GE HealthCare Announces Q4 and Full Year 2024 Financial Results

GE HealthCare Announces Q4 and Full Year 2024 Financial Results

GE HealthCare (Nasdaq: GEHC) reported its financial results for the fourth quarter and full year ended December 31, 2024, showing solid growth and progress across various sectors.

Peter Arduini, President and CEO of GE HealthCare, expressed satisfaction with the company’s performance, particularly in terms of order growth, backlog, and book-to-bill ratio, especially during Q4. He attributed this to a strong demand for products in GE HealthCare’s Advanced Visualization Solutions and Pharmaceutical Diagnostics businesses, with significant contributions from the U.S. market. He emphasized that customer interest in differentiated products led to growth in orders and recurring revenue, reinforcing the company’s precision care strategy, which is anchored on innovation and strong commercial execution.

Q4 2024 Total Company Performance

In Q4, GE HealthCare reported:

• Revenues of $5.3 billion, up by 2% year-over-year (both reported and organic).
• Book-to-bill ratio was 1.09, signaling growth in new orders, which increased 6% organically year-over-year.
• Net income attributable to GE HealthCare surged to $720 million, a significant increase from $403 million the previous year.
• Adjusted EBIT was $994 million, compared to $837 million in 2023, reflecting strong operational performance.
• Net income margin increased to 13.5%, up from 7.7% in the prior year, with a 13.5% rise in adjusted EBIT margin, now standing at 18.7% (up from 16.1%).
• Diluted EPS reached $1.57, up by $0.69 from the previous year.
• Adjusted EPS rose to $1.45, an increase of $0.27 from the previous year, attributed to improved EBIT and lower interest expenses.
• Cash flow from operating activities was $913 million, a decrease of $137 million year-over-year, while free cash flow decreased by $145 million to $811 million.

Q4 Segment Performance

In Q4, the company reported the following results for key segments:

1. Imaging:
   • Revenues: $2,393 million, with a 19% YoY EBIT increase.
   • EBIT margin: 12.6% (up 200 bps YoY).
2. Advanced Visualization Solutions (AVS):
   • Revenues: $1,440 million, up 4% YoY.
   • EBIT margin: 25.9%, a 240 bps YoY improvement.
3. Patient Care Solutions:
   • Revenues: $827 million.
   • EBIT margin: 12.8%, with a 50 bps decline YoY.
4. Pharmaceutical Diagnostics (PDx):
   • Revenues: $646 million, up 9% YoY.
   • EBIT margin: 32.9%, reflecting an 850 bps YoY increase.

Full Year 2024 Performance

For the full year 2024, GE HealthCare reported:

• Revenues of $19.7 billion, a 1% increase compared to 2023.
• Net income grew to $2.0 billion, compared to $1.6 billion in 2023.
• Adjusted EBIT reached $3.2 billion, up from $3.0 billion.
• Net income margin increased to 10.1%, up from 8.0% in the prior year.
• Adjusted EBIT margin increased to 16.3% from 15.1%.
• Diluted EPS increased to $4.34, up from $3.04.
• Adjusted EPS grew to $4.49, a $0.56 increase compared to $3.93 in 2023.
• Cash flow from operating activities was $2.0 billion, a decrease of $146 million year-over-year.
• Free cash flow decreased to $1.6 billion, down $161 million from the previous year.
• Cash flow conversion was at 98%, with a 75% free cash flow conversion.

Growth and Innovation Highlights

Peter Arduini highlighted that GE HealthCare introduced about 40 innovations in 2024, closing over 50 strategic enterprise deals globally, laying the foundation for continued growth. The company also announced two major partnerships for 2025:

• Sutter Health in the U.S. for advanced imaging.
• Nuffield Health in the UK for installing AI-powered diagnostic equipment across the hospital network.

In 2024, GE HealthCare also:

• Invested $138 million in its Cork, Ireland manufacturing facility to address the growing demand for contrast media.
• Was named to Fortune’s 2025 list of the World’s Most Admired Companies.
• Entered a £200 million collaboration with Nuffield Health to bring AI-enabled diagnostics to UK hospitals.
• Strengthened partnerships with organizations like RadNet to advance imaging systems and Peter MacCallum Cancer Centre to accelerate cancer research.

For 2025, GE HealthCare is forecasting:

• Organic revenue growth of 2% to 3% year-over-year.
• Adjusted EBIT margin of 16.7% to 16.8%.
• Adjusted EPS in the range of $4.61 to $4.75, representing a 3% to 6% increase.
• Free cash flow of at least $1.75 billion.

The company’s outlook reflects a strong demand for its products and services, tempered by market conditions in China and the impact of U.S. tariffs on products from China.

GE HealthCare continues to position itself as a leader in healthcare innovation, with a focus on expanding its precision care strategy and driving growth through strategic partnerships and technological advancements.re continues to position itself as a leader in healthcare innovation, with a focus on expanding its precision care strategy and driving growth through strategic partnerships and technological advancements.

Consolidated and Combined Statements of Cash Flows

For the years ended December 31
(In millions)

Adjustments to reconcile net income from continuing operations to cash from (used for) operating activities:

Cash flows – investing activities:

Cash flows – financing activities:

Cash from (used for) operating activities – discontinued operations | (4) | — | (21)

Effect of foreign currency rate changes on cash, cash equivalents, and restricted cash | (77) | (10) | (3)

Increase (decrease) in cash, cash equivalents, and restricted cash | 387 | 1,055 | 890 | Cash, cash equivalents, and restricted cash at beginning of year | 2,506 | 1,451 | 561 | Cash, cash equivalents, and restricted cash at end of year | 2,893 | 2,506 | 1,451 |

Supplemental disclosure of cash flows information:

Non-GAAP Financial Measures

GE HealthCare presents non-GAAP financial measures to supplement its performance and liquidity information, offering investors a better understanding of its financial health and future prospects. These measures are intended to provide insight into trends, cash flows, and the underlying results of GE HealthCare’s operations.

• Organic Revenue and Organic Revenue Growth: These metrics help assess revenue trends excluding the impacts of acquisitions, dispositions, and foreign currency fluctuations.
• EBIT, Adjusted EBIT, Adjusted EBIT Margin, Adjusted Net Income, and Adjusted Earnings Per Share: These measures offer a clearer view of ongoing operations and profitability, excluding certain non-recurring or non-cash items. Adjusted EBIT margin is derived by dividing Adjusted EBIT by total revenue.
• Adjusted Tax Expense and Adjusted Effective Tax Rate (ETR): These measures highlight the normalized tax rate and offer more consistent comparability across periods, excluding income tax adjustments and certain one-time items.
• Free Cash Flow and Free Cash Flow Conversion: These metrics are used to evaluate the company’s cash generation ability and capital allocation flexibility. Free cash flow is calculated as operating activities cash from continuing operations, adjusted for capital expenditures and internal-use software. Free cash flow conversion reflects the ratio of free cash flow to Adjusted net income.

Management recognizes that these non-GAAP measures have limitations, as they may be calculated differently by other companies or used for different purposes. However, these measures, when used alongside GAAP results, provide valuable insights into the company’s performance. Detailed reconciliations to the most comparable U.S. GAAP measures are included below, and no single financial metric should be solely relied upon to assess the company’s business.

Non-GAAP Financial Reconciliations

Organic Revenue

Unaudited

For the three months ended December 31
For the years ended December 31
(Amounts in millions)

| AVS revenues | 1,440 | 1,382 | 4% | 5,131 | 5,094 | 1% | | Less: Acquisitions (1) | — | — | | — | — | | | Less: Dispositions (2) | — | — | | — | — | | | Less: Foreign currency exchange | (4) | — | | (25) | — | | | AVS Organic revenue | 1,443 | 1,382 | 4% | 5,157 | 5,094 | 1% |

| PCS revenues | 827 | 827 | —% | 3,125 | 3,142 | (1)% | | Less: Acquisitions (1) | — | — | | — | — | | | Less: Dispositions (2) | — | — | | — | — | | | Less: Foreign currency exchange | (2) | — | | (6) | — | | | PCS Organic revenue | 829 | 827 | —% | 3,131 | 3,142 | —% |

| PDx revenues | 646 | 591 | 9% | 2,508 | 2,306 | 9% | | Less: Acquisitions (1) | — | — | | — | — | | | Less: Dispositions (2) | — | — | | — | — | | | Less: Foreign currency exchange | 3 | — | | (10) | — | | | PDx Organic revenue | 642 | 591 | 9% | 2,518 | 2,306 | 9% |

| Other revenues | 13 | 14 | (4)% | 52 | 66 | (21)% | | Less: Acquisitions (1) | — | — | | — | — | | | Less: Dispositions (2) | — | — | | — | — | | | Less: Foreign currency exchange | — | — | | — | — | | | Other Organic revenue | 13 | 14 | (4)% | 52 | 66 | (21)% |

| Total revenues | 5,319 | 5,206 | 2% | 19,672 | 19,552 | 1% | | Less: Acquisitions (1) | (17) | — | | (47) | — | | | Less: Dispositions (2) | — | — | | — | — | | | Less: Foreign currency exchange | (8) | — | | (112) | — | | | Organic revenue | 5,310 | 5,206 | 2% | 19,737 | 19,552 | 1% |

(1) Represents revenues from acquisitions, calculated from the date of acquisition through the end of the first four quarters.
(2) Represents revenues attributable to dispositions for the four quarters prior to the disposition date.

Adjusted EBIT

Unaudited

For the three months ended December 31
For the years ended December 31
(Amounts in millions)

(1) Includes severance, facility closures, and other charges related to restructuring programs.
(2) Includes costs such as legal, consulting, and integration fees, contingent consideration adjustments, and other transaction-related costs.
(3) Relates to costs from the Spin-Off and separation from GE, including system implementations, audit and advisory fees, and legal entity separation.
(4) Includes gains and losses from asset and business dispositions.
(5) Primarily pertains to adjustments for equity investment valuations.

Adjusted Net Income

Unaudited

For the three months ended December 31
For the years ended December 31
(Amounts in millions)

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