GE HealthCare Technologies (GEHC) - 2025 Q1 - Quarterly Results

Overview of First Quarter 2025 Performance GE HealthCare reported robust Q1 2025 growth in revenue, orders, and profit, driven by the U.S. market, despite a significant decline in cash flow Q1 2025 Key Financial Highlights (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $4.8B | $4.7B | +3% Reported, +4% Organic* | | Net Income Margin | 11.8% | 8.0% | +380 bps | | Adjusted EBIT Margin* | 15.0% | 14.7% | +30 bps | | Diluted EPS | $1.23 | $0.81 | +$0.41 | | Adjusted EPS* | $1.01 | $0.90 | +$0.11 | | Cash from Operating Activities | $250M | $419M | -$169M | | Free Cash Flow* | $98M | $274M | -$175M | - The company experienced strong customer demand, with a total company book-to-bill ratio of 1.09 and a record 10% organic increase in orders year-over-year[7] - CEO Peter Arduini highlighted strong execution, focus on precision care strategies, and active mitigation actions regarding the current global trade environment[3] Segment Financial Performance All four segments achieved positive organic revenue growth in Q1 2025, with Pharmaceutical Diagnostics leading in growth and margin expansion, while Patient Care Solutions saw a significant EBIT margin decline Q1 2025 Segment Financial Performance (YoY) | Segment | Revenues ($M) | Organic Growth* | Segment EBIT ($M) | EBIT Margin | Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Imaging | $2,140 | 5% | $199 | 9.3% | +130 bps | | Advanced Visualization Solutions | $1,239 | 3% | $261 | 21.1% | +10 bps | | Patient Care Solutions | $753 | 2% | $48 | 6.4% | -450 bps | | Pharmaceutical Diagnostics | $632 | 8% | $205 | 32.4% | +270 bps | - Financial results were recast to reflect the move of Image Guided Therapies from the Imaging segment to Advanced Visualization Solutions[8] Growth, Innovation, and Strategic Initiatives The company is advancing its precision care strategy through new product launches, strategic acquisitions, and a new $1 billion share repurchase program to enhance shareholder value - Key commercial and strategic highlights for the quarter include: Completion of the acquisition of Nihon Medi-Physics (NMP), a leading radiopharmaceutical company in Japan; U.S. launch of Flyrcado™ (flurpiridaz F 18) injection for PET imaging; Unveiling of the Revolution™ Vibe CT system and the Freelium sealed magnet platform; Expansion of the invasive cardiology portfolio with AltiX AI.i[9][10] - The Board of Directors authorized a $1 billion share repurchase program, demonstrating confidence in the company's long-term prospects and providing a mechanism to opportunistically return capital to shareholders[13][14] Full-Year 2025 Guidance Update GE HealthCare updated its full-year 2025 guidance, revising down Adjusted EBIT Margin*, Adjusted EPS*, and Free Cash Flow* due to estimated tariff impacts, while Organic Revenue Growth* remains unchanged Updated Full-Year 2025 Guidance | Metric | Previous Guidance | Updated Guidance | Change | | :--- | :--- | :--- | :--- | | Organic Revenue Growth* | 2% to 3% | 2% to 3% | Unchanged | | Adjusted EBIT Margin* | 16.7% to 16.8% | 14.2% to 14.4% | -250 to -240 bps | | Adjusted EPS* | $4.61 to $4.75 | $3.90 to $4.10 | -$0.71 to -$0.65 | | Free Cash Flow* | at least $1.75B | at least $1.2B | -$0.55B | - The guidance was updated to reflect the impact of announced tariffs, which are assumed to return to pre-pause levels on July 9, 2025[10][12] Consolidated Financial Statements This section provides the unaudited consolidated financial statements for Q1 2025, including Statements of Income, Financial Position, and Cash Flows, detailing the company's financial performance and condition Condensed Consolidated Statements of Income Q1 2025 saw total revenues increase to $4.78 billion, gross profit to $2.01 billion, operating income to $629 million, and net income attributable to GE HealthCare significantly rose by 51% to $564 million, yielding a diluted EPS of $1.23 Q1 2025 Income Statement Highlights (in millions, except EPS) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $4,777 | $4,650 | | Gross profit | $2,012 | $1,902 | | Operating income | $629 | $540 | | Net income attributable to GE HealthCare | $564 | $374 | | Diluted EPS | $1.23 | $0.81 | Condensed Consolidated Statements of Financial Position As of March 31, 2025, total assets were $33.6 billion and total liabilities $24.2 billion, with cash and equivalents decreasing to $2.47 billion and long-term borrowings reducing to $6.76 billion Balance Sheet Highlights (in millions) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $2,473 | $2,889 | | Total current assets | $9,735 | $9,901 | | Total assets | $33,586 | $33,089 | | Total current liabilities | $9,969 | $9,553 | | Long-term borrowings | $6,757 | $7,449 | | Total liabilities | $24,168 | $24,437 | | Total equity | $9,207 | $8,464 | Condensed Consolidated Statements of Cash Flows Q1 2025 cash from operating activities significantly decreased to $250 million, with investing activities using $407 million and financing activities using $286 million, resulting in a net cash decrease of $416 million Q1 Cash Flow Summary (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash from operating activities | $250 | $419 | | Add: Additions to PP&E and internal-use software | ($152) | ($145) | | Free cash flow* | $98 | $274 | Non-GAAP Financial Measures and Reconciliations This section defines and reconciles non-GAAP financial measures like Organic Revenue*, Adjusted EBIT*, and Free Cash Flow* to U.S. GAAP, providing transparency on adjustments for acquisitions, currency, and one-time costs - The company uses non-GAAP measures to help investors understand underlying business trends by excluding effects of acquisitions, currency fluctuations, and certain non-recurring or non-cash items[22][23][24] Organic Revenue Reconciliation Total reported revenues of $4.78 billion were adjusted for currency and acquisitions, resulting in an Organic Revenue* of $4.84 billion, a 4% year-over-year growth Total Revenue to Organic Revenue* Reconciliation (in millions) | Description | Q1 2025 | | :--- | :--- | | Total revenues (GAAP) | $4,777 | | Less: Acquisitions | $14 | | Less: Foreign currency exchange | ($78) | | Organic revenue (Non-GAAP)* | $4,842 | Adjusted EBIT Reconciliation Adjusted EBIT* for Q1 2025 increased 5% to $715 million, reconciled from Net Income Attributable to GE HealthCare by adjusting for interest, taxes, restructuring, spin-off costs, and an investment revaluation gain EBIT* and Adjusted EBIT* Reconciliation (in millions) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income attributable to GE HealthCare | $564 | $374 | | EBIT* | $728 | $531 | | Add/Less: Adjustments (Restructuring, Spin-Off, etc.) | ($13) | $151 | | Adjusted EBIT* | $715 | $681 | Adjusted Net Income & EPS Reconciliation Adjusted Net Income* increased 12% to $464 million, leading to Adjusted EPS* of $1.01, primarily adjusted from GAAP Diluted EPS by excluding non-operating income, spin-off costs, and an investment revaluation gain Diluted EPS to Adjusted EPS* Reconciliation | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Diluted earnings per share (GAAP) | $1.23 | $0.81 | | Total Adjustments | ($0.22) | $0.09 | | Adjusted earnings per share (Non-GAAP)* | $1.01 | $0.90 | Free Cash Flow Reconciliation Free Cash Flow* for the quarter decreased 64% to $98 million, derived from $250 million in operating cash flow minus $152 million for PP&E and internal-use software additions Free Cash Flow* Reconciliation (in millions) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash from operating activities | $250 | $419 | | Add: Additions to PP&E and internal-use software | ($152) | ($145) | | Free cash flow* | $98 | $274 | Other Information This section provides investor and media details, including earnings call information, and outlines forward-looking statement risks such as geopolitical instability, tariff policies, and supply chain disruptions, concluding with a corporate overview - The company will host a conference call and webcast on April 30, 2025, at 8:30 am ET to discuss the quarterly results[48] - The forward-looking statements are subject to risks including geopolitical instability, changes in trade and tariff policy, supply chain management, and competition[49] - GE HealthCare is a $19.7 billion business with approximately 53,000 employees, focused on medical technology, pharmaceutical diagnostics, and AI-enabled solutions[51]