GE HealthCare Technologies (GEHC) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $5.1 billion, up 7.4% year-over-year, with 2.9% organic growth, driven by strong performance in pharmaceutical diagnostics, Advanced Imaging Solutions, and imaging businesses.

• Net income attributable to shareholders was $389 million, down from $564 million year-over-year, with diluted EPS of $0.85 and adjusted EPS of $0.99.

• Profit performance was pressured by inflation, tariffs, and a supplier recall, resulting in reduced profit and free cash flow guidance for 2026.

• Major acquisition of Intelerad for $2.3 billion completed, advancing cloud and AI imaging capabilities.

• Double-digit reported growth in EMEA and Rest of World, mid-single digit in U.S.; China sales in line with expectations but down year-over-year.

Financial highlights

• Adjusted EBIT was $691 million (13.5% margin), down 150 basis points year-over-year; adjusted EPS was $0.99, including $0.16 tariff impact.

• Free cash flow was $112 million, up 13.3% year-over-year, supported by working capital improvements.

• Book-to-bill ratio was 1.07x, with a record backlog of $21.8 billion.

• Gross profit margin was 38.5%-39.6% (non-GAAP), net income margin 7.6%, and effective tax rate 15.0%-18.6%.

• Total debt outstanding was $10.1 billion, with cash and equivalents at $2.3 billion.

Outlook and guidance

• 2026 organic revenue growth guidance reaffirmed at 3%-4%.

• Adjusted EBIT margin guidance lowered to 15.4%-15.7%, reflecting ~$250 million in cost inflation.

• Adjusted EPS guidance reduced to $4.80-$5.00; free cash flow outlook revised to ~$1.6 billion.

• Price and cost actions expected to offset more than half of inflation impact; larger price mitigation expected in 2027.

• Q2 organic revenue growth expected at 3%-4%, with adjusted EPS to decline low single digits year-over-year.