GE HealthCare — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues were $5.5 billion, up 7.2% year-over-year, with organic revenue growth of 6.2%.
• Net income attributable to GE HealthCare was $615 million compared to $446 million in the prior year.
• Adjusted EBIT was $913 million versus $761 million in the prior year.
• Net income margin increased to 11.1% from 8.7%, a 250 basis point improvement.
• Adjusted EBIT margin expanded to 16.6% from 14.8%, a 180 basis point increase.
• Diluted EPS was $1.36, up 39.1% from $0.98; Adjusted EPS was $1.34, up 25.1% from $1.07.
• Cash flow from operating activities was $907 million, an increase of $314 million year-over-year.
• Free cash flow was $793 million, an increase of $310 million year-over-year.
• Both operating cash flow and free cash flow included a $55 million tariff refund.
• Total debt outstanding was $10.0 billion.
• Cash and cash equivalents were $2.9 billion, with access to $3.5 billion in revolving credit facilities.

Guidance and Future Outlook:

• Full-year 2026 organic revenue growth guidance was raised to approximately 4.0% (previously 3.0%–4.0%).
• Full-year 2026 Adjusted EBIT margin guidance was raised to 15.5%–15.7% (previously 15.4%–15.7%).
• Full-year 2026 Adjusted EPS guidance was raised to $4.95–$5.05, representing 7.9%–10.1% growth (previously $4.80–$5.00).
• Full-year 2026 Free Cash Flow guidance was raised to $1.6 billion or more (previously approximately $1.6 billion).
• Full-year 2026 Adjusted Effective Tax Rate (ETR) guidance was reaffirmed at 20.0%–21.0%.

Business Segments and Product Lines:

• Advanced Imaging Solutions (AIS) revenue was $3.873 billion, up 6.1% year-over-year, with organic growth of 4.5%. Segment EBIT margin was 15.3%, up 130 basis points.
• Pharmaceutical Diagnostics (PDx) revenue was $846 million, up 13.0% year-over-year, with organic growth of 13.8%. Segment EBIT margin was 29.9%, up 50 basis points.
• Patient Care Solutions (PCS) revenue was $793 million, up 8.5% year-over-year, with organic growth of 8.8%. Segment EBIT margin was 8.6%, up 480 basis points.
• Total orders were up 4.0% organically, with a book-to-bill ratio of 1.03 times and a backlog of $23.7 billion.
• Product launches and innovations include LOGIQ Focus ultrasound, StarGuide™ GX 4D SPECT/CT (510(k) pending), Photonova™ Spectra (CE Mark), next-generation Vivid cardiovascular ultrasound, Invenia ABUS Prime, and ABUS StreamVue.
• New commercial initiatives include CareIntellect for Operations and a research collaboration on generative AI for personalized radiation therapy.

Market and Competitive Landscape:

• Growth was driven by healthy demand across all segments.
• Margin expansion was attributed to volume, price, cost productivity, and favorable year-over-year net tariff impact, partially offset by inflation.
• The company operates in highly competitive markets with global geopolitical and economic instability as a factor.

Risks and Challenges:

• Risks include global geopolitical and economic instability, trade and tariff policy changes, and international conflicts.
• Potential impacts from public health crises, epidemics, and pandemics.
• Risks related to changes in government subsidies, reimbursement processes, and payer mix.
• Supply chain management challenges and the ability to secure materials cost-effectively.
• Cybersecurity, data security breaches, and intellectual property maintenance.
• Ability to attract and retain key talent.

Management Commentary and Tone:

• CEO Peter Arduini stated the company delivered strong top-line growth, margin expansion across all segments, and robust EPS growth.
• Management attributed performance to commercial execution, disciplined operational focus enabled by "Heartbeat," and continued customer adoption of innovations.
• The tone was confident, citing improved year-to-date performance and business momentum as reasons for raising full-year guidance.

Other Key Points:

• Jeannette Bankes, President and CEO of Patient Care Solutions, is leaving for a CEO role at a publicly traded company. Neal Sandy will assume the PCS role on November 16, 2026.
• In October 2026, the company announced plans to acquire SOFIE Biosciences from Trilantic North America for $945 million in cash, expected to close in the first half of 2027.
• The company declared a quarterly dividend of $0.04 per share, a 14% increase from the previous quarter.
• Capital expenditures for the quarter were $114 million compared to $110 million in the prior year.
• For the nine months ended September 30, 2026, cash used for investing activities was $2.7 billion, primarily due to $2.3 billion in purchases of businesses.
• The company repurchased $300 million of common stock during the nine-month period.