, growing in low double digits, and adjusted EBITDA in excess of 30%. - Progress on new product launches like Omni Total Body Pet, NexGen spec, VividPioneer, and Forcado, with regulatory timelines on track for products announced at RSNA.

Imaging: Organic revenue in the quarter was 5.3% year over year, driven by strong execution in EMEA and the US, particularly in nuclear medicine. Segment EBIT margin benefited from volume and price but declined year over year due to tariff pressure. Advanced Visualization Solutions: Organic revenue for the quarter was up 4.2%, with continued strong performance in the US and EMEA. New product adoption across the portfolio also contributed to revenue growth. Patient Care Solutions: Organic revenue improved sequentially, with restoration of shipments from the third-quarter product hold. Organic revenue declined 1.1% versus the prior year due to a decline in life support solutions. Pharmaceutical: Delivered another strong quarter with organic sales growth of 12.7%. This was driven by global growth in contrast media, pricing execution, and adoption of the US radiopharmaceutical NPI portfolio.

• 2026 organic revenue growth expected to be 3% to 4%. - Adjusted EBIT expected to be in the range of 15.8% to 16.1%, reflecting 50 to 80 basis points of expansion. - Adjusted EPS expected to be in the range of $4.95 to $5.15, representing 8% to 12% growth. - Free cash flow anticipated to be approximately $1.7 billion for the full year, representing growth of 13%. - First quarter year-over-year organic revenue growth expected to be in the range of 2% to 3%.

• Tariffs impacting margins, with efforts underway to mitigate tariff impact through manufacturing flexibility and supply chain repositioning. - China market dynamics posing a cautious outlook, with expected decline in China's performance factored into guidance. - Regulatory approvals and timing of new product launches potentially impacting order book and revenue recognition.

Q: Matthew Taylor asked about 2% order growth composition and outlook for orders and book-to-bill in 2026, including headwinds and tailwinds.

A: Peter Arduini responded that they were pleased with Q4 order book performance, backlog is at a record level, and in 2026, they'll see benefit from new products launched in Q4 once approvals are received.

Q: Matthew Taylor followed up on Fortetto, asking about current supply state and reception from facilities.

A: Peter Arduini said feedback on Fortetto is positive regarding image quality and convenience, with focus on consistent on-time delivery (OTD) at 95% rate, and doses expected to increase as OTD improves.

Q: Robbie Marcus asked about assumptions for China and EPS upside.

A: Jay Saccaro said China's performance is factored cautiously into guidance, with improved commercial execution but expected decline, and EPS guidance driven by volume growth, cost and productivity initiatives, and investments in growth.

Q: Larry Biegelsen asked about organic growth guidance midpoint being in line with 2025 and timing of orders and sales for photon counting.

A: Jay Saccaro said backlog is a great setup for sales growth, and timing of photon counting and other NPIs' orders and sales will have biggest impact in 2027 due to order cycle, but will have impact later in 2026.

Q: Ryan Zimmerman asked about bridging 2026 guide to midterm targets and service revenue composition.

A: Jay Saccaro and Peter Arduini said new products will drive sales growth, Heartbeat will help with margin expansion, and service revenue is growing with enterprise agreements and installed base utilization.

Q: Anthony Petrone asked about price in 2026 guidance and IntelliRed deal.

A: Peter Arduini said no major step-ups in price initially, but new products will have price step-ups, and IntelliRed acquisition expected to close in first half of 2026, slightly dilutive but offset by cost efficiency.

Q: Joanne Wuensch asked about hospital CapEx environment and ACA impacts.

A: Jay Saccaro said US capital backdrop is solid, European market improving, emerging markets solid, and ACA impacts not concerning the capital environment.

Q: David Roman asked about order growth and Omnipaque.

A: Peter Arduini said orders depend on product approvals, and Omnipaque business is consistent, correlated to procedures growth.

Q: Vijay Kumar asked about guidance for Flurcato and China.

A: Jay Saccaro said China's performance is factored cautiously, and Flurcato's weekly doses are expected to grow as OTD improves, with no specific guidance on Flurcato's fiscal 2026 contribution.