GEHC - Earnings call transcript Q4 2024 | GE HealthCare Technologies Inc.

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Operator

Good day, and thank you for standing by. Welcome to the GE HealthCare Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions] Please be advised this conference is being recorded.

I would now like to hand the conference over to your speaker today, Carolynne Borders, please go ahead.

Carolynne Borders

operator. Thanks, welcome Fourth and Call. XXXX GE to morning, Quarter HealthCare's Earnings Good joined CEO, Jay and and our Saccaro. Arduini; I'm President President Peter by and Vice CFO,

Our slides be found and today's press both between conference in and our in will the website. and results. presentation GAAP can financial on Reconciliations GAAP measures non-GAAP release call remarks available non-GAAP include

about see During this how statements we things are These call, we'll our make based performance. forward-looking today. statements on

to results described uncertainties. risks our due filings, differ As and actual may in materially SEC

And I'll the over call with hand that, to Peter.

Peter Arduini

all and thanks we've joining Carolynne, our our becoming Thanks, At executing company. Investor in we to Precision that those progress independent us since strategy an shared today. Care on Day, made

continuing quarter path our on execution with Now results. strong the pleased X years into we're journey, of fourth our I'm that to say

In orders the segment. in every quarter, saw growth we

robust the public also and company. We since a backlog a we became saw book-to-bill, strongest

to the see U.S. We in market. strength continue

surveyed half previous This a For setting recent in slight those growth. China, the expansion in investment, driven evolving market, example, expected we're line U.S. by outpatient in see the by plans. evidenced survey customers, incremental improvement to is our a particularly In orders imaging of indicated market beginning with of in they commentary.

were by to The U.S. total solutions driven continue businesses We deliver advanced strength revenue volume in the company, price demand visualization with and our in positive. growth and sales overall pharmaceutical diagnostics both

and sales orders digits, China addition, In quarter. mid-single the excluding in grew fourth

R&D. per growth to also while robust earnings investing deliver in continued share margin and expansion We

customers patients the better driven value Our across culture, our lean efficiencies delivering been creating progress has business. while and by our for

the enabled our our comprehensive of highly differentiates we on bring and is our a services is proprietary which us AI-powered offering, that enterprise strategy, digital What holistic and together by their goals GE commercial our integrated on deliver includes equipment deals focused apart strategic radiopharmaceuticals sets which securing way customers long-term capabilities. HealthCare. believe We help portfolio

XXXX, And deals closed X XX deals globally, Health to date care enterprise and future solid total years, growth. month, closed laying $X over last announced $X over Sutter the billion. we large bringing a a to the value billion at with of In spend we valued foundation for alliance

more I'll our strategy the talk impact partnership call. this later enterprise about and of the in

health supports strategy provider this commercial by from few illustrate Our customers evolution together like a share that solve imaging care I'd with working a an their greatest to examples company our to challenges. our to transformation. solutions

XX approximately XXXX, introduced In we innovations.

of contributed product within a launched of years last R&D the the impact increased revenue. reflect new products the introduction strong for recurring to year. X help also high-margin us our drive and Additionally, vitality approximately These commitment XX% NPIs

launch example, on and to term. IGS outperforming For Pulse expectations, track our in lab, near we're the our is cap Allia Flyrcado

disciplined making to applications the into solutions. brain market. and like in existing cloud-based clinical beyond also accelerate technologies on development cardiac M&A our move orthopedics. and And other CareIntellect We're like DL to executing We of base gone XX position continue XX in approximately expanded with upgraded one advance care. XX% to we've our DL in to in To Sonic from AI-enabled and leadership Recon AI, X of date, health our year, authorizations, most the areas we're and operational solutions our of Air MR strategy, we've bringing to complementing FDA strides

Last recognition Intelligent and workflow image real-time analysis year, Software innovative Ultrasound, tools with and closed AI-enabled X adding MIM we technology. acquisitions:

in other capabilities the acquisition Japan NMP our We of distribution markets. deepen also radiopharmaceutical Asian and announced planned to

and globally, view products and tariffs which of guide growth. services the China. outlook our reflects current This China with on is our our to in for for XXXX. introduced reflected which line most in market guidance markets products our We demand is healthy orders for Turning U.S. the year, in from of our the

to and more With for call to through our that, financial fourth the walk provide results over details to Jay on turn I'll quarter the XXXX guidance.

James Saccaro

Pete. Thanks,

Let's on start our X. Slide with financial performance

reported growth our of expectations. billion For basis of X% of with XXXX, line the quarter. growth, approximate organic fourth with point revenue from in revenues China we X%, Global an the $X.X excluding impact for was fourth up quarter XXX sales

segments. Organic basis, was growth deliver continued strong the States and continued total strength was grew across in Order by X.XXx, helping reported book-to-bill X% highest spin. a revenue On outpace since revenue the to sales, year-over-year our and orders driven service product X% up all United us company of dollars X%.

exited a $XXX up of up $XXX record fourth million We backlog quarter million sequentially. and billion, $XX.X the with year-over-year

We excellent up adjusted XXX make to basis and of EBIT on continue XX.X%, delivering volume. due year-over-year an margin progress points to productivity margin,

As year. EPS last from a flow was $X.XX, XX% cash Free was result, up down quarter year-over-year. adjusted million $XXX of $XXX million fourth

to Turning our on X. full results Slide year

in For X% XXXX. guidance. organically product flat reported that revenue basis, service line revenues grew with $XX.X in grew On X%, our organically and revenue year, X% grew XXXX, of a versus last was recall billion we

which total year. and attractive for than margins, revenues is has more more the Importantly, recurring revenue, represented predictable XX% of

growing our grew book-to-bill year-over-year, and price. of year-over-year. expanded guidance, EPS and $X.XX our driven guidance margin X% XX.X% was orders exceeded XXX basis year, year-over-year, X.XXx. the EBIT points Organic XX% ahead Adjusted by for adjusted XXXX of also of productivity

filings. benefited completing by our flow of was to XXXX, billion prior later. $XXX approximately I'll down year-over-year, tax million global EPS $X.X our $X.XX adjusted cover from onetime tax Free related cash which year In favorability

year XXXX. made products in increase basis change basis points year. full on and On Slide result the including quarter improvements material last The year margin fourth progress closer in a on the costs, X, gross adjusted productivity XXX factory for suppliers our full points was with and partnering versus and margin service gross in and improvements, expanded of look take XXX design productivity. margins Adjusted let's versus a quarter the fourth strong the at the our we

products. also from margin We new higher benefited

capacity kaizen and million health the our safety improving manufacturing held As reducing of by of critical an doses wasted actions, prep time we a and on on and changeover focused PDx, over shortening annual capacity. added X motion lines environmental X implementing times, multi-team example, patient in we

recognized also XX%. improvements We more productivity than of

fourth R&D investment the of up was X.X% year-over-year. sales, For X% quarter,

position $X.X and research among in such XXXX. year, the to X.X% from committed R&D, fast-growing we equating as strengthen technologies. to in unique For of collaborations remain theranostics, billion our invested billion innovation interventional We roughly full also other opportunities. areas sales, We're investing up in $X.X growth that cardiology leadership in cultivating developing

I focus and cost mentioned, all transition all with really in TSAs of the combined year. substantially the our stand-alone exited improvement further XXX to structure enabling basis I ongoing am just of into adjusted deliver with teams margin, our future. the future. who our These a improvement to we've today G&A, points give delivered execution confidence EBIT points supported to and fourth the GE us the the proud in full XXX operational results, excellent us of Because margin quarter expansion up we optimize and On our into for enterprise. on actions basis our ability in

of was was prior XXX up and to by in year-over-year, the year. Imaging turn segments. points revenue Rest World China by on was the basis market. product driven X. offset in U.S. Organic and Now versus headwinds quarter favorable Strength flat mix. with EBIT I'll in margin price the the Slide Starting our Segment

quarter year expansion price. with basis and fourth on of The basis to imaging productivity a for a an both capped results XXX year strong margin with due points improvement total of progress

U.S. as in the We see continue customers growth robust to in innovation. invest

in as new the the increased Sequentially, with by well points a to increased due of AVS standardization continued our product platform. X. X% productivity demand to driven was in volume Cardiology in U.S., decrease volume Turning OEC our the surgery offset the for Organic XXX volume strong products improvement basis Segment on through Interventional quarter. remain margin AVS was year-over-year and particularly Customer XXXX partially primarily Slide XD China. EBIT sales like introductions. margin up in in robust, year-over-year, versus and as rest revenue by leverage by

on monitoring Patient due Segment versus margin partially volume mix, EBIT actions. year, offset by portfolio leverage. declined Care productivity to Organic inflation by offset due to Slide points was basis X. XX to growth services with revenue Sequentially, solutions. improved Solutions fulfillment and points EBIT a in Moving comparison growth and improved prior basis flat difficult XXX

mix our customer continued global As normalizes portfolio productivity expect particularly partnerships, position to us and initiatives, U.S., performance, margin future we with drive growth. the strong well for in improved

quarter, Slide We're both margin XX%. approximately continued on and We year-over-year Diagnostics organic strong with margin EBIT to XX. Moving generating expansion X% and growth growth this another delivered year-over-year sequentially. pleased and of Pharmaceutical

PET in-licensing of was note items favorably fourth related the onetime that radio the to investment would comparison I last including impacted tracers EBIT an quarter by year. in year-over-year

we manufacturing that I announced also demand additional highlight investment media to Cork, capacity while This will facility recently supply in create offering media million for Ireland. a increased expand growing to wanted meet and contrast flexibility resiliency. $XXX our to contrast

that flow down $XXX In was expect to we Slide XXXX down million. cash in we XX. work $XXX flow inventory the on XXXX. quarter, to in free healthy to fourth first of of Turning delivered half the builds cash due million This year-over-year

XXXX. million in capital sheet, additional strengthen year, with XXXX down in $XXX our we the balance pleased To we're paid at initiatives. first an debt quarter our of the on Looking $XXX of execution allocation million and

on M&A, our including Ultrasound and as our NMP. of executed strategic Intelligent planned purchase also well of acquisition We MIM as

XX. our to on Slide turn Let's outlook

in continued that as we well half XXXX, China. assumes leading our a negative first in sequential to half range the a which for with approach China's the low a X%, for For current of to in view demand single-digit conditions expect revenue the improvement We're XXXX services sales the taking be half, of decline of of X% products year and as the the will first year. measured our second market performance versus reflects in growth

be addition, headwind X.X%. approximately we expect foreign a exchange to to revenue In

in we year productivity margins. EBIT adjusted While year-over-year XXXX the expect margin guidance. initiatives This into XX.X% the and impacts driving points. tariff months we to to which fluid, we have EBIT today points, approximately assuming basis expanding U.S. XX impact. Operationally, Therefore, be XX.X%, tariffs, dynamic China are XX place XX representing of the to incorporated committed remain in new of by adjusted our range of is XX to basis full expansion

the adjusted a recently XX% we China. adjusted X% an assuming and from approximately products $X.XX expect for tariffs point in between year-over-year. the year. includes full impact from This to rate on deliver to of $X.XX effective representing to We're growth the of XX% range for announced year, On X% full EPS, tax

least full year. deliver the cash to for billion expect we Lastly, free $X.XX of flow at

X% and quarter to we EBIT adjusted be For the the year-over-year. growth flat of margin XXXX, to and first adjusted approximately year-over-year be of organic revenue X% to in range EPS expect

of stronger the growth looking When the organic half at first year. we second half to of half in the the second be of revenue the XXXX expect year, versus

As we year, EBIT move the rate are through adjusted and expected EPS to increase sequentially. margin, adjusted

to the XXXX progress, and about backlog Overall, orders for and we in momentum. our we're with guidance deliver especially contributed very of on our innovation strong work good proud teams feel financial XXXX, and

Pete. call Now to I'll back the turn Pete?

Peter Arduini

Jay. Thanks,

you've in of precision As NPIs revenue on strategy. another progress XXXX. have orders on today example our growth years made the see and customers, care last which Slide to we've is in our translated appealed launched into few heard This how XX, and

this to in and We beyond. continue expect XXXX

understanding been about think strategic much a deep We partner and of about unique acting for our as is continue a we customer. customers cohesive the to create. way than and equipment way customer, vendor. diseases innovation, cornerstone and offering, for holistic inclusive bring technology drive we it together It's of always each we for services than in transformation co-create Innovation which By to rather so solutions understanding GE the a all having needs evolve a of a more has transactional a HealthCare. the the technology,

Sutter the began and building Sutter us example thousands taking our the relationship, create U.S. XX-year way We largest Health, tens we they network. the how a is with one serve to chose recent networks strategy on delivery care Best-in-class an help it's to our patients across deliver long-term to capacity their of them became independent of in when in of more company. to million deliver their transform precision Health care X.X hold enterprise partnership integrated announcement

our provide example and in our with Nuffield latest Another to services long-term upgrades technology Health over next U.K. is and the agreement X ultrasound imaging advanced decades. the equipment,

access commitment partner capacity and quality of of patients. the the of As agreements bring care for choice, these us a security while increasing multiyear

a in together partnerships bring to of ability these services holistic growth. our offering recurring accelerating is believe of and more digital result We drugs, revenue long-term and solutions differentiating smart will devices,

I'm how and what our on Slide proud for every XXXX patients in day. summary, they XX, teams In of delivered do

margin, deliver to We on the deliver through and solid cash, in R&D most enterprise to commercial continue our results precision executing health patients we're care earnings innovation for pressing investments in customers. partnerships care solves challenges that and revenue, strategy and our and

the on a we're book-to-bill groundwork number also positions for from laid XXXX, momentum well which backlog conversion radiopharmaceutical to our proprietary us and and starting growth. strong We've We're NPIs, launch orders, in orders of sales the track exciting including Flyrcado. for stronger record future

evolve. taking see to said, year market how of All dynamics, a as approach and we're improvement the including measured that tariffs the China guidance start and we

base, will supply a a plans. our we're Meanwhile, total to chain with targets. making continue significant good mitigation manufacturing we company financial potential on U.S. company global progress a As medium-term towards and work proactively diversified

I'd also the deliver recognized every humbled that for world's admired of Fortune are colleagues for our is XXXX, dedication global this as of we and by day XX,XXX note be testament its to a companies patients to really customers. to most and one

an questions, XX retire Before GE for President moments than the has Solutions, few CEO like up share take more to a and open call Westrick, Care decided I'd with announcement. Tom company, to HealthCare. the After to Patient of years we from organizational

Tom in a for us expect transition, through like future. replacement the him best I'd near the thank wish announce retirement. all in to his contributions the to his We support and will his Tom remain and to years with smooth

the that, And call up open let's with questions. for

Carolynne Borders

[Operator you, Thank Instructions] Peter.

Operator

[Operator from Instructions] Our Petrone Anthony first question Mizuho Group. comes with Financial

Anthony Petrone

strong on record I start very I'm and latter overall margin. a on off backlog margin. there the And print Jay, going on bookings, Congratulations think to

to above us model. exiting in XXs, range outlook through the in maybe was bit But That XXXX. about our your for teens XXX low so XX.X% points LRP you're walk calls already little particular, And on a basis high XXXX. through that

a ahead I'll in maybe So quick and coming about follow-up. of dynamics on that bit be LRP? the little through margin should And we have expectations just thinking one the how

James Saccaro

I we margin with We're pleased XX.X% the Sure. And question, was XXX we're To expansion. points notably, think point, the that SG&A. the quarter. And at were the of Thanks was versus But the of category, of the declines performance basis margin, basis deliver this a the as Anthony. your about the able on doing that P&L, fourth some expectations. for us. very record also it talked of in great look in fourth and we in on was quarter progress margin ahead gross year. then optimize XXX making work lines so. for our we're expansion to on We've points prior had we to or that the

points approximately and we good think any saw volume, the productivity XXX contributing. offset we variable result, categories. all was of of all savings basis expansion saw. It from those a from drivers that specific And cost a interestingly, price, EBIT and doing or we of inflation program then initiatives, that fully inefficiencies work mix from that we're As about benefit margin

So all of unimpacted. to was volume price able flow mix the through

Now some I which we you, about items had of we basis tell points of XXX will anticipated. had onetime

this repeated year. spend was Some from that of year not to relates last it

of Some foreign it to was exchange. related

points. overall in so performance. about combination, And basis was just was But that solid XXX really an this really,

fourth and lot impact solid cost to there's talk lean delivery, safety, a quarter. of quality in and I we're We the idea of this do. elements the about that trying was to think, on what very extensively Lean's culture but like And

Now to always because as the to important the quarter extrapolate fourth year. it's of look off far margin not seasonally, fourth a quarter midterm, highest is we by the

increasingly the And ability say business. safe from look first so deliver our confident XXXX, we're margin expansion we'll a to solid as think see a to return I in margin the nice in it's to normalcy we in but quarter have to do

XX%-plus was And we time. change guidance. on over -- think addition did an us. the plus no to midterm that to Investor for opportunity said deliver So there's We important an we Day,

us that this I more print in gives think quarter plus. confidence fourth

Anthony Petrone

-- just helpful. jump to facing in. That's And would you're very margin, be the I'll others quick follow-up let stick

in You're pressures facing the China.

inflation, over assume in time. some mid-XXs FX, say normalization have be have we stays if the You an to China, But you it let's inflation case mentioned upside side fair to this margin could on there. the Congratulations. is that

James Saccaro

to But year's with it's XXX say, growth market to margin about XX that's And basis basis midterm despite low sales unplanned at sales forward despite volatility. And expectations. the start the safe another look talking points some growth delivering to midterm I fast resetting guidance. amidst think points we're below we're result, year, then and last of expansion. we if despite we'll -- this full think that, you very I XX

forward. our all Pete, really about those So to performance. to market feel excitement and should good those innovation coming what this we only drive And add? products think some the opportunities around of you I going would bolster

Peter Arduini

launches recall, higher segments higher for those in the strategy you year. that's lot beginning prices our from critical again, of and you come we're think look Anthony, of in of a you track XX-plus this about take been to be. I such. Investor is your we just out think than part expecting having big on talked we And growth here we're went if to a But to When also at through as at our to platforming that they're gross expected right a Day had margins. 'XX covered that the where I a And then focus and on value Jay. and and be the part we it, question, where rate, the

through. coming see And so that it's good to

Operator

Bijou Next question from with Securities. BofA Craig comes

Craig Bijou

Pete, maybe is helpful with been to and see to you understand the about where in elaborate past the in by if province that talking done environment QX. just process. in guys on want work province China some have in the the of your could each you then China comments on start province I And order of some stimulus you've

can wanted And each follow-up. at just insight the then for So have you I'll various to province? some provide maybe a see if stages updated

Peter Arduini

we've between out mean are. Investor Yes, level Craig, been say, the start to at fundamentally, what communicating I expectations said for in and high and our would at we what track I a what thanks question. just is on Day

of Again, place. off challenging it's some a to the actually We expected orders. took but year, see of improvement base that previous

And so and again, across then forward And going the on all looked the we've the at process. from steps stimulus past and about the standpoint provinces. of talked in the anticorruption different in this the that, movement we've

would track don't what question? orders said the I China the see have little what guide. a -- exactly starting on say benefits now, Jay at would in to to out on things time, but first in would I bit improvement sales track of we half, to I later QX, of we is well half. comment what up orders add laid can that the QX, in from second to line Jay, before, that. QX, having be it majority about in the again, And the to in of which part right seeing from we of is at you latter this the it the translation more on maybe some see starting start more had to point some they're as what But more

James Saccaro

growth improvement look anticipating the And No, half that's kind see in I the fourth XXXX. of first the But half. see as first we're then versus of sequential second we in the to were growth some right. think negative quarter. we'll in encouraged We forward, half orders

year. low watch numbers, a for single-digit our the in revenue overall, we're this anticipating carefully. very So We'll decline

said some been attractive As previously, we But volatility. we've China an long-term is market. think clearly, there's

So that here. thinking guidance reflected in the we've we've that shared

Peter Arduini

our they you'll ship announce are to tender, starting guidance the step that the announced we're they'll aligned for to process is out place. in a again, the how very we pretty in past, order And to money they'll to aligned much And X, have simple about was of province this then much roll kind mean grant I've and of tenders think take it. I step the is the that kind used I a going year. think

Craig Bijou

just it. like It about That's environment. or guys pretty sounds thinking hospital And a you solid in market and the you're Got environment see the around world. CapEx U.S. helpful. the

dynamics of ask So one if I some I is maybe competitors in markets? touch guess competitive wanted recently to true. then just that I talked on wins. And of competitive about your the the know

So to front seeing well environment. competitive hear what as on as the overall we'd market you're love the

James Saccaro

we Yes. say see world. start discussions I Craig, Europe we standpoint, around the improvements a ex with more made, would challenging year. China Europe would say, say year much just a look, CapEx from last pretty and was the I I'd

and I moving that think expect some 'XX. about had here put government comments mentioned previous would people positive at look in seeing we in a changes a took on more to in start pauses things. that We direction

orthopedic the companies, procedures device that moving of the of Those ultrasound strong are requiring benefit, we're to believe against continue. to arms. -- seeing procedures, year. guys and The outpatient some what all things And States, in of as the the different up for are heart digits, a United it was procedures one the world, taking example. lot place. bases a we seeing around an again surgical you centers, strong know strong the double world, see the labs more growth handle so again, and of we're in around but C interventional underpins around installed of upgrade countries procedures is going in and I the oldest many to need U.S. growth hospital systems which which And structured cath is happening that the retool, probably just that, as In

kind standpoint, that that's from of marketplace. the So

in I the of Europe well very as based in quite And but of stronger competitive we feel look ability are being well U.S. say company. you China imaging it's obviously we're bit been the on would kind the be U.S. coming tend new from we a confident win. strong a little a laid around environment. Obviously, a competitive quite local market about take world, to in multinationals, players asked would U.S. we how markets You at as standpoint, to the we've our out when with harken segments. CT just we -- a out that discuss believe I we product have maybe look, us launch say, back in we'll in to the on to Day largest year. each Investor track be than to next our But doing the and

We with in imaging be our have PET that evolution an molecular out. pipeline coming a will full-body

of so some confident And there, in converting of their base, certain some of the players quite of we in well. helping in base across growth, areas actually very think exemplified some wins, own some doing installed many and but I our their larger is our are that we're cases, which feel installed

the points You the out. of products products growth to Investor in at additional X coming new are coming Day be are, from add worth in going those is years. again, I mentioned, X to Those new as

Operator

Our comes Vijay from question next Evercore ISI. Kumar with

Vijay Kumar

ex-China in I fiscal to on rounded like book-to-bill, Maybe, here. at to think 'XX. guidance one Jay, capital it's X.Xx I The something close question X% organic, it to was X.X% X% your look X.X%. the If

in you I Flyrcado? is when X% the why organic. right guidance X.X% the versus ended the price year is QX What like -- think QX to you you ex at mean for X.XX, number China, at volume exited X.X%,

James Saccaro

the for question. Thanks Sure.

China year as full have a you we digit basis. overall, on down single say, low So

we the that deliver hope you performance buoyant a mid-single-digit lot capital X% with midterm the has where exactly were aspiration. to a and we And lot And very get fourth with and do of attractive a the of described, team. as tell with order great to China, performance very that. able close is to encouraged in with the book-to-bill the quarter, from to environment, to I were Pete excluding so we end you, on year, A has will do it

half the dates or sales delivery year. of either next we second think about, have As those a though, in year guidance, of orders this the into lot

that And it's those place from while a of when to relates so that's to so us QX the very take about standpoint, very deliveries be impacts very, work something or as sign, guidance encouraging our for and revenues, things year. QX it the important how and thoughtful not

So in with Pete, book-to-bill orders as what health add? would quarter with the of the record increasing a And backlog confidence place, this gives reasonable I the high the we say that us put look guidance fourth growth standpoint, from anything to year. is I reflected we've the at a business. we that along think for

Peter Arduini

think Jay. you it, I covered

dosing our plans Vijay, mentioned our around about of here I this well within really We've we're beginning in first on then at roughly covered you quarter that. it. referenced you just mean are, And you raised point the $XX I million about the be in question clear. time, first and think the launch to feel We're ultimately Flyrcado, we to good assuming before year. revenue we of April. where We're for launch. on track to track

Vijay Kumar

think Or would which more mean, this maybe is drive say QX? guidance-related item, And That's gross sort helpful, a I one flat margins? in guys. I there of margin line is impact? flat Is margins. I QX, question, one-off heard you anything that the OpEx Jay.

James Saccaro

thing first quarter, exciting little going of happening launches and In that's we're -- the interesting to bit have little we to The investment. margin is improvement of lot expect a OpEx see gross coming. of we'll a a

this some programs make we're coming those So milestones crucial standpoint, year. from we R&D crucial have success, funding to with an for sure

first to in coming is the investment that So bear quarter.

from having We require And adequate taking any across are of other about does launches these an excited SG&A then want launches. of to investment. place in the that number we're company. new product this investments secondly, the standpoint, But underclub Flyrcado launch crucial a and that don't

margin going gross leading from of we've bit described little quarter. an you're first see the to that to in margin the So OpEx expansion, a standpoint offsets to

Peter Arduini

a So expanding we're Vijay, simple just example is, PET points. obviously, call our cardiology

that So profit the for be launch. the half to be that's of That first an investment number. built adding would marketing force part into we're sales in prepared --

Operator

Our with next question comes from Jefferies. Taylor Matt

Matthew Taylor

growth a you gave? talked any the for I And with across growth terms being of us you segments. the color XXXX on was just segment if help order I Flyrcado noticed more you given the the expectations up guess I wondering bit in could about and particularly commentary PDx little

James Saccaro

Yes.

we think rare business, see the a orders the across growth. quarter to I was board. strength definitely of when consistent order It single it one were was so every pleased

really think, was year full that I basis, And So great. a on robust.

say growth in XXXX with speaking, I average. growth, to the As see business, would then with line in of is guess the I line of what look broadly corporate guidance, expect expect we'll rest broadly XXXX. speaking, the growth, the at we And we'll PDx

So embedded I a next think growth in mentioned of a nice couple the assumption that, the contributes overall PDx, profile year. to for those that Pete but out beyond lay we'll dynamics. the are environment Flyrcado

Matthew Taylor

and And the about reach actually to throughout how can talk Can Is on hospitals need where and think contract? that you the Flyrcado, talk I $XX getting expect gating their a through that year? factor? just you evolves is just puts? ask the to one just sort steps follow-up the your the patterns you referral factors how million. for about talk of gating Or on about capital Maybe And reimbursement then evolve?

Peter Arduini

Yes. Thanks, Matt.

bit little product opportunity, midterm again, is a on $X.X billion Investor the we at Day about this we drug. spoke type So of as this believe and again,

hasn't that standpoint. all that so from changed And at

all launch sales are force. preparations track, of in As is well scale on also question, track. a It's the reimbursement. is those on are I It previous up. And manufacturing of which combination mentioned our just

would organizations. are. we that partnerships the where with closer have contract mind the that work to our with which Because be? Why that the has typical to manufacturing need is cluster you a half-life, in Keep of a radiopharmaceutical, structure manufacturing way them in products

So those we that set selection then actually CMOS window target it operations to will have the deliver And we to there. Why? half-life within of also a a in already you beginning. be right geographical up sales Because our areas. be to able need produce within ready within

So how ramp. fast manages that you

in it. methodically. some them because working areas. adding also cases, far that can targeting doing they capacity bit other be already as with You then cardiovascular little would implement give already -- options patients why additional Robidium. as we'll more go this PET a they're have actually capabilities And better on these into how We're centers

time. the -- on put other delivery. can unlike something, other and But you convert just-in-time this ship Remember, it drugs over is shelf where

there's little do orchestration more a is bit out. other this day it. on But to So molecules day what and in we

good again, out. as But it. that it's have roll about So a more as approach feel why we we measured we

HCPCS that have codes -- stuff, future. distant coding commercial but from on of we're the comes really the playing as through feel would in, not on how here we going to too down when To and too And are We've road fundamentally, approvals but in coating April. here, we're out. we see on off our say, your to in that, the point things that have and good first not about far far and filed expect date, doses I that we'll is be well on the effect pass-through to track also I'd a and code in mentioned, this

Operator

Wuensch Citi. Our next from comes question with Joanne

Joanne Wuensch

commentary margin you out could put some year-over-year just just to some for the through the please? I op first of both get in you're think will One, spend revenue margin about a the moment to of I the the year-over-year to just pace trying there. implying what and headwinds. sure on expansion? headwinds I on op headwinds, maybe quarter, how I I'm but make appreciate want

broadly, sort could just what versus if the and probably some participate And the globally? seeing about could competitive then landscape this the in really other you you talk the of of rest up you're competitors all, that and take call, second of

James Saccaro

Sure.

in first have think obviously, described. going of from from really to decline to we're as we'll the P&L those of a investment decline the the in quarter, have China and the standpoint, relate noteworthy have we'll a an standpoint, that rest growth this and categories. I sales first growth see think So both quarter But a will in the a about world. standpoint, we items we in then a we've R&D From bit SG&A

will from And landing the offset expansion gross a flat we'll number. margin a it us to of so that standpoint, some see

launching, of we're time. the of the But some the to new forward and get rest year, start go as products of benefit to we the that you attached the moderates sales investment over through some R&D

one-timers our want want support these And with make it's sure look We investing we for success per as make we're the se, some so to we're but driving between growth midterm to new not this to sure imbalance want products. investing on we sales specific -- success the it's really, the -- of really that way year. to for for

the margin see. And you'll quarter to that's so first leading that

Peter Arduini

I look, us And between say, there's and same. compositions know, many are no competitive would then, the similarities question would things, on there's your I Julian, between with, the companies of that you any as but that compete say we of to nature

As radiopharmaceutical know, to one others treatment, are. I drug mean, not in you development, aren't similar monitoring. else is we we're some in in would No radiation really

lot globe. well mix core we've I where there play the area that across the But would imaging through commonality there. a and of So there's say done some things, changes in is

I a than think we've U.S. experiences, done have maybe those bit done spot had Europe. we've in some areas. in some others other the probably in the better or one Maybe little better

marketplace. I players take some in to think that been certain from share we've able the

shows to for about well. may and talk say that takes interesting be DL, as growth you of which have given but by you us didn't that our of areas. that think one vast I'll window. really base majority Air installed we refer things And taken back meaning Recon always up growth large those business I like place, And capital a just to a would There's we've But share, where true have. own sockets good that mix in there. the obviously with bringing a I the in we've others expansion share made new sales new a and installed is capabilities actually converting base, some progress in

converting with have, what always of And you where installed see all things in the during a be full what the you'll come introduce you're converting such if base there's ASPs faster. some we're of obviously for much as time. And you of like premium significantly Xx it growth higher twice you're And or own some time your know I sales of think area and body windows us, products that higher as shipping of growth that PET a will period dollars have of in product as today, than some our costs when [indiscernible], we we and those through. that

doing from on growth, in know share When just the holding what socket like reported numbers to and we're we to share the it comes well in you're things marketplace.

hopefully, color. So little helps bit a that added with some

Operator

comes next Our question Biegelsen with Larry from Wells Fargo.

Larry Biegelsen

that over Pete, you $X And billion similar linear XXXX? what for $XXX are million opportunities elsewhere? do years. one maybe you X the And I about Is year? follow-up. almost deal, talk a assuming And had see or Sutter

Peter Arduini

on is better it's outcomes, of value with about together. experience. win-win the announce We Yes, Larry, offer if lower help even work A with if kind from you I'll big And end imagine, this, your And patient again, better actually you drive you when ultimately, you stride our other down this, of the buy some question. sides. the of you you opportunity see these things better we're really we past things. a both lots and start folks road, in more we get a you part a then like getting lot, of as calls productivity, us price. of can on structures get what And were

about And so good really feel it. we

is think U.K. Nuffield Health I well. example as the a good the in

expect see more. to So

it's like Sutter, linear. most always not of With these,

so site item. probably with are not I just changes the it and the which earthquake all would that say it's regs a in Sutter, the California-based is based always case lead like back-ended, and And on account. renovations exist longest

taking time to say would those for more our put I into the those the half But years. also here in of And of orders of year. then the things of mid thereafter. coming some will year be place go the those in So first we'll in. book We'll order see that window Sutter, the each

them Northern that's improve that come, have California. we again, So the patient about good opportunity. partnership really And to we lives that but to feel with in can

Larry Biegelsen

to expect fair? at update That's Are more active of like on for you focused One in JPMorgan the on any And M&A? tuck-in that helpful. Pete. more you areas M&A interest? front It be you, on Is XXXX. that the sounded still

Peter Arduini

for Larry, is us, tuck-in believe M&A we Yes, superimportant. that I think

fit and -- smaller. a various sizes, and M&A They financial right? tuck-in The be that have very strategic they into can Jay I think returns we've can weekly. And they fit key they have can think a I I be is cadence our a be larger, framework. strong

month the looking that with cadence at times business and for strategic a a teams, most solving have we're makes investments multiple our We what inorganic. happens sense organic what with with

this more in things all health lens, for change we do start company, does solutions, customers much just bring as you not just again, to solutions an how And our to again, they're like than at solve imaging And Sutter, more looking with be plug meet looking be how care you as point we value. you company, can longitudinally connect more together.

balance And that here a into be that and healthy a our we the with more flow so M&A honestly, generation optimistic strong an we're in M&A will of XXXX XXXX and part play. into sheet, that, play have important cash participation can

which great That's coming capability. capabilities the The a NMP outside with manufacturing region new radiopharmaceutical fall, gives a radiopharmaceutical, the also example Europe, Japan, taking deal beachhead having of and in having really another of molecules announced kind capability Japan each we that of a into the Asia. for U.S. in and us of in world, Southeast Asia, and now

again, see strategy makes to So sense, into expect more. our that examples that, plug like that

Operator

Roman comes Goldman with Sachs. question Our from next David

David Roman

made this second. here you're the in respect you business a us the help a inflection prepared wanted a remarks growth think of we basis? with in I point volume to the and your to for the go-forward of reference on business underlying that category to some you to growth. Pete, about just saw on procedure seeing that benefits in maybe AVS there select start you quarter sort drivers should understand can But that tied how

Peter Arduini

Yes, David.

and labs, stuff. that large in labs, interventional everybody, surgical remind ultrasound AVS, are so the chunks also large business, to cath and just So then again, our biggest of

And overall. saw good actually ultrasound have very so we quarter a

Some And new that pressured our is China traction. that launched were still to that again, with we're a last market. tied early of platforms year getting

other quite did the actually throughout within base. world, that so And areas we within well

coming things quite we're and about within the launches drive more continue in excited new I going half and some year that's have it. cardiovascular side, to so think this later also to We which second the

specifically, IGS But the expectations. has Allia cath exceeded our Pulse just lab,

lab. have I talking relative us think dialogue the of our we're performance customers a wouldn't to in candidly the probably that to with past

the to seeing that a be X you structured really procedures one someone views the is do premium they're efficiency marketplace. that's going top the in of get Some lab that for for a long or heart and cases, from X to output cardiac can't, lab radiation the who's bariatric or out in patients, a of

come that orders the seeing in from standpoint. we're So

to very And OEC, which have then procedures centers out with strong a high-quality side, brand movement on the surgery growth orthopedic a the and has need been more in there, of you surgical surgical worldwide, C-arm. the

logic. our like ultrasound have to need You

And of the well we those of what center. that very in recall, lab XD may All OEC are because you doing outpatient that. we call onto capabilities migrated

many go OEC has, tied only past. in procedures in to C arms the more fixed our there, were that C-arm so cases, as of procedures And these sophisticated

'XX. significantly So that's those well. get continue we And here as into been would growing fast to we expect as trends

David Roman

parts free That's helpful of Jay, And piece cash on some I'm trying here side. moving to together very flow perspective. the maybe the

I being it in flow through like year-over-year. prepared a as looks here. remarks, inventory your inventory that down disclosed, headwind referenced was cash But actually You look the you

payable You in saw a benefit year-over-year. accounts

free cash that was I the influencing to the and trying just in XXXX? why in reverses here declines So factors flow understand

James Saccaro

Yes.

comes on latter to miss that the the year. inventory occurred at in XXXX, David, think, we down build expectations the really looked part an as our of I

strategic was inventory that of levels. Some

sales for in Some specific inventory We in us. of terms opportunity was some we categories, inventory. tough planning. it an optimization volatility improvement for careful It's saw of opportunity manage makes it we which further for have how

that And really see through so do here inventory, We year. improvement should some we next an point it's this year, that I from balance measures we time. working lean would on. as But performance the today, see in an into opportunity us. should at we're operational inflated for we inventory I is improve are lot levels the a next drawdown of a of see some inventory as that year turns look of opportunity this say at benefit moving will focused the optimizing sit overall the next capital --

Operator

Marcus Our last question comes JPMorgan. Robbie with from

Robert Marcus

capital equipment Maybe outlook. market first the on

the the capital Given about what's And on outlook in market, with seeing we're guidance? How the feeling here? all hospitals pressures the U.S. are the you assumption including

Peter Arduini

Yes, feel need multiple to the Robbie, you think leverage that's we points ultrasound we to think ability growth customers and look pretty done as actually the when and we and procedure of surveys obviously I it. good execute there. such, out different interventional care, about I with And we've as particularly underlying growth, was a think on mentioning, products the at the I on take mentioned, the procedure

obviously, on either seeing programs brakes of or change. inpatient or say reimbursement outpatient point what anticipation out certain rates think, there. out that of in plays in it this -- the about there's of I drug time, are put questions I reimbursement would with a we're type any lot be not people how at changes open But certain

a to environment many the I where and a MR say accelerators ultrasound, it's CapEx also would tighter that, those MI be generate environment core world profit institution. the cost worlds capabilities, to and for our particularly of products, which in and CT tend is even tighter in it's

second year, would robust U.S. expecting a see for seen of little time, the a haven't that. to capital of U.S. we're but a we're year in it still I of where slower we're you pretty But this we the And as estimates bit market signs what the same half seeing for not to mentioned, a the at lot was somewhat last Europe, then point the so, in of seeing level in add? pickup And Jay,

James Saccaro

on is environment. evolve a seeing our survey No, solid. basis impact the Robbie, customers. watch quarterly robust that's environment the we've now, that everything And that and a this. things work right. of as seems And talked continued initiatives about very how we're I major policy we We'll how do carefully past But in the think with pointing to

Robert Marcus

'XX? follow-up. down Maybe Free was year-over-year. that we was 'XX? a Great. do in What for think Jay, cash how quick reason flow And that in about the

James Saccaro

forecast key to an relates in did Yes. this that. incredibly opportunity we optimization sales driver and A free some down comes have and strategic and manage terms link reduction sure in the ended cash tight and there's what operations we how the have some of we make, between there's The you inventory making We opportunities of there. inventory. sales and planning flow to year, lot as of build also

catalyst over And cash in the we turns growth will in year-over-year. so I for and expect some this of will year, course improvement free normalize see year, the the through next which is flow the

Operator

concludes Please question-and-answer session. That proceed with the remarks. closing any

Peter Arduini

us everyone, one We Thanks, Thank you days coming forward for much. Yes. conferences. today. the very concludes in joining to of you look at call. connecting with our upcoming That our

Operator

and conference. participation gentlemen, your for thank conclude today's you in does presentation. Ladies today's This

disconnect, now wonderful may have day. and You a

GE HealthCare (GEHC) 13 Feb 252024 Q4 Earnings call transcript