GE HealthCare reports fourth quarter and full year 2024 financial results

 Full year 2024 total company financial performance

• Revenues of $19.7 billion increased 1% on both a reported and Organic* basis year-over-year. Revenue growth in the U.S. and in PDx was partially offset by continued market softness in China.
• Total company book-to-bill was 1.05 times. Total company orders increased 3% organically year-over-year.
• Net income attributable to GE HealthCare was $2.0 billion versus $1.6 billion for the prior year, and Adjusted EBIT* was $3.2 billion versus $3.0 billion.
• Net income margin was 10.1% versus 8.0% for the prior year, up 210 bps. Adjusted EBIT margin* was 16.3% versus 15.1%, up 120 bps as both measures saw benefits from productivity and price.
• Diluted EPS was $4.34 versus $3.04, up $1.31 from the prior year. Adjusted EPS* was $4.49 versus $3.93, up $0.56 from the prior year as both measures saw improved EBIT and lower interest expense.
• Cash flow from operating activities was $2.0 billion, down $146 million year-over-year. Free cash flow* was $1.6 billion, down $161 million year-over-year.
• Cash flow conversion, defined as cash from operating activities divided by net income attributable to GE HealthCare, was 98% while Free cash flow conversion* was 75%.

Growth and innovation

Mr. Arduini continued, “In 2024, we introduced approximately 40 innovations and closed more than 50 strategic enterprise deals globally, laying a solid foundation for future growth. We started 2025 with commercial momentum announcing two strategic long-term enterprise deals – Sutter Health in the U.S., and Nuffield Health in the UK. These collaborative agreements help increase capacity, expand access to quality care for patients, and drive growth for our customers and GE HealthCare.”

Recent innovation and commercial highlights

• GE HealthCare invests $138 million in Cork, Ireland manufacturing facility to address increasing contrast media demand
• GE HealthCare named to 2025 Fortune World’s Most Admired Companies™ list
• Nuffield Health and GE HealthCare announce £200 million collaboration to install the latest AI-enabled diagnostic equipment across UK hospital network
• Sutter Health and GE HealthCare enter strategic partnership to benefit patients, physicians and clinicians with advanced, AI-powered imaging
• Alfred Health becomes first in Southern Hemisphere to adopt GE HealthCare’s Command Center software proven to optimize operations
• GE HealthCare to acquire remaining 50% stake in Nihon Medi-Physics (NMP), a leading radiopharmaceutical company in Japan, from Sumitomo Chemical
• GE HealthCare highlights new solutions including AI-enabled innovations to drive precision care at RSNA 2024
• GE HealthCare unveils Pristina Via to streamline technologist workflow and improve patient-centered breast care
• Investigating cancer: GE HealthCare and Peter MacCallum Cancer Centre aim to advance cancer research and help enable improved patient outcomes with new total body PET/CT technology
• GE HealthCare announces advanced imaging innovations for OEC 3D C-arm to help improve precision care in practice of interventional pulmonology
• GE HealthCare receives FDA clearance for head-only SIGNA MAGNUS 3.0T MRI system
• GE HealthCare and RadNet forge collaboration to transform imaging systems and accelerate the adoption of Artificial Intelligence with SmartTechnology™
• GE HealthCare begins manufacturing in Wisconsin its fastest-selling PET/CT, installs 100th system in the U.S.

2025 guidance

Today, the Company introduces 2025 full-year guidance, which includes the estimated impact from recently implemented U.S. tariffs on products from China.

2025 guidance is as follows:

• Organic revenue growth* of 2% to 3% year-over-year, which reflects continued demand for our products and services as well as a measured view of market conditions in China
• Adjusted EBIT margin* of 16.7% to 16.8%, reflecting an expansion of approximately 40 to 50 basis points versus 2024 Adjusted EBIT margin* of 16.3%
• Adjusted effective tax rate (ETR)* in the range of 22% to 23%
• Adjusted EPS* in the range of $4.61 to $4.75, representing 3% to 6% growth versus Adjusted EPS* of $4.49 for 2024
• Free cash flow* of at least $1.75 billion

The Company provides its outlook on a non-GAAP basis. Refer to the Non-GAAP Financial Measures in Outlook section below for more details.

Financial rounding

Certain columns and rows in this document may not sum due to the use of rounded numbers. Percentages presented are calculated from the underlying whole-dollar amounts.

Non-GAAP Financial Measures

The non-GAAP financial measures presented in this press release are supplemental measures of GE HealthCare’s performance and its liquidity that the Company believes will help investors understand its financial condition, cash flows, and operating results, and assess its future prospects. When read in conjunction with the Company’s U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in GE HealthCare’s underlying businesses and can be used by management as one basis for making financial, operational, and planning decisions. Descriptions of the reported non-GAAP measures are included below.

The Company reports Organic revenue and Organic revenue growth rate to provide management and investors with additional understanding and visibility into the underlying revenue trends of the Company’s established, ongoing operations, as well as provide insights into overall demand for its products and services. To calculate these measures, the Company excludes the effect of acquisitions, dispositions, and foreign currency rate fluctuations.

The Company reports EBIT, Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, and Adjusted earnings per share to provide management and investors with additional understanding of its business by highlighting the results from ongoing operations and the underlying profitability factors, on a normalized basis. To calculate these measures the Company excludes, and reflects in the detailed reconciliations below, the following adjustments as applicable: Interest and other financial charges – net, Net (income) loss attributable to noncontrolling interests, Non-operating benefit (income) costs, Benefit (provision) for income taxes and certain tax related adjustments, and certain non-recurring and/or non-cash items. GE HealthCare may from time to time consider excluding other non-recurring items to enhance comparability between periods. Adjusted EBIT margin is calculated by taking Adjusted EBIT divided by Total revenues for the same period.

The Company reports Adjusted tax expense and Adjusted effective tax rate (“Adjusted ETR”) to provide management and investors with a better understanding of the normalized tax rate applicable to the business and provide more consistent comparability across periods. Adjusted tax expense excludes the income tax related to the pre-tax income adjustments included as part of Adjusted net income and certain income tax adjustments, such as adjustments to deferred tax assets or liabilities. The Company may from time to time consider excluding other non-recurring tax items to enhance comparability between periods. Adjusted ETR is Adjusted tax expense divided by income before income taxes less the pre-tax income adjustments referenced above.

The Company reports Free cash flow and Free cash flow conversion to provide management and investors with an important measure of the ability to generate cash on a normalized basis and provide insight into the Company’s flexibility to allocate capital. Free cash flow is Cash from (used for) operating activities – continuing operations including cash flows related to the additions and dispositions of property, plant, and equipment (“PP&E”) and additions of internal-use software. Free cash flow does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct the capital required for debt repayments. Free cash flow conversion is calculated by taking Free cash flow divided by Adjusted net income.

Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes. In order to compensate for the discussed limitations, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. The detailed reconciliations of each non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure are provided below, and no single financial measure should be relied on to evaluate our business.

Non-GAAP Financial Reconciliations

Non-GAAP Financial Measures in Outlook

GE HealthCare calculates forward-looking non-GAAP financial measures, including Organic revenue growth, Adjusted EBIT margin, Adjusted ETR, Adjusted EPS, and Free cash flow based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. GE HealthCare does not provide reconciliations of these forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or dispositions, timing and magnitude of restructuring activities, and revaluation of strategic investments, amongst other items. The timing and amounts of these items are uncertain and could have a substantial impact on GE HealthCare’s results in accordance with GAAP.

Key Performance Indicators

Management uses the following metrics to provide a leading indicator of current business demand from customers for products and services.

• Organic orders growth: Rate of change period-over-period of contractual commitments with customers to provide specified goods or services for an agreed upon price, and excluding the effects of: (1) recent acquisitions and dispositions with less than a full year of comparable orders; and (2) foreign currency exchange rate fluctuations in order to present orders on a constant currency basis.
• Book-to-bill: Total orders divided by Total revenues within a given financial period (e.g., quarter or FY).

Conference Call and Webcast Information

GE HealthCare will discuss its results during its live earnings call today, February 13, 2025 at 8:30 am ET/7:30 am CT. The webcast and accompanying slide presentation containing financial information can be accessed by visiting the investor section of the website at https://investor.gehealthcare.com/news-events/events. An archived version of the webcast will be available on the website after the call.

Forward-looking Statements

This release contains forward-looking statements. These forward-looking statements might be identified by words, and variations of words, such as “will,” “expect,” “may,” “would,” “could,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “potential,” “position,” “forecast,” “target,” “guidance,” “outlook,” and similar expressions. These forward-looking statements may include, but are not limited to, statements about the Company’s business and expected financial performance, financial condition, and results of operations, including revenue, revenue growth, profit, taxes, earnings per share, and cash flows, and the Company’s outlook; and the Company’s strategy, innovation, and investments. These forward-looking statements involve risks and uncertainties, many of which are beyond the Company’s control. Factors that could cause the Company’s actual results to differ materially from those described in its forward-looking statements include, but are not limited to, operating in highly competitive markets; global geopolitical and economic instability, including as a result of the conflict between Ukraine and Russia, tensions in the Middle East, and changes in trade and tariff policy; public health crises, epidemics, and pandemics, and their effects on the Company’s business; changes in third-party and government reimbursement processes, rates, and contractual relationships, including related to government shutdowns, and changes in the mix of public and private payers; demand for the Company’s products, services, or solutions and factors that affect that demand; the delayed China stimulus and the ongoing anti-corruption campaign; the Company’s ability to control increases in healthcare costs and any subsequent effect on demand for the Company’s products, services, or solutions; the Company’s ability to successfully complete strategic transactions; the impacts related to the Company’s increasing focus on and investment in cloud, edge computing, artificial intelligence, and software offerings; management of the Company’s supply chain and the Company’s ability to cost-effectively secure the materials it needs to operate its business; disruptions in the Company’s operations; the actions or inactions of third parties with whom the Company partners and the various collaboration, licensing, and other partnerships and alliances the Company has with third parties; the impact of potential information technology, cybersecurity, or data security breaches; maintenance and protection of the Company’s intellectual property rights, as well as maintenance of successful research and development efforts with respect to commercially successful products and technologies; the Company’s ability to attract and/or retain key personnel and qualified employees; environmental, social, and governance matters; compliance with the various legal, regulatory, tax, privacy, and other laws to which the Company is subject, such as the Foreign Corrupt Practices Act and similar anti-corruption and anti-bribery laws globally, and related changes, claims, inquiries, investigations, or actions; the impact of potential product liability claims; the Company’s level of indebtedness, as well as the Company’s general ability to comply with covenants under its debt instruments, and any related effect on its business; and the Company’s ability to operate effectively as an independent, publicly traded company. Please also see Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission and any updates or amendments it makes in future filings. There may be other factors not presently known to the Company or which it currently considers to be immaterial that could cause the Company’s actual results to differ materially from those projected in any forward-looking statements the Company makes. The Company does not undertake any obligation to update or revise its forward-looking statements except as required by applicable law or regulation.