GE HealthCare Technologies Inc. (GEHC) Q3 2025 Earnings Summary

Executive Summary

Q3 delivered a clean beat vs Street on both revenue and EPS: Revenue $5.143B vs $5.078B consensus; Adjusted EPS $1.07 vs $1.05 consensus. Margin headwinds came from tariffs, which management quantified and partially mitigated; excluding tariffs, margins would have expanded YoY . EPS and revenue beats are relative to S&P Global consensus values*.
Segment mix skewed to Imaging, AVS and PDx strength; PCs revenue declined on a product hold that is now resolved, setting up sequential improvement in Q4 .
Full-year guidance: raised the lower-end of Adjusted EPS to $4.51–$4.63 (from $4.43–$4.63) with all other metrics reaffirmed; guidance includes ~$265M Adjusted EBIT and $0.45 Adjusted EPS tariff impacts .
Near-term catalysts: RSNA product wave (photon counting CT, total-body PET/CT, AI-powered platforms), strengthening enterprise deals and backlog ($21.2B), and Furcato radiopharmaceutical ramp with CDL distribution; management reiterated mid-single-digit growth trajectory into 2026 and tariff mitigation tailwind next year .

What Went Well and What Went Wrong

What Went Well

Robust demand and commercial execution: Organic orders +6%, book-to-bill 1.06x; backlog at $21.2B .
Segment performance highlights: AVS +7% reported revenue with 180 bps margin expansion YoY; PDx +20% reported revenue (+10% organic), EBIT +14% on strong contrast media and radiopharma demand .
Clear innovation cadence: “We’re entering a new wave of innovation” with >$3B R&D since 2022; AI-powered launches driving price and margin accretion. “We expect to accelerate top and bottom line growth” (Peter Arduini) .

What Went Wrong

Tariffs compressed margins: Adjusted EBIT margin 14.8% (-150 bps YoY); Adjusted gross margin -300 bps YoY; ~$95M Q3 tariff impact (≈180 bps on EBIT) .
PCs underperformed: Organic revenue -7% and margin -680 bps YoY due to a product hold; mix and tariffs compounded pressure, though shipments have resumed .
Free cash flow down YoY: FCF $483M vs $651M last year, driven by higher receivables and ~$95M higher tariff payments in Q3 .

Financial Results

Headline results vs prior periods and consensus

Metric	Q3 2024	Q2 2025	Q3 2025	Q3 2025 Consensus
Revenue ($USD Billions)	$4.863	$5.007	$5.143	$5.078*
Diluted EPS ($)	$1.02	$1.06	$0.98	$1.0469*
Adjusted EPS ($)	$1.14	$1.06	$1.07	$1.0469*
Net Income Margin (%)	9.7%	9.7%	8.7%	—
Adjusted EBIT Margin (%)	16.3%	14.6%	14.8%	—
Cash from Operations ($USD Billions)	$0.742	$0.094	$0.593	—
Free Cash Flow ($USD Billions)	$0.651	$0.007	$0.483	—

Values marked with * retrieved from S&P Global.

Interpretation:

Revenue beat by ~$65M and Adjusted EPS beat by ~$0.02 vs consensus*, aided by AVS/PDx strength and solid services; diluted EPS was below prior year due to tariff expense .
Sequential margin improvement vs Q2 (14.6% → 14.8%) despite tariffs; excluding tariffs, Adjusted EBIT margin would have expanded ~30 bps YoY .

Segment breakdown – Q3 2025

Segment	Revenue ($USD Millions)	YoY %	Organic YoY %	Segment EBIT ($USD Millions)	EBIT Margin (%)	YoY Margin Change (bps)
Imaging	$2,349	5%	4%	$240	10.2%	-260
AVS	$1,301	7%	6%	$271	20.9%	+180
PCs	$731	-6%	-7%	$27	3.7%	-680
PDx	$749	20%	10%	$220	29.4%	-150

KPIs

KPI	Q3 2025
Organic Orders Growth (%)	+6%
Book-to-Bill (x)	1.06x
Backlog ($USD Billions)	$21.2

Guidance Changes

Metric	Period	Previous Guidance (Q2’25)	Current Guidance (Q3’25)	Change
Organic Revenue Growth (%)	FY 2025	≈3%	≈3%	Maintained
Adjusted EBIT Margin (%)	FY 2025	15.2%–15.4%	15.2%–15.4%	Maintained
Adjusted ETR (%)	FY 2025	20%–21%	20%–21%	Maintained
Adjusted EPS ($)	FY 2025	$4.43–$4.63	$4.51–$4.63	Raised low end
Free Cash Flow ($USD Billions)	FY 2025	≥$1.4	≥$1.4	Maintained
Tariff Impact (Adj. EBIT / EPS)	FY 2025	≈$265M / $0.45	≈$265M / $0.45	Maintained

Management noted tariffs set to rise in November and other jurisdictions, and reiterated mitigation actions; expects tariffs to be a tailwind to earnings growth in 2026 vs 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/Technology initiatives	Topped FDA AI authorizations; launched AI platforms (CleaRecon DL, Clarify DL); broad device refresh	“New wave of innovation”; RSNA to feature “a dozen” high-impact AI products; digital revenue tracking to $1.8B by 2028	Accelerating launches; pricing/margin accretion
Supply chain & tariffs	Tariff headwinds embedded in guidance; mitigation underway	~$95M Q3 tariff impact; mitigated ~50% gross exposure; excluding tariffs, EBIT margin +30 bps YoY; expect tailwind next year	Mitigation progressing; 2026 tailwind
Product performance (AVS, PDx)	Omni Legend PET mega-order; PDx growth (Vizamyl, Cerianna)	AVS sales/margin up 4th straight quarter; PDx +10% organic, EBIT +14%	Sustained strength
PCs & regulatory	Portfolio work; device launches	Product hold drove -7% organic and margin pressure; hold resolved; shipments resumed; leadership change to drive margin recovery	Sequential improvement expected Q4
Regional trends (EMEA/U.S., China)	Strength in U.S.; EMEA supportive	EMEA/U.S. drove growth; China tenders improving; H2 China sales lower than H1 as expected	Stable to improving tenders
Cardiology pathway (Furcato)	U.S. launch; building CMO network	Prioritize customer experience; CDL distribution; 2025 revenue below ~$30M target; still targeting ~$500M by 2028, $1B potential at 25% PET MPI conversion	Deliberate ramp; strong medium-term optionality

Management Commentary

“We delivered robust orders with growth across all segments… Revenue performance was driven by Imaging, Advanced Visualization Solutions, and Pharmaceutical Diagnostics” — Peter Arduini .
“Adjusted EBIT margin of 14.8% was down due to the impact of tariffs… Excluding the tariff impact of 180 basis points, adjusted EBIT margin would have expanded ~30 bps” — Jay Saccaro .
“We’ve invested more than $3 billion in R&D since 2022… AI-powered systems across the entire segment have strong customer adoption… driving revenue growth and margin accretion” — Peter Arduini .
“Backlog at $21.2 billion… strong book-to-bill at 1.06 times… good indicators of future growth” — Jay Saccaro .

Q&A Highlights

China outlook: tenders improving; market recovery ongoing; H2 sales lower than H1 as previously guided; optimistic long-term potential .
AVS and ASC opportunity (EP labs): ALIA Pulse small footprint, Vivid Pioneer ultrasound, MAC Lab Alt X—integrated solutions + reimbursement shifts favor ASC expansion .
Margin dynamics: ~300 bps gross margin decline YoY; ~180 bps from tariffs; ~60 bps reclass from R&D to COGS as programs commercialize; sequential gross margin expansion expected in Q4 .
PCs recovery: product hold accounted for ~5% of the 7% sales decline and ~half of margin decline; shipments resumed; meaningful sequential margin improvement expected .
Furcato ramp: below ~$30M in 2025 by design to ensure customer experience and supply yields; CDL channel accelerates; medium-term ~$500M by 2028; $1B potential at 25% PET MPI conversion; growing PET install base supports tracer volumes .

Estimates Context

Q3 2025 S&P Global consensus vs actuals: Revenue $5.078B* vs actual $5.143B; Primary EPS $1.0469* vs Adjusted EPS $1.07; EBITDA $847.8M* vs actual $879.0M*. Beat on revenue and EPS by ~1.3% and ~$0.02, respectively; EBITDA above consensus*.

Values retrieved from S&P Global.

Key Takeaways for Investors

The quarter was fundamentally solid with a clean top-line and Adjusted EPS beat, despite tariff-driven margin compression; excluding tariffs, margins expanded and mitigation is tracking to a 2026 tailwind .
Segment mix improving: AVS and PDx are delivering faster growth and higher margins; Imaging sequentially improved; PCs should rebound as the product hold clears in Q4 .
Backlog and enterprise deal momentum underpin 2026 revenue acceleration; management guided to growing faster than 3% next year, with RSNA launches acting as catalysts .
Furcato radiopharma offers outsized optionality; CDL distribution and improving supply yields set up a meaningful ramp in 2026+, with a credible path to ~$500M by 2028 and long-run $1B potential at 25% PET MPI conversion .
Cash conversion was pressured by receivables and tariff payments; full-year FCF ≥$1.4B reinforced, pointing to capital allocation capacity (buybacks, tuck-ins) alongside organic investments .
Guidance risk appears balanced: revenue maintained, margins reaffirmed, EPS low end raised—execution on tariff mitigation and Q4 PCs recovery are near-term watch items .
Trading lens: near-term RSNA news flow and Q4 sequential recovery (PCs; margin expansion) are potential positive catalysts; tariff headlines could add volatility but mitigation plan supports medium-term multiple resilience .