GE Healthcare at Goldman Sachs Conference: Strategic Growth Insights

On Tuesday, 10 June 2025, GE Healthcare (NASDAQ:GEHC) presented at the Goldman Sachs 46th Annual Global Healthcare Conference, offering a strategic overview that highlighted both promising growth and challenges. The company reported robust sales and order growth, yet acknowledged the impact of tariffs and a slight decline in the Chinese market.

Key Takeaways

• GE Healthcare’s Q1 sales grew by 4% with a 10% increase in orders.
• A record backlog supports the company’s positive outlook for the year.
• Tariffs are expected to have a $500 million impact in 2025, with mitigation strategies in place.
• Significant investments in AI and new product launches are planned for 2026.
• A share buyback program is underway, alongside strategic M&A pursuits.

Financial Results

• Sales and Orders: Q1 sales increased by 4%, while orders rose by 10%, leading to a book-to-bill ratio of 1.09x.
• China Market: Experienced a 1% decline in Q1, with a low single-digit decline anticipated for the year.
• Tariffs: A projected $500 million impact in 2025, equivalent to 85 cents per share, with efforts to reduce this impact through dual sourcing and local production.
• Digital Sales: Currently at $1.2 billion, with a projection to reach $1.8 billion in the coming years.
• R&D Investment: Increased from 4.5% to 7% of sales, emphasizing innovation.

Operational Updates

• Pharmaceutical Diagnostics (PDX): The new product Flurcado is expected to generate $30 million in revenue this year, with plans to expand radio pharmacies across the U.S.
• Imaging: Continued growth with AI investments, such as AIR Recon DL, and future launches like photon counting and full-body PET in 2026.
• Patient Care Solutions (PCS): Moderated expectations for 2024 following COVID-related demand, with new leadership under Jeanette Bankis.
• Advanced Visualization Solutions (AVS): Despite challenges in China, long-term growth opportunities remain, bolstered by recent innovations.

Future Outlook

• Growth Projections: GE Healthcare anticipates mid-single-digit growth over the next several years, with PDX outpacing equipment sales.
• Product Launches: A robust lineup is expected in 2026, with significant revenue contributions in the following years.
• Capital Allocation: Focused on strategic M&A, share buybacks, and continued dividend payments.

Q&A Highlights

• China Market: Expected improvements in the latter half of the year despite a projected low single-digit decline.
• Tariff Mitigation: Emphasis on reducing the impact through strategic sourcing and production adjustments.
• AI Revenue: Strong revenue generation from AI products like AIR Recon DL.
• Capital Strategy: Prioritizing growth through business development, M&A, and share repurchases.

Readers are encouraged to refer to the full transcript for a comprehensive understanding of GE Healthcare’s strategic initiatives and financial performance.

Full transcript - Goldman Sachs 46th Annual Global Healthcare Conference:

David, Analyst: Good morning, everybody. Just make a quick reminder that presentations are not open to to members of the press. So that, I’d like to welcome GE Healthcare here, Jay Sicarro, Chief Financial Officer and Carolyn Borders, Head of Investor Relations. As I’ve mentioned in all of these, happy to keep this interactive. And if you do want to ask a question, we’ll just get a mic over to you so those participating via webcast can hear the interaction as well.

So maybe we could just kind of start with kind of reflections here on Q1, a good start to the year, 4%. You’ve guided 2% to 3% for the balance of the year. So maybe help us think through some of the factors that played into the better than expected Q1 and then how that toggled over to the guidance that you provided for the rest of the year.

Jay Sicarro, Chief Financial Officer, GE Healthcare: Sure. David, thank you. Thanks for the invitation to your conference. We really appreciate it. To those that have joined us here in person today, thanks for your interest in our company.

I know we have a few shareholders in the room, so we appreciate your support. We were pleased with the first quarter, certainly. We had very robust order growth at 10%. That supported sales growth of 4%, which was a great start to the year. Book to bill, one point o nine times, very solid.

And we also had a record backlog. And so for us, as we look at the first quarter of the year, it really did set us up nicely for achieving our guidance for the rest of the year. And it was also supportive of our aspiration as we think about the midterm long range plan that we’ve shared with investors. So really nice start. And and by the way, the strength was broad based.

You know, we saw strength in The US certainly, but we also saw our Europe, Middle East, and Africa business, you know, it was flat on a reported growth basis. But overall, we had some orders as well, growth in that arena. So a really nice start to the year. And China kind of proceeded in line with our expectations for the most part with a 1% decline. So broad based strength across the portfolio and a really nice start to the year.

Now, of course, there were a lot of different elements coming into play when we gave guidance in April. And some of that included, you know, the tariffs, some of the potential changes to The US health care system on the back of budget bills and so on. And so, like, what I would say is, you know, we wanted to reflect the strength of our internal business and the things that we’re doing, but also reflect some of the macroeconomic uncertainties. That’s that’s why we did left guidance unchanged, and we’ll continue to watch this and and hope for the best as we move through the rest

David, Analyst: And maybe just to clarify on the macroeconomic uncertainties, are these, are these factors that you’re seeing influence the business at the time you issued guidance or today, or are these factors that have the potential to play out?

Jay Sicarro, Chief Financial Officer, GE Healthcare: Yeah. What I would say is the environment has been very buoyant. Okay? When you talk about 10% order growth and order growth in excess of that in The US, it’s it’s it’s a really strong environment. And there’s a lot of reasons that are contributing to that, but things are good.

And so we’re, you know, we’re very optimistic about how things can work out. We’ll have to see as we move through

David, Analyst: the year. And and, you know, it’s hard not to touch on China. I think that was one of the biggest variables in the guidance update that that you you sort of went through last year. How are you thinking about China this year in in terms of both the underlying dynamics and also how you’re framing it in the guidance?

Jay Sicarro, Chief Financial Officer, GE Healthcare: Yeah. I I hope so so of all, last year, we had to make a significant adjustment to China and to our total company guidance as a result of China. We had to lower our China expectations by 5 or $600,000,000. So that was really dramatic. But I think most participants in the market had a similar, quantum of impact from the market change.

As we approach this year, we really studied the multiphase tendering process and how that translated to sales. And I, you know, I think by and large, we’ve got it right. You know, we’re expecting a low single digit decline for China for this year. And and so far, that’s you know, we’re we’re we’re seeing things that support that expectation. To your point, it is a big variable for us.

With China declining, you know, it took something which would be closer to 4% company wide growth, and it lowered it to 2% to 3% because of that decline in China this year. So it is an important variable for us. But as we sit here, we expected we had a low single a 1% decline in the first quarter, a little bit worse than that in the second quarter. And then in the third and fourth quarter, it will be closer to what we saw in the first quarter. And so I think and the reason I can say this is because we have a backlog that supports sales.

A lot of the sales for 2,025 in China will come from the backlog. And what we do is we schedule the backlog to specific dates. We have a pathway, and that’s how we build develop our expectations in addition to some orders. So that’s how we have line of sight to what I’m talking about. Of course, things could change, but I think it’s trending in line

David, Analyst: with our expectations. And and and I think if you look at that from a year over year growth perspective, that would imply very little sequential growth in dollars because the comparisons get much easier in China as you as you pace through the year.

Jay Sicarro, Chief Financial Officer, GE Healthcare: They do get easier in China. And, you know, the interesting thing is with with all of the volatility in the market over the last couple years, the market is down quite a bit. And so, you know, it’s it’s interesting because we had anticorruption, in in ’23, and then that rolled into stimulus. But, actually, stimulus, because of some uncertainty around how it would precisely work, ended up being a depressant to sales last year and even into this year. The interesting thing though is the equipment base in China ages by the day, and so I do believe there will be opportunity.

We’re cautious in terms of, you know, the long term growth aspiration. We’ve taken it down from you know, it was high single digits. We think the long term, you know, expectation is closer to mid single at this point. But, you know, at some point, there could be a catch up that we’ve not modeled in our numbers just because of the aging state of the of the installed bases in China for all competitors.

Carolyn Borders, Head of Investor Relations, GE Healthcare: Maybe just to add a point on that, we’re seeing this stimulus behave a little bit differently than the one we saw in 2022, which was driven more so by the central government. And so this time, we are seeing the stimulus roll out across 31 provinces, which is part of the reason that it’s taking a little bit longer.

David, Analyst: Okay. You know, I think some of the macro dynamics have overshadowed the business by business sort of product drivers. So so maybe we could spend a little bit of time going into the individual businesses and and walking through kind of performance and and and and some, recent updates. And I think it’s we can start with PDX, just given all the focus on Flacardo. And maybe just sort of talk us through kind of some of the dynamics in that franchise and how we should think about how the Flacarto ramp planning and early kind of uptake is going?

Jay Sicarro, Chief Financial Officer, GE Healthcare: Yes. This has been a real bright spot for us. PDX has been a business that’s performed extremely well, and it’s got really nice attributes in terms of recurring revenue and procedure driven revenue, which is just great. So over the last several years, you know, we’ve seen a nice mix of both volume growth and pricing with a bit of new product. And to a large extent, that’s what we’re gonna see this year as well.

It will be a mix of volumes driven by critical procedures, some pricing, and then also the benefit of new products. This the new product area starts to get really exciting for us as it relates in particular to Flurcado. So far, you know, we’ve we’re in the launch phase of this new product. We got approval. We we we announced the dose, and and it’s been very well received.

We’re working very hard to set this up so that we hopefully beat the $30,000,000 target that we’ve shared with investors. And, you know, we’re working very hard to line up success against that. And what that involves is really a number of different facets. It starts with, do you have capacity? And so in this case, you need to have local manufacturing facilities, I put that in quotes, to support rollout.

And so for us, by year end, we expect to have 30 radio pharmacies around The United States in support of basically ninety percent of the potential patient population. Right now we’re at 13. That’s progressing really well. The piece is, you know, we have reimbursement from a CMS standpoint, but you also have to have commercial carrier reimbursement set up. Really good progress in those areas.

And then the is you have to support of course, you have to convince physicians that this is the right diagnostic tool, but you also have to ensure that you have centers operationalizing this in the right way. And so it’s not enough to sign up a center because when you sign up a center, they’re gonna start with one or two doses on the way to converting a larger portion of their patient population. But when they start with one or two doses, you have to ensure that they have a good experience with those patients. And then they’ll move from two patients to four patients to something much larger than that. And so for us, we’re having success signing up centers, and then we’re also really working hard to make sure those centers have a good experience, with with the product and and and GE Healthcare.

And so far, that’s going well. As I say, our hope is $30,000,000 this year. That’s our expectation. We hope to do better, on a way to a number that will be meaningfully larger than that next year. And, you know, we’re we’re we’re very optimistic about this particular product, but it fits into this whole area of pharmaceutical diagnostics where these are great products that we sell.

We think we’re a world class manufacturer here, and there will be continued opportunity. And obviously, FERCARDO has

David, Analyst: got a ton of attention just given its opportunity set. What other products would you point people to? Or are there other products in the pipeline that will come to surface over the course of this year? And how should we think about additional launches?

Jay Sicarro, Chief Financial Officer, GE Healthcare: Yes. So obviously, we have Bismill on the market today, and that’s been a source of great growth, and it’s becoming a very meaningful number for us. And to a large extent, that’s dependent on the success of the Alzheimer’s therapies that are out there. So we continue to watch that, continue to support growth in Visible. So that’s that’s one other.

The core business is a huge growth driver. Right? If you if you have a CT scan, you’re gonna have iodine or something like that. If you are having an MRI, more often than not or very often, I should say, It’s with a contrast agent that’s gadolinium based in many instances. We sell those products.

So those core products are gonna continue to grow. What gets interesting for me is there are things like we in licensed a product called FAPI, which is for specific types of cancers that are heavy glucose consumers. This does a great job highlighting the cancer in unique ways. That’s something that in the future will be a product that we launch. But in addition to that, gadolinium is one particular MRI agent.

What we’re developing is a manganese based agent which has certain attributes which we believe may be very favorable and interesting to radiologists. And so that’s another one that’s gonna be coming. None of these are near term. I think we’ve got enough near term stuff to support robust growth in this, but those represent longer term opportunities and our commitment to continue to evolve and advance this portfolio. So if

David, Analyst: we think about PDX in the context of the LRP or the market, I think you’ve talked about this as a five to 6% growth category. Is that a good way to think about it than Fekardo layered on top of that?

Jay Sicarro, Chief Financial Officer, GE Healthcare: Well, in our PDX, which our expectation is PDX grows faster than the equipment. And so we’ve said our company should grow mid single digits over the next several years with PDX growing faster than that. So you could say a little bit above the five to 6%. Included in that is this 500,000,000 plus number for for Flurcado. Listen.

My hope is the plus is large, and that’s what we’re working towards. We’ll have we you know, it’s too early to say what the right number for Floccato is long term, but it is a real source of excitement for our team. We’re so and by the way, you know, we wanna create a world where health care has no limits. That’s like the mission of the company. And Florkato helps that in a very meaningful way, and so we’re, we’re getting after it.

So that’s that’s that’s but that’s the assumption in the plan.

David, Analyst: Maybe we could go over to imaging, which which, I think the imaging numbers get heavily impacted by the exposure to China and probably do mask some of the performance in other geographies. But one of the questions I frequently do get on imaging is what’s happening competitively, especially versus versus Siemens? What’s your your kind of take on the the competitive landscape and how you’re doing in imaging?

Jay Sicarro, Chief Financial Officer, GE Healthcare: If we look at share over the last several years in imaging, we’ve gained. We feel very good about the performance in imaging. And by the way, look at the order growth in the third in the fourth quarter of this year, the first quarter of fourth quarter of last year, first quarter of this year, you had incredibly robust order growth, large part driven by imaging, inclusive of CT, inclusive of MR. So we’ve had tremendous performance and and good momentum in that critically important business. And by the way, even if you look at it over four quarter period, you’re still talking about 5% order growth, incredibly robust performance, a lot of that driven by imaging despite, to your point, the impacts from China.

So we we feel quite good about where imaging is heading. Why is that? We’ve made some significant investments in MR, in the form of AI. And so, specifically, AIR Recon DL is a product that we’ve been selling for years, and in our view, it really differentiates our MR platform. What it allows for is a faster, higher quality image with the use of AI.

And basically, AI is used to improve the signal to noise ratio. And and so incredibly incredibly exciting work that we’ve done, with respect to that has led to robust MR growth. In the case of CT, we have also invested heavily in AI in support of that work We believe we have a wonderful platform, our high end APEX platform. We had tremendous CT growth in the third and fourth quarter from an order standpoint, a lot of that driven by investments that we’ve made. Remember, taking a step back, our R and D as a percent of sales just a few years ago was 4.5% of sales.

We bolstered that to 7% as a company. And a lot of that is geared towards imaging. A lot of it’s geared towards other areas. Some of it has impacted our numbers already. Some will continue to impact into the future, but that’s really what’s supporting it.

So some of these AI investments, like Sonic DL, which cuts cardiac MR time substantially, north of 50% in some instances. And why is this? I I talk about reduction in image times. And the reason I talk about that is because if you think about hospitals today, the MR suite is perhaps one of the most constrained areas. And so if there are opportunities to reduce time under image, to reduce the spin time, it’s a big deal because it allows for more patient throughput.

So it’s those kinds of things that have, I believe, differentiated us and allowed us to improve our share position over the last several years.

Carolyn Borders, Head of Investor Relations, GE Healthcare: Could I just add two other key products that we will be bringing to market next year in ’26 will be photon counting and full body PET that will help our imaging. And we do have a very large global installed base, and so that’s a natural target for us to sell into with those new products.

David, Analyst: And and on on the imaging side, I know it’s sort of a a nuance, but any issues with rare earth materials as it relates to magnets or anything else that could impact or disrupt sales?

Carolyn Borders, Head of Investor Relations, GE Healthcare: The one I’d point to more specifically would be gadolinium, which we are applying for the special licenses to be able to continue that supply. But we do have more than a year’s worth of supply in gadolinium, so we feel comfortable with that. There are certain rare earth elements that are used for imaging equipment that we’re obviously going to pursue similar path on licenses. And you

David, Analyst: have sufficient inventory of that as well?

Carolyn Borders, Head of Investor Relations, GE Healthcare: We haven’t had any issues with production stop on that.

David, Analyst: Okay. And then on some of these AI features, like, do you how do you make money? Have you figured out

Jay Sicarro, Chief Financial Officer, GE Healthcare: the business model? So so the answer is, like, we we’ve been selling, and we’ve been generating revenue from AI for years, and and and it’s it’s not an insignificant amount of money. For a company that, you know, does a lot of different things, we have a a decent amount of AI revenue. Why? AIR Recon DL, is is the prime example of this.

If you can help solve the problem for hospitals to make older magnets a little more efficient, a little more diagnostically capable, they’ll pay for that. And so what we’ve been and and and by the way, with new magnets, with new MR machines, to the extent that you can attach a piece of software that makes it more efficient and more diagnostically capable, people pay for that. And so we’ve chosen to model that through a purchase price distinct for, Air Recon DL, and it’s been, you know, it’s been it’s been a real it’s a nice driver for us. And by the way, part of the reason it’s a nice driver is because not only is it incremental revenue attached, and the attachment rate is nontrivial, but it’s an incredibly high margin sale. So we’ve been very pleased with that.

Now listen. There are other areas that are more complex to monetize, and I I get that. You know, as you look at certain futuristic uses of AI. But when you talk about the basics of, hey. Help me make my image faster and and and more readable, people will pay for that.

And in the case of AIR Recon DL, Sonic DL, direct product areas, we’ve seen the real benefit from AI in terms of sales. We expect to have $1,200,000,000 in digital sales in the current format, and we believe that that’s going to migrate to $1,800,000,000 in the next few years. And a lot of that is on the back of some of these products. Now it does get a little more esoteric as we talk about things like command center. Command center is a great product, which is helping hospitals organize their workflow more efficiently with the use of AI.

And so we’re talking about a command center in the cloud version that we’re developing. You know, we’re really excited about that. But, you know, that has those we have not impacted sales that much to date through that. That’s more in the coming years. But direct product has played a big role in terms of sales impact in the short term.

David, Analyst: That’s very helpful. And that’s a good segue. I want to see if we can get through PCS and AVS, and then I want to cover margins and everyone’s favorite tariff topic. It’s a good segue to to to PCS. Like, what I don’t how to better like, what what’s the deal on that business?

How are you gonna how are you gonna get that business to grow?

Jay Sicarro, Chief Financial Officer, GE Healthcare: So so p well, look. PCS is a business which did benefit some from some very intense dynamics coming out of COVID. And and and to a large extent, that, that kinda shaped the curve for ’24 and and some some of this performance that we’ve seen to date. But here’s the interesting thing about PCS. We help hospitals solve very important problems that, you know, in terms of patient monitoring and patient care that, you know, that is you know, can save significant money, that can, you know, and and drive outcomes in positive ways.

So we’re really optimistic about this area over the midterm. We have a number of new products in development that will support this in both The US and outside. And importantly, we hired a new leader, Jeanette Bankis, who’s a long term long time med tech executive, highly skilled, she’s kinda shepherding this area for us. There’s a lot of great opportunity in terms of our own internal development, but also in terms of, in terms of business development and other areas. I would say though that, from my standpoint, this is one that, you know, again, has this a bit of a COVID overhang, and that should sort out over time because the core products are necessary capable, and we have a lot of really neat in internal innovations coming soon.

David, Analyst: So so that was a pull forward coming out of COVID, basically?

Jay Sicarro, Chief Financial Officer, GE Healthcare: What happened coming out of COVID and and even in COVID, there was robust order growth, like, off the charts order growth for a period of a couple years, and then we paid that off 2223 into even into sales growth before. And so we’ve moderated our expectations for that business. But again, it’s one where, you know, long term, we’re very excited about. And and then lastly, on

David, Analyst: on AVS, like, I’m kinda I’m waiting for, like, the breakout quarter here because you go into any hospital, and EP volumes, structural heart volumes are all growing at very robust rates. They’re also constructing labs, expanding capacity, not yet seeing that play through into your business as a derivative of that. Is is that is that a fair assessment? Like, how how should we

Jay Sicarro, Chief Financial Officer, GE Healthcare: think about that business? So I’m gonna paste this piece of the transcript and share it with the business leader, Phil Rackledge. Yeah. Please do. We’re we are very excited about this business.

And part of the putting of the two together was was for some of the reasons that you specifically mentioned in your question here. And, you know, what I would say is this business has been negatively impacted by China, so that’s definitely a factor. But there is a real opportunity for growth. There’s constrained procedure volumes. EP labs are completely constrained today, so there’s opportunity for builds and growth.

And so as we think about the long term, this is an incredibly exciting business for us. And by the way, you look at the growth and the order growth that we’re seeing in this area, we we had a a series of launches a little over a year ago where, you know, we we’re starting to see that momentum play out, in particular, in The US market where some of those new innovations were geared. We’re seeing really good momentum. And some of the workflow improvements that we’ve made, the incorporation of Caption Health to simplify, incredibly optimistic about the core ultrasound business. And then to your point, the surgery business that we have, there’s a lot of opportunity there.

So this one is a nice long term growth driver for us.

David, Analyst: And before we go to the P and L, maybe a tough one just to kind of frame out for folks the just the cadence of product launch to revenue because I think it’s a little bit different with capital equipment than some of the other markets that we cover. So you get a product approved, you got to do some marketing, physician education, hospital CFO, blah, blah, blah. And then you get the order, and then there’s revenue. Like, is there a good, like, bogey you could give us to think about product approval to revenue contribution timelines?

Jay Sicarro, Chief Financial Officer, GE Healthcare: The answer is it depends. But to your point, it’s not an immediate it takes time. And so for example, in Flurcato, we’re talking about changing workflow in centers. It just takes time to build that up. So we had the approval.

We had the patient, but we’re only talking about $30,000,000 in kind of calendar year revenue. And a lot of that is based upon this idea of taking conversion education. And so what I would say is the more innovative the product is, the more time it takes to explain the benefits, sell the benefits, and then and then bring to revenue and to impact. And, you know, Flaccato is a unique example. The time frame is a little bit longer.

But, you know, as we bring new MR devices with new AI capabilities radiologists or technicians to change perhaps how they think about the workflow of their procedure at least to some extent. And so when you do that, it’s, you know, that’s that’s incremental sales. So could it be six months? It could be six months from approval to meaningful orders or sales. It could take some time to do that.

But at the same time, stay patient, stay investing in R and D, and set yourself up for, you know, this this this bolus of new launches. Like in 02/1926, we laid this out at our Investor Day. We have an incredibly robust set of products launching in 02/1926. There will be some revenue impact in ’26. And then ’27 and ’28, it should be very robust.

Things like whole body pet. Whole body pet is not a market we play in today. We don’t sell whole body pet. This represents a great untapped opportunity for us, but it’s about getting it out, explaining our benefits to our product. We should get that, and that should have an impact in ’twenty six.

David, Analyst: Excellent. Let’s touch on tariffs. I think obviously, the that you had communicated in on your earnings call was, I think, as expected but toward the higher side of what we saw across medtech. We I don’t know if we have tariffs, we don’t have tariffs. Right now, we’re on this a variety of pauses.

How should we think about de tariffing for you guys? And maybe remind people of the framework that you laid out on the earnings call.

Jay Sicarro, Chief Financial Officer, GE Healthcare: Sure. So on the earnings call, we basically said, we have roughly a $500,000,000 net impact from tariffs. Over a billion gross with due to MCA qualifications offsets that we had, we got the a billion down to 500,000,000 for 02/2025, which is 85¢. Our expectation is that next year is below 85¢. Why?

Because we have incremental mitigation activity that we’re working on that will have more of an impact next year. Some of it is dependent on the final contours of trade deals that are put in place, so we have to wait and see before we pursue all of the mitigation that we’d like to pursue on on final trade deals. But but that’s why next year is less than this year. This year is 85¢. We also said for investors that the vast majority of our impact is between The US and China corridor back and 65 of the 85¢ is in that US China corridor at the very elevated rates that were present at the time we gave guidance.

The rates were, like, over one twenty five, you know, really robust rates. And so what we said then was because that was such a big thing, we wanted to size that for investors. So we said, listen. If on May 1, there’s a deal and the rates between US and China come down bilaterally by a 100 basis points, we would eliminate 40¢ of that 85¢ impact. That’s what we were able to say at the time.

Now, fortunately, rates came down it was May 12, and they came down a 115%. So we were in the right range as we thought about that. And, of course, we assumed that that would be sustained for the full year, the full remainder of the year. So we’re still sort of contingent on that. How do we think about this going forward?

Look. It’s hard to say. We’re gonna watch very carefully what happened. Our assumption is on July 7, rates go back to the Liberation Day rates. And so we’re gonna watch that very carefully, what deals get done, what happens with The US China trade dynamic, and all of those things will inform what we give when we give guidance.

But, you know, I think from our standpoint, intensely focused on mitigation, meaning looking at dual source, looking at making local for local, looking at working with our suppliers to get supplies from the right countries, All of those things, you know, we’re going to continue regardless and then evaluate the cost. If it’s prohibitive to do it, we, of course, wouldn’t do it. But, you know, I think there are a whole set of no regrets moves that we’ll continue to work on that, you know, should benefit us, And and and, you know, and then we’ll be ready for whatever happens, in the July time frame and share guidance. I think our guidance philosophy will be the same as we’ve given so far. Which is?

Which is whatever the rates are you know, have been announced, reflect them in your guidance. If there’s a pause, assume the pause is going to end, reflect that in your guidance. I think we’ll put all of those principles in place.

David, Analyst: Okay. And are there any actions you’re taking now in midst of China pause, for example, that would impact second quarter results, whether that’s running plants at high levels of capacity utilization, building inventory, etcetera?

Jay Sicarro, Chief Financial Officer, GE Healthcare: Not materially. When we gave guidance, we had some set of assumptions around the mitigation activities that we outlined and what the impact would be on inventory, what the impacts would be on costs, and so on. Remember, on the earnings call, one of the things that we said is, you know, we are we are focused on managing costs in a very disciplined manner. But we are earmarking some of those savings for you know, if there are costs related to tariff mitigation, we wanted to have dollars available for that. And so that’s why, you know, we didn’t have a, you know, there was not a big reduction or anything like that.

It’s because, listen, there may be some onetime costs or specific costs related to tariffs that we have to address, and and we wanted to be mindful to protect that.

David, Analyst: Okay. Maybe we’ll close on capital allocation. I mean you announced the buyback authorization, the one since the spin, I think, at the time of the earnings call. You had I think your LRP had assumed really just cash piling up and no real deployment of the balance sheet. Maybe just give us an update how you’re thinking about use of cash now.

Jay Sicarro, Chief Financial Officer, GE Healthcare: Sure. So to your point, the long range plan, the LTS that we shared had no real deployment of capital in the form of business development or in the form of share buyback or anything like that. We just had it accumulate. We did announce a buyback, and really, this is a tool that we wanna have at our disposal for opportunistic deployment. When the shares are displaced, we wanna be able to take advantage of that in in a in a robust manner.

And so, you know, we we weren’t without asking a buyback, we didn’t have that vehicle available to us, which is why we put the buyback in place. But to be clear, we’re really interested in business development as a vehicle for us. And, you know, we’re excited about the portfolio that we have. We’re really excited about the innovation that we have in place and how that’s going to bear fruit in ’26, ’27, ’28, and beyond. But there are unique opportunities for us to supplement with smart m and a.

And, you know, what what’s what I found very compelling about our portfolio is there are so many areas in the portfolio where we have a unique and distinct strategic advantage that lends itself to acquisitions that would give us proprietary returns. And so, you know, we did a deal with a company called MIMS, and MIMS is radiation oncology workflow software. The interesting thing about MIMS is, you know, we would lose to a competitor that had better workflow than we had because we didn’t have Or if we won a deal, oftentimes, a customer would buy MIMs to put on top. So it was a great deal where, you know, it’s a very unique transaction to us. It it had very good financial profile as a result of that.

That’s the kind of deal that we wanna do. But by the way, there are a lot of deals like that in the market today, which get us very excited about the opportunity for m and a. So you know? And then we, of course, on the we pay a dividend. So from a hierarchy standpoint, reinvest in the business to drive returns, primarily in the form of R and D.

Sometimes that requires some s g sales and marketing support, but primarily in the form of R and D. Evidence of this, 4.5% growth goes to 7% of sales from an R and D standpoint. is you focus on M and A as an opportunity to deploy. we have share buyback. And then, of course, we pay a small dividend.

So we think it’s a balanced capital allocation approach, but really excited about the opportunities that have been presented to us. Excellent.

David, Analyst: Well, I think with that, we we are at time. And Jay and Carolyn, thank you thank you for your support, thank you for your participation. Great to

Jay Sicarro, Chief Financial Officer, GE Healthcare: see you again, Thanks, Jay.

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