vGE HealthCare Technologies Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to GE Healthcare's first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Good day, and thank you for standing by.

Speaker Change: I'll come to Chi Health Care's first quarter 'twenty 'twenty four earnings conference call at this time, all participants on a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automatic message and fights and you'll hear in this race. Please note that today's conference may be.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automatic message advising that your hand is raised. Please note that today's conference may be recorded. I will now turn the conference over to your speaker host, Carolynne Borders, Chief Investor Relations Officer.

Speaker Change: Recorded.

Now I'll turn the conference over to your Speaker host Calvin borders Chief Investor Relations Officer. Please go ahead.

Carolynne Borders: Thanks, Operator. Good morning, and welcome to GE Healthcare's first quarter 2024 earnings call. I'm joined by our President and CEO, Peter Arduini, and our Vice President and CFO, Jay Saccaro. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides available on our website.

Carolynne Borders: Thanks, operator, good morning, and welcome to GE Healthcare's first quarter 2024 earnings call I'm joined by our President and CEO, Peter Arduini, and our Vice President and CFO, Jason <unk>. Our conference call remarks will include both GAAP and non-GAAP financial results.

Carolynne Borders: Reconciliations between GAAP and non-GAAP measures can be found in today's press release ended the presentation slides available on our website.

Carolynne Borders: During this call, we'll make forward-looking statements about our performance. These statements are based on how we see things today. As described in our SEC filings, actual results may differ materially due to risks and uncertainty.

Carolynne Borders: During this call we'll make forward looking statements about our performance. These statements are based on how we see things today as described in our SEC filings actual results may differ materially due to risks and uncertainties and with that I'll hand, the call over to Peter.

Peter J. Arduini: Thanks, Carolyn, and thanks to all those who are joining us today. We've made good progress against our key priorities for 2024. In the first quarter, we delivered margin expansion while continuing to invest in innovation to help solve the evolving needs of customers and patients. Healthy Backlog, Order Growth, and Positive Book to Build position us for accelerated growth for the rest of the year. Today, we reaffirmed our 2024 guidance, which Jay will discuss in greater detail.

Peter J. Arduini: Thanks, Carolyn and thanks to all those joining us today.

Peter J. Arduini: We've made good progress against our key priorities for 2020 for the first quarter, we delivered margin expansion, while continuing to invest in innovation to help solve evolving needs of customers and patients. Thank you backlog orders growth and positive book to bill position us for accelerated growth.

Peter J. Arduini: Through the year.

Peter J. Arduini: Today, we reaffirmed our 2024 guidance, which Jay will discuss in greater detail.

Peter J. Arduini: I'd like to highlight some milestones that illustrate our commercial execution, for making steady progress with large multi-year, multi-modality deals across equipment and services resulting in incremental share. In the US, we secured a 10-year strategic alliance with OSF Healthcare to deliver technology, digital solutions, and equipment management services to help clinicians improve care delivery and patient outcomes. We also extended our relationship with Hartford HealthCare to run through 2030.

Jay: Now I'd like to highlight some milestones that illustrate our commercial execution.

Jay: We're making steady progress with large multi year multi modality deals across equipment and service, resulting in incremental share gains you.

Jay: We secured a 10 year strategic alliance with OSF healthcare to deliver technology digital solutions and equipment management services to help clinicians improve care delivery and patient outcomes.

We also extended our relationship with Hartford healthcare to run through 2030.

Peter J. Arduini: As a trusted partner, we'll continue to work together to optimize their imaging fleet and provide specialized support from our GE HealthCare service technicians. Our Care Pathway strategy is progressing well, enabling commercial growth opportunities and introducing us to adjacent markets with attractive growth potential. For example, last week, we announced the expansion of our collaboration with Electa to enhance their radiation therapy planning offerings using MIMSOFT. Unknown Attendee

Jay: Rusty partner and we'll continue to work together to optimize their imaging fleet and provide specialized support from our GE healthcare service technicians.

Jay: Our care pathway strategy is progressing well, enabling commercial growth opportunities and introducing us to adjacent markets with attractive growth potential.

Jay: For example, last week, we announced the expansion of our collaboration with <unk> to enhance their radiation therapy planning offerings, using NIM software, which we acquired in April.

Unknown Attendee: Thank you. Thank you. Thank you.

In Spain, we announced the first global install of our alia IGF pulse system, which is our market leading cath lab design that we expect will be a growth vehicle and its important interventional cardiology market.

Peter J. Arduini: Thank you, which is our market-leading cath lab that we expect will be a growth vehicle in this important interventional cardiology. As we look to 2024, we see a growing funnel of opportunities for products like our IGS. Our strategic initiatives and trusted partnerships are taking hold and preparing us for a future where healthcare is more connected, efficient, and patient-centered. Looking ahead, our outlook reflects a strong global procedure environment, particularly in the United States, and customers continue to be optimistic about capital investment and market normalization.

As we look to 2024, we see a growing funnel of opportunities for products like our Ics portfolio.

Our strategic initiatives and trusted partnerships are taking hold and position us well for a future where health care is more connected efficient and patient centric.

Jay: Looking ahead, our outlook reflects a strong global procedure environment, particularly in the United States and customers continue to be optimistic about capital investment and market normalization <unk> combined with our focus on execution give us confidence in our ability to deliver on our commitments for 2020.

Peter J. Arduini: These tailwinds, combined with our focus on execution, give us confidence in our ability to deliver on our commitments for 2024 and in the medium term. Now I'll pass it on to Jay, who will take us through the details of our first quarter performance. Jay. Thanks, Pete.

Jay: And our medium term goals.

Now I'll pass it on to J, who will take us through the details of our first quarter performance Jay.

J: Thanks, Pete let's start with our financial performance on slide four.

James K. Saccaro: Let's start with our financial performance on slide four. For the first quarter of 2024, revenues of $4.6 billion were approximately flat organically year over year. As you recall, this quarter's results follow the strong double-digit growth we delivered in the first quarter of 2023, which benefited from easing supply chain conditions and strong China stimulus sales. Organic orders increased 1% year over year, primarily driven by strength in the US. With orders dollars continuing to outpace sales, we generated a solid total company book-to-bill of 1.03 times versus 1.01 times last year.

J: For the first quarter of 2020 for revenues of $4 $6 billion were approximately flat organically year over year.

J: Call. This quarter's results followed the strong double digit growth we delivered in the first quarter of 2023, which benefited from easing supply chain conditions and strong China stimulus sales.

J: Organic orders increased 1% year over year, primarily driven by strength in the U S with orders continuing to outpace sales we generated a solid total company book to Bill of one three times versus one one times last year.

James K. Saccaro: We also exited the first quarter with a healthy backlog of $18.7 billion. The adjusted EBIT margin was 14.7%, up 50 basis points year-over-year, with improvements in both gross profit margin and SG&A. First quarter adjusted EPS was $0.90, up 6% year over year, driven by improved margins and lower interest expense.

J: We also exited the first quarter with a healthy backlog of $18 $7 billion.

J: Adjusted EBIT margin was 14, 7% up 50 basis points year over year with improvements in both gross profit margin and SG&A.

J: First quarter adjusted EPS was <unk> 90 up 6% year over year, driven by improved margins and lower interest expense.

James K. Saccaro: And we generated $274 million in free cash flow from improved working capital. On slide five, we take a closer look at total company revenue performance for the first quarter. Organic revenue growth was approximately flat versus the 12% that we generated in the same period last year.

And we generated $274 million in free cash flow from improved working capital.

J: On slide five let's take a closer look at total company revenue performance for the first quarter.

J: Organic revenue growth was approximately flat versus the 12% that we generated in the same period last year.

James K. Saccaro: On a reported basis, service revenue grew 2% and product revenue declined 3%. Product performance was impacted by the difficult year-over-year comparison. Longer term, we see good growth opportunities in both product and service, including greater service revenue from a larger installed base. China revenue declined by low double digits given the stimulus that benefited the first quarter of 2023, as well as the anti-corruption impact in the quarter.

J: On a reported basis service grew 2% and product revenue declined 3%.

J: Product performance was impacted by the difficult year over year comparison.

J: Longer term, we see good growth opportunities in both product and service, including Greater service revenue from a larger installed base.

J: China revenue declined low double digits, given the stimulus that benefited the first quarter of 2023 as well as anti corruption impact in the quarter.

James K. Saccaro: The EMEA sales were up slightly, and sales in the U.S. and rest of the world were flat with prior year results. Turning to slide six and the progress we made in the first quarter on margin initiatives. The adjusted gross margin expanded 120 basis points as we benefited from commercial wins and productivity initiatives. We also delivered positive price in the quarter. Productivity is an ongoing focus for our teams, and our lean practices continue to drive improvement.

J: EMEA sales were up slightly and sales in the U S and rest of world were flat with prior year results.

J: Turning to slide six and the progress we made in the first quarter on margin initiatives.

J: Adjusted gross margin expanded 120 basis points as we benefited from commercial wins and productivity initiatives.

J: We also delivered positive price in the quarter.

J: Productivity is an ongoing focus for our teams and our lean practices continue to drive improvements.

James K. Saccaro: Our teams are expanding daily management and standard work to new areas while delivering on current commitments. All of our segments delivered mid single-digit or greater variable cost productivity and made significant platforming improvements. We've been making strategic investments in advanced manufacturing technologies such as 3D printing and additive manufacturing across our segments to enhance product capabilities and quality and improve variable cost productivity. Unknown Attendee, Ryan Zimmerman, Sezgi Ozener, Taha Kass, Graham Doyle, Ryan Zimmerman, Sezgi Ozener, 51.

J: Our teams are expanding daily management and standard work to new areas, while delivering on current commitments.

J: All of our segments delivered mid single digit or greater variable cost productivity and made significant platforming improvements.

J: We've been making strategic investments in.

J: Advanced manufacturing technologies, such as <unk> printing and additive across our segments to enhanced product capabilities and quality and improved variable cost productivity.

J: To date in the U S. We have more three D printing related patents and any other imaging company.

J: With 51.

James K. Saccaro: These investments drive lower costs and higher durability. For example, in MR, we're applying these methodologies across the entire portfolio, saving us more than $1 million a year and improving performance and reliability. In S.U.N.A.

J: These investments drive lower cost and higher durability.

J: For example, an MLR, we're applying these methodologies across the entire portfolio saving us more than $1 million, a year and improving performance and reliability.

J: On SG&A, we continue to make progress with roughly 330, <unk> exited since spin and we're well positioned to exit the vast majority of the remaining agreements. This year. This will allow us to further optimize our cost structure in the future.

James K. Saccaro: We continue to make progress with roughly 330 T.S.A.s exited since SPIN, and we're well positioned to exit the vast majority of the remaining agreements this year. This will allow us to further optimize our cost structure in the future. We delivered solid progress in gross margin and adjusted EBIT margin expansion while continuing to fund strategic priorities for future growth. Now, I'll turn to our segment.

J: We delivered solid progress in gross margin and adjusted EBIT margin expansion, while continuing to fund strategic priorities for future growth.

J: Now I'll turn to our segments.

James K. Saccaro: Let's start with imaging on slide 7, where we had approximately flat organic revenue growth. This was against a difficult comparison to the prior year when sales were up 12%, and the segment EBIT margin was up 210 basis points year over year. We made progress on enhancing gross margin through productivity, price, and service contract capture rates while investing in R&D. Margin expansion in this business remains a critical priority for us, and we're on track with the plans we communicated at our investor day.

J: Let's start with imaging on slide seven where we had approximately flat organic revenue growth.

J: This was against a difficult comparison to the prior year when sales were up 12%.

J: <unk> EBIT margin was up 210 basis points year over year, we made progress on enhancing gross margin through productivity price and service contract capture rate.

J: Investing in R&D.

J: Margin expansion in this business remains a critical priority for us and we're on track to the plans we communicated at our Investor day.

James K. Saccaro: Customer demand for our imaging products remains healthy as new therapies drive the need for precision imaging guidance. We're excited about the impact our new product introductions are expected to have on both future revenue and margin. Turning to ultrasound on slide eight, organic revenue was down 4% year-over-year following double-digit growth in the prior year. Segment EBIT margin decreased 200 basis points year-over-year, driven primarily by inflation and lower volume.

J: Customer demand for our imaging products remains healthy as new therapies drive the need for precision imaging guidance.

J: We're excited about the impact of our new product introductions are expected to have both future revenue and margin.

J: Turning to ultrasound on slide eight organic revenue was down 4% year over year following double digit growth in the prior year segment EBIT margin decreased 200 basis points year over year, driven primarily by inflation and lower volume.

J: During the quarter the team's strong focus on productivity through standardization and commonality across platforms, along with ongoing pricing strategies helped to partially offset these challenges.

James K. Saccaro: During the quarter, the team's strong focus on productivity through standardization and commonality across platforms, along with ongoing pricing strategies, helped to partially offset these challenges. Looking ahead, our funnel is solid, and we expect growth to accelerate as well as productivity initiatives to drive margin improvements in the second half of the year. Most notably, we also recently launched several exciting new ultrasound innovations that will benefit both top and bottom line performance. Moving to patient care solutions on slide nine.

J: Looking ahead, our funnel is solid and we expect growth to accelerate as well as productivity initiatives to drive margin improvements in the second half of the year most.

J: Most notably we also recently launched several exciting new ultrasound innovations that will benefit both top and bottom line performance.

J: Moving to patient care solutions on slide nine organic revenue was down 4% year over year, driven primarily by in quarter fulfillment delays and prior year Covid related ventilator volume in China, which drove double digit growth last year back.

J: Backlog remains healthy.

J: Which positions us well for growth.

James K. Saccaro: Organic revenue is down 4% year-over-year, driven primarily by in-quarter fulfillment delays and prior-year COVID-related ventilator volume in China, which drove double-digit growth last year. Backlog remains healthy, which positions us well for growth. However, segment EBIT margin decreased 310 basis points year over year due to inflation and timing of shipments.

J: <unk> EBIT margin decreased 310 basis points year over year due to inflation and timing of shipments.

J: We implemented programs to drive productivity and price that we expect will improve our margin in future quarters.

J: Moving to pharmaceutical diagnostics on slide 10, we had another strong quarter generating 8% year over year organic growth driven by price and continued volume growth.

J: In the quarter, we saw encouraging progress with the first signs of sales uptake for <unk> in the U S and other countries.

James K. Saccaro: We implemented programs to drive productivity and price that we expect will improve our margin in future quarters. Moving to pharmaceutical diagnostics, on slide 10, we had another strong quarter, generating 8% year over year organic growth driven by price and continued volume growth. In the quarter, we saw encouraging progress with the first signs of sales upticks for Visamil in the U.S. and other countries. With additional Alzheimer's therapy approvals, we expect more substantial increases in the second half of 2024.

J: With additional Alzheimer's therapy approvals, we expect more substantial increases in the second half of 2024.

J: Segment EBIT margin of nearly 30% improved 190 basis points year over year, mostly driven by price productivity actions and volume, while we continue to invest in our robust R&D pipeline. We're also encouraged by the continued strength of global procedures, which drives the need for our image.

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J: We're executing on significant capacity investments to strengthen the security of supply for our customers and to deliver on our patients needs planned expansion at our lindesnes facility in Norway is expected to be completed during the second quarter.

James K. Saccaro: Segment even margin of nearly 30% improved 190 basis points year over year, mostly driven by price, productivity actions, and volume, while we continue to invest in our robust R&D pipeline. We're also encouraged by the continued strength of global procedures, which drives the need for our imaging agents.

J: At the same time, our lean methodologies foundational to delivering for our customers as we continue to increase patient dose capacity across our supply chain.

J: Turning to slide 11, I'll walk through our cash flow performance.

J: In the first quarter, we delivered free cash flow of $274 million, our working capital improved year over year and reflected improved inventory turns and lower accounts receivable many of our lean efforts and priorities associated with inventory management and the collection processes helped drive our.

James K. Saccaro: We're executing on significant capacity investments to strengthen the security of supply for our customers and to deliver on our patients' needs, planned expansion at our Lindesnes facility in Norway. Speaker 1 – This meeting is expected to be completed during the second quarter. At the same time, our lean methodology is foundational to delivering for our customers as we continue to increase patient dose capacity across our supply chain. Turning to slide 11, I'll walk through our cash flow performance. In the first quarter, we delivered free cash flow of $274 million.

Speaker Change: Yes here, our strong cash generation capabilities provides us with the financial flexibility to support future growth, leaving room for organic and opportunistic M&A to accelerate innovation as.

Speaker Change: As previously disclosed we strengthened our balance sheet by paying down $150 million of debt in the quarter.

Speaker Change: Now, let's turn to our outlook on slide 12 in short we are reaffirming our full year 2024 guidance, we expect a modest sequential improvement in second quarter organic sales growth and adjusted EBIT margin as discussed in our fourth quarter call, we expect stronger revenue growth and adjusted.

Speaker Change: EBIT margin in the second half of the year.

James K. Saccaro: Our working capital improved year-over-year and reflected improved inventory turns and lower accounts receivable. Many of our lean efforts and priorities associated with inventory management and the collection processes help drive our progress here. Our strong cash generation capabilities provide us with the financial flexibility to support future growth, leaving room for organic and opportunistic M&A to accelerate innovation. As previously disclosed, we strengthened our balance sheet by paying down $150 million of debt in the quarter.

Speaker Change: There are a few catalysts that will support growth for the through the rest of the year. This includes a number of new product launches that will accelerate growth in ultrasound. In addition, we expect to see growth in imaging supported by healthy backlog and a large order funnel. We expect continued growth in our pdx business as procedure trends rim.

Speaker Change: <unk> strong and in Tcs, we have healthy backlog.

Speaker Change: I expect the fulfillment challenges in the first quarter to resolve by mid year.

Speaker Change: With that I'll turn the call back over to Pete.

Pete: Thanks, Jay turning to our precision innovation strategy on slide 13.

Pete: We're excited about recent product introductions across our segments to address customer challenges and improve patient outcomes.

James K. Saccaro: Now let's turn to our outlook on slide 12. In short, we are reaffirming our full year 2024 guidance. We expect a modest sequential improvement in second quarter organic sales growth and adjusted EBIT margin.

Pete: Industry continues to be challenged with higher rates of clinical burn out.

Pete: By increased demand for imaging and caring for an aging population.

Pete: Our customers need solutions that increased flexibility and staffing scheduling and operations.

James K. Saccaro: As discussed in our fourth-quarter call, we expect stronger revenue growth and adjusted EBIT margin in the second half of the year. There are a few catalysts that will support growth through the rest of the year. This includes a number of new product launches that will accelerate growth in ultrasound. In addition, we expect to see growth in imaging supported by a healthy backlog and a large order funnel. We expect continued growth in our PDX business as procedure trends remain strong, and in PCS, we have a healthy backlog and expect the fulfillment challenges in the first quarter to resolve by mid-year. With that, I'll turn the call back over to Pete.

Digitally enabled remote scanning and connected patient monitoring our ways. We can help address these issues.

Pete: In the U S. GE healthcare is the exclusive distributor of a vendor agnostic system that allows clinical experts to provide remote MLR, Cte and pet scanning support and image review.

Pete: By enabling virtual clinical experts to provide real time guidance to technologists on site, we're helping to address staffing shortages and streamlining operational workflows.

Pete: Our portrait mobile and monitoring solutions platform recently introduced the portrait vital signs monitor in the U S and Europe.

This new solution integrates with the EHR, allowing clinicians to customize early patient warning scores like low oxygen rates and declining blood pressure to identify patient deterioration sooner.

Peter J. Arduini: Thanks, Jay. Turning to our precision innovation strategy on slide 13, we're excited about recent product introductions across our segments to address customer challenges and improve patient outcomes. However, the industry continues to be challenged with higher rates of clinical burnout.

Pete: We're also focused on advancing cancer research and creating AI to address some of the biggest challenges in cancer care for.

Peter J. Arduini: Fueled by increased demand for imaging and caring for an aging population, our customers need solutions that increase flexibility in staffing, scheduling, and operations. Digitally enabled remote scanning and connected patient monitoring are two ways we can help address these issues. In the US, GE Healthcare is the exclusive distributor of a vendor agnostic system that allows clinical experts to provide remote MR, CT, and PET-CT scanning support and image review.

Pete: For example, immunotherapy has revolutionized the way we think about cancer treatment. However, patient outcomes vary with some response rates ranging from 15% to 30% in solid tumors and 45% to 60% in melanoma because of this variation a considerable amount of research is focused on determining.

Pete: Treatment response.

Pete: AI can potentially make a difference in our pharmaceutical diagnostics business. We created AI research models in collaboration with Vanderbilt University Medical Center.

Peter J. Arduini: By enabling virtual clinical experts to provide real-time guidance to technologists on site, we're helping to address staffing shortages and streamlining operational work. Our Portrait Mobile and Monitoring Solutions platform recently introduced the Portrait Vital Signs Monitor in the U.S. and Europe. This new solution integrates with the EHR, allowing clinicians to customize early patient warning scores like low oxygen rates and declining blood pressure to identify patient deterioration. We're also focused on advancing cancer research and creating AI to address some of the biggest challenges in cancer care. For example, immunotherapy has revolutionized the way we think about cancer treatment.

Pete: <unk> demonstrated a 70% to 80% accuracy in predicting cancer patients response to certain immunotherapies.

Pete: Which unique about the approach is that we created these AI models using routinely collected data available in the EHR, giving them the potential for broad deployment and adoption.

Pete: Methodology that was recently published in a peer reviewed scientific journal.

Pete: These AI models have the potential to help clinicians to match patients to the most effective treatment sooner, while avoiding unnecessary side effects and costs and could be integrated into our digital suite of tools in the future.

Pete: We are bolstering our leading portfolio in ultrasound with six new products introductions that includes significant upgrades platforming solutions and new artificial intelligence applications for radiology urology and cardiology.

Peter J. Arduini: However, patient outcomes vary, some response rates ranging from 15% to 30% in solid tumors and 45% to 60% in melanoma. Because of this variation, a considerable amount of research is focused on determining treatment response. AI can potentially make a difference. In our Pharmaceutical Diagnostics business, we created AI research models in collaboration with Vanderbilt University Medical, that demonstrated a 70-80% accuracy in predicting cancer patients' response to certain immunotherapies. What's unique about the approach is that we created these AI models using routinely collected data available in the EHR, giving them the potential for broad deployment and adoption, methodology that was recently published in a peer-reviewed science These AA models have the potential to help clinicians to match patients to the most effective treatment sooner, while avoiding unnecessary side effects and costs, and could be integrated into our digital suite of tools in the, We're bolstering our leading portfolio in all, Six New Products, Introduction, that includes significant platforming solutions and new artificial intelligence applications, for Radiology, Urology, and Cardiology.

Pete: This is a direct correlation to our increased investments in R&D dollars.

Pete: We've supported clinicians for more than 30 years with our premium general imaging platform logic.

Pete: And we're excited to share that we've made significant enhancements. These include the launch of three upgraded premium systems and a new mid tier solution. The logic told us all with AI and <unk> are wireless handheld probe integration.

Pete: Our new urology based software feature prostate volume assessed is now available on several BK active imaging systems between MIM software is prostate fusion solutions and the power of AI, we're strengthening our prostate focused ultrasound solutions and improving the cancer journey.

Pete: For providers and patients.

Pete: Earlier this month, we launched the V scan air SL with caption AI cardiac guidance at the American College of Cardiology Conference.

Pete: Integrating AI into our handheld system, we're enabling clinicians to acquire up to 10 standard cardiac us with guidance trading even more access and use cases for ultrasound point of care for example, with AI in the palm of their hand, a primary care physician with less.

Peter J. Arduini: This is a direct correlation to our increased investments in R&D dollars. We've supported clinicians for more than 30 years with our premium general imaging platform, Logitech. And we're excited to share that we've made significant enhancements. These include the launch of three upgraded premium systems and a new mid-tier solution, the Logic TOTUS, all with AI and vScan Air wireless handheld probe integration. Our new urology-based software feature, Prostate Volume Assist, is now available on several BK ActiveImage models between MIMS software's Prostate Fusion...

Pete: <unk> experience.

Pete: You cover heart disease sooner.

Pete: Our cardiologist can easily and automatically calculate a left ventricular ejection fraction potentially diagnosing heart failure currently.

Pete: We expect these advancements in ultrasound to drive price and cost efficiencies over time and continue to realize more productivity while accelerating growth.

Pete: We also continue to build our reputation as a trusted partner in ultrasound with several collaborations to address growing patient needs globally. For example, two leading public health agencies in China recently chose GE healthcare to develop innovative technologies patient management models and clinical trading programs.

Peter J. Arduini: The Power of AI, we're strengthening our prostate-focused ultrasound solutions and improving the cancer journey for providers and patients. Earlier this month, we launched the vScanAir SL with CaptionAI cardiac guidance at the American College of Cardiology. By integrating AI into our handheld, we're enabling clinicians to acquire up to 10 standard cardiac uses with guidance, creating even more access and use cases for ultrasound point of care. For example, with AI in the palm of their hand, a primary care physician with less ultrasound experience may uncover heart disease sooner, or cardiologists can easily and automatically calculate a left ventricular ejection fraction, potentially diagnosing heart failure.

Pete: To improve outcomes for patients with liver disease.

Pete: In summary on slide 14, I'd like to thank our team for their focus and execution in the first quarter I'm encouraged by the progress on the product pipeline and market outlook for.

Pete: Situates us well for an improving growth profile as we move through the year.

Pete: Look forward to sharing more about our progress and future innovation plans at upcoming conferences.

I'd like to introduce that we will host our Investor day on November 21 in New York City, where we will provide more in depth views on technology and innovation with that we'd like to open up the call for questions.

Peter J. Arduini: We expect these advancements in ultrasound to drive price and cost efficiencies over time and continue to realize more productivity while accelerating growth. We also continue to build our reputation as a trusted partner in ultrasound with several collaborations to address growing patient needs globally. For example, two leading public health agencies in China recently chose GE Healthcare to develop innovative technologies, patient management models, and clinical training programs to improve outcomes for patients with liver disease. In summary, on slide 14, I'd like to thank our team for their focus and execution in the first quarter.

Speaker Change: Thank you Peter I'd like to ask participants to please limit yourself to one question and one follow up.

Speaker Change: Can you please open the line.

Speaker Change: Ladies and gentlemen to ask a question you will need to press star one on your telephone and wait premium to blow nose to withdraw your question simply question.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: First question coming from the line of so Thats Kelly with Oppenheimer. Your line is now.

Kelly: Good morning, Good morning, everyone. Peter can you hear me all right.

Kelly: Yes clear.

Kelly: My apologies for the background noise.

Kelly: So Peter the obvious question.

Kelly: U S year over year was flattish I guess you are pointing towards China.

Peter J. Arduini: I'm encouraged by the progress on the product pipeline and market outlook, which situates us well for an improving growth profile as we move through the year. I look forward to sharing more about our progress and future innovation plans at upcoming conferences. I'd like to introduce that we will host our Investor Day on November 21st in New York City. We will provide more in-depth views on technology and, with that, we'd like to open up the call.

In terms of ventilator.

Kelly: <unk>.

Kelly: We have set the stage for us in terms of the U S.

Kelly: A portion of the business.

Kelly: This performance in the quarter and how you see it progressing through the year.

Kelly: No.

Speaker Change: Yeah. So it's look I would just kind of start out to say from that standpoint.

Speaker Change: The endpoint is just remember as we talked about the compare was.

Speaker Change: Our toughest one of the year. So obviously it gets better throughout the year, we talked about that in our guidance.

Speaker Change: But really Q1 was impacted by fundamentally was two items.

Peter J. Arduini: Thank you, Peter. I'd like to ask participants to please limit themselves to one question and one follow-up. Operator, can you please open the line? And finally, ladies and gentlemen, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again.

Speaker Change: And Jay touched this on the prepared remarks, one was some fulfillment delays in Tcs I think we've got those well in hand to have them resolved by probably mid year I think thats. The first part of this there were specific items plus about technology and more about actually delivery of the components and then the China piece and again, we know that anti corruption.

Speaker Change: <unk> <unk>.

Speaker Change: Presents a challenging environment and we expected that to play out through through mid year. I mean, those are really the two items if I look at the U S. Specifically.

Operator: Please stand by while we compile the Q&A roster. Now, the first question coming from the line of Suraj Kalia with Oppenheimer, your line is open. Good morning, good morning everyone.

Speaker Change: We actually are seeing a more positive backdrop relative to orders funnel relative to growth potential and really across all of our businesses and I'd say ultrasound I talked a lot on the call here about new products 2023 market was somewhat down for the whole market in ultrasound, we see that actually turning around.

Peter J. Arduini: Peter, can you hear me all right? Yes, it's clear. My apologies for the background noise. So, Peter, the obvious question, U.S. year-over-year growth was flattish. I get your point on China. Transcripts provided by Transcription Outsourcing, LLC. Look, I would just kind of start out to say from that standpoint, just remember, we talked about how the compare was our toughest one of the year, so obviously, it gets better throughout the year. We talked about that in our guidance. But really, Q1 was impacted by two items.

Speaker Change: <unk> and 'twenty four and so the timing of our new product introductions is very good as well as an imaging so.

I am rather confident on how we're going to see the capital landscape and the market evolve within the United States, but relative to the quarter. It was those two specific items that dampened our topline.

Speaker Change: Got it Peter.

Speaker Change: Peter My follow up specifically within imaging, how should we think about.

Backlog.

Speaker Change: Hi, E business that was already in the hands.

Peter J. Arduini: And Jay touched on this in his prepared remarks. One was some fulfillment delays in PCS. I think we've got those well in hand to have them resolved by mid-year. I think that's the first part of this. And there were specific items less about technology and more about actually delivery of the components. And then the China piece.

Peter J. Arduini: Flowing through in the next three quarters versus <unk>.

Peter J. Arduini: New orders coming in versus NPI and price increase just kind of give us how you're thinking about if there's any bad shape as the year progresses, which is the leverage to be folks that know how.

Peter J. Arduini: Should we think about the cadence of imaging growth I think it progresses. Thank you for taking my question.

Peter J. Arduini: And again, we know that anti-corruption presents a challenging environment, and we expected that to play out through mid-year. I mean, those are really the two items. If I look at the U.S. specifically, we actually are seeing a more positive backdrop relative to the order funnel, relative to growth potential, and really across all of our businesses. And to say ultrasound, I talked a lot on the call here about new products. The 2023 market was somewhat down for the whole market in ultrasound, but we see that actually turning around in 2024.

Speaker Change: Yes, great. Thanks, Let me comment and then Jay you can you can jump in as well on this so we've got a we've got a very solid backlog for our imaging business I think we feel quite good about the diversity of it the mix of it.

Speaker Change: And it actually being growing with price in the backlog and that new platform and capabilities that are coming in like our rgs system or new Cath lab, which will come in and actually bring better margins. So it's positioned well from that standpoint, we think the profile is going to be more second half just as.

Speaker Change: We've communicated there hasn't been a lot we're going to clearly see.

Speaker Change: Pickup in the second quarter, but the majority of its more profile out towards Q3, and Q4 and again that really hasn't changed from what we've laid out our initial guidance on I would say from a broader order standpoint.

Speaker Change: We expect that we will see an uptick in broader imaging orders both in Q2, three and four.

Peter J. Arduini: And so the timing of our new product introductions is very good, as well as in imaging. So I'm rather confident about how we're going to see the capital landscape and the market evolve within the United States. But relative to the quarter, it was those two specific items that dampened our top line.

Speaker Change: Most likely having a larger step up in the second half and some of that is tied to the China stimulus discussion that we had from an order standpoint, but even in the U S profile. When you take a look at the products that we've got laid out some of the big deals that we have visibility into the pipeline. They are probably going to nest more so.

Peter J. Arduini: And Peter, my follow-up question specifically within imaging: how should we think about backlog, i.e., business that is already in the hands, flowing through in the next three quarters versus new orders coming in versus NPI and price increases? Just kind of give us how you all are thinking about, within imaging, as the year progresses, which are the levers to be pulled? You know, and how should we think about the cadence of imaging growth as the year progresses?

Speaker Change: And that second half of the year.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Thank you.

Adele Dang: Our next question coming from the line of adequately Dang with Madmen Atlantic Your line is open.

Adele Dang: Thank you very much.

Adele Dang: Question, just to follow up actually on the China stimulus plan, the new Chinese stimulus that is being discussed we see the headline details.

Adequately Dang: From the authorities, there, but not much more.

Peter J. Arduini: Thank you for taking my question. Yeah, great, thanks. Let me comment, and then Jay, you can jump in as well on this. So we've got a very solid backlog for our imaging business. I think we feel quite good about the diversity of it, the mix of it, and it actually growing with price in the backlog, and then new platforming capabilities that are coming in, like our IGS system, our new cath lab, which will come in and actually bring better margins. So it's positioned well from that standpoint. We think the profile is going to be more second half, just as we've communicated. There hasn't been a lot.

Adequately Dang: You speak to.

Adequately Dang: Well.

Adequately Dang: You see the benefit of these might be.

Adequately Dang: For your address markets through the remainder of the year.

Adequately Dang: Your peer yesterday was talking about some evidence of wholesale submitting the orders as a result of the potential new stimulus, but then if you could speak to that first please.

Speaker Change: Yes, so look the the data is unveiling as we speak so I think we don't have perfect information on it but I think if you look at it since our guidance what is new.

Speaker Change: Is obviously not anti corruption thats out there and it's going to continue we believe to be tough through mid year and as we said before we believe that thats going to continue to begin to improve in the second half what is new is the stimulus and from our understanding of it the prior stimulus was more about.

Peter J. Arduini: We're going to clearly see a pickup in the second quarter, but the majority of it is profiled out towards Q3 and Q4. And again, that really hasn't changed from what we've laid out our initial guidance on. I would say from a broader order standpoint, we expect that we will see an uptick in broader imaging orders, both in Q2, 3, and 4, most likely having a larger step up in the second half.

Speaker Change: Low low interest rates or relief relative to loans, where this will actually be specific cash grants.

Speaker Change: Which then would reach a larger group of institutions that arent just looking for loans, but are looking for.

Speaker Change: Supplemental dollars to buy equipment. So we think that obviously opens us up to a larger population.

Peter J. Arduini: And some of that's tied to the China stimulus discussion that we had from an order standpoint. But even the U.S. profile, when you take a look at the products that we've got laid out, some of the big deals that we have visibility into the pipeline, they're probably going to nestle more so in that second half of the year. Thank you. Thank you. Thank you, and our next question coming from the line-up, Edward Ridley Day with Redbridge Atlantic Airlines, is open. Hi there, thank you very much.

Speaker Change: The second piece to that as well is that it's.

Speaker Change: Ability to be multi year, and so we'll see how that ultimately plays out but those are the two characteristics relative to the rollout of it I would say what we did see at the end.

Speaker Change: The first quarter is actually a little bit tapping of the brakes of some orders in China relative to stimulus coming out and you say well why would that be customers, taking a look at to say I really want to understand the rules of it so when I submit an order I make sure I get the full benefit of the stimulus. So we believe that there's going to be clarity to.

Peter J. Arduini: So my first question is, just to follow up on the Chinese stimulus plans, the new Chinese stimulus that is being discussed. We've seen headline details from the authorities there, but not much more. Could you speak to what you think the benefits might be for your address markets through the remainder of the year? And your colleague yesterday was talking about some evidence of hospitals submitting new orders as a result of the potential new stimulus. I don't know if you could speak to that first, please. Yeah, so look, the data is being revealed as we speak. So I think, you know, we don't have perfect information on it.

Speaker Change: Stimulus rules so to speak at some point here in Q2 and post those rule then we would expect an uptake in orders and then how that plays out if the orders come sooner there is more possibility for sales within the year if the orders come later.

Speaker Change: Like ultrasound that you can do flow shipments most likely with benefits sooner, whereas installed products would probably be a little bit later, but net net this is all positive and.

Speaker Change: Kind of how we see the landscape as we speak right now.

Speaker Change: So thank you that's very helpful and just a quick follow up actually on your radiopharmaceutical business.

Speaker Change: If you can give any color on when we should expect FDA approval for flip here with us.

Peter J. Arduini: But I think if you look at since our guidance, what is new is obviously not the anti-corruption that's out there. And it's going to continue to be, we believe, to be tough through mid-year. And as we said before, we believe that that's going to continue to improve in the second half. What is new is the stimulus. And from our understanding of it, the prior stimulus was more about low interest rates or relief relative to loans, where this will actually be specific cash grants, which would reach a larger group of institutions that aren't just looking for loans; they're looking for supplemental dollars to buy equipment.

Speaker Change: And also any other updates that we should be thinking about or looking for the remainder of the year. Thank you.

Speaker Change: Yes look I mean, we've heard as you referenced.

Speaker Change: In Asia, that's in our pdx business that will be used for cardiac imaging and pads.

Speaker Change: We think it's going to be a really breakthrough approach to be able to do cardiac perfusion imaging and <unk> and a lot of it is as you know is tied to logistics the half life and the ability to ship a product there as opposed to have to generate it an automatic seconds on site.

Speaker Change: <unk> has been submitted to the FDA and we will provide.

Speaker Change: Updates here on the milestones I think.

Speaker Change: Here from the team, we have everything and we're not assuming anything within our 24 guidance I mean, this will be more about 'twenty five 'twenty six 'twenty seven event.

Peter J. Arduini: So we think that obviously opens this up to a larger population. If the orders come later, businesses like ultrasound that you can do, flow shipments would probably benefit sooner, whereas installed products would probably be a little bit later. But net-net, this is all positive. And kind of how we see the landscape as we speak right now.

Speaker Change: As those ramp up but all things good and we'll be waiting to hear back from the agency if theres any questions or follow ups that they have for us.

Speaker Change: Thank you for your questions great. Thanks.

Speaker Change: Thank you and our next question coming from the line of thank you.

Speaker Change: Sure.

HSBC: HSBC Your line is open.

HSBC: Hi.

HSBC: From HSBC here. Thanks for taking my questions I Hope you can hear me all right.

HSBC: And Mike one.

Peter J. Arduini: Thank you, that's very helpful. And just a quick follow-up, actually, on your radiopharmaceutical business. If you can give us any color on when we should expect FDA approval for Pyridaz and also any other updates that we should be thinking about or looking for in the remainder of the year, thank you.

HSBC: My first one is on your confidence on the full year 'twenty four outlook given the lower book to Bill are you more on the lower end or.

HSBC: Are you equally confident on both ends of your guidance and the second one is on your pricing versus volume comments I've seen that the positive pricing comment.

Peter J. Arduini: Yeah, look, Fliproot, as you referenced, is an agent that's in our PDX business that will be used for cardiac imaging and PET-CT. We think it's going to be a really breakthrough approach to be able to do cardiac perfusion imaging and PET-CT. And a lot of it, as you know, is tied to logistics, the half-life, and the ability to ship a product there, as opposed to having to Files have been submitted to the FDA, and, you know, we'll provide updates here on the milestones.

HSBC: This means selected uniformly across the segments as well as across the region. Some color that would be really helpful.

Speaker Change: So maybe I'll start then Jay you can talk a little bit more about some of the book to bill on the cadence.

HSBC: <unk>.

Jay: I walked through just a minute ago, the impact for first quarter, including a difficult comp, but we expect that to alleviate through the year, which again gives us strong confidence in our ability to hit our guidance again for things the comps get better quarter over quarter, our final growing on orders and sales we have good visibility into <unk>.

Jay: <unk> our service model. So how does service grow when you won share in the previous year you have one year warranty when it comes off of warranty it becomes part of a contract we're starting to see the benefit of that service growth now in 24 three.

Jay: Three the new products against across the whole product line, but particularly in ultrasound in select areas in imaging the new products and then an improving China. So thats really the four items that kind of gives us confidence Jay maybe over to you talk a little bit how we think about price sure from a book to Bill standpoint, you have to recall that we include.

Peter J. Arduini: I think, you know, from what I hear from the team, we have everything in. We're not assuming anything within our 24-hour guidance. I mean, this will be more of a 25, 26, 27 event as those ramp up.

Peter J. Arduini: But all things are good, and we'll be waiting to hear back from the agency if there are any questions or follow-ups that they have for us. Thanks for your questions. Yeah, no, great.

Jay: In our book to Bill calculation, both service and Pdx coming in at one to one so if we were to adjust those two items out the actual book to Bill is much higher so we feel good about the overall book to Bill that we have for the quarter. The other thing I would say is the backlog sits at near record levels. So we're sitting at roughly 19 billion.

Operator: And our next question, coming from the line of Sezgi Ozener with HSBC, is from Yolanda Silva. Hi, Sezgi Ozener from HSBC here. Thanks for taking my questions. I hope you can hear me all right.

Jay: A backlog.

Jay: We feel very good about the orders that we have in the backlog and say, it's a robust pipeline of future sales that we have in place. So overall, that's great and then as we think about pricing the pricing environment continues to be solid.

Operator: Oh, great. My first question is on your confidence in the full year 24 outlook given the lower book to build. Are you more on the lower end, or are you equally confident on both ends of your guidance? And the second question is on your pricing versus volume comments. I've seen the positive pricing comment, but has this been reflected uniformly across the segments as well as across the region? Some color there would be really helpful.

Jay: We highlighted at the beginning of the year, we expect 1% to 2%.

Jay: In pricing impact to sales.

Jay: Trending very much in line with those expectations. So we had a good quarter from a pricing standpoint from a volume standpoint, I think Pete highlighted some temporary issues that we've been navigating which we expect to resolve the other thing to remember is the comps get a lot easier as we move through the rest of the year. So I think all of those elements.

Peter J. Arduini: So maybe I'll start, then Jay, you can talk a little bit more about some of the book, the bill, and the cadence piece. But look, as you know, I walked through just a minute ago the impact for the first quarter, including the difficult comp. But we expect that to alleviate through the year, which, again, gives us strong confidence in our ability to hit our guidance. And, again, four things.

Jay: Come into play as we as we.

Jay: We're able to firmly reiterate guidance.

Jay: From a sales and an EPS standpoint.

Speaker Change: That's very helpful. Thank you.

Speaker Change: Thank you.

Speaker Change: Our next question and our next question coming from the line of Greg <unk> with Bank of America Securities. Your line is now open.

Greg: Good morning, guys. Thanks for thanks for taking the questions.

Greg: Does the store start on an order growth.

Peter J. Arduini: The comps get better quarter over quarter. A funnel growing on orders and sales we have good visibility into, including our service funnel. So how does service grow? When you buy one share in a previous year, you have one year of warranty.

Greg: You guys have seen low single digit order growth over the last.

Greg: Three quarters.

Greg: And I understand that there are a couple of reasons for that.

Greg: Wanted to see if you guys could maybe give a little bit of more color on how that order growth translates into into revenue growth.

Peter J. Arduini: When it comes off the warranty, it becomes part of a contract. We're starting to see the benefit of that service growth now in 24. Three, the new products across the whole product line, but particularly in ultrasound and select areas in imaging, the new products, and then in improving China. So that's really the four items that kind of give us confidence. Jay, maybe I could turn it over to you to talk a little bit about how we think about book-to-bill and price. Sure.

Greg: In subsequent quarters.

Greg: Your confidence that that order growth will really accelerate over over 24, and then be able to drive kind of the mid single digit revenue growth target that you guys have put out there.

Speaker Change: Yeah, Craig Thanks for the question it's great.

Speaker Change: Great question.

Speaker Change: Reality of it is is that over the last year plus year and a half we've actually had a positive book to bill ratio again, and we give that ratio with everything in so that you can see.

Speaker Change: Not just the capital piece, but you kind of get a feel for the total composite of it I think.

James K. Saccaro: From a book-to-bill standpoint, you have to recall that we include in our book-to-bill calculation both service and PDX coming in at one-to-one. So if we were to adjust those two items out, the actual book-to-bill is much higher. So we feel good about the overall book-to-bill that we have for the quarter. The other thing I would say is that the backlog sits at a near record level. So we're sitting at roughly $19 billion in backlog. We feel very good about the orders that we have in the backlog.

Speaker Change: As long as that is a positive scenario and the and the backlog is almost about a $1 billion higher than where it was pre COVID-19.

Speaker Change: Got a lot of gas in the tank to deliver on mid single digit revenue growth.

Speaker Change: That's just kind of how the profile of this works and I think you guys understand with some of the capital that can be lumpy. So shipments tend to be a little bit smoother, but you can pick up significant a couple of large and IV and deals in a given quarter and your orders can spike up in that quarter and that can be lower in the following quarter, but.

Speaker Change: That's kind of how we'd say it from that standpoint.

Speaker Change: The interesting part here is that over the last I'd say 12 to 18 months the markets that we played in and we track. These with third party data has been probably in the neighborhood of only up a point or they've been down a couple of points relative to different markets in the world our outlook when we see what the rest of this year is in going into.

James K. Saccaro: It's a, you know, a robust pipeline of future sales that we have in place. So overall, that's great. And then, you know, as we think about pricing, the pricing environment continues to be solid. You know, we highlighted at the beginning of the year that we expect one to 2% of pricing impact on sales, and we're trending very much in line with those expectations. So we had a good quarter from a pricing standpoint.

Speaker Change: 225 definitely brings a more positive view, which we would expect to see orders pick up relative to those markets. So thats one aspect of it. The other side is when you start winning share and I've mentioned this on a previous comment and you start growing your installed base the opportunity for the service revenue to play a bigger.

Speaker Change: Contributing component in revenue is there. So you saw this quarter, we actually had positive growth within our service component, we would expect that growth rate to continue to advance pro faster than it did in the first quarter. This year, which means in the second half we have more service can.

James K. Saccaro: From a volume standpoint, I think Pete highlighted some temporary issues that we've been navigating, which we expect to resolve. The other thing to remember is, you know, the comps get a lot easier as we move through the rest of the year. So I think all of those elements come into play as we were able to firmly reiterate guidance from a sales and an EPS standpoint. That's very helpful. Thank you. Thank you.

Speaker Change: <unk> to the growth that service is already in the backlog until we have visibility into it. So it's a host of those things and then obviously the typical six new product launches and ultrasound just refresh the cardiac platform. We just refresh the volume saw in women's health care platform handheld first Cath lab that I would say that we've had in <unk>.

Speaker Change: Some time that is very competitive robotic platform with new two <unk> platform, which is doing well new wider bore <unk>, our new treaty all of those then turnaround into faster growth and a faster growing market, but also winning some share.

Operator: One moment for our next question, and our next question comes from the line of Craig Bishop with Bank of America Securities. Good morning, guys.

Operator: Thanks for taking the questions. I wanted to start on orders. And, you know, you guys have seen low single-digit order growth over the last three quarters. And I understand that there are a couple reasons for that, but wanted to see if you guys could maybe give a little bit more color on how that order growth translates into revenue growth, you know, in subsequent quarters and your confidence that, you know, that order growth will really accelerate over 24 and then be able to drive, you know, kind of the mid single-digit revenue growth target that you guys have put out there. Yeah, Craig, thanks for the It's a great question.

Speaker Change: Those are the pieces that give us confidence, but again I think when you look at our backlog compared to what we need to deliver on mid single digit growth. We've got plenty of gas in the tank on that just over the next couple of years, but we would expect to see our orders growth pickup in my expectation here in the second half, we're going to start seeing that pick up.

Speaker Change: And that mid single digit range and again not every quarter will be consistent but how that will play out over multiple quarters, we'll be in that range.

Speaker Change: Great. Thanks for that Pete and if I could follow up on the hospital Capex sentiment you mentioned that it's still pretty pretty good.

Speaker Change: So.

Speaker Change: Are you here I know you guys cuts are you survey your customers often so are you hearing any concerns given that the interest rate environment. It looks like we're not going to see many more cuts and then just on top of that.

Peter J. Arduini: But the reality of it is that over the last, you know, year plus year and a half, we've actually had a positive book to bill ratio again. And we give that ratio with everything in it so that you can see, not just the capital piece, but you kind of get a feel for the total composite of it. I think, you know, as long as that is a positive scenario, and the backlog is almost about a billion dollars higher than where it was pre-COVID, we've got a lot of gas in the tank to deliver on mid single-digit revenue growth. So that's, that's just kind of how the profile of this works.

Speaker Change: Maybe just talk about how the pricing your ability to get that price that Jay mentioned in one of the previous calls how does that get impacted.

Speaker Change: <unk>.

Speaker Change: If there is some concern or hesitation.

Speaker Change: On capital spending by hospitals.

Speaker Change: Yes, let me let me start and then Jay you can kind of fill in some of the gaps on this I think again, if you compare it to over a year ago. You were taking a look at an environment, where hospitals were primarily in the red heavily tied to labor cost, we're seeing that moderate in most of our customers, particularly our big important idea.

Peter J. Arduini: And I think you guys understand that with some of the capital that can be lumpy. So you know, shipments tend to be a little bit smoother, but you can pick up significant couple large and IDN deals in a given quarter, and your orders can spike up in that quarter, and they can be lower in the following quarter. But that's kind of how we see it from that standpoint.

Jay: And back in the Black So I think that that's a quarter lag relative to rates. It's obviously out there. It's a topic, we haven't really seen it come up or in a major discussion thats limiting.

Jay: How things are playing out I still think the underlying play here is that demand for procedures is just still on continuing to grow. So if you think about some of our peer group of the device companies that are showing very high growth rates and their implants were showing that same kind of growth in <unk>.

Peter J. Arduini: The interesting part here is that over the last, I'd say 12-18 months, the markets that we've played in, and we track these with third-party data, you know, have been probably in the neighborhood of only up a point, or they've been down a couple points relative to different markets in the world. Our outlook when we see what the rest of this year is and going into 25 definitely brings a more positive view, which we would expect to see orders pick up relative to those markets. So that's one aspect of it.

Jay: Our pdx business, because we see that day to day effect of that on equipment isn't in that same quarter. The effect on the equipment is usually three to four quarters out why is that because youre using current equipment and then you start having capacity constraints and you need to buy upgrades or new equipment and so thats what also gives us.

Speaker Change: <unk> that we're going to see that tick up in later quarters, but at this point in time.

Speaker Change: Backlog to get a scan or a pad still are much longer than they were pre COVID-19 and that brings high value procedures within to an institution and again, that's what gives us confidence we're going to continue to see investments take place, particularly in the United States.

Peter J. Arduini: The other side is, when you start winning share, and I mentioned this in a previous comment, and you start growing your install base, the opportunity for the service revenue to play a bigger contributing component and revenue is there. So you saw this quarter; we actually had positive growth within our service component. We would expect that growth rate to continue to advance, grow faster than it did in the first quarter this year, which means in the second half, we have more service contributing to the growth. That service is already in the backlog, and so we have visibility into it. So it's a host of those things.

Speaker Change: Chad.

Chad: That's exactly right I think we do a survey each quarter on Pete's comments are very reflective of what we heard from our customers continued procedure volume demand staffing.

Chad: Staffing shortages ease good economics for the hospitals interest rates really have played a less prominent role in some of those discussions and survey results.

Chad: So we feel quite good about that from a pricing standpoint, as I said, we've talked about we're talking about low single digit 1% to 2% price increases and what we're finding is that is not the difference between buying and not buying it's not really the decisions aren't that sensitive and so as we continue to emphasize this focus.

Peter J. Arduini: And then obviously, the typical thing, six new product launches and ultrasound. We just refreshed the cardiac platform, we just refreshed the volume sign, women's healthcare platform, handheld, first calf lab that I would say that we've had in quite some time that is very competitive. It's robotic platform with new to pet CT platform, which is doing well in new wider for Mr. Our new treaty, all of those then turn around into faster growth and a faster growing market, but also winning some share. So those are the pieces that give us confidence.

Chad: On pricing discipline across the organization, we've been able to see that driving a positive impact for the company.

Speaker Change: Thanks, guys.

Speaker Change: Thank you.

Speaker Change: Our next question coming from the line of <unk>.

Wells Fargo: With Wells Fargo. Your line is now open.

Speaker Change: Good morning, Thanks for taking the question.

<unk>: A follow up on China, So sales were down about 11% in Q1 in China, what are the expectations with the rest of the year. It does the new stimulus represent potential upside to the prior guidance and I had one follow up.

Peter J. Arduini: But again, I think when you look at our backlog compared to what we need to deliver on mid single-digit growth, we've got plenty of gas in the tank on that just over the next couple years. But we would expect to see our orders growth pick up. And my expectation here is that in the second half, we're going to start seeing that pickup in that mid single-digit range. And again, not every quarter will be consistent, but how that will play out over multiple quarters will be in that range. Great, thanks for that, Pete. And if I could follow up on the hospital CAPEX sentiment, You mentioned that it's still pretty, pretty good. So, you know, are you here?

Speaker Change: Yes, I think it will depend upon.

Speaker Change: Then the details of the stimulus package are laid out because as Pete said earlier, we did see some hesitancy amongst customers as they wait.

<unk>: Clarity on the stimulus rules before submitting orders and that makes complete sense to me we've seen that continue in the second quarter of the year.

<unk>: From our standpoint stimulus package, Larry we view that as a good long term catalysts for the market on exactly when that shapes up with respect to 2024 is something that we're watching to the extent that we get clarity sooner than it certainly could be a positive <unk>.

<unk>: A list versus guidance previous to the extent that we're still waiting and theres still hesitancy amongst customers with respect to orders.

Peter J. Arduini: I know you guys customers, or you survey your customers often. So are you hearing any concerns? You know, given the interest rate environment, it looks like we're not going to see many more cuts. And then, just on top of that, maybe just talk about how the pricing, your ability to get that price that Jay mentioned in one of the previous calls, you know, how that gets impacted if there's some concern or hesitation on capital spending by, Yeah, let me start. And then Jay, you can kind of fill in some of the gaps on this.

<unk>: It could it could be sort of a negative in the short term, but again I think from our standpoint, we're very pleased to learn about this and long term, it's a very positive development for the overall market.

Speaker Change: Yes, I mean, Larry the only thing I would add is from our guide not a lot has changed the first half we guided would be negative the second half will be positive I think in the second half stem is going to have an effect.

Speaker Change: Probably having a bigger step up in Q4 than Q3, just because of the delivery time to ship equipment.

Speaker Change: If it gets more clarify within Q2, and you can actually have a little bit sooner, but I think those are the dynamics I think the good part is even if it's later that benefits Q1 'twenty fiber.

Peter J. Arduini: I think again, if you compare it to over a year ago, you're taking a look at an environment where hospitals were primarily in the red, heavily tied to labor costs. We're seeing that moderate, and most of our customers, particularly our big, important IDNs, are back in the black. So I think that's a core like relative to rates. You know, it's obviously out there.

Speaker Change: Q2 dollars 25, but we're expecting that there's going to be clarity here before we get into the half and we'll see how that plays out so fundamentally our guidance doesn't change, but stimulus could have a benefit to it but at this point in time, we need to see more of the cards be unveil.

Peter J. Arduini: It's a topic we haven't really seen come up or in a major discussion that's limiting how things are playing out. I still think the underlying issue here is that demand for procedures is just still continuing to grow. So, as you know, if you think about some of our peer group of the device companies that are showing very high growth rates in their implants, you know, we're showing that same kind of growth in our PDX business because we see that day to day. The effect of that on equipment isn't in that same quarter. The effect on the equipment is usually three to four quarters out. Why is that?

Speaker Change: That's helpful. Pete you've been very active on the business development front, but mostly very small deals.

Pete: Is that.

Pete: What we should expect going forward and maybe just refresh us on areas of interest in.

Pete: And if you think robotics is.

Pete: With fit within GE health care. Thank you.

Pete: Yes look Larry I would just say on your last point on robotics, it's not a from a surgical standpoint, it's not a top priority focus for us.

Pete: I think from a broader standpoint of robotics, and AI and I mentioned, our Alyea IGF is actually a robot that actually comes into position on how it's used it's one of the only that's actually used within the cath lab from that standpoint, but.

Peter J. Arduini: Because you're using current equipment, and then you start having capacity constraints, and you need to buy upgrades or new equipment. And so that also gives us confidence that we're going to see that pick up in later quarters. But at this point in time, you know, backlogs to get an MR scan or a PET still are much longer than they were pre-COVID.

Pete: Tuck in deals.

Pete: The right size that have a strategic fit into our core business and enable us to connect different parts of our portfolio to bring more differentiated capability. That's what we're looking at both in partnership in an acquisition. So I think thats what you should.

Pete: Stay focused on that as our primary target as we've always said a larger deal came up it actually was a really good fit for US we would obviously take a look at it but our 80, 590% target range is the type of deals like the <unk> deal that.

Peter J. Arduini: And that brings, you know, high-value procedures within an institution. And again, that's what gives us confidence. We're going to continue to see investments that take place, particularly in the United States. That's exactly right.

Pete: That we did that are just really good fits into one of our priorities growing our care pathway within oncology linking our products to make them more differentiated on how they actually work together and we just have a very good funnel of opportunities like those.

James K. Saccaro: I think, you know, and we do a survey each quarter. Pete's comments are very reflective of what we hear from our customers. Continued procedure volume demand, staffing shortages, ease, and good economics for the hospitals. Interest rates really have played a less prominent role in some of those discussions and survey results, so we feel quite good about that. From a pricing standpoint, you know, as I said, we've talked about low single-digit, 1-2% price increases, and what we're finding is that that's not the difference between buying and not buying.

Speaker Change: Thanks, a lot.

Speaker Change: Thanks, Larry.

Speaker Change: Thank you and our.

Speaker Change: Next question coming from the line of Ryan Zimmerman with <unk>. Your line is open.

Ryan Benjamin Zimmerman: Hey, Thanks for taking my questions.

Ryan Benjamin Zimmerman: A lot has been asked I wanted to ask two.

Ryan Benjamin Zimmerman: Separate questions one.

Ryan Benjamin Zimmerman: The numbers, we're off to a strong start for Biogen.

Ryan Benjamin Zimmerman: And so just curious how the conversation around Alzheimer's has changed at all or the trajectory that you're expecting I think for the uptake and kind of patient adoption and then I have a second one on margins.

Speaker Change: Yeah, Ryan So you heard Jay's comments, probably on on the call relative do we saw some slight upticks here for visit now I would just again remind everyone. What we said is our expectation.

James K. Saccaro: It's not really, you know, the decisions aren't that sensitive, and so as we continue to emphasize this focus on pricing discipline across the organization, we've been able to see that driving a positive impact for the company. Thanks, guys. And our next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open. Good morning.

Ryan Benjamin Zimmerman: Was that we'll start seeing some uptick more in the second half of the year I think thats pretty much in line with what we're expecting I think since we gave guidance. There's some been discussions that the lilly drug might be a little bit delayed coming out, but when the combination of all of those from a diagnostic standpoint, which is what our role is we expect to see.

Ryan Benjamin Zimmerman: See some of that picking up in the second half of the year now.

Operator: Thanks for taking the question. Follow up on China. So sales were down about 11% in Q1 in China. What are the expectations for the rest of the year? Does the new stimulus represent potential upside to the prior guidance? and Edwin Powell.

Ryan Benjamin Zimmerman: Relative to any type of major material moves. This is not 24 play as far as we see it right now I think we think that again into 'twenty five 'twenty six 'twenty, 7% range based on the adoption of both molecules thats when youre going to see an uptick there is reimbursement now for the agent and the outpatient center.

James K. Saccaro: Yeah, I think it will depend upon when the details of the stimulus package are laid out. Because, as Pete said earlier, we did see some hesitancy among customers as they waited for clarity on the stimulus rules before submitting orders. And that makes complete sense to me.

Ryan Benjamin Zimmerman: That's still being worked through and patient and I think as that gets more cleared up that's also going to drive more.

Ryan Benjamin Zimmerman: Need for the product, but we were encouraged to see on a ratio standpoint, the numbers are up significantly.

Ryan Benjamin Zimmerman: From a actual dose standpoint, but we would we would view that as positive and on track to what we've already communicated what the ramp should look like.

James K. Saccaro: We've seen that continue in the second quarter of the year. And so from our standpoint, the stimulus package, we view that as a good long-term catalyst for the market. Exactly when that shapes up with respect to 2024 is something that we're watching. To the extent that we get clarity sooner, then it certainly could be a positive catalyst versus guidance previously. To the extent that we're still waiting and there's still hesitancy amongst customers with respect to orders, it could be sort of a negative in the short term.

Speaker Change: Okay, and then can you spend a little let's go ahead sorry.

Speaker Change: I was going to say go ahead ask your next question Ryan.

Ryan Benjamin Zimmerman: Thanks.

Ryan Benjamin Zimmerman: Jay on gross margins for a bit here.

Speaker Change: You've got some segments kind of down you've got some segments in terms of EBIT margin.

Ryan Benjamin Zimmerman: Pricing I think we all understand those dynamics, but there are still I think a lot of TSA has left and.

Speaker Change: Just help us understand kind of the objective of gross margin as you see it today and kind of what youre tackling to get that higher outside of maybe price price pick up.

James K. Saccaro: But again, I think from our standpoint, we're very pleased to learn about this. And, long-term, it's a very positive development for the overall market. Yeah, I mean, Larry, the only thing I would add is that, from our guide, not a lot has changed.

Speaker Change: Yes overall I think we were very pleased with the first quarter margin performance.

Speaker Change: And gross margin in particular, we expanded 120 basis points.

Speaker Change: Really driven by pricing and productivity now there is an element that has not yet featured in our numbers, which is related to some of the new products that Pete referenced in his discussion we will see benefits from some of the new imaging and some of the new ultrasound products that will also support gross margin expansion.

Peter J. Arduini: The first half we guided would be negative; the second half will be positive. I think in the second half, the STEM is going to have an effect of probably having a bigger step up in Q4 than Q3, just because of the delivery time to ship equipment. You know, if it gets more clarified within Q2, then you could actually have a little bit sooner. But I think those are the dynamics.

Speaker Change: In the first quarter was really about pricing I discussed that and productivity in my prepared remarks, I talked a little bit about some of the lean initiatives and what we call the variable cost productivity initiatives that we have in place and it's safe to say we're off to a great start from a from a productivity standpoint, and we did.

Peter J. Arduini: I think the good part is, even if it's later, that then benefits a Q125 or a Q225. But, you know, we're expecting that there's going to be clarity here before we get into the second half. And we'll see how that plays out.

Speaker Change: Levered I think mid single digits in each of our businesses more than offsetting inflation and allowing us to drive this gross margin going forward and so as we look at things on a full year basis. We will continue to see solid margin gross margin performance supporting the EBIT expansion that we have.

Peter J. Arduini: So fundamentally, our guidance doesn't change, but stimulus could have a benefit for it. But at this point in time, you know, we need to see more of the cards being. That's helpful. Pete, you've been very active on the business development front, but mostly very small deals. Is that, you know, what we should expect going forward? And maybe just refresh us on areas of interest and, and if you think robotics is, you know, it would fit within GE Healthcare. Thank you.

Speaker Change: Laid out 50 to 80 basis.

Speaker Change: <unk> points of EBIT expansion, but really nice to see in the face of flat sales.

Speaker Change: 50 basis points of expansion that we saw in the first quarter now you referenced another comment which relates to <unk> and we're making good progress there a lot of great support from GE, but also a lot of good work on our team side.

Peter J. Arduini: Yeah, look, Larry, I would just say on your last point on robotics, it's not a top priority focus for us from a surgical standpoint. But I think from a broader standpoint of robotics and AI, and I mentioned our Alia IGF, it's actually a robot that actually comes into position, and how it's used, it's one of the only that's actually used within the cath lab from that standpoint. But, you know, investing in deals of the right size that have a strategic fit into a core business and that enable us to connect different parts of our portfolio to bring more differentiated capability. That's what we're looking at, both in partnership and in acquisition. So I think that's what you should, you know, stay focused on that.

Speaker Change: Eliminated we've removed roughly 330, we're on a path to completing virtually all of the TSA is by year end and what will happen as a result of this.

Speaker Change: I would say it predominantly impacts SG&A over time, it will allow us to optimize our structure optimize our it systems for the needs of our organizations, but really a gating factor to get at all of that is coming off the TSA. So we've seen a little bit of benefit.

Speaker Change: In terms of SG&A and G&A savings. This year, we will expect to see more next year as we stand on our own two feet as an independent company. So overall, that's really the story on margin Pete anything to add yeah. Ryan I would just say again just to remind everyone. I mean, our focus on the increased R&D dollars is obviously new products, but are really important.

Pete: And part of it is kind of doing this gross margin triple which is getting priced out of a new prospect increased volume because of differentiated features and reducing the actual cost of that product because of platforming and so when you do that obviously, if you could get the growth and the lift because of people one it's differentiated.

Peter J. Arduini: That is our primary target. And, you know, as we've always said, if a larger deal came up that actually was a really good fit for us, we would obviously take a look at it. But our 85-90% target range is the type of deals like the MIM deal that we did that are just really good fits into our priorities, right, growing our care pathway within oncology, linking our products to make them more differentiated on how they actually work together. And we just have a very good funnel of opportunities like those. Thanks a lot. Thanks, Larry. And our next question comes from the line of Ryan Zimmerman with BTIG, Yelena Sokolova.

Pete: More price at a lower cost we have this focus as we've mentioned that any new product comes out at a higher gross margin and again thats something we drive across the whole portfolio.

Speaker Change: Thank you.

Speaker Change: Thank you and our.

Speaker Change: Next question coming from the line of Graham.

Graham: With UBS your line is now open.

Graham: Good morning, guys, Hey, Graeme my questions.

Graham: Can I just ask one again, it's on China, but just to get context for things have to go through the year and.

Graham: So firstly just on revenues.

Graham: Steve's got it.

Speaker Change: Just the comps get a bit easier on the revenue side, but am I correct in saying you did grow revenues page two.

Speaker Change: And are you, assuming a sort of catch up.

Operator: Thanks for taking my question. A lot has been asked, and I want to ask... questions number one. [inaudible] Curious how the [inaudible] Yeah, Ryan, so you heard Jay's comments probably on the call, relative to how we saw some slight upticks here for Bisamo. I would just again remind everyone what we said was our expectation was that we'd start seeing some upticks more in the second half of the year. I think that's pretty much in line with what we're expecting.

Speaker Change: The numbers I think you flagged earlier in the year that page to grow enough to offset the weakness.

Speaker Change: And then just one question on order intake I know you've gone to great lengths to explain.

Speaker Change: Gross.

Speaker Change: Growth sort of algorithm should work through the year on order intake.

Speaker Change: What sort of number are we looking for because it seems like mid single digit growth. When you combine what's happened over the last sort of 12 18 months. It wouldn't make me Super bullish that do high single digit growth in revenue terms next year, but is there something we've missed in terms of how you can translate say, 5% to 6% growth for the next three quarters into better.

Peter J. Arduini: I think since we gave guidance, you know, there's been discussions that the Lilly drug might be a little bit delayed in coming out. But when combined with all of those, from a diagnostic standpoint, which is what our role is, we expect to see some of that picking up in the second half of the year. Now, relative to, you know, any type of major material moves, this is not a 24 play as far as we can see it right now.

Speaker Change: Revenue growth for 2025, thank you.

Speaker Change: Sure maybe maybe first on the on the China comp and the contours of the year.

Speaker Change: As you recall last year, we saw roughly 20% organic growth in the first half of the year. So when we gave guidance. Originally we said first half negative second half positive and one of the things that we're watching very carefully is the <unk>.

Speaker Change: <unk> around this new stimulus package as.

Speaker Change: As I said earlier I think this is long term very positive for the market, but how much of this impact we see in 2024 really relates to share.

Peter J. Arduini: I think we think that, again, in the 25, 26, 27 range, based on the adoption of both molecules, that's when you're going to see an uptick. There is reimbursement now for the agent in the outpatient center, but that's still being worked through in the inpatient setting. And I think as that gets more cleared up, that's also going to drive more need for the product. But we were encouraged to see that, on a ratio standpoint, the numbers are up significantly from an actual dose standpoint.

Speaker Change: A sharing more guidance from the government and then also customers acting on it. So we're very bullish but what that means is.

Speaker Change: Certainly theres going to be some positive impact relative to our previous expectations in the fourth quarter related to stimulus, but what happens in the third quarter and how much of that demand is pent up paid off in the third quarter versus delayed to the fourth quarter, how much of the fourth quarter stimulus impacts Q1, and Q2 of two.

Peter J. Arduini: But we would view that as positive and on track with what we'd already communicated. And then, Jay, if we spend a little, go ahead. No, I was going to say go ahead and ask your next question, Ryan.

Speaker Change: <unk> thousand 25 to Pete's comments earlier, that's really that's really a question that we're watching very carefully.

Speaker Change: So we're optimistic about this but I think it's as we think about the third and fourth quarter third quarter will be much.

Operator: Oh. Just Jay on gross margins for a bit here. Transcribed by https://otter.ai, Pricing. I think we all understand those dynamics. There are still, I think, a lot of TSAs left.

Speaker Change: <unk> ish.

Speaker Change: In that short of a range with fourth fourth quarter seeing some of that pent up demand paid off but again a lot of this depends on when all of this comes together from a from a customer demand standpoint.

James K. Saccaro: Help us understand kind of the trajectory of gross margin, day, Unknown Attendee What year tax? get that higher, you know, outside of, Yeah, overall, I think we were very pleased with the first quarter margin performance. And gross margin, in particular, we expanded 120 basis points, really driven by pricing and productivity. Now, there's an element that has not yet been factored in our numbers, which is related to some of the new products that Pete referenced in his discussion.

Speaker Change: As it relates to the order when maybe Pete you want to you want to address that yes, I think Graham I mean, it's a little bit of more of the same I mean, the first part is again the markets that we participate in around the world over the last 18 months coming out of Covid I've, either been roughly flat or slightly down we see that trend.

Speaker Change: Over the next two years again, a lot of it tied to this lagging indication that the more actually procedures are growing more patients are coming into the systems you need more things that we make so that's a really important one and again I think across all of our markets. This year, we'll actually see an uptick over over the 23 window.

James K. Saccaro: We'll see benefits from some of the new imaging and some of the new ultrasound products that will also support gross margin expansion. But in the first quarter, it was really about pricing, and I discussed that, and productivity. In my prepared remarks, I talked a little bit about some of the lean initiatives and what we call the variable cost productivity initiatives that we have in place.

Speaker Change: The new NPI is as big deal and so again that adds some pricing growth that also adds to.

Speaker Change: To some share gains with it and then services so.

James K. Saccaro: And it's safe to say we're off to a great start from a productivity standpoint. We delivered, I think, mid-single digit growth in each of our businesses, more than offsetting inflation and allowing us to drive this gross margin going forward. And so, as we look at things on a full-year basis, we will continue to see solid gross margin performance, supporting the EBIT expansion that we've laid out, 50 to 80 basis points of EBIT expansion.

Speaker Change: We have been gaining some share in the last couple of years. Our prior 78, we haven't probably gained as much when you do that you start growing your service base and service becomes a bigger contributor within your overall capabilities and then the last part is these care pathway areas that we've been nurturing start to bring more growth.

Speaker Change: <unk> and.

Speaker Change: The next year or so again from Alzheimer's, we talked about cardiovascular care pathways about products work together, but even a product like preferred as those are some of the things that we take a look at that we'll continue to kind of drive.

James K. Saccaro: But really nice to see, in the face of flat sales, the 50 basis points of expansion that we saw in the first quarter. Now, you referenced another comment, which relates to TSAs, and we're making good progress there. A lot of great support from GE, but also a lot of good work on our team's side. We've eliminated, or we've removed, roughly 330. We're on a path to completing virtually all of the TSAs by year-end. And what will happen as a result of this...

Speaker Change: Focus on mid single digit growth in orders that will then translate that into into revenue and then based on timing.

Speaker Change: <unk> be slightly higher lower in a given quarter, but that's the formula that we're executing on.

Speaker Change: Craig Cheeky quick follow up on China, just because it does sort of stimulus package or idea that you sort of mentioned I know Philips and Siemens.

James K. Saccaro: I would say it predominantly impacts SG&A over time. It will allow us to optimize our structure, optimize our IT systems for the needs of our organizations. But really, a gating factor to get at all of that is coming off the TSA.

Craig: Something similar.

Craig: Presumably that relates to this medical equipment for new cars.

Speaker Change: On the surface look.

Craig: Typically ambitious in terms of the 6% CAGR on spend but is this something you've seen in the past where these things can expand and become bigger is that will give you some cautious optimism around that.

James K. Saccaro: So we've seen a little bit of benefit in terms of SG&A and G&A savings this year. We'll expect to see more next year as we stand on our own two feet as an independent company. So overall, that's really the story on margin. Pete, anything to add?

Craig: Well Theres a couple of different views out there there is a larger stimulus number thats in the trillions of yen, that's touching multi industry and that is money that actually is kind of a stipend dollars. If you will that we will go to particular areas within healthcare and other industries, so what that direct.

Craig: Distribution looks like it's a big number.

Peter J. Arduini: Yeah, Ryan, I would just say, and again, just to remind everyone, our focus on the increased R&D dollars is obviously new products. But a really important part of it is kind of doing this gross margin triple, which is getting price out of a new product, increased volume because of differentiated features, and reducing the actual cost of that product because of platform. So when you do that, obviously, if you can get the growth and the lift because people want it to differentiate, you get more price at a lower cost.

Craig: That's more of what we're actually referencing.

Craig: And so again, if you compare it to the previous stimulus, which was interest free loans. This is for trade laid out to actually be.

Craig: Dollars that will be granted to actually buy equipment and again. So we believe that will have a larger appeal because by definition many customers werent been going for a loan. So this opens up the field for that.

Craig: And it also is being expressed at this point to be not a 90 day or 120 day window, but to be a multiyear approach. So again more to come and see what the details are on it but from when we gave guidance to start the year. This is net net positive really any way you look at it from a China outlook.

Peter J. Arduini: We have this focus, as we mentioned, that any new product comes out at a higher gross margin. And again, that's something we drive across the whole portfolio. And our next question comes from the line of Graham Doyle with UBS, Helena Sultan. Good morning, guys. Thank you for your time.

Craig: And we will see what it means for this year, but clearly have implemented the way. It's described it will have a bigger impact as well going into next year.

Speaker Change: Thank you very much I really appreciate the question thanks guys.

Speaker Change: Thank you.

Speaker Change: Thank you and our next.

Craig: Next question coming from the line of Matt Taylor with Jefferies. Your line is now open.

Operator: My pleasure. Can I just ask one, again it's on China, but just to get context for things as we go through the year, so firstly on revenue. Comps do get a bit easier on the revenue side, but am I correct in saying you did grow revenue? And are you assuming a sort of catch-up now in the, https://www.youtube.com.access.vr? And then just one question on order intake, I know you've gone to sort of great lengths to explain how the growth sort of algorithm should work through the year on order intake, but And what sort of number are we looking for, because it seems like mid-single-digit growth, [inaudible] Tran So when we originally gave guidance originally, we said first half negative, second half positive.

Matthew Charles Taylor: Hi, Thank you for taking the question good morning.

Matthew Charles Taylor: I was hoping you could kind.

Matthew Charles Taylor: Comment on two things one is that you identified the catalyst and ultrasound.

Matthew Charles Taylor: Resolution.

Matthew Charles Taylor: But some of the fulfillment issues to resolve.

Craig: Catalysts for growth and flush it through the year.

Craig: Could you help us understand how much inflection that could drive.

Craig: As you work through the launches and resolve the challenges.

Speaker Change: So Matt let me just take I'll take.

Matthew Charles Taylor: I hit the ultrasound piece, I think youre, referring to the PCF shipments.

Matthew Charles Taylor: Maybe Jay you can you can touch on that look I think with ultrasound.

Speaker Change: Again, I think the first part is is that when we look at our market dynamics.

Matthew Charles Taylor: They are definitely continuing to prove and improve and as the us as one of the top two largest players worldwide that has a positive impact.

Jay: From a standpoint of the compares I mean, if you take a look at our expectation is that we will continue to ramp our revenue growth throughout the year.

Jay: From the from Q2 on.

Matthew Charles Taylor: And then also from an order standpoint, it's a highly correlated business I mean, just to give you an idea a vast majority of this business is self install.

James K. Saccaro: And one of the things that we're watching very carefully is the timeline around this new stimulus package. As I said earlier, I think this is very positive for the market in the long run. But how much of this impact we see in 2024 really relates to sharing more guidance from the government and then also customers acting on it. So we're very bullish, but what that means is, you know, certainly there's going to be some positive impact relative to our previous expectations in the fourth quarter related to stimulus.

Matthew Charles Taylor: China this tends to be a larger portion of our business and so some of the effect that we felt here in the first quarter was directly correlated to the challenges in China, and I think even in China stem will help ultrasound, but ex China around the World U S. Europe.

Matthew Charles Taylor: We're bullish on how we will see the pickup within China.

Matthew Charles Taylor: Excuse me, an ultrasound and particularly because of the new product introductions that we've that we've laid out.

Speaker Change: What about the yeah, and just at the highest level, Matt I do think we have easing comps throughout the year and I think thats supportive of the accelerated growth profile at GE healthcare level with respect to <unk>, we will see accelerating growth as we move forward here with the second half of the year.

James K. Saccaro: But what happens in the third quarter and how much of that demand is pent up, paid off in the third quarter versus delayed to the fourth quarter, and how much of the fourth quarter stimulus impacts Q1 and Q2 of 2025, to Pete's comments earlier, that's really a question that we're watching very carefully.

Speaker Change: <unk> more similar to growth rates that we saw last year and as we resolve some of the bottlenecks in the second quarter, we will see some level of improved growth, but then again more of those benefits will accrue to the second half of the year.

Peter J. Arduini: And so, you know, we're optimistic about this, but I think it's, you know, as we think about the third and fourth quarters, third quarter will be much flat-ish in that sort of a range with the fourth quarter seeing some of that pent-up demand paid off. But again, a lot of this depends on when all of this comes together from a customer demand standpoint. As it relates to order number one, maybe, Pete, you want to address that? Yeah, I think, Graham. I mean, it's a little bit of more of the same.

Speaker Change: Great and can I ask a follow up on phasing and he talked about some sequential improvement in organic growth and margin in the second quarter.

Speaker Change: That would be modest improvement if I figured out what modest means maybe going to slightly positive organic.

Speaker Change: 20 to 40 basis points on margin, if I flow that through.

Speaker Change: Consensus EPS looks like it needs to come down a little bit is that kind of thinking your math wrong or can you help us at all with the second quarter.

Peter J. Arduini: I mean, the first part is, again, the markets that we participate in around the world for the last 18 months coming out of COVID have either been roughly flat or slightly down. We expect that trend over the next two years. Again, a lot of it tied to this lagging indication that the more actual procedures are growing, more patients are coming into the systems. You need more things that we make. So that's a really important one.

Speaker Change: From a from a second quarter standpoint, we're looking at low single digits on the sales.

Speaker Change: <unk> continued we will see we will see a reasonable expansion versus the prior year. So that will actually the first quarter is the lowest quarter of the year. So we will see a little bit more sequential margin expansion.

Speaker Change: More similar to year over year.

Peter J. Arduini: And again, I think across all of our markets this year, we'll actually see an uptick over the 23 window. The new NPIs are a big deal. And so, again, that adds some price and growth. It also adds to some share gains with it. And then services.

Speaker Change: <unk> versus last year similar to what we saw in the first quarter. So.

Speaker Change: We don't talk about consensus we don't get into that but I think.

Speaker Change: Are the dimensions that are in play in the second quarter.

Speaker Change: Okay, Alright, thanks Jay.

Peter J. Arduini: So, you know, we have been gaining some share in the last couple years. Our prior 78 years, we haven't probably gained as much. When you do that, you start growing your service, and it becomes a bigger contributor within your overall capabilities. And then the last part is these care pathway areas that we've been nurturing start to bring more growth in the next year or so. Again, from how Alzheimer's, we talked about cardiovascular care pathways and how products work together, but even a product like ProperDes, those are some of the things that we take a look at that will continue to kind of drive, you know, focus on mid-single-digit growth in orders that will then translate that And then, based on timing, you know, you may be slightly higher or lower in a given quarter, but that's the formula that, you know, we're actually using. A cheeky quick follow-up on China...

Speaker Change: Thanks.

Speaker Change: Thank you and that concludes the question and answer session speakers. Please proceed with any closing remarks.

Speaker Change: Thank you operator, and thanks, everyone for joining us today, hopefully we addressed your questions. We've got all the right pieces in place here to deliver on our annual guidance that we've laid out and we look forward to connecting with each of you in some upcoming calls or conferences in the next few months. Thank you very much.

Speaker Change: Ladies and gentlemen, and Douglas will teleconference for today. Thank you for your participation you may now disconnect.

Speaker Change: Yes.

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Operator: This sort of stimulus package or idea that you sort of mentioned, I know Philips and Siemens have referenced. Presumably, that relates to this medical equipment renewal, because it doesn't, on the surface, look like it. [inaudible] Transcribed by https://otter.ai Cautious Optimism, Well, there's a couple different views out there. There's a larger stimulus number that's in the trillions of yen that's touching every industry. And that is money that actually is kind of stipend dollars, if you will, that will go to particular areas within healthcare and other industries. So what that direct distribution looks like, it's a big number.

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Peter J. Arduini: That's more of what we're actually talking about. And so again, if you compare it to the previous stimulus, which was interest-free loans, this is for trade laid out to actually be dollars that will be granted to actually buy equipment. And again, we believe that will have a larger appeal because, by definition, many customers weren't even going for a loan. So this opens up the field for that. And it also is being expressed at this point to be not a 90-day or 120-day window but a multi-year, so again, more to come and see what the details are on it.

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Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Sure.

Peter J. Arduini: But from when we gave guidance to start the year, this is net, net positive, really, any way you look at it from a Chinese perspective. And we'll see what it means for this year. But clearly, if implemented the way it's described, it will have a bigger impact as well going into next year. Thank you very much.

Speaker Change: Okay.

Speaker Change: Yeah.

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Speaker Change: Sure.

Operator: I really appreciate the extra question. Thanks, guys. Thank you. Thank you. And our next question comes from the line of Matt Taylor with Jeffreys. Your line is open. Hi, thank you for taking the question. Good morning.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Operator: I was hoping you could comment on two things. One is that you identified the catalyst in ultrasound and the resolution of some of the fulfillment issues to resolve as, and I'm a catalyst for growth and selection through the year in those segments. Could you help us understand how much inflection that could drive?

Peter J. Arduini: you work through the launches and resolve the challenges. So Matt, let me just take a shot at the ultrasound piece. I think you're referring to the PCS shipment on that. Vijay, you can you can touch on that. Look, I think with ultrasound, you know, again, I think the first part is that when we look at our market dynamics, they are definitely continuing to improve and improve. And, you know, as one of the top two largest players worldwide, that has a positive impact.

Peter J. Arduini: From a standpoint of the comparers, I mean, if you take a look at our expectation is that we will continue to ramp up our revenue growth throughout the year. You know, from Q2 on, and then also from an order standpoint, it's highly correlated. To give you an idea, the vast majority of this business is sales and installation. China, this tends to be a larger portion of our business, and so some of the effect that we felt here in the first quarter was directly correlated to the challenges in China, and I think even China's STEM will help with ultrasound.

James K. Saccaro: But ex-China around the world, US, Europe, we're bullish on how we'll see the pickup within China, and again, excuse me, in ultrasound, and particularly because of the new product introductions that we've laid out. Jay, what about the- Yeah, and just at the highest level, Matt, I do think we have easing comps throughout the year, and I think that's supportive of the accelerated growth profile at GE Health Care.

James K. Saccaro: With respect to PCS, you know, we'll see accelerating growth as we move forward here with the second half of the year, more similar to growth rates that we saw last year, and, you know, as we resolve some of the bottlenecks in the second quarter, we'll see some level of improved growth, but then, again, more of those benefits will accrue to the second half of the year. Can I ask a follow-up question on phasing?

Operator: You talked about some sequential improvement in organic growth and margin in the second quarter, and that would be modest improvement. If I think about what modest means, maybe going to slightly positive organic growth and 20 to 40 basis points on margin, if I flow that through, consensus EPS looks like it needs to come down a little bit. Is that kind of thinking or math wrong?

James K. Saccaro: Or can you help us at all with the second quarter? You know, from a second quarter standpoint, we're looking at low single digits on sales and continued, you know, we'll see a reasonable expansion versus the prior year. So that will, actually, the first quarter is the lowest quarter of the year, so we'll see a little bit more sequential margin expansion, more similar to year over year improvements versus last year, similar to what we saw in the first quarter. So I don't have the, we don't talk about consensus, we don't get into that, but I think those are the dimensions that are in play in the second quarter. All right.

Operator: Thanks, Jay. Thanks, Pete. Thanks.

Operator: Thank you. And that concludes the question and answer session. Speakers, please proceed with any closing remarks. Thank you, operator. Thanks, everyone, for joining us today.

Peter J. Arduini: Hopefully, we've addressed your questions. We've got all the right pieces in place here to deliver on the annual guidance that we've laid out, and we look forward to connecting with each of you on some upcoming calls or conferences in the next few months. Thank you very much.

Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.

Operator: ??? ??? ??? ??? ??? ??? ??? ??? ??? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, https://www.youtube.com.uk, Good day and thank you for standing by. Welcome to GE Healthcare's first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automatic message advising that your hand is raised. Please note that today's conference may be recorded. I will now turn the conference over to your speaker host, Carolynne Borders, Chief Investor Relations Officer.

Speaker Change: [music].

Carolynne Borders: Thanks, Operator. Good morning, and welcome to GE Healthcare's first quarter 2024 earnings call. I'm joined by our President and CEO, Peter Arduini, and our Vice President and CFO, Jay Saccaro. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides available on our website.

Carolynne Borders: During this call, we'll make forward-looking statements about our performance. These statements are based on how we see things today. As described in our SEC filings, actual results may differ materially due to risks and uncertainties.

Peter J. Arduini: Thanks, Carolyn, and thanks to all those who are joining us today. We've made good progress against our key priorities for 2024. In the first quarter, we delivered margin expansion while continuing to invest in innovation to help solve the evolving needs of customers and pay. A Healthy Backlog, Order Growth, and Positive Book to Build position us for accelerated growth for the rest of the year. Today, we reaffirmed our 2024 guidance, which Jay will discuss in greater detail.

Peter J. Arduini: I'd like to highlight some milestones that illustrate our commercial execution, for making steady progress with large multi-year, multimodal deals across equipment and services resulting in incremental shared revenue. In the U.S., we secured a 10-year strategic alliance with OSF Healthcare to deliver technology, digital solutions, and equipment management services to help clinicians improve care delivery and patient outcomes. We also extended our relationship with Hartford HealthCare to run through 2030.

Peter J. Arduini: As a trusted partner, we'll continue to work together to optimize their imaging fleet and provide specialized support from our GE HealthCare service technicians. Our Care Pathway strategy is progressing well, enabling commercial growth opportunities and introducing us to adjacent markets with attractive growth potential. For example, last week, we announced the expansion of our collaboration with Electa to enhance their radiation therapy planning offerings using MIMSoft.

Peter J. Arduini: [inaudible] which is our market-leading cath lab that we expect will be a growth vehicle for this important interventional cardiology. As we look to 2024, we see a growing funnel of opportunities for products like our IGS. Our strategic initiatives and trusted partnerships are taking hold and preparing us for a future where healthcare is more connected, efficient, and patient-centered. Looking ahead, our outlook reflects a strong global procedure environment, particularly in the United States, and customers continue to be optimistic about capital investment and market normalization.

Speaker Change: [music].

Peter J. Arduini: These tailwinds, combined with our focus on execution, give us confidence in our ability to deliver on our commitments for 2024 and our medium term targets. Now I'll pass it on to Jay, who will take us through the details of our first quarter performance. Jay

James K. Saccaro: Thanks, Pete. Let's start with our financial performance on slide four. For the first quarter of 2024, revenues of $4.6 billion were approximately flat organically year over year. As you recall, this quarter's results follow the strong double-digit growth we delivered in the first quarter of 2023, which benefited from easing supply chain conditions and strong China stimulus sales. Organic orders increased 1% year over year primarily driven by strength in the US. With order dollars continuing to outpace sales, we generated a solid total company book-to-bill of 1.03 times versus 1.01 times last year.

James K. Saccaro: We also exited the first quarter with a healthy backlog of $18.7 billion. The adjusted EBIT margin was 14.7%, up 50 basis points year-over-year, with improvements in both gross profit margin and SG&A. First quarter adjusted EPS was $0.90, up 6% year over year, driven by improved margins and lower interest expense.

James K. Saccaro: And we generated $274 million in free cash flow from improved working capital. On slide five, let's take a closer look at total company revenue performance for the first quarter. Organic revenue growth was approximately flat versus the 12% that we generated in the same period last year. On a reported basis, service revenue grew 2%, and product revenue declined 3%.

James K. Saccaro: Product performance was impacted by the difficult year-over-year comparison. Longer term, we see good growth opportunities in both product and service, including greater service revenue from a larger installed base. China revenue declined by low double digits given the stimulus that benefited the first quarter of 2023, as well as the anti-corruption impact in the quarter.

James K. Saccaro: The EMEA sales were up slightly, and sales in the U.S. and rest of the world were flat with prior year results. Turning to slide six and the progress we made in the first quarter on margin initiatives. The adjusted gross margin expanded 120 basis points as we benefited from commercial wins and productivity initiatives. We also delivered positive price in the quarter. Productivity is an ongoing focus for our teams, and our lean practices continue to drive improvement.

Speaker Change: Good day and thank you for standing by welcome to Chi Health Care's first quarter 'twenty 'twenty four earnings conference call. At this time, all participants on a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automatic message and Pfizer.

Johan Reyes: Johan is Reyes. Please note that today's conference maybe recorded.

Speaker Change: Now I'll turn the conference over to your Speaker House Calvin borders Chicken Investor Relations Officer. Please go ahead.

James K. Saccaro: Our teams are expanding daily management and standard work to new areas while delivering on current commitments. Additionally, all of our segments delivered mid-single-digit or greater variable cost productivity and made significant platforming improvements. We've been making strategic investments in advanced manufacturing technologies such as 3D printing and additive manufacturing across our segments to enhance product capabilities and quality and improve variable cost productivity. The U.S. has more 3D printing-related patents than any other imaging company. 51.

Carolynne Borders: Thanks, operator, good morning, and welcome to GE Healthcare's first quarter 2024 earnings call I'm joined by our President and CEO, Peter Arduini, and our Vice President and CFO, Jason Carl Our conference call remarks will include both GAAP and non-GAAP financial results.

Carolynne Borders: Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides available on our website. During this call. We'll make forward looking statements about our performance. These statements are based on how we see things today as described in our SEC filings actual results may differ.

James K. Saccaro: These investments drive lower costs and higher durability. For example, in MR, we're applying these methodologies across the entire portfolio, saving us more than $1 million a year and improving performance and reliability. In S.U.N.A.

Carolynne Borders: Materially due to risks and uncertainties and with that I'll hand, the call over to Peter.

Peter J. Arduini: Thanks, Carolyn and thanks to all those joining us today.

Peter J. Arduini: We've made good progress against our key priorities for 2020 for the first quarter, we delivered margin expansion, while continuing to invest in innovation to help solve the evolving needs of customers and patients.

James K. Saccaro: We continue to make progress with roughly 330 TSAs exited since SPIN, and we're well positioned to exit the vast majority of the remaining agreements this year. This will allow us to further optimize our cost structure in the future. We delivered solid progress in gross margin and adjusted EBIT margin expansion while continuing to fund strategic priorities for future growth. Now, I'll turn to our segment.

Peter J. Arduini: Hope your backlog orders growth and positive book to Bill position us for accelerated growth for the rest of the year.

Peter J. Arduini: Today, we reaffirmed our 2024 guidance, which Jay will discuss in greater detail.

Peter J. Arduini: Now I'd like to highlight some milestones that illustrate our commercial execution.

Peter J. Arduini: We're making steady progress with large multi year multi modality deals across equipment and service, resulting in incremental share gains.

James K. Saccaro: Let's start with imaging on slide 7, where we had approximately flat organic revenue growth. This was against a difficult comparison to the prior year when sales were up 12%, and the segment EBIT margin was up 210 basis points year over year. We made progress on enhancing gross margin through productivity, price, and service contract capture rates while investing in R&D. Margin expansion in this business remains a critical priority for us, and we're on track with the plans we communicated at our investor day.

Peter J. Arduini: We secured a 10 year strategic alliance with OSF healthcare to deliver technology digital solutions and equipment management services to help clinicians improve care delivery and patient outcomes.

Peter J. Arduini: We also extended our relationship with Hartford healthcare to run through 2030, as a trusted partner and we will continue to work together to optimize their imaging fleet and provide specialized support from our GE healthcare service technicians.

Peter J. Arduini: Our care pathway strategy is progressing well, enabling commercial growth opportunities and introducing us to adjacent markets with attractive growth potential.

James K. Saccaro: Customer demand for our imaging products remains healthy as new therapies drive the need for precision imaging guidance. We're excited about the impact our new product introductions are expected to have on both future revenue and margin. Turning to ultrasound on slide 8, organic revenue was down 4% year-over-year following double-digit growth in the prior year. Segment EBIT margin decreased 200 basis points year-over-year, driven primarily by inflation and lower volume.

Peter J. Arduini: For example, last week, we announced the expansion of our collaboration with <unk> to enhance their radiation therapy planning offerings, using NIM software, which we acquired in April.

Peter J. Arduini: In Spain, we announced the first global install of our alia IGF pulse system, which is our market leading cath lab design.

Peter J. Arduini: We expect will be a growth vehicle and its important interventional cardiology market.

Peter J. Arduini: As we look to 2024, we see a growing funnel of opportunities for products like our Ics portfolio.

James K. Saccaro: During the quarter, the team's strong focus on productivity through standardization and commonality across platforms, along with ongoing pricing strategies, helped to partially offset these challenges. Looking ahead, our funnel is solid, and we expect growth to accelerate as well as productivity initiatives to drive margin improvements in the second half of the year. Most notably, we also recently launched several exciting new ultrasound innovations that will benefit both top and bottom line performance. Moving to patient care solutions on slide nine.

Peter J. Arduini: Our strategic initiatives and trusted partnerships are taking hold and position us well for a future where health care is more connected efficient and patient centric.

Peter J. Arduini: Looking ahead, our outlook reflects a strong global procedure environment, particularly in the United States and customers continue to be optimistic about capital investment and market normalization <unk> combined with our focus on execution give us confidence in our ability to deliver on our commitments for 2020.

Peter J. Arduini: And our medium term goals.

Peter J. Arduini: Now I'll pass it onto J, who will take us through the details of our first quarter performance Jay.

J: Thanks, Pete let's start with our financial performance on slide four.

J: For the first quarter of 2020 for revenues of $4 $6 billion were approximately flat organically year over year.

James K. Saccaro: Organic revenue is down 4% year-over-year, driven primarily by in-quarter fulfillment delays and prior year COVID-related ventilator volume in China, which drove double-digit growth last year. Backlog remains healthy, which positions us well for growth. Segment EBIT margin decreased 310 basis points year over year due to inflation and timing of shipments.

J: Call. This quarter's results followed the strong double digit growth we delivered in the first quarter of 2023, which benefited from easing supply chain conditions and strong China stimulus sales.

J: Organic orders increased 1% year over year, primarily driven by strength in the U S with orders continuing to outpace sales we generated a solid total company book to Bill of one three times versus one one times last year.

James K. Saccaro: We implemented programs to drive productivity and price that we expect will improve our margin in future quarters. Moving to pharmaceutical diagnostics, on slide 10, we had another strong quarter, generating 8% year-over-year organic growth driven by price and continued volume growth. In the quarter, we saw encouraging progress with the first signs of sales upticks for Visamil in the U.S. and other countries. With additional Alzheimer's therapy approvals, we expect more substantial increases in the second half of 2024.

J: We also exited the first quarter with a healthy backlog of $18 $7 billion.

J: Adjusted EBIT margin was 14, 7% up 50 basis points year over year with improvements in both gross profit margin and SG&A.

J: First quarter adjusted EPS was <unk> 90 up six.

J: 6% year over year, driven by improved margins and lower interest expense.

James K. Saccaro: Segment even margin of nearly 30% improved 190 basis points year over year, mostly driven by price, productivity actions, and volume, while we continue to invest in our robust R&D pipeline. We are also encouraged by the continued strength of global procedures, which drives the need for our imaging agents. We're executing on significant capacity investments to strengthen the security of supply for our customers and to deliver on our patients' needs, planned expansion at our Lindesnes facility in Norway. Unknown Attendee.

J: And we generated $274 million in free cash flow from improved working capital.

J: On slide five let's take a closer look at total company revenue performance for the first quarter.

J: Organic revenue growth was approximately flat versus the 12% that we generated in the same period last year.

J: On a reported basis service grew 2% and product revenue declined 3%.

J: <unk> performance was impacted by the difficult year over year comparison.

J: Longer term, we see great growth opportunities in both product and service, including Greater service revenue from a larger installed base.

James K. Saccaro: At the same time, our lean methodology is foundational to delivering for our customers as we continue to increase patient dose capacity across our supply chain. Turning to slide 11, I'll walk through our cash flow performance. In the first quarter, we delivered free cash flow of $274 million.

J: China revenue declined low double digits, given the stimulus that benefited the first quarter of 2023 as well as anti corruption impact in the quarter.

J: EMEA sales were up slightly and sales in the U S and rest of world were flat with prior year results.

James K. Saccaro: Our working capital improved year-over-year and reflected improved inventory turns and lower accounts receivable. Many of our lean efforts and priorities associated with inventory management and the collection processes help drive our progress here. Our strong cash generation capabilities provide us with the financial flexibility to support future growth, leaving room for organic and opportunistic M&A to accelerate innovation. As previously disclosed, we strengthened our balance sheet by paying down $150 million of debt in the quarter.

J: Turning to slide six and the progress we made in the first quarter on margin initiatives.

J: Adjusted gross margin expanded 120 basis points.

J: We benefited from commercial wind and productivity initiatives.

J: We also delivered positive price in the quarter.

J: Connectivity is an ongoing focus for our teams and our lean practices continue to drive improvements.

J: Our teams are expanding daily management and standard work to new areas, while delivering on current commitments.

J: All of our segments delivered mid single digit or greater variable cost productivity and made significant platforming improvements.

James K. Saccaro: Now let's turn to our outlook on slide 12. In short, we are reaffirming our full year 2024 guidance. We expect a modest sequential improvement in second quarter organic sales growth and adjusted EBIT margin.

J: We've been making strategic investments.

J: Advanced manufacturing technologies, such as <unk> printing and additive across our segments to enhanced product capabilities and quality and improved variable cost productivity.

James K. Saccaro: As discussed in our fourth-quarter call, we expect stronger revenue growth and adjusted EBIT margin in the second half of the year. There are a few catalysts that will support growth through the rest of the year. This includes a number of new product launches that will accelerate growth in ultrasound. In addition, we expect to see growth in imaging supported by a healthy backlog and a large order funnel. We expect continued growth in our PDX business as procedure trends remain strong, and in PCS, we have a healthy backlog and expect the fulfillment challenges in the first quarter to resolve by mid-year. With that, I'll turn the call back over to Pete.

J: To date in the U S. We have more three D printing related patents than any other imaging company.

J: With 51, these investments drive lower cost and higher durability.

J: For example, an MLR, we're applying these methodologies across the entire portfolio saving us more than $1 million, a year and improving performance and reliability.

J: On SG&A, we continue to make progress with roughly 330, <unk> exited since spin and we're well positioned to exit the vast majority of the remaining agreements. This year. This will allow us to further optimize our cost structure in the future.

J: We delivered solid progress in gross margin and adjusted EBIT margin expansion, while continuing to fund strategic priorities for future growth.

Peter J. Arduini: Thanks, Jay. Turning to our precision innovation strategy on slide 13, we're excited about recent product introductions across our segments to address customer challenges and improve patient outcomes. However, the industry continues to be challenged with higher rates of clinical burnout, fueled by increased demand for imaging and caring for an aging population.

J: Now I'll turn to our segments.

J: Let's start with imaging on slide seven where we had approximately flat organic revenue growth.

J: This was against a difficult comparison to the prior year when sales were up 12%.

J: <unk> EBIT margin was up 210 basis points year over year, we made progress on enhancing gross margins through productivity price and service contract capture rate.

Peter J. Arduini: Our customers need solutions that increase flexibility in staffing, scheduling, and operations. Digitally enabled remote scanning and connected patient monitoring are ways we can help address these issues. In the US, GE Healthcare is the exclusive distributor of a vendor-agnostic system that allows clinical experts to provide remote MR, CT, and PET-CT scanning support and image review.

J: While investing in R&D.

J: Margin expansion in this business remains a critical priority for us and we're on track to the plans we communicated at our Investor day.

J: Customer demand for our imaging products remains healthy as new therapies drive the need for precision imaging guidance.

Peter J. Arduini: By enabling virtual clinical experts to provide real-time guidance to technologists on site, we're helping to address staffing shortages and streamlining operational work. Our Portrait Mobile and Monitoring Solutions platform recently introduced the Portrait Vital Signs Monitor in the U.S. and Europe. This new solution integrates with the EHR, allowing clinicians to customize early patient warning scores like low oxygen rates and declining blood pressure to identify patient deterioration. We're also focused on advancing cancer research and creating AI to address some of the biggest challenges in cancer care. For example, immunotherapy has revolutionized the way we think about cancer treatment.

J: We're excited about the impact of our new product introductions are expected to have both future revenue and margin.

J: Turning to ultrasound on slide eight organic revenue was down 4% year over year following double digit growth in the prior year segment EBIT margin decreased 200 basis points year over year, driven primarily by inflation and lower volume during the quarter the team's strong focus on.

J: Productivity through standardization and commonality across platforms, along with ongoing pricing strategies helped to partially offset these challenges.

J: Looking ahead, our funnel is solid and we expect growth to accelerate as well as productivity initiatives to drive margin improvements in the second half of the year. Most notably we also recently launched several exciting new ultrasound innovations that will benefit both top and bottom line performance.

Peter J. Arduini: However, patient outcomes vary, with some response rates ranging from 15-30% in solid tumors and 45-60% in melanoma. Because of this variation, a considerable amount of research is focused on determining treatment response. AI can potentially make a difference. In our pharmaceutical diagnostics business, we created AI research models in collaboration with Vanderbilt University Medical and demonstrated a 70-80% accuracy in predicting cancer patients' response to certain immunotherapies. What's unique about the approach is that we created these AI models using routinely collected data available in the EHR, giving them the potential for broad deployment and adoption. Methodology that was recently published in a peer-reviewed science journal. These AA models have the potential to help clinicians to match patients to the most effective treatment sooner, while avoiding unnecessary side effects and costs, and could be integrated into our digital suite of tools in the. We're bolstering An introduction that includes significant Platforming Solutions and new artificial intelligence applications for Radiology, Urology, and Cardiology.

J: Moving to patient care solutions on slide nine organic revenue was down 4% year over year, driven primarily by in quarter fulfillment delays and prior year Covid related ventilator volume in China, which drove double digit growth last year.

J: Backlog remains healthy.

J: Which positions us well for growth.

J: <unk> EBIT margin decreased 310 basis points year over year due to inflation and timing of shipments.

J: We implemented programs to drive productivity and price that we expect will improve our margin in future quarters.

J: Moving to pharmaceutical diagnostics on slide 10, we had another strong quarter generating 8% year over year organic growth driven by price and continued volume growth.

J: In the quarter, we saw encouraging progress with the first signs of sales uptake for <unk> in the U S and other countries.

J: With additional Alzheimer's therapy approvals, we expect more substantial increases in the second half of 2024.

J: Segment EBIT margin of nearly 30% improved 190 basis points year over year, mostly driven by price productivity actions and volume, while we continue to invest in our robust R&D pipeline. We're also encouraged by the continued strength of global procedures, which drives the need for our image.

J: <unk> agents.

J: We're executing on significant capacity investments to strengthen the security of supply for our customers and to deliver on our patients needs planned expansion at our lindesnes facility in Norway is expected to be completed during the second quarter.

Peter J. Arduini: This is a direct correlation to our increased investments in R&D dollars. We've supported clinicians for more than 30 years with our premium general imaging platform logic, and we're excited to share that we've made significant progress. These include the launch of three upgraded premium systems and a new mid-tier solution, the Logic TOTUS, all with AI and vScan Air wireless handheld probe integration. Our new urology-based software feature, Prostate Volume Assist, is now available on several BK Active Imaging devices. Between MIMS software's Prostate Fusion and the Power of AI, we're strengthening our prostate-focused ultrasound solutions and improving the cancer journey for providers and patients.

J: At the same time, our lean methodologies foundational to delivering for our customers as we continue to increase patient dose capacity across our supply chain.

J: Turning to slide 11, I'll walk through our cash flow performance.

J: In the first quarter, we delivered free cash flow of $274 million, our working capital improved year over year and reflected improved inventory turns and lower accounts receivable many of our lean efforts and priorities associated with inventory management and the collection processes helped drive our.

Speaker Change: Yes here, our strong cash generation capabilities provides us with the financial flexibility to support future growth, leaving room for organic and opportunistic M&A to accelerate innovation.

Peter J. Arduini: Earlier this month, we launched the vScan Air SL with Caption AI cardiac guidance at the American College of Cardiology. By integrating AI into our handheld, we are enabling clinicians to acquire up to 10 standard cardiac uses with guidance, creating even more access and use cases for ultrasound point of care. For example, with AI in the palm of their hand, a primary care physician with less ultrasound experience may uncover heart disease sooner, or cardiologists can easily and automatically calculate a left ventricular ejection fracture, potentially diagnosing heart failure.

J: As previously disclosed we strengthened our balance sheet by paying down $150 million of debt in the quarter.

J: Now, let's turn to our outlook on slide 12 in short we are reaffirming our full year 2024 guidance, we expect a modest sequential improvement in second quarter organic sales growth and adjusted EBIT margin as discussed in our fourth quarter call, we expect stronger revenue growth and adjusted EBIT.

J: And in the second half of the year.

J: There are a few catalysts that will support growth for the through the rest of the year. This includes a number of new product launches that will accelerate growth in ultrasound. In addition, we expect to see growth in imaging supported by healthy backlog and a large order funnel. We expect continued growth in our pdx business as procedure trends were.

Peter J. Arduini: We expect these advancements in ultrasound to drive price and cost efficiencies over time and continue to realize more productivity while accelerating growth. We also continue to build our reputation as a trusted partner in ultrasound with several collaborations to address growing patient needs globally. For example, two leading public health agencies in China recently chose GE Healthcare to develop innovative technologies, patient management models, and clinical training programs to improve outcomes for patients with liver disease. In summary, on slide 14, I'd like to thank our team for their focus and execution in the first quarter.

J: <unk> strong and in Tcs, we have healthy backlog.

J: I expect the fulfillment challenges in the first quarter to resolve by mid year.

J: With that I'll turn the call back over to Pete.

Pete: Thanks, Jay turning to our precision innovation strategy on slide 13.

Pete: We're excited about recent product introductions across our segments to address customer challenges and improve patient outcomes.

Pete: Industry continues to be challenged with higher rates of clinical burn out.

Pete: By increased demand for imaging and caring for an aging population.

Pete: Our customers need solutions that increased flexibility and staffing scheduling and operations.

Peter J. Arduini: I'm encouraged by the progress on the product pipeline and market outlook, which situates us well for an improving growth profile as we move through the year. I look forward to sharing more about our progress and future innovation plans at upcoming conferences. I'd like to introduce that we will host our Investor Day on November 21st in New York City. We will provide more in-depth views on technology and, with that, we'd like to open up the call.

Pete: Digitally enabled remote scanning and connected patient monitoring our ways. We can help address these issues in the U S.

Pete: Yes.

Pete: There is the exclusive distributor of a vendor agnostic system that allows clinical experts to provide remote MLR, Cte and pet scanning support and image review.

Pete: By enabling virtual clinical experts to provide real time guidance to technologists on site.

Peter J. Arduini: Thank you, Peter. I'd like to ask participants to please limit themselves to one question and one follow-up. Operator, can you please open the line? And finally, ladies and gentlemen, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again.

Pete: We're helping to address staffing shortages and streamlining operational workflows.

Pete: Our portrait mobile and monitoring solutions platform recently introduced the portrait vital signs monitor in the U S and Europe.

Pete: This new solution integrates with the EHR, allowing clinicians to customize early patient warning scores like low oxygen rates and declining blood pressure to identify patient deterioration sooner.

Operator: Please stand by while we compile the Q&A roster. Now, the first question coming from the line of Suraj Kalia with Oppenheimer, your line is open. Good morning, good morning everyone.

Pete: We're also focused on advancing cancer research and creating AI to address some of the biggest challenges in cancer care for.

Pete: For example, immunotherapy has revolutionized the way we think about cancer treatment. However, patient outcomes vary with some response rates ranging from 15% to 30% in solid tumors and 45% to 60% in melanoma because of this variation a considerable amount of research is focused on determining.

Peter J. Arduini: Peter, can you hear me all right? Yes, it's clear. My apologies for the background noise. So, Peter, the obvious question, US year over year, was flattish. I get your point on China. In terms of ventilators and top comms, can you set the stage for us in terms of the US portion of the business, the flattish performance in the quarter, and how you see it progressing through the year? Look, I would just kind of start out to say from that standpoint, just remember we talked about the compare being our toughest one of the year, so obviously, it gets better throughout the year. We talked about that in our guidance, but really, Q1 was impacted by, fundamentally just two items, and Jay touched this in his prepared remarks. One was some fulfillment delay in PCS.

Pete: Treatment response.

Pete: AI can potentially make a difference in our pharmaceutical diagnostics business. We created AI research models in collaboration with Vanderbilt University Medical Center.

Pete: <unk> demonstrated a 70% to 80% accuracy in predicting cancer patients response to certain immunotherapies.

Pete: What's unique about the approach is that we created these AI models using routinely collected data available in the EHR, giving them the potential for broad deployment and adoption.

Pete: Methodology that was recently published in a peer reviewed scientific journal.

Peter J. Arduini: I think we've got those well in hand to have them resolved by mid-year. I think that's the first part of this, and there were specific items less about technology and more about actually delivery of the components. And then the China piece, and again, we know that anti-corruption presents a challenging environment, and we expected that to play out through mid-year. The 2023 market was somewhat down for the whole market in ultrasound, but we see that actually turning around in 24, and so the timing of our new product introductions is very good, as well as in imaging, so I'm rather confident about how we're going to see the capital landscape and the market evolve within the United States, but relative to the quarter, it was those two specific items that dampened our top line. I got it.

Pete: These AI models have the potential to help clinicians to match patients to the most effective treatment sooner, while avoiding unnecessary side effects and costs and could be integrated into our digital suite of tools in the future.

Pete: We are bolstering our leading portfolio in ultrasound with six new products introductions that includes.

Pete: <unk> significant upgrades platforming solutions, and new artificial intelligence applications for radiology urology and cardiology.

Pete: This is a direct correlation to our increased investments in R&D dollars.

Pete: We've supported clinicians for more than 30 years with our premium general imaging platform logic.

Pete: And we're excited to share that we have made significant enhancements. These include the launch of three upgraded premium systems and a new mid tier solution. The logic told us all with AI and <unk> are wireless handheld probe integration.

Pete: Our new urology based software feature prostate volume assessed is now available on several BK active imaging systems between MIM software is prostate fusion solutions and the power of AI, we're strengthening our prostate focused ultrasound solutions and improving the cancer journey.

Peter J. Arduini: And Peter, my follow-up question specifically within imaging: how should we think about backlog, i.e., business that is already in the hands of customers, flowing through in the next three quarters versus new orders coming in versus NPI and price increases? Just kind of give us how you all are thinking about, within imaging, as the year progresses, which are the levers to be pulled, you know, and how should we think about the cadence of imaging growth as the year progresses? Thank you for taking my question. Yeah, great, thanks. Let me come in, and then Jay, you can jump in as well on this.

Pete: For providers and patients.

Pete: Earlier this month, we launched the V scan air SL with caption AI cardiac guidance at the American College of Cardiology Conference.

Pete: Integrating AI into our handheld system, we're enabling clinicians to acquire up to 10 standard cardiac us with guidance, creating even more access and use cases for ultrasound point of care for example, with AI in the palm of their hand, a primary care physician with less.

Peter J. Arduini: So we've got a very solid backlog for our imaging business. I think we feel quite good about the diversity of it, the mix of it, and it actually growing with price in the backlog and then new platforming capabilities that are coming in, like our IGS system, our new cath lab, which will come in and actually bring better margins. So it's positioned well from that standpoint. We think the profile is going to be more in the second half, just as we've communicated. There hasn't been a lot of them.

Pete: <unk> experience.

Pete: And recover heart disease sooner.

Pete: We're a cardiologist can easily and automatically calculate a left ventricular ejection fraction potentially diagnosing heart failure early.

Pete: We expect these advancements in ultrasound to drive price and cost efficiencies over time and continue to realize more productivity while accelerating growth.

Pete: We also continue to build our reputation as a trusted partner in ultrasound with several collaborations to address growing patient needs globally. For example, two leading public health agencies in China recently chose GE healthcare to develop innovative technologies patient management models and clinical trading programs.

Peter J. Arduini: We're going to clearly see a pickup in the second quarter, but the majority of it is profiled out towards Q3 and Q4. And again, that really hasn't changed from what we've laid out our initial guidance on. I would say from a broader order standpoint, we expect that we will see an uptick in broader imaging orders, both in Q2, 3, and 4, most likely having a larger step up in the second half.

Pete: To improve outcomes for patients with liver disease.

Pete: In summary on slide 14, I'd like to thank our team for their focus and execution in the first quarter I'm encouraged by the progress on the product pipeline and market outlook for.

Peter J. Arduini: And some of that's tied to the China stimulus discussion that we had from an order standpoint. But even the U.S. profile, when you take a look at the products that we've got laid out, some of the big deals that we have visibility into the pipeline, they're probably going to nestle more so in that second half of the year. Thank you. Thank you. Thank you. And our next question coming from the line-up, Edward Ridley Day from Redbridge Atlantic, your line is open. Hi there, Thank you very much.

Pete: The situates us well for an improving growth profile as we move through the year.

Pete: Look forward to sharing more about our progress and future innovation plans at upcoming conferences.

Pete: I'd like to introduce that we will host our Investor day on November 21 in New York City, where we will provide more in depth views on technology and innovation with that we'd like to open up the call for questions.

Speaker Change: Thank you Peter I'd like to ask participants to please limit yourself to one question and one follow up operator can you. Please open the line.

Speaker Change: Ladies and gentlemen to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question simply press star.

Operator: So my first question is just to follow up on the Chinese stimulus plans, the new Chinese stimulus that is being discussed. We've seen headline details from the authorities there, but not much more. Could you speak to what... You see, the benefits might be for your address markets through the remainder of the year, and your peer yesterday was talking about some evidence of hospitals submitting new orders as a result of the potential new stimulus. I don't know if you could speak to that first, please.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Yeah.

Speaker Change: Yes first question coming from the line of so Thats Kelly with Oppenheimer. Your line is now open.

Kelly: Good morning, Good morning, everyone. Peter can you hear me all right.

Kelly: Yes clear.

Peter J. Arduini: Yeah, so look, the data is being revealed as we speak. So I think, you know, we don't have perfect information on it. But I think if you look at since our guidance, what is new is obviously not the anti-corruption that's out there. And it's going to continue to be, we believe, to be tough through mid-year. And as we said before, we believe that that's going to continue to improve in the second half. What is new is the stimulus.

Kelly: Yes, my apologies for the background noise.

Kelly: Peter the obvious question.

Kelly: U S year over year was flattish I guess, you are pointing to in China.

Kelly: In terms of ventilator tough comps can you just set the stage for us in terms of the U S.

Kelly: A portion of the business.

Kelly: <unk> performance in the quarter and how you see it progressing through the year.

Peter J. Arduini: And from our understanding of it, the prior stimulus was more about customers taking a look at this and saying, I really want to understand the rules of it. So when I submit an order, I make sure I get the full benefit of the stimulus. So we believe that there will be clarity on the stimulus rules, so to speak, at some point in Q2. And following those rules, then we would expect an uptake in orders.

Kelly: Yes.

Speaker Change: Yes look I would just kind of start out say.

Speaker Change: From that standpoint.

Speaker Change: Remember, we talked about the compare was.

Speaker Change: Our toughest one of the year. So obviously it gets better throughout the year, we talked about that in our guidance.

Speaker Change: But really Q1 was impacted by fundamentally was two items.

Speaker Change: And Jay touched this on the prepared remarks, one was some fulfillment delays in Tcs I think we've got those well in hand to have them resolved by probably mid year I think thats. The first part of this there were specific items.

Peter J. Arduini: And then how that plays out, if the orders come sooner, there's more possibility for sales within the year. If the orders come later, businesses like Ultrasound that you can do flow shipments most likely would benefit sooner, whereas installed products would probably be a little bit later. But net-net, this is all positive. And kind of how we see the landscape as we speak right now.

Kelly: Technology and more about actually delivery of the components and then the China piece and again, we know that anti corruption.

Kelly: <unk> challenging environment, and we expected that to play out through through mid year. I mean, those are really the two items if I look at the U S. Specifically.

Kelly: We actually are seeing a more positive backdrop relative to orders final relative to growth potential and really across all of our businesses and I'd say ultrasound I talked a lot on the call here about new products 2023 market was.

Peter J. Arduini: Thank you, that's very helpful. And just a quick follow-up, actually, on your radiopharmaceutical business. If you can give us any color on when we should expect FDA approval for Pyridaz and also any other updates that we should be thinking about or looking for in the remainder of the year.

Kelly: Down for the whole market in ultrasound, we see that actually turning around in 'twenty, four and so the timing of our new product introductions.

Kelly: Very good as well as an imaging.

Peter J. Arduini: Thank you. Yeah, look, I mean, Flipperdez, that you referenced, is a, you know, an agent that's in our PDX business that will be used for cardiac imaging and PET-CT. We think it's going to be a really breakthrough approach to be able to do cardiac perfusion imaging and PET-CT. And a lot of it, as you know, is tied to logistics, the half-life, and the ability to ship a product there, as opposed to have to generate it in, I don't know, seconds on site.

Kelly: <unk>.

Kelly: I am rather confident on how we're going to see the capital landscape and the market evolve within the United States, but relative to the quarter. It was those two specific items that dampened our topline.

Speaker Change: Got it.

Kelly: Peter My follow up specifically within imaging, how should we think about.

Kelly: Backlog.

Peter J. Arduini: E business that was already in the hands.

Peter J. Arduini: Flowing through in the in the next three quarters versus.

Peter J. Arduini: The file's been submitted to the FDA, and, you know, we'll provide updates here on the milestones. I think, from what I hear from the team, we have everything in. We're not assuming anything within our 24-guidance. I mean, this will be more of a 25, 26, 27 event as those ramp up.

Peter J. Arduini: New orders coming in versus NPI and price increase just kind of give us how youre thinking about.

Speaker Change: As the year progresses, which is the leverage to be folks.

Speaker Change: Should we think about the cadence of <unk>.

Speaker Change: Imaging growth progresses. Thank you for taking my question.

Speaker Change: Great. Thanks, Let me comment and then Jay you can you can jump in as well on that so we've got that we've got a very solid backlog for our imaging business I think we feel quite good about the diversity of it the mix of it.

Peter J. Arduini: But all things are good, and we'll be waiting to hear back from the agency if there are any questions or follow-ups that they have for us. Thanks for your questions. Yeah, no, great.

Speaker Change: And it actually being growing with price in the backlog and that new.

Jay: At forming capabilities that are coming in like Rgs system, or new Cath lab, which will come in and actually bring better margins. So it's positioned well from that standpoint, we think the profile is going to be more second half just as we've communicated there hasn't been a lot we're going to clearly see a pickup in the second quarter.

Operator: And our next question, coming from the line of Sezgi Ozener with HSBC, is from Yelena Sokolov. Hi, Sezgi Ozener from HSBC here. Thanks for taking my questions. I hope you can hear me all right.

Operator: Great. My first question is on your confidence in the full year 24 outlook given the lower book to bill. Are you more on the lower end, or are you equally confident on both ends of your guidance? And the second question is on your pricing versus volume comments. I've seen the positive pricing comment, but has this been reflected uniformly across the segments as well as across the regions? Some color there would be really helpful.

Jay: But the majority of its more profile out towards Q3, and Q4 and again that really hasn't changed from what we've laid out our initial guidance on I would say from a broader order standpoint.

Jay: We expect that we will see an uptick in broader imaging orders both in Q2, three and four most likely having a larger step up in the second half and some of that is tied to the China stimulus discussion that we had from an order standpoint, but even the U S profile. When you take a look at the products that we have.

Peter J. Arduini: So maybe I'll start, then Jay, you can talk a little bit more about some of the book to fill and the cadence piece. But look, as you know, I walked through just a minute ago the impact for the first quarter, including the difficult comp. But we expect that to alleviate through the year, which, again, gives us strong confidence in our ability to hit our guidance. And, again, four things.

Jay: Got laid out some of the big deals that we have visibility into the pipeline. They are probably going to nest more so in that second half of the year.

Speaker Change: Thank you.

Speaker Change: Thank you.

Adele Dang: Thank you and our next question coming from the line of adequately Dang with Madmen Atlantic Your line is open.

Peter J. Arduini: The comps get better quarter over quarter. A funnel growing on orders and sales we have good visibility into, including our service funnel. So how does service grow? When you buy one share in a previous year, you have one year of warranty.

Adequately Dang: Thank you very much.

Adele Dang: My first question just to follow up actually on the China stimulus plans, the new Chinese stimulus that is being discussed.

Adequately Dang: Headline details.

Adequately Dang: The authorities, there, but not much more could you speak to.

Peter J. Arduini: When it comes off the warranty, it becomes part of a contract. We're starting to see the benefit of that service growth now in 24. Three, the new products across the whole product line, but particularly in ultrasound and select areas in imaging, the new products, and then in improving China. So that's really the four items that kind of give us confidence. Jay, maybe I could turn it over to you to talk a little bit about how we think about book-to-bill and price. Sure.

Adequately Dang: What.

Adequately Dang: You see the benefit of these might be.

Adequately Dang: For your address markets through the remainder of the year.

Adequately Dang: And your peer yesterday was talking about some evidence of hospital submit the orders as a result of the potential new stimulus, but then if you could speak to that first please.

Speaker Change: Yes, so look the the data is unveiling as we speak so I think we don't have perfect information on it but I think if you look at it since our guidance what is new.

Speaker Change: Is obviously not anti corruption thats out there and it's going to continue we believe to be talked through mid year and as we said before we believe that thats going to continue to begin to improve in the second half what is new is the stimulus and from our understanding of it the prior stimulus was more about.

James K. Saccaro: From a book-to-bill standpoint, you have to recall that we include in our book-to-bill calculation both service and PDX coming in at one-to-one. So if we were to adjust those two items out, the actual book-to-bill is much higher. So we feel good about the overall book-to-bill that we have for the quarter. The other thing I would say is that the backlog sits at a near record level. So we're sitting at roughly $19 billion in backlog. We feel very good about the orders that we have in the backlog.

Speaker Change: Low low interest rates or relief relative to loans, where this will actually be specific cash grants.

Speaker Change: Which then would reach a larger instance group of institutions that arent just looking for loans, but are looking for.

Adequately Dang: Supplemental dollars to buy equipment. So we think that obviously opens us up to a larger population.

Adequately Dang: The second piece to that as well is that it is.

Adequately Dang: Ability to be multi year, and so we'll see how that ultimately plays out but those are the two characteristics relative to the rollout of it I would say what we did see at the end.

James K. Saccaro: It's a, you know, a robust pipeline of future sales that we have in place. So overall, that's great. And then, you know, as we think about pricing, the pricing environment continues to be solid. You know, we highlighted at the beginning of the year that we expect one to 2% of pricing impact on sales, and we're trending very much in line with those expectations. So we had a good quarter from a pricing standpoint.

Adequately Dang: The first quarter is actually a little bit tapping of the brakes of some orders in China relative to stimulus coming out and you say well why would that be customers, taking a look at to say I really want to understand the rules of it so when I submit an order I make sure I get the full benefit of the stimulus.

Adequately Dang: We believe that there's going to be clarity to the stimulus rules so to speak at some point here in Q2 and post those rule then we would expect an uptick in orders and then how that plays out if the orders come sooner there is more possibility for sales within the year if the orders come later.

James K. Saccaro: From a volume standpoint, I think Pete highlighted some temporary issues that we've been navigating, which we expect to resolve. The other thing to remember is, you know, the comps get a lot easier as we move through the rest of the year. So I think all of those elements come into play as we, you know, as we're able to firmly reiterate guidance from a sales and an EPS standpoint. That's very helpful. Thank you.

Adequately Dang: As like ultrasound that you can do flow shipments most likely with benefits sooner, whereas installed products would probably be a little bit later, but net net this is all positive and.

Adequately Dang: Kind of how we see the landscape as we speak right now.

Speaker Change: Thank you that's very helpful and just a quick follow up actually on your radiopharmaceutical business.

Speaker Change: If you can give any color on when we should expect FDA approval flow peer with us.

Speaker Change: And also any other updates that we should be thinking about or looking for the remainder of the year. Thank you.

Speaker Change: Yes look I mean, <unk> heard as you referenced is.

Operator: One moment for our next question, and our next question comes from the line of Craig Bishop with Bank of America Security. Good morning, guys.

Speaker Change: In Asia, that's in our Pdx business that will be used for cardiac imaging and <unk>.

Speaker Change: We think it's going to be a really breakthrough approach to be able to do cardiac perfusion imaging and <unk> and a lot of it is as you know is tied to logistics the half life and the ability to ship a product there as opposed to have to generate it an automatic seconds on site.

Operator: Thanks for taking the questions. Wanted to start on unanswered. And, you know, you guys have seen low single-digit order growth over the last three quarters. And I understand that there are a couple reasons for that. But I wanted to see if you guys could maybe give a little bit more color on how that order growth translates into revenue growth, you know, in subsequent quarters and your confidence that that order growth will really accelerate over 24 and then be able to drive, you know, kind of the mid single-digit revenue growth target that you guys have put out there. Yeah, Craig, thanks for the question. It's a great question.

Speaker Change: File has been submitted to the FDA and will provide updates here on the milestones I think from what I hear from the team we have everything and we're not assuming anything within our 24 guidance I mean, this will be more about 25 26 27 event.

Speaker Change: Those ramp up but all things good and we'll be waiting to hear back from the agency if theres any questions or follow ups that they have for us.

Speaker Change: Thank you for your questions.

Adequately Dang: Thanks.

Speaker Change: Thank you.

Speaker Change: Our next question coming from the lineup.

Adequately Dang: Sure.

HSBC: HSBC Your line is now open.

Adequately Dang: Hi.

HSBC: I'm from HSBC here. Thanks for taking my questions I Hope you can hear me all right.

HSBC: One.

HSBC: My first one is on your confidence on the full year 2004 outlook given the lower book to Bill are you more on the lower end or.

Peter J. Arduini: But the reality of it is that over the last, you know, year plus year and a half, we've actually had a positive book to bill ratio again. And we give that ratio with everything in it so that you can see, not just the capital piece, but you kind of get a feel for the total composite of it. I think, you know, as long as that is a positive scenario, and the backlog is almost about a billion dollars higher than where it was pre-COVID, we've got a lot of gas in the tank to deliver on mid single-digit revenue growth. So that's, that's just kind of how the profile of this works.

HSBC: Do you are you equally confident on both ends of your guidance and the second one is on your pricing versus volume comments I've seen that the positive pricing comment.

HSBC: This means selected from across the segments as well as across the region. Some color that would be really helpful.

Speaker Change: So maybe I'll start then Jay you can talk a little bit more about some of the book to bill on the cadence.

Speaker Change: Yes.

Jay: I walked through just a minute ago, the impact for first quarter, including a difficult comp, but we expect that the alleviate through the year, which again gives us strong confidence in our ability to hit our guidance again for things the comps get better quarter over quarter.

Jay: Final growing on orders and sales we have good visibility into including our service model. So how does service grow when you won share in the previous year you have one year warranty when it comes off of warranty it becomes part of a contract we're starting to see the benefit of that service growth now in 24 three.

Peter J. Arduini: And I think you guys understand that with some of the capital that can be lumpy. So you know, shipments tend to be a little bit smoother, but you can pick up significant couple large and IDN deals in a given quarter, and your orders can spike up in that quarter, and they can be lower in the following quarter. But that's kind of how we see it from that standpoint.

Jay: Three the new products against across the whole product line, but particularly in ultrasound in select areas and imaging to new products and then an improving China. So thats really the four items that kind of gives us confidence as Jay maybe over to you talk a little bit how we think about price sure from a book to Bill standpoint, you have to recall that we include.

Peter J. Arduini: The interesting part here is that over the last, I'd say 1218 months, the markets that we've played in, and we track these with third-party data, you know, have been probably in the neighborhood of only up a point, or they've been down a couple points relative to different markets in the world. Our outlook, when we see what the rest of this year is, and going into 25, definitely brings a more positive view, which we would So that's one aspect of it.

Jay: In our book to Bill calculation, both service and Pdx coming in at one to one so if we were to adjust those two items out the actual book to Bill is much higher so we feel good about the overall book to Bill that we have for the quarter. The other thing I would say the backlog sits at near record levels. So we're sitting at roughly 19 billion.

Jay: A backlog.

Jay: Feel very good about the orders that we have in the backlog and say, it's a robust pipeline of future sales that we have in place. So overall, that's great and then as we think about pricing the pricing environment continues to be solid.

Peter J. Arduini: The other side is, when you start winning share, and I mentioned this in a previous comment, and you start growing your install base, the opportunity for service revenue to play a bigger contributing component and revenue is there. So you saw this quarter; we actually had positive growth within our service component. We would expect that growth rate to continue to grow faster than it did in the first quarter this year, which means in the second half, we have more service contributing to the growth because that service is already in the backlog. And so we have visibility into it. So it's a host of those things.

Jay: We highlighted at the beginning of the year, we expect 1% to 2%.

Jay: In pricing impact sales.

Jay: We're trending very much in line with those expectations. So we had a good quarter from a pricing standpoint from a volume standpoint, I think Pete highlighted some temporary issues that we've been navigating which we expect to resolve the other thing to remember is that comps get a lot easier as we move through the rest of the year. So I think all of those.

Jay: Elements come into play as we as we.

Jay: We're able to firmly reiterate guidance.

Jay: From a sales and an EPS standpoint.

Speaker Change: That's very helpful. Thank you.

Peter J. Arduini: And then obviously, the typical thing, six new product launches and ultrasound, just refresh the cardiac platform, we just refreshed the volume sign women's healthcare platform, handheld, first calf lab that I would say that we've had in quite some time that is very competitive. It's robotic platform with new to pet CT platform, which is doing well in new wider for Mr. Our new treaty, all of those then turn around into faster growth and a faster growing market, but also winning some share.

Jay: Thank you our next question and our next question coming from the line of Greg <unk> with Bank of America Securities. Your line is open.

Greg: Good morning, guys. Thanks for thanks for taking the questions.

Greg: Wanted to start on on order growth and you guys have seen low single digit order growth over the last.

Greg: Three quarters.

Greg: And I understand that there are a couple of reasons for that.

Peter J. Arduini: So those are the pieces that give us confidence. But again, I think when you look at our backlog compared to what we need to deliver on mid single-digit growth, we've got plenty of gas in the tank on that just over the next couple years. But we would expect to see our orders growth pick up. And my expectation here is that in the second half, we're going to start seeing that pickup in that mid single-digit range.

Greg: I wanted to see if you guys could maybe give a little bit of more color on how that order growth translates into into revenue growth.

Greg: In subsequent quarters.

Greg: Your confidence that you have that order growth will really accelerate over over 24, and then be able to drive kind of the mid single digit revenue growth target that you guys have put out there.

Peter J. Arduini: And again, not every quarter will be consistent, but how that will play out over multiple quarters will be in that. Great, thanks for that, Pete. And if I could follow up on the hospital CAPEX sentiment, you mentioned that it's still pretty, pretty good. So, you know, are you here?

Speaker Change: Yeah, Craig Thanks for the question. It's a great question look the reality of it is is that over the last year plus year and a half we've actually had a positive book to bill ratio again, and we give that ratio with everything in so that you can see.

Operator: I know you guys customers, or you survey your customers often. So are you hearing any concerns? You know, given the interest rate environment, it looks like we're not going to see many more cuts. And then, just on top of that, it, Maybe just talk about how the pricing, your ability to get that price that Jay mentioned in one of the previous calls, you know, how that gets impacted if there's some concern or hesitation on capital spending by houses. Yeah, let me start. And then Jay, you can kind of fill in some of the gaps on this.

Speaker Change: Not just the capital piece, but you kind of get a feel for the total composite of it I think.

Greg: As long as that is a positive scenario and the and the backlog is almost about $1 billion higher than where it was pre COVID-19.

Greg: Got a lot of gas in the tank to deliver on mid single digit revenue growth.

Greg: It's just kind of how the profile of this works and I think you guys understand with some of the capital that can be lumpy. So shipments tend to be a little bit smoother, but you can pick up significant a couple of large and IBM deals in a given quarter and your orders can spike up in that quarter and that can be lower in the following quarter, but.

Greg: That's kind of how we see it from that standpoint.

Peter J. Arduini: I think again, if you compare it to over a year ago, you're taking a look at an environment where hospitals were primarily in the red, heavily tied to labor costs. We're seeing that moderate, and most of our customers, particularly our big, important IDNs, are back in the black. So I think that's a core like relative to rates. You know, it's obviously out there.

Greg: The interesting part here is that over the last I'd say 12 to 18 months the markets that we played in and we track needs with third party data has been probably in the neighborhood of only up a point or they've been down a couple of points relative to different markets in the world our outlook when we see what the rest of this year is in going into.

Greg: 225 definitely brings a more positive view, which we would expect to see orders pick up relative to those markets. So thats one aspect of it. The other side is when you start winning share and I mentioned this on a previous comment and you start growing your installed base the opportunity for the service revenue to play a bigger.

Peter J. Arduini: It's a topic; we haven't really seen it come up or in a major discussion that's limiting how things are playing out. I still think the underlying issue here is that demand for procedures is just still continuing to grow. So, as you know, if you think about some of our peer group of the device companies that are showing very high growth rates in their implants, you know, we're showing that same kind of growth in our PDX business because we see that day to day, the effect of that on equipment isn't in that same quarter; the effect on the equipment is usually three to four quarters out. Why is that?

Greg: Contributing component in revenue is there. So you saw this quarter, we actually had positive growth within our service component, we would expect that growth rate to continue to advance pro faster than it did in the first quarter. This year, which means in the second half we have more service <unk>.

Greg: <unk> to the growth that service is already in the backlog and so we have visibility into it. So it's a host of those things and then obviously the typical six new product launches and ultrasound just refresh the cardiac platform. We just refresh the volumes saw in women's health care platform handheld first Cath lab that I would say that we've had in <unk>.

Peter J. Arduini: Because you're using current equipment, and then you start having capacity constraints, and you need to buy upgrades or new equipment. And so that also gives us confidence that we're going to see that pick up in later quarters. But at this point in time, you know, backlogs to get an MR scan or a PET still are much longer than they were before COVID.

Greg: Some time that is very competitive it's robotic platform with new two FCT platform, which is doing well new wider bore <unk>, our new treaty all of those then turnaround into faster growth and a faster growing market, but also winning some share.

Greg: Those are the pieces that give us confidence, but again I think when you look at our backlog compared to what we need to deliver on mid single digit growth. We've got plenty of gas in the tank on that just over the next couple of years, but we would expect to see our orders growth pick up in my expectation here in the second half, we're going to start seeing that pick up.

Peter J. Arduini: And that brings, you know, high-value procedures within an institution. And again, that's what gives us confidence that we're going to continue to see investments that take place, particularly in the United States. That's exactly right.

James K. Saccaro: I think, you know, and we do a survey each quarter. Pete's comments are very reflective of what we heard from our customers: continued procedure volume, demand, staffing shortages, ease, and good economics for the hospitals. Interest rates really have played a less prominent role in some of those discussions and survey results.

Greg: And that mid single digit range and again not every quarter will be consistent but how that will play out over multiple quarters, we'll be in that range.

Speaker Change #100: Great. Thanks for that Pete and if I could follow up on the hospital Capex sentiment you mentioned that it's still pretty pretty good.

Speaker Change #100: So.

Speaker Change #100: Are you here I know you guys are you survey your customers often so are you hearing any concerns given that the interest rate environment. It looks like we're not going to see many more cuts and then just on top of that.

James K. Saccaro: So we feel quite good about that. From a pricing standpoint, you know, as I said, we've talked about low single-digit, 1-2% price increases. And what we're finding is that's not the difference between buying and not buying. It's not really, you know, the decisions aren't that sensitive.

Speaker Change #100: Maybe just talk about how the pricing your ability to get that price that Jay mentioned in one of the previous calls how does that get impacted.

Speaker Change #100: <unk>.

Greg: If there is some concern or hesitation.

James K. Saccaro: And so as we continue to emphasize this focus on pricing discipline across the organization, we've been able to see that driving a positive impact for the company. Thanks, guys. And our next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open. Good morning.

Greg: On capital spending by hospitals.

Speaker Change #101: Yes, let me let me start and then Jay you can kind of fill in some of the gaps on this I think again, if you compare it to over a year ago. You were taking a look at an environment, where hospitals were primarily in the red heavily tied to labor cost, we're seeing that moderate in most of our customers, particularly our big important idea.

Operator: Thanks for taking the question. Follow up on China. So sales were down about 11% in Q1 in China. What are the expectations for the rest of the year? Does the new stimulus represent potential upside to the prior guide? and Edwin Powell.

Jay: And back in the Black So I think thats a quarter lag relative to rates. It's obviously out there. It's a topic, we haven't really seen it come up or in a major discussion thats limiting how things are playing out I still think the underlying play here is that demand for procedures.

James K. Saccaro: Yeah, I think it will depend upon when the details of the stimulus package are laid out. Because, as Pete said earlier, we did see some hesitancy among customers as they waited for clarity on the stimulus rules before submitting orders. And that makes complete sense to me.

Greg: Is just still on continuing to grow so as you think about some of our peer group of the device companies that are showing very high growth rates and their implants.

Greg: Showing that same kind of growth in our pdx business, because we see that day to day effect of that on equipment isn't in that same quarter. The effect on the equipment is usually three to four quarters out why is that because youre using current equipment and then you start having capacity constraints and you need to buy upgrades or new equipment and so.

James K. Saccaro: We've seen that continue in the second quarter of the year. And so from our standpoint, the stimulus package, Larry, we view that as a good long-term catalyst for the market. Exactly when that shapes up with respect to 2024 is something that we're watching. To the extent that we get clarity sooner, then it certainly could be a positive catalyst versus guidance previously. To the extent that we're still waiting and there's still hesitancy amongst customers with respect to orders, it could be sort of a negative in the short term.

Greg: That's what also gives us confidence that we're going to see that pick up in later quarters, but at this point in time.

Greg: Backlogs to get MLR scan or a pad still are much longer than they were pre COVID-19 and that brings high value procedures within to an institution and again, that's what gives us confidence we're going to continue to see investments that take place, particularly in the United States.

Speaker Change #105: Hi, Chad.

Chad: That's exactly right I think.

Chad: We do a survey each quarter on Pete's comments are very reflective of what we heard from our customers continued procedure volume demand.

James K. Saccaro: But again, I think from our standpoint, we're very pleased to learn about this. And, long term, it's a very positive development for the overall market. Yeah, I mean, Larry, the only thing I would add is that, from our guide, not a lot has changed.

Speaker Change #104: Wrapping shortages each good economics for the hospitals interest rates really have played a less prominent role in some of those discussions and survey results.

Speaker Change #104: So we feel quite good about that from a pricing standpoint, as I said, we've talked about we're talking about low single digit one 2% price increases and what we're finding is that is not the difference between buying and not buying it's not really the decisions aren't that sensitive and so as we continue to emphasize this focus.

Peter J. Arduini: The first half we guided would be negative; the second half will be positive. I think in the second half, the STEM is going to have an effect of probably having a bigger step up in Q4 than Q3, just because of the delivery time to ship equipment. You know, if it gets more clarified within Q2, then you could actually have a little bit sooner. But I think those are the dynamics.

Speaker Change #104: On pricing discipline across the organization, we've been able to see that driving a positive impact for the company.

Speaker Change #108: Thanks, guys.

Speaker Change #102: Thank you.

Speaker Change #106: Next question coming from the lineup.

Peter J. Arduini: I think the good part is, even if it's later, that then benefits a Q125 or a Q225. But, you know, we're expecting that there's going to be clarity here before we get into the second half. And we'll see how that plays out.

Wells Fargo: <unk> with Wells Fargo. Your line is open.

Wells Fargo: Good morning, Thanks for taking the question.

Wells Fargo: Follow up on China, So sales were down about 11% in Q1 in China, what are the expectations with the rest of the year. It does the new stimulus represent potential upside to the prior guidance and I had one follow up.

Peter J. Arduini: So fundamentally, our guidance doesn't change, but stimulus could have a benefit to it. But at this point in time, you know, we need to see more of the cards be dealt. That's helpful. Pete, you've been very active on the business development front, but mostly very small deals. Is that, you know, what we should expect going forward, and maybe just refresh us on areas of interest and, and if you think robotics is, you know, it would fit within GE Healthcare.

Speaker Change #103: Yes, I think it will depend upon.

Wells Fargo: The details of the stimulus package are laid out.

Wells Fargo: As Pete said earlier, we did see some hesitancy amongst customers as they wait on clarity on the stimulus rules before submitting orders and that makes complete sense to me we've seen that continue in the second quarter of the year.

Wells Fargo: So from our standpoint stimulus package Larry.

Wells Fargo: View that as a as a good long term catalyst for the market on exactly when that shapes up with respect to 2024 is something that we're watching to the extent that we get clarity sooner.

Peter J. Arduini: Thank you, Larry, I would just say on your last point on robotics, it's not a top priority focus for us from a surgical standpoint. But I think from a broader standpoint of robotics and AI, and I mentioned our Alia IGS, it's actually a robot that actually comes into position, and how it's used, it's one of the only that's actually used within the cath lab from that standpoint.

Wells Fargo: It certainly could be a positive catalyst versus guidance previous to the extent that we're still waiting and theres still hesitancy amongst customers with respect to orders.

Wells Fargo: It could be sort of a negative in the short term, but again I think from our standpoint.

Wells Fargo: We're very pleased to learn about this and long term, it's a very positive development for the overall market.

Peter J. Arduini: But, you know, tucking in deals of the right size that have a strategic fit into a core business and that enable us to connect different parts of our portfolio to bring more differentiated capability. That's what we're looking at, both in partnership and in acquisition. So I think that's what you should, you know, stay focused on that.

Speaker Change #107: Yes, I mean, Larry the only thing I would add is from our guide not a lot has changed the first half we guided would be negative the second half will be positive I think in the second half that stem is going to have an effect.

Speaker Change #107: Probably having a bigger step up in Q4 than Q3, just because of the delivery time to ship equipment.

Speaker Change #107: If it gets more clarify within Q2, and you can actually have a little bit sooner, but I think those are the dynamics I think the good part is even if it's later than benefits our Q1 'twenty fiber.

Peter J. Arduini: That is our primary target. And, you know, as we've always said, if a larger deal came up, it actually would be a really good fit for us. We would obviously take a look at it.

Speaker Change #107: Q2 dollars 25.

Speaker Change #107: We're expecting that there's going to be clarity here before we get into the half and we will see how that plays out so fundamentally our guidance doesn't change, but stimulus could have a benefit to it but at this point in time, we need to see more of the cards beyond Vale.

Peter J. Arduini: But our 85, 90% target range is the type of deals like the MIM deal that we did that are just really good fits into our priorities, right, growing our care pathway within oncology, linking our products to make them more differentiated on how they actually work together. And we just have a very good funnel of opportunities like those. Thanks a lot.

Speaker Change #109: That's helpful. Pete you've been very active on the business development front, but mostly very small deals is that what we should expect going forward and maybe just refresh us on areas of interest in and if you think robotics.

Speaker Change #107: Is.

Pete: With fit within GE healthcare. Thank you.

Peter J. Arduini: Thanks Larry. And our next question comes from the line of Ryan Zimmerman with BTIG, Yelena Silkova. Thanks for taking my question. A lot has been asked. Question number one: Attendee numbers were off.

Pete: Yes look Larry I would just say on your last point on robotics, it's not a from a surgical standpoint, it's not a top priority focus for us I think from a broader standpoint of robotics and AI and I mentioned, our Alyea IGF is actually a robot that actually comes into position on how it's used it's one of the only that's actually.

Pete: Used within the Cath lab from that standpoint, but.

Operator: [inaudible] curious how the landscape for Alzheimer's has changed at all or the trajectory that you're expecting, I think, you know, for the uptake and, you know, kind of patient adoption. Yeah, Ryan, so you heard Jay's comments probably on the call, relative to how we saw some slight upticks here for Visomil. I would just again remind everyone what we said our expectation was that we'll start seeing some uptick more in the second half of the year.

Pete: A tuck in deals.

Pete: The right size that have a strategic fit into our core business and enable us to connect different parts of our portfolio to bring more differentiate capability. That's what we're looking at both in partnership and an acquisition. So I think thats what you should.

Pete: Stay focused on that as our primary target and as we've always said a larger deal came up it actually was a really good fit for US we would obviously take a look at it but our 85% 90% target range is the type of deals like the <unk> deal that we did that are just really good fits into one.

Operator: I think that's pretty much in line with what we're expecting. I think since we gave guidance, you know, there's been discussions that the Lily drug might be a little bit delayed in coming out. But when combined all of those, from a diagnostic standpoint, which is what our role is, we expect to see some of that picking up in the second half of the year. Now, relative to, you know, any type of major material moves, this is not a 24 play as far as we see it right now.

Pete: Our priorities right growing our care pathway within oncology linking our products to make them more differentiated on how they actually work together and we just have a very good funnel of opportunities like those.

Speaker Change #112: Thanks, a lot.

Speaker Change #110: Thanks, Larry.

Speaker Change #110: Yeah.

Speaker Change #113: Thank you.

Speaker Change #110: Next question coming from the line of Ryan Zimmerman with <unk>. Your line is open.

Ryan Benjamin Zimmerman: Hey, Thanks for taking my questions.

Ryan Benjamin Zimmerman: A lot has been asked I want to ask two.

Ryan Benjamin Zimmerman: Separate questions one.

Peter J. Arduini: I think we think that, again, in the 25, 26, 27 range based on the adoption of both molecules, that's when you're going to see an uptick. There is reimbursement now for the agent in the outpatient center, but that's still being worked through in the inpatient setting.

Ryan Benjamin Zimmerman: Well <unk> numbers, we're off to a strong start for Biogen.

Ryan Benjamin Zimmerman: The stabilized and so just curious how the conversation around Alzheimers has changed at all or the trajectory that you're expecting I think for the uptake and kind of patient adoption and then I have a second one on margins.

Speaker Change #114: Yeah, Ryan So you heard Jay's comments, probably on the call relative to we saw some slight upticks here for <unk> I would just again remind everyone. What we said is our expectation.

Peter J. Arduini: And I think as that gets more cleared up, that's also going to drive more need for the product. But we were encouraged to see that, on a ratio standpoint, the numbers are up significantly from an actual dose standpoint. But we would view that as positive and on track with what we'd already communicated, and then Jay, can we spend a little time, go ahead. No, I was going to say go ahead and ask your next question, Ryan.

Ryan Benjamin Zimmerman: Was that we'll start seeing some uptick more in the second half of the year I think thats pretty much in line with what we're expecting I think since we gave guidance there is some good.

Ryan Benjamin Zimmerman: And is that the Lilly drug might be a little bit delayed coming out, but when the combination of all of those from a diagnostic standpoint, which is what our role is we expect to see some of that picking up in the second half of the year now relative to any type of major material moves. This is not 24 play as far as <unk>.

Operator: Oh. Just Jay on gross margins for a bit here. Transcribed by https://otter.ai, Pricing. I think we all understand those dynamics. There are still, I think, a lot of TSAs left. Help us understand kind of the trajectory of gross margin. Day.

Ryan Benjamin Zimmerman: Right now I think we think that again in the 25% 26, 27% range based on the adoption of both molecules thats when youre going to see an uptick there is reimbursement now for the agent and the outpatient center.

Ryan Benjamin Zimmerman: It's still being worked through and patient and I think as that gets more cleared up that's also going to drive more.

James K. Saccaro: [inaudible] get that higher, you know, outside of, Yeah, overall, I think we were very pleased with the first quarter margin performance and gross margin, in particular, we expanded 120 basis points, really driven by pricing and productivity. Now, there's an element that has not yet appeared in our numbers, which is related to some of the new products that Pete referenced in his discussion. We'll see benefits from some of the new imaging and some of the new ultrasound products that will also support gross margin expansion. But the first quarter was really about pricing.

Ryan Benjamin Zimmerman: Need for the product, but we were encouraged to see on a ratio standpoint, the numbers are up significantly.

Ryan Benjamin Zimmerman: From a actual dose standpoint, but we would we would view that as positive and on track to what we've already communicated what the ramp should look like.

Speaker Change #115: Okay, and then can you spend a little let's go ahead sorry.

Speaker Change #116: He was going to say go ahead ask your next question Ryan.

Ryan Benjamin Zimmerman: Thanks Nathan.

Ryan Benjamin Zimmerman: Jay on gross margins for a bit here.

Jay: You've got some segments kind of down you've got some segments in terms of EBIT margin.

Speaker Change #111: Pricing I think we all understand those dynamics, but there are still I think a lot of TSA has left and.

Jay: Just help us understand kind of the trajectory of gross margin as you see it today and kind of what youre tackling to get that higher outside of maybe price prices picked up.

James K. Saccaro: I discussed that and productivity. In my prepared remarks, I talked a little bit about some of the lean initiatives and what we call the variable cost productivity initiatives that we have in place. And it's safe to say we're off to a great start from a productivity standpoint. We delivered, I think, mid single-digit growth in each of our businesses, more than offsetting inflation and allowing us to drive this gross margin going forward.

Jay: Yes overall I think we were very pleased with the first quarter margin performance.

Jay: And gross margin in particular, we expanded 120 basis points.

Speaker Change #111: Really driven by pricing and productivity now there is an element that has not yet featured in our numbers, which is related to some of the new products that Pete referenced in his discussion we will see benefits from some of the new imaging and some of the new ultrasound products that will also support gross margin expansion.

James K. Saccaro: And so as we look at things on a full year basis, you know, we will continue to see solid gross margin performance supporting, you know, the EBIT expansion that we've laid out 50 to 80 basis points of EBIT expansion. But really nice to see, in the face of flat sales, the 50 basis points of expansion that we saw in the first quarter. Now, you referenced another comment, which relates to TSAs, and we're making good progress there.

Speaker Change #111: In the first quarter. It was really about pricing I discussed that and productivity in my prepared remarks, I talked a little bit about some of the lean initiatives and what we call the variable cost productivity initiatives that we have in place and it's safe to say we're off to a great start from a from a productivity standpoint, and we did.

Speaker Change #111: Levered I think mid single digits in each of our businesses more than offsetting inflation and allowing us to drive this gross margin going forward and so as we look at things on a full year basis. We will continue to see solid margin gross margin performance supporting the EBIT expansion that we have.

James K. Saccaro: A lot of great support from GE, but also a lot of good work on our team's side. We've eliminated or removed roughly 330. We're on a path to completing virtually all of the TSAs by year end. And what will happen as a result of this?

Speaker Change #111: Laid out 50 to 80 basis.

Speaker Change #111: Points of EBIT expansion, but really nice to see in the face of flat sales.

James K. Saccaro: I would say it predominantly impacts SG&A over time. It will allow us to optimize our structure, optimize our IT systems for the needs of our organizations, but really, a gating factor to get at all of that is coming off the TSA. So we've seen a little bit of benefit in terms of SG&A and G&A savings this year. We'll expect to see more next year as we stand on our own two feet as an independent company. So overall, that's really the story on the margin. Pete, anything to add?

Speaker Change #111: 50 basis points of expansion that we saw in the first quarter now you referenced another comment which relates to <unk> and we're making good progress there a lot of great support from GE, but also a lot of good work on our team side.

Speaker Change #111: Eliminated we've removed roughly 330, we're on a path to completing virtually all of the TSA is by year end and what will happen as a result of this.

Speaker Change #111: I would say it predominantly impacts SG&A over time, it will allow us to optimize our structure optimize our it systems for the needs of our organizations, but really a gating factor to get at all of that is coming off the TSA. So we've seen a little bit of benefit.

Peter J. Arduini: Yeah, Ryan, I would just say, and again, just to remind everyone, our focus on the increased R&D dollars is obviously new products, but a really important part of it is kind of doing this gross margin triple, which is getting price out of a new product, increased volume because of differentiated features, and reducing the actual cost of that product because of platform. So when you do that, obviously, if you can get the growth and the lift because people want it differentiated, you get more price at a lower cost.

Speaker Change #111: In terms of SG&A and G&A savings. This year, we will expect to see more next year as we stand on our own two feet as an independent company. So overall, that's really the story on margin Pete anything to add yeah. Ryan I would just say again just to remind everyone. I mean, our focus on the increased R&D dollars is obviously new products, but are really important.

Pete: And part of it is kind of doing this gross margin triple which is getting priced out of a new prospect increased volume because of differentiated features and reducing the actual cost of that product because of platforming and so when you do that obviously, if you could get the growth and the lift because of people one it's differentiated.

Peter J. Arduini: We have this focus, as we mentioned, that any new product comes out at a higher gross margin. And again, that's something we drive across the whole portfolio. Thank you. And our next question comes from the line of Graham Doyle with UBS, Yelena Silkin. Good morning, guys.

Pete: More price at a lower cost we have this focus as we've mentioned that any new product comes out at a higher gross margin and again thats something we drive across the whole portfolio.

Speaker Change #120: Thank you.

Speaker Change #117: Thank you and our.

Operator: Thanks for taking my questions. Can I just ask one, again it's on China, but just to get context for things as we go through the year, so firstly on revenue. The comps get a bit easier on the revenue side, but am I correct in saying you did grow revenue? And are you assuming a sort of catch-up now in the, and then just one question on order intake. I know you've gone to great lengths to explain how the growth sort of algorithm should work through the year on order intake. And what sort of number are we looking for, because it seems like mid-single-digit growth? Unknown Speaker.

Speaker Change #117: Next question coming from the line of Graham.

Graham: <unk> with UBS. Your line is now open.

Graham: Good morning, guys. Thanks my questions.

Graham: Can I just ask one again, it's on China, but just to get context for things as we go through the year and.

Graham: So firstly just on revenues.

Graham: Steve's got it.

Speaker Change #119: Just the comps get a bit easier on the revenue side, but am I correct in saying you did grow revenues in H two.

Graham: And are you, assuming a sort of catch up.

Graham: The numbers I think you flagged earlier in the year that page to grow enough to offset the weakness and then just one question on order intake.

Graham: You have gone to great lengths to explain.

James K. Saccaro: And I think, you know, if you combine what's happened over the last sort of 12, 18 months, it wouldn't make me super bullish that you. Better, maybe first on the China comp and the contours of the year. As you recall, last year, we saw roughly 20% organic growth in the first half of the year. So when we gave guidance originally, we said, first half negative, second half positive.

Graham: Growth sort of algorithm should work through the year on order intake but.

Graham: What sort of number are we looking for because it seems like mid single digit growth. When you combine what's happened over the last sort of 12 18 months it wouldn't make me Super bullish.

Graham: <unk>.

Graham: Single digit growth in revenue terms next year, but is there something we've missed in terms of how you can translate say, 5% to 6% growth for the next three quarters into better revenue growth for 2025. Thank you.

James K. Saccaro: And one of the things that we're watching very carefully is the timeline around this new stimulus package. As I said earlier, I think this is long-term, very positive for the market. But how much of this impact we see in 2024 really relates to sharing more guidance from the government and then also customers acting on it. So we're very bullish, but what that means is, you know, certainly there's going to be some positive impact relative to our previous expectations in the fourth quarter related to stimulus.

Graham: Yeah.

Speaker Change #118: Sure maybe maybe first on the on the China comp and the contours of the year.

Speaker Change #118: As you recall last year, we saw roughly 20% organic growth in the first half of the year. So when we gave guidance. Originally we said first half negative second half positive and one of the things that we're watching very carefully is the timeline around this new stimulus package.

Speaker Change #118: As I said earlier I think this is long term very positive for the market, but how much of this impact we see in 2024 really relates to share.

James K. Saccaro: But what happens in the third quarter and how much of that demand is pent up, paid off in the third quarter versus delayed to the fourth quarter, and how much of the fourth quarter stimulus impacts Q1 and Q2 of 2025, to Pete's comments earlier, that's really a question that we're watching very carefully.

Speaker Change #118: <unk> more guidance from the government and then also customers acting on it. So we're very bullish but what that means is we certainly theres going to be some positive impact relative to our previous expectations in the fourth quarter related to stimulus, but what happens in the third quarter and how much of that demand is.

Speaker Change #118: Pent up paid off in the third quarter versus delayed to the fourth quarter, how much of the fourth quarter stimulus impacts Q1, and Q2 of 2025 to Pete's comments earlier, that's really that's really a question that we're watching very carefully.

James K. Saccaro: And so, you know, we're optimistic about this, but I think it's, you know, as we think about the third and fourth quarters, the third quarter will be much more flat-ish in that sort of a range with the fourth quarter seeing some of that pent-up demand paid off. But again, a lot of this depends on when all of this comes together from a customer demand standpoint. As it relates to order number one, maybe, Pete, you want to address that? Yeah, I think, Graham. I mean, it's a little bit of more of the same.

Speaker Change #118: So we're optimistic about this but I think as we think about the third and fourth quarter third quarter will be much.

Speaker Change #117: Flat ish.

Speaker Change #117: In that short of a range with fourth fourth quarter seeing some of that pent up demand paid off but again a lot of this depends on when all of this comes together from a from a customer demand standpoint.

Speaker Change #117: As it relates to the order when maybe Pete you want to you want to address that yes, I think Graham I mean, it's a little bit of more of the same I mean, the first part is again the markets that we participate in and around the world over the last 18 months coming out of Covid.

Peter J. Arduini: I mean, the first part is, again, the markets that we participate in around the world for the last 18 months coming out of COVID have either been roughly flat or slightly down. We expect that trend over the next two years. Again, a lot of it tied to this lagging indication that the more, actually, procedures are growing, more patients are coming into the systems. You need more things that we make. So that's a really important one.

Speaker Change #117: <unk> been roughly flat or slightly down we see that trend over the next two years again, a lot of it tied to this lagging indication that the more actually procedures are growing more patients are coming into the systems you need more things that we make so that's a really important one and again I think across all of our market.

Peter J. Arduini: And again, I think across all of our markets this year, we'll actually see an uptick over the 23 window. The new NPIs are a big deal. And so, again, that adds some price and growth. It also adds to some share gains with it. And then services. So, you know, we have been gaining some share in the last couple years. Our prior 78, we haven't probably gained as much.

Speaker Change #117: This year, we'll actually see an uptick over over the 23 window. The new NPI is as big deal and so again that adds some pricing growth that also adds to.

Speaker Change #117: To some share gains with it and then services so.

Speaker Change #117: We have been gaining some share in the last couple of years. Our prior 78, we haven't probably gained as much when you do that you start growing your service base.

Peter J. Arduini: When you do that, you start growing your service business. And service becomes a bigger contributor within your overall capabilities. And then the last part is that these care pathway areas that we've been nurturing start to bring more growth in the next year or so. Again, from how Alzheimer's we talked about, cardiovascular care pathways, how products work together, but even a product like ProperDes, those are some of the things that we take a look at that will continue to kind of drive, you know, focus on mid-single-digit growth in orders that will then translate that into revenue.

Speaker Change #117: And service becomes a bigger contributor within your overall capabilities and then the last part is these care pathway areas that we've been nurturing start to bring more growth.

Speaker Change #117: And the next year or so again from Alzheimer's, we talked about cardiovascular care pathways, our products work together, but even a product like prepared as those are some of the things that we take a look at that we'll continue to kind of drive.

Speaker Change #117: Focus on mid single digit growth in orders that will then translate that into into revenue and then based on timing.

Peter J. Arduini: And then, based on timing, you know, you may be slightly higher or lower in a given quarter, but that's the formula that, you know, we're actually using. A cheeky quick follow-up on China. This sort of stimulus package or idea that you sort of mentioned, I know Phillips and Siemens have referenced. Presumably, that relates to this medical equipment renewal because it doesn't, on the surface, look like it. Transcribed by https://otter.ai, Cautious Optimism Well, there's a couple different views out there.

Speaker Change #117: <unk> be slightly higher lower in a given quarter, but that's that's the formula that we're executing on.

Speaker Change #117: Greg.

Greg: Quick follow up on China, just because it does sort of stimulus package or idea that.

Greg: You sort of mentioned I know Philips and Siemens I've referenced something similar.

Speaker Change #117: Presuming that relates to this medical equipment for new because it wasn't on the surface look, particularly ambitious in terms of the 6% CAGR on spend but is this something you see in the past where these things can expand and become bigger is that what gives you some cautious optimism R&R.

Speaker Change #123: Well Theres a couple of different views out there there is a larger stimulus number that's in the trillions of yen, that's touching multi industry and that is money that actually is kind of Skype in dollars. If you will that will go to particular areas within healthcare and other industries, so what that <unk>.

Peter J. Arduini: There's a larger stimulus number that's in the trillions of yen that's touching many industries. And that is money that actually is kind of stipend dollars, if you will, that will go to particular areas within healthcare and other industries. So what that direct distribution looks like, it's a big number. That's more of what we're actually, And so again, if you compare it to the previous stimulus, which was interest-free loans, this is for trade laid out to actually be dollars that will be granted to actually buy equipment.

Speaker Change #117: Distribution looks like it's a big number that's more of what we are actually referencing.

Speaker Change #117: And so again, if you compare it to the previous stimulus, which was interest free loans. This is per trade laid out to actually be.

Speaker Change #117: That will be granted to actually buy equipment and again. So we believe that will have a larger appeal because by definition many customers weren't even going for a while so this opens up the field for that and.

Peter J. Arduini: And again, we believe that will have a larger appeal because, by definition, many customers weren't even going to go for a loan. So this opens up the field for that. And it also is being expressed at this point to be not a 90-day or 120-day window but a multi-year.

Speaker Change #117: And it also is being expressed at this point to be not a 90 day or 120 day window, but to be a multiyear approach. So again more to come and see what the details are on it but from when we gave guidance to start the year. This is net net positive really any way you look at it from a China outlook.

Peter J. Arduini: So again, more to come and see what the details are on it. But from when we gave guidance to start the year, this is a net positive, really any way you look at it, from a Chinese perspective. And we'll see what it means for this year. But clearly, if implemented the way it's described, it will have a bigger impact as well going into next year.

Speaker Change #117: And we will see what it means for this year, but clearly have implemented the way. It's described it will have a bigger impact as well going into next year.

Operator: Thank you very much. I really appreciate the extra question. Thanks, guys. Thank you. Thank you. And our next question comes from the line of Matt Taylor with Jeffreys. Your line is open. Hi, thank you for taking the question. Good morning.

Speaker Change #127: Thank you so much I really appreciate the question thanks guys.

Speaker Change #124: Thank you.

Speaker Change #128: Thank you and our.

Speaker Change #117: Next question coming from the line of Matt Taylor with Jefferies. Your line is now open.

Matthew Charles Taylor: Hi, Thank you for taking the question good morning.

Matthew Charles Taylor: I was hoping you could kind.

Matthew Charles Taylor: Comment on two things one is that you identified the catalyst and ultrasound and the resolution.

Operator: I was hoping you could comment on two things. One is that you identified the catalyst for ultrasound and the resolution of some of the fulfillment issues to resolve as, (inaudible] you work through the launches and resolve the challenges. So Matt, let me just take a hit on the ultrasound piece. I think you're referring to the PCS shipment. I'll have Vijay, you can touch on that.

Matthew Charles Taylor: Some of the fulfillment issues to resolve.

Matthew Charles Taylor: Catalysts for growth inflection through the year those vessels.

Speaker Change #121: Could you help us understand how much inflection that could drive as you work through the launches and resolve the challenges.

Speaker Change #126: So Matt maybe just take I'll take.

Matthew Charles Taylor: I hit the ultrasound piece, I think youre, referring to the PCF shipments.

Speaker Change #126: Maybe Jay you can you can touch on that look I think with the ultrasound.

Peter J. Arduini: But I think with ultrasound, again, the first part is that when we look at our market dynamics, they are definitely continuing to improve, and as one of the top two largest players worldwide, that has a positive impact. From a standpoint of the comparers, I mean, if you take a look at our expectation, we will continue to ramp up our revenue growth throughout the year from Q2 onwards. Then also from an order standpoint, it's highly correlated. To give you an idea, the vast majority of this business is sales and installation.

Speaker Change #122: Again, I think the first part is is that when we look at our market dynamics there.

Speaker Change #122: They are definitely continuing to approve an improving us as one of the top two largest players worldwide that has a positive impact.

Speaker Change #129: From a standpoint of the compares I mean, if you take a look at our expectation is that we will continue to ramp our revenue growth throughout the year.

Speaker Change #122: From the from Q2 on.

Speaker Change #122: And then also from an order standpoint, it's a highly correlated business I mean, just to give you an idea a vast majority of this business is solid and install.

James K. Saccaro: China, this tends to be a larger portion of our business, and so some of the effect that we felt here in the first quarter was directly correlated to the challenges in China, and I think even China's STEM will help with ultrasound. But ex-China around the world, US, Europe, we're bullish on how we'll see the pickup within China, and again, excuse me, in ultrasound, and particularly because of the new product introductions that we've laid out.

Speaker Change #122: China this tends to be a larger portion of our business and so some of the impact that we felt here in the first quarter was directly correlated to the challenges in China, and I think even in China stem will help ultrasound, but ex China around the World U S. Europe.

Speaker Change #122: We're bullish on how we will see the pickup within China.

Speaker Change #122: Excuse me, an ultrasound and particularly because of the new product introductions that we've that we've laid out.

James K. Saccaro: Jay, what about the- Yeah, and just at the highest level, Matt, I do think we have easing comps throughout the year, and I think that's supportive of the accelerated growth profile at GE Healthcare. With respect to PCS, you know, we'll see accelerating growth as we move forward here with the second half of the year, more similar to growth rates that we saw last year. And, you know, as we resolve some of the bottlenecks in the second quarter, we'll see some level of improved growth, but then, again, more of those benefits will accrue to the second half of the year.

Speaker Change #131: What about the yeah, and just at the highest level, Matt I do think we have easy comps throughout the year and I think thats supportive of the accelerated growth profile at GE healthcare level with respect to PCF will see accelerating growth as we move forward here with the second half of the year.

Speaker Change #131: <unk> more similar to growth rates that we saw last year and as we resolve some of the bottlenecks in the second quarter, we'll see some level of improved growth, but then again more of those benefits will accrue to the second half of the year.

James K. Saccaro: Great. And can I ask a follow-up question on phasing? You talked about some sequential improvement in organic growth and margin in the second quarter, and that would be modest improvement. If I think about what modest means, maybe going to slightly positive organic growth and, I don't know, 20 to 40 basis points on margin. If I flow that through, the consensus EPS looks like it needs to come down a little bit. Is that kind of thinking or math wrong?

Speaker Change #130: Okay, Great and can I ask a follow up on phasing and you talked about some sequential improvement in organic growth and margin in the second quarter.

Speaker Change #133: And that would be modest improvement if I figured out what modest means that maybe going to slightly positive organic.

Speaker Change #132: 20 to 40 basis points on margin, if I flow that through.

Speaker Change #132: Consensus EPS looks like it needs to come down a little bit is that kind of thinking your math wrong or can you help us at all with the second quarter.

Operator: Or can you help us at all with the second quarter? You know, from a second quarter standpoint, we're looking at low single digits on sales and continued, you know, we'll see a reasonable expansion versus the prior year. So that will, actually, the first quarter is the lowest quarter of the year, so we'll see a little bit more sequential margin expansion, more similar to year over year improvements versus last year, similar to what we saw in the first quarter. So I don't have the, we don't talk about consensus, we don't get into that, but I think those are the dimensions that are in play in the second quarter.

Speaker Change #122: From a from a second quarter standpoint, we're looking at low single digits on the sales.

Speaker Change #122: And continued we'll see it we will see a reasonable expansion versus the prior year. So that will actually the first quarter is the lowest quarter of the year. So we will see a little bit more sequential margin expansion.

Speaker Change #122: More similar to year over year.

Speaker Change #122: <unk> versus last year similar to what we saw in the first quarter. So.

Speaker Change #122: We don't talk about consensus we don't get into that but I think.

Speaker Change #122: As of the dimensions that are in play in the second quarter.

James K. Saccaro: All right, thanks, Jay. Thanks, Pete. Thanks. Thank you, and that concludes the question and answer session. Speakers, please proceed with any closing remarks. Thank you, operator. Thanks, everyone, for joining us today. Hopefully, we have addressed your questions. We've got all the right pieces in place here to deliver on the annual guidance that we've laid out, and we look forward to connecting with each of you on some upcoming calls or conferences in the next few months. Thank you very much. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.

Speaker Change #134: Okay, Alright, thanks Jay.

Speaker Change #122: Thanks.

Speaker Change #125: Thank you and that concludes the question and answer session speakers. Please proceed with any closing remarks.

Speaker Change #135: Thank you operator, and thanks, everyone for joining us today, hopefully we addressed your questions. We've got all the right pieces in place here to deliver on our annual guidance that we've laid out and we look forward to connecting with each of you in some upcoming calls or conferences in the next few months. Thank you very much.

Speaker Change #136: Ladies and gentlemen, and Douglas will teleconference for today. Thank you for your participation you may now disconnect.