GE HealthCare Technologies Inc. (GEHC) Q4 2024 Earnings Summary

Executive Summary

Q4 2024 revenue was $5.32B, up 2% year over year, with organic revenue growth of 2%; adjusted EBIT margin expanded to 18.7% (+260 bps YoY) and diluted EPS rose to $1.57 (adjusted EPS $1.45), driven by productivity, volume, and lower interest expense .
Total company book-to-bill hit 1.09x and organic orders grew 6%; backlog reached a record $19.8B, up $700M YoY and $200M sequentially, providing visibility into 2025 revenues .
Advanced Visualization Solutions (AVS) and Pharmaceutical Diagnostics (PDx) led growth; Imaging margins improved on price/mix; PCS margins were pressured by inflation and mix .
2025 guidance introduced: organic revenue +2–3%, adjusted EBIT margin 16.7–16.8% (+40–50 bps), adjusted EPS $4.61–$4.75 (includes ~1 pt tariff headwind), adjusted ETR 22–23%, FCF ≥$1.75B; Q1 2025 guide implies flat YoY margins/EPS with 1–2% organic growth .
S&P Global consensus estimates were unavailable at time of analysis; comparisons to Street estimates could not be made (S&P Global access limitation).

What Went Well and What Went Wrong

What Went Well

Robust orders and backlog momentum: “Total company book-to-bill was 1.09 times” and orders +6% organic; management highlighted “strong momentum in orders, backlog and book-to-bill” .
Margin expansion and earnings growth: Adjusted EBIT margin reached 18.7% in Q4 (+260 bps YoY), a record for GEHC; “price, volume, and mix” plus Lean-driven variable cost productivity offset inflation .
AVS and PDx outperformance: AVS organic revenue +4% with margin +240 bps YoY; PDx organic revenue +9% with ~33% EBIT margin; new product introductions and capacity expansions supported growth .
CEO tone: “We were pleased with the strong momentum… overall strength in the U.S., and robust margin expansion and earnings growth” .

What Went Wrong

Free cash flow down YoY: Q4 FCF was $811M, down 15% YoY on inventory builds; management expects working down inventory in H1 2025 .
PCS margin pressure: PCS EBIT margin declined 50 bps YoY on inflation and portfolio mix, partially offset by productivity; sequential EBIT improved 220 bps on volume leverage .
China softness: Revenue growth ex-China was stronger; management expects China sales negative in H1’25 and a low single-digit decline for FY’25, reflecting ongoing stimulus timing and anti-corruption dynamics .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024	Consensus Q4 2024
Revenue ($USD Billions)	$5.206	$4.863	$5.319	N/A — S&P Global consensus unavailable
Organic Revenue Growth (%)	—	1%	2%	N/A — S&P Global consensus unavailable
Diluted EPS ($)	$0.88	$1.02	$1.57	N/A — S&P Global consensus unavailable
Adjusted EPS ($)	$1.18	$1.14	$1.45	N/A — S&P Global consensus unavailable
Operating Income ($USD Millions)	$689	$676	$801	N/A — S&P Global consensus unavailable
Adjusted EBIT Margin (%)	16.1%	16.3%	18.7%	N/A — S&P Global consensus unavailable
Net Income Margin (%)	7.7%	9.7%	13.5%	N/A — S&P Global consensus unavailable

Note: S&P Global consensus values were unavailable at time of analysis due to access limitations.

Segment performance and margins:

Segment ($USD Millions)	Q3 2024 Revenues	Q3 2024 EBIT	Q3 2024 EBIT Margin	Q4 2024 Revenues	Q4 2024 EBIT	Q4 2024 EBIT Margin
Imaging	$2,229	$287	12.9%	$2,393	$302	12.6%
Advanced Visualization Solutions (AVS)	$1,216	$232	19.0%	$1,440	$374	25.9%
Patient Care Solutions (PCS)	$779	$82	10.6%	$827	$106	12.8%
Pharmaceutical Diagnostics (PDx)	$625	$193	30.9%	$646	$212	32.9%

KPIs:

KPI	Q3 2024	Q4 2024
Book-to-Bill (x)	1.04x	1.09x
Organic Orders Growth (%)	1%	6%
Backlog ($USD Billions)	—	$19.8

Cash flow highlights:

Metric ($USD Millions)	Q4 2023	Q4 2024
Cash from Ops	$1,050	$913
Free Cash Flow	$956	$811

Non-GAAP reconciliation notes: Adjustments include restructuring, spin-off/separation costs, amortization of acquisition-related intangibles, investment revaluation, and tax effects, driving adjusted EPS of $1.45 in Q4 2024 versus GAAP diluted EPS of $1.57 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth (%)	FY 2025	—	2%–3%	Introduced
Adjusted EBIT Margin (%)	FY 2025	—	16.7%–16.8% (≈+40–50 bps vs 2024)	Introduced
Adjusted EPS ($)	FY 2025	—	$4.61–$4.75 (includes ~1 pt tariff impact)	Introduced
Adjusted Effective Tax Rate (%)	FY 2025	—	22%–23%	Introduced
Free Cash Flow ($USD Billions)	FY 2025	—	≥$1.75	Introduced
Near-term Organic Revenue Growth (%)	Q1 2025	—	1%–2%	Introduced
Near-term Adjusted EBIT Margin/EPS	Q1 2025	—	Approximately flat YoY	Introduced
Dividend	Q1 2025	—	$0.035/share declared, payable May 15, 2025	Introduced

Additional guidance color: ~1.5% FX revenue headwind; China tariffs embedded, ~10 bps adjusted EBIT impact assuming 11 months; sequential strengthening expected in H2’25 for growth/margins/EPS .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024 and Q3 2024)	Current Period (Q4 2024)	Trend
AI/technology initiatives	Expanded AI-enabled products; AWS cloud collaboration; 85 FDA AI authorizations; strong NPI vitality ~50%	Continued AI/NPIs expansion; autonomous imaging collaboration (NVIDIA) announced in March; ongoing Air Recon DL upgrades	Strengthening
Supply chain/productivity	Lean/Kaizen driving margin expansion; variable cost productivity offset inflation	Productivity and volume drove +260 bps adjusted EBIT margin; supplier/materials partnering; factory/service productivity	Improving
China/macros/tariffs	China stimulus timing delayed; 2024 guide cut; expect negative China growth in 2024	Orders improved in Q4; expect H1’25 negative sales with H2 sequential improvement; tariffs incorporated (~10 bps EBIT, ~1 pt EPS)	Cautious recovery; tariff headwinds embedded
Product performance	PDx volumes/margins strong; Vizamyl acceleration; AVS mixed	PDx organic +9%, ~33% EBIT margin; AVS organic +4%, margin +240 bps; Imaging margin +200 bps; PCS margin −50 bps	Mixed by segment; PDx/AVS strong
Regional trends	U.S. strength; Europe pause in H2’24; China weakness	U.S. robust; Europe improving in 2025; China cautious H1’25	U.S. solid; Europe improving
Regulatory/reimbursement	CMS outpatient rule expected to pay market value for radiopharmaceuticals starting Jan 1, 2025	Flyrcado launch prep with coding/pass-through; PDx growth outlook maintained	Positive structural tailwinds
R&D execution	R&D up 10% YoY in Q2; investment focus across modalities	Q4 R&D 6.5% of sales; full-year $1.3B (~6.7% of sales)	Sustained investment

Management Commentary

“We were pleased with the strong momentum in orders, backlog and book-to-bill… overall strength in the U.S., and robust margin expansion and earnings growth” — Peter Arduini .
“Adjusted EBIT margin of 18.7%, up 260 bps year-over-year… price, volume, mix contributed ~150 bps; variable cost productivity fully offset inflation/inefficiencies” — Jay Saccaro .
“We exited the fourth quarter with a record backlog of $19.8 billion… book-to-bill of 1.09x, our highest since the spin” — Jay Saccaro .
“We expect… China’s sales performance will be negative in the first half of 2025 with sequential improvement… leading to a low single-digit decline for the year” — Jay Saccaro .
“We’re on track to launch Flyrcado… assuming roughly ~$30 million of revenue for the year” — Peter Arduini .

Q&A Highlights

Margin trajectory and midterm target: Management emphasized record Q4 margin and confidence in 20%+ midterm potential, cautioning against extrapolating Q4 seasonality; price/volume/mix and productivity drove expansion; ~100 bps one-time items aided Q4 .
China outlook and stimulus cadence: Orders improved in Q4, but H1’25 sales expected negative; tenders progressing province-by-province; majority of sales translation expected in H2; prudent guidance reflects uncertainty .
Free cash flow/inventory: FCF decline tied to inventory builds late in the year (strategic and planning factors); expect turns improvement and inventory drawdown in 2025 .
AVS drivers: Ultrasound traction and Allia IGS Pulse cath lab outperformance; OEC 3D capabilities supporting outpatient surgery centers; margins improved on standardization/volume and NPIs .
Enterprise deals: $1B Sutter Health (7-year) alliance not purely linear; site renovations in mid-window; orders to be booked in H1; more long-term deals expected (e.g., Nuffield Health) .
Flyrcado launch details: First commercial doses anticipated near-term; coding (HCPCS) on track by April; pass-through expected; cardiology PET sales force expansion; CMO network enabling half-life logistics; ~$30M FY’25 revenue assumption .

Estimates Context

S&P Global consensus estimates for Q4 2024 were unavailable at time of analysis due to access limitations; therefore, explicit beat/miss comparisons versus Street consensus could not be provided.
Directionally, sustained margin expansion (record Q4 adjusted EBIT margin), orders/backlog strength, and 2025 guide (including tariff/FX headwinds) suggest potential focus areas for estimate revisions, particularly margin trajectory and PDx contributions, but without S&P Global consensus figures, this remains a qualitative assessment .

Key Takeaways for Investors

Orders and backlog momentum (record $19.8B backlog, 1.09x book-to-bill) provide strong revenue visibility into 2025; watch conversion cadence and H2 weighting .
Margin story intact: Q4 adjusted EBIT margin at 18.7% with productivity/price/volume levers; management reaffirmed confidence in medium-term expansion (20%+ over time) .
PDx and AVS are growth/margin anchors: PDx organic +9% with ~33% margin; AVS margin +240 bps; track Flyrcado launch ramp and CMS reimbursement impacts in 2025 .
China and tariffs are near-term swing factors: H1’25 China sales negative with H2 sequential improvement; tariffs embedded (~10 bps EBIT, ~1 pt EPS), FX ~1.5% revenue headwind — monitor provincial tender progress and mitigation actions .
Cash discipline: FCF declined in Q4 on inventory build; guidance sets ≥$1.75B FY’25; execution on working capital and backlog conversion is key .
Enterprise alliances (Sutter $1B; Nuffield Health) bolster recurring revenue and multi-year visibility; expect more large deals as GEHC leans into solutions/platform strategy .
Near-term setup: Q1 2025 organic growth 1–2% with flat margins/EPS YoY and sequential improvement through the year; trading lens favors H2 catalysts (China, Flyrcado ramp, backlog conversion) .