GE HealthCare (GEHC) Q4 FY25 earnings call: guidance and Q&A

Can you provide more color on the 2% order growth in Q4 and the outlook for orders and book-to-bill in 2026, considering the trailing 12-month orders are in the mid-single digits?

Management was pleased with Q4 order performance, noting a robust book-to-bill of 1.06x (1.07x TTM) and a record backlog of $21.8 billion. While Q1 2026 will have a difficult comparison, new product approvals (NPIs) from RSNA are expected to accelerate order growth in the second half of 2026, setting up strong sales for 2027.

“We're really going to see a bit of an acceleration as we approach the second half of the year versus early in the year. And we think this is a really good setup for '26, but as we think about sales impact, we start to see a great sales impact in 2027.”

asked by Matthew Taylor · answered by James Saccaro

What is the current state of Flyrcado supply, how are things progressing with major partners, and what is the reception from facilities adopting it?

Management is positive on Flyrcado, citing unanimous positive feedback on image quality and convenience. Supply consistency is key, with CMO partners operating at approximately 95% on-time delivery. Weekly doses were around 220 in late January, and this rate is expected to increase as more customers are onboarded. Relationships with major partners are strong, and they see potential for expansion.

“I'm happy to say we're starting the year with our CMO partners more consistently operating at approximately 95% on time to delivery to meet customer demand, which allows us to begin bringing on more patients.”

asked by Matthew Taylor · answered by Peter Arduini

Can you detail your assumptions for China in 2026 guidance and how that relates to potential EPS upside?

China's performance in Q4 was in line with expectations, with the second half being more challenging. For 2026 guidance, the company is taking a cautious approach, budgeting for a decline in China, despite improved commercial execution and VBP win rates. Any stronger performance in China would represent an upside to the current guidance.

“In our 3% to 4% total company guidance, we're anticipating decline in China in 2026. We'll watch this as we move throughout the year. But again, we wanted to take a prudent approach at this point.”

asked by K. Gong · answered by James Saccaro

How did you arrive at the 2026 EPS guidance range, and what are the key drivers for growth?

The 2026 EPS guidance reflects about $0.45 growth at the midpoint. Key drivers include approximately $0.30 from volume growth and $0.30 from cost and productivity initiatives (including Heartbeat). These are partially offset by continued investments in SG&A and R&D, which are crucial for mid- and long-term growth.

“As we think about the growth in EPS in 2026, at the midpoint of the range, it's about $0.45. And as we think about the drivers of it, about $0.30 will come from volume growth, about $0.30 will come from cost and productivity initiatives that we have and then we'll offset that with continued investments in growth.”

asked by K. Gong · answered by James Saccaro

Your 2026 organic growth guidance of 3% to 4% implies a midpoint similar to 2025. Why is it not faster, as previously indicated?

Management stated the guidance is consistent with prior expectations to grow faster than 3%. The current guidance is a prudent start to the year, built on a strong $21.8 billion backlog and a robust orders funnel. The pragmatic view on China, budgeting for a decline, also influences the initial guidance, with potential for upside.

“This is very consistent with what we shared. And we feel good about the guidance to start the year. Remember, at the start of last year, we guided 2% to 3%, and we ultimately did a little bit better than that based on commercial execution and some of the early success in our innovation cycles.”

asked by Vikramjeet Chopra · answered by James Saccaro

How much price is embedded in the 2026 top-line guidance, especially with new product introductions? Also, can you provide more details on the Intelerad deal, including timing and growth drivers?

For 2026, there are no significant step-ups in price for like-for-like products, but new products will bring higher prices due to their advanced nature. The Intelerad acquisition is expected to close in H1 2026, advancing cloud-enabled AI solutions and expanding capabilities in outpatient networks. It's expected to be slightly dilutive to EPS but offset by cost efficiencies, and strategically accretive to top and bottom line.

“I think just the standpoint of these are the type of deals that we think make a lot of sense for the company. relative to a strategic fit for us, the enablement of artificial intelligence to be deployed at an enterprise level, both inpatient and outpatient.”

asked by Anthony Petrone · answered by Peter Arduini

Can you provide a 'state of the union' on the medical technology market, particularly regarding hospital CapEx environment and any impacts from changes to the Affordable Care Act?

The U.S. capital backdrop is solid, driven by customer investment in an aging installed base and strong procedure trends, with many customers anticipating investment increases. The European market has also improved, and emerging markets show robust trends. No concerning impacts from the Affordable Care Act on the capital environment have been observed. GE HealthCare's equipment, often an enabler for profit growth, tends to be prioritized even in tighter capital environments.

“What we found after completing the recent study is the U.S. market continues to be robust, driven by customer investment in an aging installed base. So we're seeing continued momentum on the U.S. CapEx side.”

asked by Joanne Wuensch · answered by James Saccaro