GE HealthCare delivered a strong Q4 with revenue of $5.7B (+4.8% org), record backlog of $21.8B, and EPS of $1.44, despite significant tariff headwinds. FY2026 guidance of 3-4% organic growth and EPS of $4.95-5.15 was initiated, with management expressing confidence in a stronger 2026 and '27 driven by new product launches. Record backlog of $21.8B, up $2B YoY, provides strong revenue visibility.
GE HealthCare delivered a strong Q4 with revenue of $5.7B (+4.8% org), record backlog of $21.8B, and EPS of $1.44, despite significant tariff headwinds. FY2026 guidance of 3-4% organic growth and EPS of $4.95-5.15 was initiated, with management expressing confidence in a stronger 2026 and '27 driven by new product launches. Record backlog of $21.8B, up $2B YoY, provides strong revenue visibility.
Management expressed confidence in their innovation pipeline, backlog growth, and ability to drive margin expansion, while acknowledging headwinds like tariffs and China.
Record backlog of $21.8B, up $2B YoY, provides strong revenue visibility.
New product launches (Photon Counting CT, Total Body PET, etc.) are expected to drive order acceleration through 2026 and stronger growth in 2027.
Florcado supply improving, hitting ~220 doses/week in late January with 95% on-time delivery, setting up for a gradual ramp.
Management emphasized AI-enabled equipment and the planned acquisition of IntelliRAD to advance a cloud-first imaging ecosystem, enhancing clinical operations and driving recurring revenue. They also highlighted AI remote fix as improving service capture rates.
Record backlog of $21.8 billion supports 2026 revenue outlook. Management expressed confidence in their innovation pipeline, backlog growth, and ability to drive margin expansion, while acknowledging headwinds like tariffs and China.
Management did not provide specific capital expenditure guidance, but referenced investments in innovation and organic growth, including $1.7 billion deployed in 2025, and noted a healthy capital equipment environment with strong U.S. demand.
Management expressed confidence in their innovation pipeline, backlog growth, and ability to drive margin expansion, while acknowledging headwinds like tariffs and China.
“we enhance manufacturing flexibility by shifting a PET CT line from the Middle East to the US and a surgery line from Asia to the US”
“we'll start to see the benefit of many of the new products that we highlighted at RSNA start to come into the order book”
“we also look at a kind of two-year comparison, two-year compounded growth or stacked growth to eliminate some anomalies there. And again, it gets us to about 4% in the quarter”
“we saw some performance from our heartbeat business system help improve our operating margins and reduce waste, cost productivity”
Recent acquisition in radiopharmaceuticals, contributing to current margin dilution but planned for future growth.
“along with the Nihon Metaphysics acquisition.”
… actions position PCS for profitability improvement in the future. Moving to pharmaceutical diagnostics on slide 12, we 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 our U.S. radio pharmaceutical MPI portfolio. EBIT grew 10%, and sequential margin expanded 20 basis points. While margin declined 330 basis points year over year due to ongoing planned investments in MPIs, along with the Nihon Metaphysics acquisition. We're executing our strategy and expect continued robust growth driven by global demand for contrast media and radiopharmaceuticals for PET imaging. Now let's look at cash performance and capital deployment on slide 13. For the year, we deliver free cash flow of $1.5 billion. This included approximately $285 million tariff impact Free cash flow conversion was 72%. Reinvesting in innovation and organic growth is a top priority. This is translating into a differentiated product portfolio that we expect to improve our competitive position globally. We also look to deploy capital inorganically, as evidenced by the seven acquisitions we've closed since spin. We're …
New product launches required to order growth sequential acceleration through 2026, with all major NPIs hitting market in 2027. — Order growth and market share gains from Photon Counting and Total Body PET will pressure competitors like Siemens and Philips.
now first question coming from the line of matthew taylor with jeffrey seal and it's now open hi thanks for taking the questions uh i did want to ask uh first for a little bit more color about the two percent order growth if you could talk about the composition of that and just the outlook for orders and book to bill as you look into 2026 uh given now trailing 12-month orders in kind of the mid-single-digit range. What are some of the puts and takes? What are some of the headwinds and tailwinds for orders next year?
Matt, thanks for the question. So we were actually pleased with the order book performance in the fourth quarter. And as I've said in the past, when we think about the health of the business, we really look at three different areas. We look at book-to-bill. which we was 1.06 times in the fourth quarter, 1.07 times on a trailing 12-month basis. So robust book to bill. We look at the backlog. The backlog sits at a record level. It was up $2 billion year over year. And then finally, we look at the order growth rate. Now, when we look at orders, we do look at it in a couple of different ways. We look at the trailing 12-month, as you pointed out, solidly in the mid-single digits. And we also look at a kind of two-year comparison, two-year compounded growth or stacked growth to eliminate some anomalies there. And again, it gets us to about 4% in the quarter. We feel pleased with the order backdrop. And then as we look to next year, a few things are going to happen. Now, first, we'll have a difficult comp in the first quarter of the year related to the Sutter deal and some of those bookings. But then as we move through the rest of the year, we'll start to see the benefit of many of the new products that we highlighted at RSNA start to come into the order book. So 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, you know, as we think about sales impact, we start to see a great sales impact in 2027. Pete, anything to add?