GE HealthCare Technologies (NASDAQ:GEHC) reported fourth-quarter and full-year 2025 results that management said came in above expectations, driven by strength in pharmaceutical diagnostics and steady demand for capital equipment in the U.S. and EMEA. Executives also outlined a 2026 outlook that assumes continued healthy end markets while taking a cautious stance on China and anticipating a smaller tariff headwind than in 2025.
Fourth-quarter results: revenue growth and tariff-driven margin pressure
For the fourth quarter, GE HealthCare posted revenue of $5.7 billion, with organic revenue growth of 4.8% year over year. On a reported basis, product revenue grew 7.9% and service revenue rose 5.5%. Orders increased 2% in the quarter, and the company ended the period with a record backlog of $21.8 billion, up $2.0 billion year over year and $600 million sequentially. Book-to-bill was 1.06x.
Free cash flow was $916 million for the quarter, up $105 million year over year, and included an estimated $90 million tariff impact.
Full-year 2025: organic growth ahead of guidance and record backlog
For full-year 2025, GE HealthCare reported revenue of $20.6 billion with organic growth of 3.5%, which management said was ahead of guidance. On a reported basis, product revenue increased 4.5% and service revenue grew 5.6%. Organic orders grew in the mid-single digits for the year, and book-to-bill was 1.07x.
Adjusted EBIT margin was 15.3%, down 100 basis points year over year. Adjusted EPS was $4.59, up 2.2%. Management quantified tariff impacts at approximately $245 million to EBIT and $0.43 to adjusted EPS for the year. Excluding tariffs, the company said adjusted EBIT margin would have increased 20 basis points and adjusted EPS would have grown 12%, driven by volume and price.
Full-year free cash flow was $1.5 billion, including approximately $285 million of tariff impact, with free cash flow conversion of 72%.
Business highlights: innovation pipeline, Flyrcado ramp, and “Heartbeat” operating system
CEO Peter Arduini emphasized progress on what he called an “innovation renaissance,” pointing to a three-year vitality rate of 55%, meaning 55% of revenue came from new products. He said regulatory timelines remain on track for products announced at RSNA, including Photonova Spectra photon-counting CT and SIGNA MR with Freelium.
In theranostics and nuclear medicine, Arduini highlighted that Omni total body PET and next-generation SPECT are commercially available in Europe, and cited customer feedback on Vivid Pioneer (cardiovascular ultrasound) as a driver of growth in advanced visualization solutions.
On Flyrcado, the company reiterated confidence in its prior target of $500 million or more in revenue by year-end 2028 and described a supply-driven, “go slow to go fast” launch approach. Management said contract manufacturing organization (CMO) partners have been operating at roughly 95% on-time delivery, enabling broader patient ramp. The company delivered 220 Flyrcado doses in the week ended Jan. 23 and said it expects the weekly dose rate to increase through the year. Executives also noted that the American Society of Nuclear Cardiology recommended PET as the preferred modality over SPECT, which they said supports a shift toward PET in nuclear cardiology.
Arduini and Saccaro also discussed “Heartbeat,” the company’s proprietary business system anchored in safety, quality, delivery, cost, and innovation (SQDCI). Arduini said Heartbeat helped improve past-due backlog by an average monthly 25% versus the prior year by eliminating steps, improving information flow, and better managing customer site readiness. Saccaro added that tariff mitigation actions included shifting a PET/CT line from the Middle East to the U.S. and moving a surgery line from Asia to the U.S., as well as working with contract manufacturers to reposition production to more favorable geographies.
The company said it invested more than $1.7 billion in innovation in 2025 and completed seven acquisitions since the spin, while also deleveraging and maintaining investment-grade credit ratings. GE HealthCare returned capital through its dividend and a new share repurchase program authorized in April, repurchasing $200 million in shares at an average price of $71.
Segment performance: PDX strength offsets mixed trends elsewhere
- Imaging: Organic revenue grew 5.3% in the quarter, driven by strong execution in EMEA and the U.S., particularly in nuclear medicine. Margin declined year over year due to tariffs but was described as accretive excluding tariffs.
- Advanced Visualization Solutions (AVS): Organic revenue rose 4.2%, with strength in the U.S. and EMEA and new product adoption. EBIT benefited from volume and productivity, offset by tariffs and inflation; margin increased excluding tariffs.
- Patient Care Solutions (PCS): Organic revenue declined 1.1% year over year due to a decline in life support solutions, though results improved sequentially as shipments resumed after a third-quarter product hold. EBIT margin improved 530 basis points sequentially but declined 380 basis points year over year, largely due to mix and tariffs.
- Pharmaceutical Diagnostics (PDX): Organic sales grew 12.7%, driven by global contrast media growth, pricing execution, and adoption of the U.S. radiopharmaceutical NPI portfolio. EBIT grew 10%, while year-over-year margin declined 330 basis points due to planned NPI investments and the Nihon Medi-Physics acquisition.
2026 outlook: 3%–4% organic growth, margin expansion, and cautious China assumptions
For 2026, GE HealthCare guided to organic revenue growth of 3%–4% and expects foreign exchange to provide a revenue benefit of approximately 150 basis points. Adjusted EBIT margin is projected at 15.8%–16.1%, implying 50–80 basis points of expansion. The company expects tariff impacts to be less than 2025 and said mitigation actions will continue, including supply chain shifts, product transfers to more tariff-efficient geographies, and expansion of duty-free USMCA efforts.
Adjusted EPS is expected to be $4.95–$5.15, representing 8%–12% growth, with an adjusted effective tax rate of 20%–21%. Free cash flow is projected at approximately $1.7 billion, up about 13%.
For the first quarter, management expects organic revenue growth of 2%–3%. The company said it expects the largest tariff impact in the first quarter due to the timing of 2025 policy changes, but still anticipates mid-single-digit adjusted EPS growth driven by volume.
In the Q&A, Saccaro said the company’s 2026 guidance assumes a decline in China, describing the approach as prudent despite signs of improved commercial execution, better VBP win rates, and tender wins that may convert into orders later in the year. Management also said the first quarter faces a difficult comparison related to the prior-year booking of a large enterprise deal (Sutter).
Executives said they expect order momentum to improve as regulatory approvals for new products enable orders, noting that several of the RSNA launches require approvals before orders can be taken. Management also reiterated that it expects Intelerad, a planned acquisition announced in November, to close in the first half of 2026; the company has said it expects Intelerad to add about $270 million of revenue in the first full year of ownership, growing low double digits, with adjusted EBITDA in excess of 30%. Saccaro added that the deal was not incorporated into 2026 guidance and is expected to be slightly dilutive, with dilution offset by cost efficiencies.
Arduini closed the call by saying the company enters 2026 with strong momentum, citing record backlog, continued enterprise deal activity, and continued deployment of Heartbeat to drive both growth and margin expansion.
About GE HealthCare Technologies (NASDAQ:GEHC)
GE HealthCare Technologies (NASDAQ: GEHC) is a global medical technology and diagnostics company that develops, manufactures and markets a broad range of products and services for healthcare providers. Its portfolio centers on diagnostic imaging systems, including MRI, CT, PET and X-ray modalities, as well as ultrasound equipment. The company also supplies patient monitoring and anesthesia delivery systems, interventional and surgical imaging solutions, and molecular imaging technologies used in both clinical care and research settings.
In addition to hardware, GE HealthCare offers software, analytics and lifecycle services aimed at improving clinical workflows and equipment uptime.
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